Germany is the foreign country that Spain admires most. The image that Spanish citizens have of the Central European state is that of a rich, efficient and socially stable country, according to a study carried out by the Royal Institute Elcano in 2025. The curious thing is that Germany is not a country of luxury. It is not even a country with a majority of rich people. In fact, it is the country with the greatest inequality in the eurozone, after Austria. Heritage is distributed very unequally. They say it the five wise menthe expert council advising the German government, in its latest half-yearly report, published this month. Achim Truger, member of the prestigious quintet, calls for “limiting the power of the rich in Germany”. AS? With higher taxes on wealthy business heirs. And the Bundesbank also says so: “The assets of private households continue to be distributed very unequally.”
In its 2025 report, the German central bank reports that, compared to other European countries, only Austria has a more unequal structure than Germany. Meanwhile, German household net worth (median) reached around 90,500 euros in 2021; In 2023 it would not exceed 76 thousand euros. According to the Bundesbank, the decrease recorded in the net worth of German families has to do with the decline that mainly affects the less advantaged half of the population with fewer resources. “Inflation resulting from Russia’s attack on Ukraine has hit the poorest families especially hard.” Wealthier families are better protected with higher risk investment formulas (such as stocks or corporate shares). 39% of German families are in debt.
According to the European Central Bank, the average wealth of German families would be slightly higher and amount to 106,000 euros. This value means that exactly half of the families have less than this amount and the other half have more. Germany is in fifteenth place in the EU, just ahead of Greece. The reason, according to the ECB itself, is the lack of real estate assets. While in Spain 75% (according to Eurostat 77.8%; according to Trading Economics 73.7%) of the population owns their own home; In Germany (as in general in Northern Europe) only 45% own their own home. The majority live on rent. The highest median wealth of European families, according to the ECB, is found in Luxembourg, the richest country, with a wealth of 739,000 euros; followed by Malta (333,000) and Ireland (315,000). Spain and Italy, with 197,000 and 161,000 euros respectively, surpass Germany.
In its autumn report, the Council of Wise Men recommends that the government create a mechanism to encourage investment among people with few economic resources. It offers a subsidized deposit that combines investment in funds and savings and which can be accessed (to dispose of the balance) in a flexible way. It would cost the State between 5,000 and 10,000 million euros per year. And it could be used for retirement or exceptional situations. Likewise, the board recommends taxing all inheritances and gifts equally. “Just by eliminating the tax exemptions that especially benefit large inheritances, the State could earn 8 billion euros.”
For Truger, Germany is very unequal and, consequently, very unjust. According to data collected in its latest report, 10% of the population owns 60% of the total assets. On the other hand, 50% of citizens (or 40 million people) own only 2%. This imbalance increased after German reunification. Only Austria has greater wealth inequality. Truger warns that “the increase in defense spending and the reduction of corporate taxes (measures implemented by the current Merz government) will generate a financial hole of 200 billion euros in 2029, which means a third of the total state budget.” Truger even proposes a solidarity tax of 7% on the population that earns the most, to finance the current polycrisis and increased defense spending.
Truger explains it like this: those who earn little, save little. And the little they save barely earns any interest. Those with wealth invest their money in more profitable real estate and business assets. While the poor stagnate, the rich become even richer: “Furthermore, Germany is already a republic of heirs.” Between 30 and 50% of the assets come from inheritances and donations. But only a few inherit a lot. The reality is that if you don’t inherit, you can hardly afford to buy a house; made difficult by the increase in rental prices. This wealth imbalance also has consequences for social progress. Above all, the children of the academic class go to university. In a smaller percentage are the children of workers and single-parent families.
However, Germany is not the United States. Truger does not yet see the risk of the super-rich radically influencing political management as in America, where some ultra-rich like Elon Musk are more powerful than many states. However, legal gaps or loopholes in tax matters for large German inheritances point in the same direction. The company assets are in the hands of 1% of families, who are privileged because the succession of company assets is difficult to tax. Truger: “If I inherit 150,000 euros from my aunt, I end up paying more than someone who inherits a company worth billions of euros.”
Economy first is the motto of the current German government under Merz, which has just approved a series of measures to boost the economy, but has not yet linked pension reform and a decision on the future of combustion vehicles. Merz agreed in his coalition government to reduce the price of electricity for industry (until 2028), reduce the air traffic tax and increase investment. But chemical employers are calling for an offensive to support German industry in Germany, with fewer taxes and less bureaucracy. The IG Metall union also calls for an intelligent industrial policy that enables progress.
In 2025 the German economy experiences its third year of stagnation. The Russian attack on Ukraine and the resulting increase in energy prices have stopped the German economic engine. Added to this are the decline in demand for Made in Germany in China and Trump’s tariffs. Wise people point to growth of 0.2% in 2025. If Germany doesn’t export, that’s bad. That won’t change as long as Trump blocks Germany and China subsidizes its industry while advancing as a tech giant. Wise people predict growth of 0.9% for 2026. The problem is that this boost will be due above all to the demand generated by the Government with its fund (one thousand billion euros financed with debt) for defense and infrastructure. Its future business model remains uncertain.
