Europe’s wealth exodus may continue
In 2016, the average European citizen is worth about $86,000. But according to New World Wealth’s Europe 2016 Wealth Report, people living in Europe are not getting wealthier – between 2005 and 2015 their wealth decreased by 5%.
The Europe 2016 Wealth Report examined wealth creation in Europe over the past 10 years. The term “wealth” refers to somebody’s net assets (property, cash, equity and business interests) less any liabilities.
Europe’s current growth compares poorly to other developed markets, says Andrew Amoils, head of research at New World Wealth. By comparison, the average worth of somebody living in Australia increased by more than 100% over the same 10- year period, in Canada by more than 50% and in emerging markets including China, India and Vietnam, by more than 400%.
Factors hampering wealth creation in Europe since 2005 include: the migration of wealthy people from Europe, the 2008 global financial crisis and its related housing crisis (impacting heavily on most European citizens’ wealth), increasing income tax rates, loss of jobs to Asia, particularly in manufacturing and the inability of countries such as Greece to handle large pension obligations. Prosperous residents of Europe migrated mainly to Australia. New World Wealth’s recent migration study cited religious tensions, increasing rates of rape and assault, financial concerns, an inability to deal with changing religious dynamics and concern for their children’s futures as reasons.
EUROPE’S WEALTH FUTURE?
New World Wealth predicts that the exodus of Europe’s well-off will continue with the loss of primary sector jobs to Asia, especially emerging countries including China, India, Sri Lanka, the Philippines and Vietnam.
Eastern European countries such as Poland are expected to grow their wealth. But minimal growth is predicted for western and southern Europe – large European economies such as Germany, the UK, France, Italy and Spain will likely struggle.
Europe’s wealth future will depend largely on its ability to cope with changing religious dynamics. By 2050 it is estimated that several European countries (including Belgium, the UK, Germany and France) will have a Muslim majority – assuming all countries stay in the European Union (EU) zone and there is continued freedom of movement within the EU and migration from the Middle East and West Africa.
Words Kim Maxwell