As someone who has spent much of his working life bridging the gap between Germany and the UK, I would like to thank you for your insightful and entertaining series on Germany (The accidental empire). Few Britons probably realise they share a love of allotments with the Germans. And your portrait of the thrifty Swabian housewife, with a tradition of abhorring waste, also gave clues as to why the green movement gained far greater traction than in the UK.
However, in describing how Germans save a one-third deposit before buying a house, it is important to understand that this is enforced by law, since the Pfandbriefgesetz, which regulates the issue of mortgage-backed bonds by banks, restricts the maximum loan-to-value on eligible collateral to 65%. Such a statutory cap remains political taboo in the UK (though ironically the British authorities never hesitated to use it in Hong Kong), but, alongside rent regulation, has been the key to a stable, affordable housing market in Germany.
Larry Elliott fairly observed (Why one country carries so much clout, 18 September) that German banks were not immune from the “reckless investment decisions” of US or UK banks abroad, but is completely wrong in his conspiracy view of German banks pumping up “housing bubbles in Spain and Greece”. Nord LB’s own exposure amounts to 5% of all credit extended globally – and the bailout of Bankia in Spain points to the inconvenient truth that their property bubble is overwhelmingly home-grown.
Ill-advised purchases of portfolios of US mortgage-backed securities by several banks including West LB (which are now being wound up) triggered the German banking crisis of 2007-08, not exposure to Europe’s peripheral economies.
Senior credit executive, Norddeutsche Landesbank, London
• David Blunkett is wrong to criticise Germany as “imperialist” for its refusal to consider a renegotiation of debt bailouts, which the Greeks voted for in their general election (Report, 17 September). A key theme of the eurozone crisis has been the clamour of countries in fiscal difficulties for Germany to shoulder more of the financial burden with higher debt guarantees. Leaving aside the question of whether Germany even has the capacity to do this, it is politically inconceivable that Chancellor Merkel, who is answerable to German voters, could simply accede to such a demand solely because Greek voters desire it.
This criticism rings particularly hollow given that the UK itself has steadfastly refused throughout the crisis to step in and commit to either the EFSF or the ESM rescue funds.
Professor Simon Green
Co-director, Aston University Centre for Europe
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