Borrowing for social security? Credit, asset-based welfare and the decline of the German savings regime

In the course of the financial crisis and with its preceding increase in private indebtedness in mind, a rising number of scholars have argued that loans to households have become a central component of contemporary welfare states. On account of high levels of public welfare provision and comprehensive savings-promotion schemes, Germany has usually been understood as a counterexample to the debt-sided financialization of everyday life. This paper argues, to the contrary, that one can observe the rise of credit-based social policy in Germany due to the gradual erosion of savings-promotion, the expansion of quasi-public loan schemes and the restructuring of the welfare state since the mid-1970s. Within the current low-interest rate environment in the Eurozone, this development might well challenge the traditional savings-oriented trajectory of the German political economy.