Life

Germany's Cost of Living

Probably even more than the country's advanced infrastructure, it is the legal, economic and political stability that have led to Germany's continued attractiveness for international business. The German Bundesbank has played an important role in achieving economic stability in the country. Until 1999, it managed to keep prices and exchange rates stable and inflation low. Additionally, the Bundesbank has served successfully as a role model to the Constitution and leadership of the newly established European Central Bank, which is located in Frankfurt. Within its newly defined function, the Bundesbank enables unions and employers to negotiate long-term collective wage agreements and contributes to Germany's stable growth.

The cost of living in Germany remains competitive when compared with other major Western European and global cities. Germany's Federal Statistical Office's 2008 ''Statistisches Jahrbuch'' states that German households spend a monthly average of EUR 2,089 of which 33% is spent on Housing, 15% on transportation, 14% on food, drinks and tobacco, 11% on leisure activities, 4% on clothing and shoes, 4% on healthcare and 19% on miscellaneous costs for consumption.

In its 2009 survey of the cost of living worldwide, Mercer LLC placed the German cities of Berlin, Frankfurt and Munich respectively in places 49, 48 and 47 among the 50 most expensive cities surveyed. A brief summary of the findings can be viewed here. The Swiss Bank UBS also ranked these German cities as internationally competitive in its own 2009 ''Prices and Earnings'' publication. The entire analysis of cost of living as compared with earnings can be downloaded here.