Fwd: Germany

'As the euro zone hurtles toward a fresh crisis, Germany is often portrayed as Europe's stern paymaster, strict and unyielding with countries that fall short of its standards.

But if you think Germany is tough with Greece, you should see how it behaves at home.

The current dilemma now facing Europe is partly an outgrowth of Germany's own countrywide obsession with avoiding excessive debt.

It's a focus born out of long historical experience, which has helped to turn responsible spending into both a personal and a civic virtue. Germany is a place where cash remains king; some retail outlets, including IKEA locations, don't accept credit cards.

At the national level, the German federal government recently balanced the budget for the first time in 45 years. Starting in 2016, it will be bound by a constitutional measure restricting its borrowing, something known as the "debt brake."

The unwavering focus on fiscal discipline is a source of consternation for those who see Germany's debt phobia as unhealthy for Europe and for its own future. In an era of ultra-low interest rates, they say, Germany should seize the chance to borrow cheaply and use the funds to update its infrastructure and make an investment in long-term prosperity.

"We are not in a situation where the balanced budget should be the first priority," said Ferdinand Fichtner of the German Institute for Economic Research in Berlin. "It would make more sense to take a bit more money and invest in public goods."

But such arguments have found little traction so far within the German government. 

http://www.theglobeandmail.com/report-on-business/international-business/european-business/at-heart-of-new-euro-crisis-germanys-obsession-with-debt/article22740448/