Head to the checkout at an Ikea in Stockholm to pay for your new leather corner sofa and with the swipe of a Visa card it’s yours. Don’t try that in Berlin, that’ll be €1,699 ($2,080) up front please.
It’s that financial culture — a deep-seated aversion to debt and an emphasis on responsibility— that makes chancellor Angela Merkel's hardline approach to solving the Eurozone crisis so popular in Germany.
The attitude shows up in all walks of life, from the daily trip to the grocery store to putting a roof over your head.
Even though Germany is Europe’s largest economy and one of its richest per head, it is last in home ownership with just over 40%. That compares to some 80% in troubled EU nations like Greece, Italy and Spain, and around 70% in Britain and the US, where owning your own home is part of the “American Dream.”
Germans tend to be instinctively averse to taking out a mortgage. And lenders often demand a 20% down payment on a house or substantial collateral. So a culture has sprung up of just renting and holding on to cash.
The German aversion to debt also translates to credit card use or non-use. Only 36% of Germans over the age of 15 even possesses a card, compared with 62% in the US, according to World Bank figures.
Around the world Merkel has been derided as intransigent in her approach to the financial crisis, demanding budget cuts and fiscal austerity from allegedly profligate EU members. But her hardline stand plays well among voters. A Stern magazine poll shows 64% of Germans think Merkel should stick to her guns while only 32% think she should reconsider her insistence on austerity.