With 40% of the fortunes of the rich in the euro zone would be paid all the debt of their states
- According to a study published by the German newspaper Süddeutsche Zeitung .
- The German Finance Minister sees “interesting” looking for options for the rich to help solve the crisis.
- The German Institute for Economic Studies proposes a temporary tax that taxes the great fortunes and the forced purchase of public debt.
40% of the fortunes of the rich in the euro area would pay the total debt accumulated by the States that share the single currency, which would balance their finances, according to a study published today by the German newspaper Süddeutsche Zeitung ( SZ).
On the occasion of the debate on the possibility of large fortunes actively contributing to the recovery of the most punished economies in the euro area, the newspaper reveals that the Federal Minister of Finance, Wolfgang Schäuble, considers “an interesting model” to seek options so that the rich make their contribution to the resolution of the crisis.
The solution to the euro crisis must also take into account the reduction of the gap between rich and poor. The discussion in Germany has its origin in the proposals presented by the German Institute of Economic Studies (DIW) in Berlin so that the wealthiest contribute to solve the crisis in the euro area, including the forced purchase of public debt. “Precisely in countries in crisis, these types of instruments are a reasonable option so that private fortunes, partly very concentrated, make their contribution to the refinancing of the State,” said the DIW.
“Depending on the progress in the consolidation of the State that debt can be returned later with their interests, ” according to the DIW, which also proposes as an alternative a temporary tax that taxes the great fortunes. In a statement to the SZ, the manager of the management company of large fortunes Assenagon, Jochen Felsenheimer, says that “the logical reaction of the rich is economically wrong” before the option that they are forced to contribute in some way to resolve the crisis .
He adds that “in the last decades welfare has been transferred at the expense of all to a few” and therefore the euro crisis is not a debt crisis in the classical sense, in which the ability to pay an economy is questioned due to its low performance. It is rather a distribution crisis between the different economies, but even more so between private persons and the public sector of each State, warns Felsenheimer, who considers that these aspects have not been considered with sufficient attention until now.
We are seeing at the same time private wealth and public misery In his opinion, the solution to the euro crisis must also take into account the gap between rich and poor, which always precedes a crisis, which not only helps the State but also it’s fair. “We are seeing both private wealth and public misery,” comments Jörg Krämer, chief economist at the Commerzbank financial institute in SZ. He cites the example of Italy, where private households accumulate a fortune of 175% of the GDP , while the state debt rises to 120%.
He adds that if the Italians had to pay 15% of property taxes their fortunes would fall to 150% of GDP, but at the same time the State would reduce its debt below the critical 100% . “I do not understand how it is not carried out,” says Krämer, for whom “Italy needs clear signals and its reform process languishes despite the fact that its head of government, Mario Monti, lets himself be celebrated as the great reformer”.
However, the director of the institute for economic studies in Hamburg HWWI, Thomas Straubhaar, believes that forcing the rich to buy state debt or taxing their fortunes with extraordinary rates are hardly applicable measures . Straubhaar is in favor of optimizing the collection of taxes, closing all gaps to the wealthy, and introduce a progressive tax system that is more serious to the strong with higher incomes than the weak.