Inequality in southern Europe remains high and greater than before the debt crisis

Inequality in Southern Europe remains high, surpassing pre-crisis levels, primarily due to the housing market collapse during the sovereign debt crisis. Economists from the ECB noted that while inequality in the eurozone returned to pre-crisis levels by 2017, it remained elevated in the most affected countries. The decline in property prices significantly impacted households, especially those with mortgages, leading to a decrease in net wealth. Although property prices have gradually recovered, the lower homeownership rates in these regions meant fewer families benefited from this recovery. The COVID-19 pandemic temporarily stabilized inequality due to government support, but rising inflation from 2021 to 2023 has further strained low-income families, diminishing their purchasing power.