German households feather their nests with marks

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The Independent Online
JUST in case readers have been considering putting together Red Cross parcels for recession-vanquished western Germans, they had better think again. For no less august an outfit than the Bundesbank has revealed that western Germans, if flat on their backs, are at least reclining on well-feathered beds. The average household had amassed cash savings of DM110,000 ( pounds 46,000) by the end of last year, the bank said in its October report yesterday.

While the US, Japan and France have seen a steady decline in private savings, western Germans have continued to squirrel away 14 per cent of disposable incomes. And despite the different economic conditions, eastern Germans have adopted the savings habits of their western counterparts, putting aside 13 per cent of their much lower disposable incomes. Eastern households held savings of DM30,000 - approaching the western level of the early Seventies.

Western German savings, including private organisations' financial assets, totalled DM3,400bn at the end of 1992.

The lucky ones are the children of this hard-working generation. The Bundesbank estimated that western Germans inherit DM100bn to DM200bn each year in financial and non-financial assets.

The value of private property at the end of 1992 was put at DM5,000bn. About half of western German households own their own property. While the proportion is increasing, it is still well below levels in Britain. The total of private debt among western Germans reached DM1,620bn, or an average of DM40,000 per household. This offers a distorted picture however, since most western households are debt-free. In the east, average household debt was DM6,000.

Including non-financial assets, private households in western Germany had a total net value of about DM8,000bn last year of which about a third was financial savings. The total amounts to four times disposable income. 'The massive destruction of wealth through war and the currency reform have been compensated for,' the Bundesbank said. In a final aside to the eastern Germans, the Bundesbank stated that growth in wealth there will not come from western transfers but must be self-produced.