In order to give some context to the disparities which so bedevil relations between countries in the Eurozone, one thing we can consider is the tally of net private indebtedness to banks (i.e., the sum of household and private, non-financial corporation loan balances less their deposits). To make these truly comparable, we take into account both the size of the population (ranging from Germany’s 80-odd million to Ireland’s 4 1/2) and also Eurostat’s estimate of median household income. We also take the opportunity to widen out the snapshot so as to include the Eurozone’s Scandinavian fellow-travellers in Sweden and Denmark.

Having done all that, the first thing we see is that the legendary Belgian dentist is still busy, squirreling away his savings in the bank, ZIRP and NIRP notwithstanding. We can also see that the Germans are members of the only other nation to enjoy a surplus on this basis, if only just in their case.

Not just the herring in a pickle

That said Germans are, in fact, far from being the selfish plutocrats of popular legend. The median income enjoyed in the Heimat is only ranked in ninth place in our sample, below France and just above Ireland, so perhaps the much-reviled Teutonic penchant for thriftiness and the marked aversion to having too much of that income transferred away to those perceived to be less assiduous is not too hard to understand.

Of further note in this calculation is that the Dutch—thanks to high levels of personal debt—are barely better placed than their Iberian counterparts, being on the hook to the bank for the same rough 50% of income as are people in Spain and Portugal and, indeed, Greece. Can they, too afford to write endless cheques to bail out the rest of their neighbours?

Most remarkably of all, perhaps, is the ranking of those paragons of the social welfare state in Scandinavia. The average Finn owes a net 62% of income, his Swedish counterpart a hefty 120%, and the Dane across the Øresund a towering 200%, five-eighths of that at the personal, rather than the corporate, level.

The devil’s bargain they must face, just like the Mediterraneans, is that this over-exposure has been both fostered and made supportable by the deliberate and ongoing suppression of interest rates by their CPI- and currency peg-obsessed central bankers. One day, that will no longer be the case there, either…

The idea of ‘Scandinavian Exceptionalism’ has been subject to a deal of critical review of late, but here – in the matter of their suffocating entanglement in debt – at least we can still offer them the palm.

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