3 ms·

Public finances are only stretched because the German government (and the electorate) has a weird aversion to taking on new debt. If she wanted to, Germany coul

• chvid 11y ago
  The money still would have to be paid back. Secondly interest rates are low due to low inflation masquerading a higher real interest.
• tomp 11y ago
  However, Merkel also pushed new EU legislation, so the government cannot help the bank (even if it has unlimited money) until depositors are bailed in. Currently, however, Italy is trying to find a loophole, that Germany might use as well later.
• kriro 11y ago
  1) I'd hardly call them stretched. 2) I wouldn't call it a "weird aversion". Weimar Hyperinflation (and the consequences) is still in the public's heads. Compared to other places I have lived people in Germany are indeed more reluctant to debt-finance things in general and "save before buying". I think it's a fairly healthy base attitude (but I'm probably biased being German). It's less valuable currently with near 0% credits everywhere but as a base mindset it helps avoid the trap of not finding a way to generate the expected revenue streams eventually.