You might be tempted to assume Britain holds the dubious accolade of being the most indebted nation in Europe, when it comes to households. But, in cash terms at least the perhaps surprising answer is that German households owe more than any of their European neighbours. The evidence can be found in this recent European Parliament paper, and the chart which underlines this is this one.
Now, I’m being slightly disingenous here: Germany has a considerably larger population (82m) than the UK (61m) or Spain (46m), so perhaps it’s not a surprise that it has a larger stock of household debt than other nations in Europe.
Nonetheless, even when you compare household debt to disposable income (a pretty good yardstick of how overextended families are), it isn’t as if Germany is a paragon of economic virtue. The chart below shows that Spain has by far the most overextended households, with debts worth over 90pc of their annual disposable income, followed by the UK at around 75pc. But it is striking that Germany actually has more overextended households than Greece, and although its position is improving (while others have seen their indebtedness worsening), it remains severely stretched.
Now, clearly one of the provisos is that whereas Britain and Spain have enormous government deficits as well as their household ones, Germany is less exposed fiscally. Moreover, because of its export industry, it does not have to rely on foreigners to lend it money (it has a current account surplus rather than deficit). But it is worth remembering, if you hear anyone trying to argue that Britain, Spain et al are the worst offenders when it comes to household debt, that even our Teutonic neighbours have their own burden.
BY EDMUND CONWAY-TELEGRAPH
Posted in: WORLD SOCIAL MEDIA