5% of families in Italy own 46% of the wealth: less inequality than in the EU thanks to the “brick”


By John

The passion of Italians for home ownership, even among the less wealthy classes, makes our country less unbalanced in terms of net wealth compared to the European average. Even so, however, 5% of families own 46% of the wealth. The Bank of Italy’s analysis carried out within the ECB recognizes that it does not entirely capture the liquidity or properties of the richest but nevertheless makes notable progress in terms of accuracy compared to previous investigations. The study reports that in 2022 “the main inequality indices remained substantially stable between 2017 and 2022, after having increased between 2010 and 2016”.

A period, the latter, where net wealth fell from almost 200,000 euros to just over 150,000 (the drop in the average value was much more limited) and was concentrated in the high segment of the population with an increase in the Gini. It must also be said that family wealth, at least until 2022, has not yet entirely recovered the collapse suffered by our country’s GDP in the sovereign debt crisis, also suffering from the drop in house prices unlike other countries such as Spain, France and Germany which, not surprisingly, had the most brilliant GDP recovery.

Given the overall positive performance of the economy in 2023, we will see the results of the next survey. The brick therefore, underlines the analysis, constitutes half of the total wealth of our country and for the poorest families it represents three-quarters of their wealth to which is added the liquidity in the current account.

When we move on to the middle class, houses and other properties constitute 70% of their wealth while the wealthier have a more diversified portfolio which includes shares, securities, deposits and life insurance policies and perhaps also due to the low interest rates, they have reduced the possession of debt securities. This Italian characteristic has no counterpart in the country with the highest degree of inequality, Germany, where less wealthy families make greater use of rent.

A solution, but the report doesn’t talk about it, but it is often subsidized by the public there, while in our country the real estate sector has seen an increase in taxation in recent years and a growing need for maintenance costs given its ageing.

And if our country has only recently recovered from the effects of the debt crisis and the Covid pandemic, it then had to face the surge in inflation and the effects of the Ukrainian crisis which the ECB had to counteract with monetary tightening.

In this context, the Bank of Italy, as required by the rules and in line with other central banks, has decided to continue, throughout 2024, to lend money to banks, also accepting as collateral the loans granted to families in the form of credits consumer and mortgages or those for small and medium-sized businesses. This amounts to 102 billion (data as of September 2023), approximately 36.7% of the total value of guarantees allocated to the Bank of Italy.

However, it increased the loan threshold from zero, the level established at the time of the pandemic, to 25 thousand euros. The additional credit scheme (Acc), revoked by the ECB last November as part of the monetary tightening, can in fact be implemented at a national level (several central banks had chosen to do so) and our bank has decided to keep it in force for entire year.

The objective is to increase the ability of banks to support the real economy also by accepting as collateral “credits that do not satisfy all the eligibility criteria established in the general Eurosystem guarantee system” as the ECB explained at the time.