View from Vitalia: this time actually from Vitales Land
The technology of prosperity differs considerably from the rusty mechanisms of vulgarity and greed.
My latest ‘After All’ column for E&T magazine (issue 7/8 2019) was about Liechtenstein, an Alpine mini-principality that, with its astounding per capita GDP of nearly $170,000 (compared with just over $43,000 in Britain), qualifies, according to some estimates, as the world’s wealthiest country.
But how about separate settlements: cities and towns, villages and hamlets? Is there a place that can be called the world’s wealthiest spot?
The answer is yes, and I had a chance to visit it briefly some years ago. It is Jungholz – a tiny and fairly little-known Austrian village (population 350), surrounded by Germany and all but lost in the Bavarian Alps, in the area known as Vitales Land, which, for obvious reasons, makes it particularly attractive for yours truly.
Jungholz boasts the world’s highest rate of deposited money per person and hence the world’s highest concentration of capital – all due to being a semi-enclave (only accessible from Germany) and home to three big Austrian banks. In plain words, it is officially the world’s wealthiest spot.
I visited Jungholz in winter. Trying to uncover the technology of its wealth, I made an appointment with a young banking executive called Wolfgang. Our meeting took place in the plush (marble, wooden sculptures, winter gardens, original old masters, indoor fountains, etc) and totally empty reception hall of Reiffeisenbank.
Wolfgang told me that the attraction of Jungholz for investors lay in the fact that it had all the benefits of an offshore haven and many more.
“Here we have three one-hundred-percent Austrian banks operating within the German financial system – the best of both worlds, so to speak. All three banks have permanent seats at the Frankfurt Stock Exchange, and our clients are mostly German.”
The real allure for investors was that Austrian banking secrecy regulations, laid down in the country’s Constitution, were among the world’s strictest, second only to Swiss. Wolfgang showed me an English copy of his bank’s ‘Private Banking’ portfolio – a document that I found darkly fascinating.
It began on a somewhat philosophical note: “There are moments in life when you can’t compromise on confidentiality [like, say, when having an affair? -VV]. For instance, when it comes to your money. Our Goldfinger Numbered Account makes absolute confidentiality a reality.”
I rather liked the straightforwardness of the account name - ‘Goldfinger’, bringing about direct associations with James Bond, gangsters, international fraudsters, etc. Confidentiality made reality, indeed. Or vice versa: reality made complete confidentiality.
“The name and address of the account holder(s) are not entered in the computer system and thus do not appear on the account statements or invoices. Only selected management-level employees and those vested with special power of attorney have access to this data.”
As I continued reading, the mystery kept deepening:
“We hold the copyright on the Goldfinger Numbered Account – the only one of its kind in the world. When you open your account, your electronic fingerprint [this was where ‘Goldfinger’ came from! -VV], stored in your account, gives you that extra margin of security.”
The most amazing – and rather spooky – feature of the account was that the transactions did not have to stop even with the account holder’s sudden demise:
“Raiffeisenbank in Jungholz has no obligation to report the death of a foreign account holder to the probate courts. You can make your own individual arrangements right away by naming additional individuals authorised to sign. That way you can grant authorisation now for someone to sign even after your death.”
The late Captain Bob, alias Robert Maxwell, would have loved this financial immortality.
“Why can’t I see any clients?” I asked Wolfgang, when we returned to the fountain-ridden reception lounge.
“They seldom come here, as most of our transactions are done either by phone or by the internet,” he smiled and added: “Some of our clients come from Eastern Europe.”
By saying that, he was obviously trying to please me. Possibly, even to reassure me that I could still make it big, if I wanted to, like some of my former compatriots did. To be absolutely honest, I was not interested. I knew precisely what their East European “clients” did for a living, and that sort of ‘Goldfinger’ lifestyle was certainly not my cup of tea. At least, I was much more likely to die of natural causes.
Being poor in the world’s wealthiest place did not feel awkward. In fact, figuratively speaking, I was wealthier that many - having discovered my very own Vitales Land!
Having left the bank, I remembered that I forgot to ask Wolfgang how they were able to verify electronic fingerprints by phone or by the internet.
Not that it really mattered…
It was there, in Jungholz, that I met Charlotte – a smiling blonde receptionist of Vital Sporthaus Hotel (I swear it was the hotel’s real name!), where I stayed. As it turned out later, she was actually the shift manager, but never mind. Countless chandeliers lit up the hotel’s lobby, decorated in the style of belle epoch. It was spacious, yet warm - heated up by enormous fireplaces.
Ironically, not only the name of the hotel itself echoed my first and last names, but, as I have said already, the area surrounding Jungholz was locally known as ‘Vitales Land’, which made me wonder if I could somehow claim at least some of it back?
Now, back to Charlotte.
