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“ Get rid of debt, like guilt, through forgiveness. ”

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DIW Berlin is one of the leading economic research institutions in Germany. Its core mandates are applied economic research and economic policy advice. 

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Adrian CHADI

Matthias KRAPF

The Protestant Fiscal Ethic: Religious Confession and Euro Skepticism in Germany. 23/04/2015






 Policy makers from Protestant countries tend to think that sins can never be forgiven, whereas policy makers from Catholic countries tend to think that sins can always be forgiven if sinners repent. In the Orthodox religion, sinners don’t even have to repent to be forgiven.

The sacrament of confession is one of the seven Catholic sacraments, whereby a believer confesses his sins to a priest, expresses regret and is absolved. Protestants, on the other hand, believe they will be accountable for everything they did during their lives.

Moral hazard considerations are more important to Protestants than to others. Protestants may have been more different from Catholics in the past than they are now; however, differences in economic views and social values persist: Protestants care more about rules.

In the modern German language, which has been shaped by Luther’s translation of the Bible, the word debt – “Schuld” – is the same as for guilt or blame.

In line with the view that Protestantism considers it a moral obligation to make up for debt, predominantly Protestant countries offer more legal protection for creditors. Catholics, on the other hand, still appear more likely to consider creditors the immoral party in debt transactions, believing that one can get rid of debt, like guilt, through forgiveness.

This can be traced back to a Catholic tradition, under which usury led to excommunication. The Calvinist Reformation has played an essential role in the development towards making interest a normal part of commerce, and interest is still more widely accepted among Protestants than among Catholics.