The gap between rich and poor in Germany is widening with at least four million people living in poverty, according to a government report issued yesterday. More than 13 per cent of the population, or 11 million people, earn less than 60 per cent of the average income. Some 2 per cent or 1.7 million German families have an income double the national average while three times that number of families live solely on social welfare. The 300-page report is a snapshot of life in Germany based on statistics from 1980 until 1998, the year the Red-Green government took office. For that reason the government was spared harsh criticism, but yesterday's report could hinder plans to tighten up the social welfare system to force long-term unemployed to accept jobs rather than life on Germany's generous unemployment benefit. The report classes some 13,000 Germans as income millionaires, with an average income of around DM3 million (€1.5 million) while 1.5 million Germans are considered capital millionaires.

Private capital in Germany totals DM8.2 billion (€4.2 billion), according to the report, with 42 per cent of this capital in the hands of 10 per cent of households. A decade after German unification, the report laid clear the economic differences that persist between east and west. The average western German household has an annual income of DM61,800 (€31,600), one fifth higher than the average eastern German income of DM47,400 (€24,200).