Living in Germany: fascination with saving money
A small exhibition recently opened in the German Historical Museum in Berlin all about Germany’s love of saving money. It might have had a mundane sounding title, “Saving – History of a German Virtue”, but it provides an interesting insight into what is a deep-rooted national obsession.
Saving has a long history in German society. The first savings bank opened in 1778 in Hamburg. By 1836, there were more than 300 of these savings banks operating in the then German Confederation.
There is plenty of evidence in the exhibition that the concept of saving was established as a virtue from this period, through the Weimar Republic, which followed World War I, then in the Nazi era and after World War II on both sides of the Berlin Wall. Saving became an essential part of the country’s tax planning, welfare provision and social policies.
Legacy of Saving
The legacy of this virtue has made Germans the top savers in the world. Households consistently saved more than 8% of their disposable income over the last two of decades, according to OECD data. The last time UK households came close to the German savings rate was in 1995. By 2015, German savers keep an equivalent of 9.96% of their disposable income in the country’s 400 savings banks. British — on there other hand — were merely at 0.16%.
Understanding the German obsession with savings is important when one wants to understand German attitudes towards domestic and European policies. For example, since 2012 the main European Central Bank interest rate has been below 1%, and in March 2016 was reduced to 0%. The reason for these low interest rates, along with large programmes of quantitative easing, was to stabilise the European banking sector and to encourage lending, spending and economic recovery.