INSEE and the Banque de France regularly publish statistics giving the value of the assets owned by the economic agents, the public sector, the enterprises and household. But the publications regarding indebtedness cause numerous comments as much as theses regarding the assets owned especially by household generate few attentions. They are yet essential data to appraise the economic and financial situation of a country and to understand the social climate which prevails in it.
At the end of the year 2022, the value of the financial assets of the French household, after deducting their short-term indebtedness to finance consumption expenditures, was exceeding 6 300 billion euro. The last global published figures concern the year 2021. According to INSEE, the total value of the household assets then reached 14 600 billion, after having removed their indebtedness mainly used to finance the acquisition of real estate. More than 60% of French household own either their main residence or a second home and sometimes both of them. It is one of the highest level in Europe. To illustrate this situation, it can also be mentioned that the number of private pools in France is the second in the world after the United States.
That accumulated wealth along the years is the consequence of a very high saving rate. After having reached near 20% of the gross available revenue during the sanitary crisis, it returned to a little above 16% in 2022. That put France among the major developed economies in the second position after Germany, but in the German rate is included a part of the expenses dedicated to retirement through pension funds subscriptions. The French people financial assets have increased during these previous years thanks to a financial saving rate above the trend, reaching 7.7% of the gross available income in 2021, at the top of the sanitary crisis. It waned to 5.5% as a yearly average in 2022 but with a strong rebound during the 4th quarter (6.7%), as a signal that the trust in the economic recovery was far from having come back.
The rise of the value of these assets has also been made possible by the rebound of the stocks markets. The structure of the investments has evolved with a significant increase of the deposits on the “handbook A”, after the increase decided by the State of the rate offered to the savers, and of life insurance. But the trend did not reverse: French household have continued to become richer these last years.
In these conditions, we are in presence of a paradox: French people as a whole have never been as wealthy but they also have never been so unsatisfied by their personal situation. The frequently given explication lies in the inequalities, in their level and especially in their evolution. These last years have seen spectacular successes of enterprises which have largely profited to their founders and to their families to the point that we see many French persons among the biggest fortunes in the world. This situation is without any precedent in history. Having been given a largely coverage, it has increased the injustice feeling and the resentment. But it is not the main explanation.
Wealth inequalities are first linked to age. Half of the population under fifty years old had a net wealth under 100 000€. The number goes to 200 000€ after 60 years old. These differences between generations are not necessarily unfavorable for the youngers because they will benefit from the transmission of this wealth. With the increase of life duration they will frequently benefit at the time or a little sooner of their retirement. Which makes the pension levels an issue today, will along the time become much less perceptible than today. The new retired persons will have, along with their own savings, the benefit of the assets of their ancestries.
Inequalities at the territorial level have much heavier consequences. First the prices levels are very different if you live at the center of a large metropole, with even a much worser situation in Paris and in the bordering towns. Rents are very high and the access to property is frequently impossible due to its cost. That situation is becoming worse with the interest rates increase and the diminution of numbers of houses built or offered for renting after the adoption of more severe energy criteria.
Life conditions are also degraded in rural areas, but for opposite reasons, with the disappearance of shops and of local public services, especially for health, and a fall of the value of real estate assets. The access to these services also contributes, even if they don’t appear in the accounts, to the national wealth. The complexity of the decision processes with the multiplication of administrative offices and of the local authorities make very difficult the putting into place of efficient policies to fight against the desertification of the territories, which is a worsening factor in the perception of the inequalities. The addition of the impoverishment in the major urban centers of a share of the population and of very degraded life conditions in many territories so explain the discontent which is amplified by the perception that there is a real enrichment of the country without it profits to everybody.
That global enrichment must be accompanied with policies making it less unequal through tackling its real causes and not being based on redistribution, which have already reached a summit if we compare them to what is done in other countries. It contributes to prosperity and it would not be put into question by punitive policies which generally are only creating losers. The objective must be to have more winners and not to have less big winners.
The wealth data also give a different vision of the financial situation of the country and of its public indebtedness. Since the adoption of the Maastricht criteria, we have taken the habit to compare the public deficit and indebtedness to the GDP. But the fact to compare a flow, the yearly production of a country, to a stock, its debt for instance is not appropriated. It is not the production of a country or the revenues of a person which give a good assessment of their reimbursement capacities, except if that last one has no assets. To assess France solvability from the comparison of its public debt and its GDP may lead to a wrong judgment.
What guarantees the solvability of a country, it is its inhabitant capacity to reimburse its debt, a capacity which, in first resort, can be evaluated from the liquid financial assets they detain. We arrive then, in the case of France, at a very different appreciation. The net public debt, according to Maastricht method, from which have been removed the liquid assets, has not progressed sensibly faster for ten years, than the household financial assets from which have been removed consumer credits.
In 2012, according to the adopted definitions, the household financial assets represented 4242 billion and the public debt 1675 billion, i.e. a ratio of 39.5%. In 2022, the corresponding figures were 6360 and 2671 billion, i.e. a ratio hardly superior of 42%. Public indebtedness may be considered as too high, it a political choice issue, but it doesn’t put into question the country solvability. Regarding the message according to which the debt would be transmitted to the future generations, it might be accompanied by the message according to which they will inherit of the money to reimburse it.