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maltatoday | SUNDAY • 11 APRIL 2021 10 NEWS JAMES DEBONO THE share of total national wealth owned by the richest 5% of the Maltese population increased from 33% to 40% be- tween 2010 and 2017, data from the European Foundation for the Improvement of Living and Working Conditions (Euro- found) this week showed. The share of total national wealth dropped for the bottom 50% from 14% to 10% in a sign of growing inequality. And the proportion of individ- uals just below Malta's average net wealth also increased, from around 72% in 2014 to nearly 77% in 2017. The Europe-wide study shows Malta was one of five countries with "a clear trend of increasing wealth inequality" over the last seven years, a period character- ised by accelerated economic growth and a property boom that was spearheaded by the Muscat administration after it was elected in 2013. Moreover in 2017, the aver- age net wealth of the richest 1% amounted to €3.35 million – while the poorest 20% possessed an average net wealth of €10,000. In measuring wealth, the Eu- rofound study used household wealth per capita (total house- hold wealth divided by the num- ber of people living in the house- hold), under the assumption that benefits, not purely financial, are shared, both with partners and with dependants. The data was based on the na- tional Household Finance and Consumption Survey, a survey of private households coordi- nated by the European Central Bank in 2010, 2014 and 2017. The Eurofound analysis points at a clear trend towards in- creased inequality in Cyprus, Greece, Malta, the Netherlands and Slovakia, while a smaller increase was noticeable in Esto- nia, Finland, Hungary, Portugal and Spain. In contrast wealth inequality decreased in Austria, Germany, Ireland, Latvia and Poland. The analysis suggests that wealth inequality has grown more in those countries that initially had low inequality. But despite this increase in wealth inequality, Malta remains part of a group of eastern and southern EU member states still register- ing the lowest levels inequality like Poland, Slovakia, Slovenia, Lithuania, Greece, Italy and Cro- atia. In contrast, wealth inequality is the highest in some western European member states: the Netherlands, Germany and Aus- tria. Cyprus, having the third high- est wealth inequality, was an exception to the southeast-ver- sus-west divide in wealth ine- quality. The study shows that the av- erage net wealth in Luxem- bourg (€375,288) is almost 20 times higher than the average wealth in Latvia (€19,249). The second richest country in terms of average net wealth is Cyprus (€182,741), followed by Belgium (€164,573), Malta (€158,468) and Ireland (€137,553). The poorest countries in terms of average net wealth after Latvia include Hun- gary (€30,227), Poland (€33,933), Slovakia (€36,593), Greece (€37,388), Croatia (€38,915) and Lithuania (€40,847). The study also shows that Malta has the smallest number of people with a negative net wealth, that is when the value of their assets and property is lower than the value of their liabilities. The proportion of such people in 2017 was the lowest in Mal- ta (0.3%) and the highest in the Netherlands (10%). In Malta, foreigners were less likely to be in the bottom 50% of the population than in other countries. While in the entire EU, 66% of individuals born in another country were in the bot- tom 50%, less than half of for- eigners living in Malta belonged to the poor half of the popula- tion. And while close to 50% of non- EU foreigners living in Malta were in the bottom half of the population, 42% of those born in other EU countries fell in this category. The Eurofound report de- nounced an enormous gap in wealth in the European Union where the gross assets of those in the top wealth quintile of 21 EU member states were 60 times larger compared to those in the bottom wealth quintile. The report suggests that regu- larising wealth declaration in the EU could be a way of promoting social justice by minimising hid- den wealth and combating tax evasion. How Malta became richer but less equal Wealth share of richest 5% increases from 33% to 40% between 2010 and 2017 45 40 35 30 25 20 15 10 5 0 Poorest 50% of population 50-90% 90-95% Richest 5% 14% 10% 36% 17% 14% 33% 40% 2010 (% of wealth) 2017 (% of wealth) Share of total net wealth of the country by net wealth percentiles 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 0-20 20-40 40-60 60-80 80-95 95-99 1% €10,443 €48,355 €83,198 €130,665 €260,630 €782,207 Average net wealth in Malta by net wealth percentiles Net wealth is total household wealth divided by the number of people living in the household. The header line refers to net wealth percentiles. For example, 0–20 is the bottom 20% of the population and so on, and 100 (in the final column) is the top 1%. Top 1% in Malta has an average net wealth of €3.35 million The view from above: the pool area constructed inside the Zaha Hadid designed Mercury Tower in St Julian's, the epitome of Malta's construction wealth In 2017, the average net wealth of the richest 1% amounted to €3.35 million – while the poorest 20% possessed an average net wealth of €10,000