Initially, I took her for an Aussie, for she spoke perfect English with the unmistakable Australian accent and no-less-inimitable (for me at least) - somewhat feline - intonations. She was actually 100 per cent German, and her accent was the result of her travels down under a couple of years ago. Charlotte was an exceptionally capable linguist, also fluent in half-a-dozen European languages (“not bad for a sheila, d’you reckon, mate?” she laughed when I praised her unaccented ‘Strine’). Jungholz was certainly an unlikely place to bump into a ‘sheila’, even if a German one, but where else to expect the wealth of surprises, if not in the ‘world’s wealthiest spot’?
So here she was sitting opposite me in the Vital Hotel lobby and talking with me about Jungholz.
With just over three hundred residents spread over an area of seven square kilometres, the village was located on a flat ‘sundeck’ plateau, which accounted for the relatively warm and sunny climate all year round. It began as a small German farmstead, sold to a Tyrolean (Austrian) owner in 1342. When the first borders between Austria and Germany were drafted in 1463, the village was given to Tyrol, at which point the ongoing duality of the place began. The Germans (Bavarians) kept trying to reclaim Jungholz (peacefully) until 1773, when the frontiers were finally agreed upon. After the Napoleonic wars, the whole of Austrian Tyrol was incorporated into Bavaria, apart from Jungholz, which was forgotten and omitted from all annexation protocols. Similar to the principality of Monaco, Jungholz owed its status to a historical boo-boo.
Unable to correct the mistake, the Bavarian authorities chose to make Jungholz a tax-free haven, which it remains, if only to a certain extent: all German food in the village is tax-free, but alcohol isn’t.
During World War I, the men of Jungholz fought in the Austrian army, yet during World War II they had to enlist in the Wehrmacht, for the village had been temporarily re-attached to Germany to become part of its Sorgschrofen district in 1938-45.
In the 1950s, the village received two different phone codes—German and Austrian. Nowadays, one could dial Jungholz from Austria using the 056 Austrian area code, whereas calls from the neighbouring German villages and towns required dialling the 083 German one. Every phone number in Jungholz could be accessed by either country’s local area code, which, for some obscure reason, did not mean that the villagers could dial both countries at local rates: whereas calling Austria from Jungholz was a local call (this started in 1957, when a phone cable was stretched across the mountain—until then the village could only connect to its mother country via Germany), calls to Germany were charged at international rates. Before the euro, the village’s few public telephones simultaneously accepted Austrian phone cards and/or German coins.
Postal services were regulated in a slightly less illogical way: from both Austria and Germany one could send a letter at national rates, using either of the village’s two post codes—“D-87491 Jungholz (Oberallgau)” from Germany, and “A-6691 Jungholz (Tyrol)” from Austria, yet letters from all other countries were supposed to use only the German code.
This Austrian village, whose residents voted in Austrian elections, received its water and electricity from Germany and was privy to the superb German National Health System. The villagers were the world’s only non-Germans entitled to use the German Health Insurance Scheme. It was baffling to learn that Jungholz was part of the German Trade Area, yet somehow outside the German Economic Area, and its Austrian residents were allowed to shop tax-free in Germany, yet not in Austria (outside Jungholz).
To get employment in the village, foreigners, including Germans like Charlotte, were supposed to obtain Austrian work-permits in the nearest Austrian town of Reuter, which housed, among other things, a tiny police station, responsible for maintaining law and order in Jungholz. It took weapons-carrying Austrian gendarmes about thirty minutes to reach the village via Germany—a procedure regulated by a special bilateral agreement. The same agreement stipulated that, in cases of emergency, German polizei were allowed to operate in Jungholz, too.
The village’s only primary school offered its pupils an Austrian curriculum, taught in Allemansch – ‘High German’ – by two German teachers. Most Jungholz children continued their education in German secondary schools, which were nearer and, unlike the area’s Austrian schools, provided school buses…
As you see, at closer inspection, the world’s wealthiest spot, despite its high-altitude location, turned out to be rather down-to-earth, and the technology of its wealth – rather mundane and not at all outrageous, like that of London’s most expensive hotel suite, say. That new penthouse inside the Mandarin Oriental is (as reported by the ‘i’ newspaper last May), available to anyone prepared to pay £42,000 per night. An important detail (in case you are tempted): breakfast is not included in the above-quoted price, and will set you down a further £34 per person. Not £34,000, mind you, but some meagre thirty-four pounds!
That reminded me of the planet’s then most expensive package tour ‘Around the World in a Private Jet’, which I was invited to join (for free, as a Daily Telegraph journalist) for just eight days in 2003. The price of the full 28-day tour that would whoosh you through eight or nine major cities of the world, including London, Venice, Sidney, Delhi and such like, was $75,000 per person, and … wait for it … drinks while on the ground were not included in it either!
And here, to my mind, lies the main difference between prosperity, earned by fiscal technology and geographical location (like in the case of Jungholz), and vulgarity (or greed, if you wish) whereby one does not comprehend the sheer absurdity of charging a traveller (even if a multimillionaire) a tenner for a bottle of wine from the very vineyard the latter has just bought.
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