EUROPEAN UNION HOUSEHOLD DEBT

The phenomenon of households becoming indebted is natural and common in developed countries with modern financial systems. Over the last decades, the attitude to credit has changed and it has become a part of a modern consumer society. Households accustomed to living on credit, and they treat it as an ordinary resource in a household economy. The indebtedness of households in the EU countries can be monitored on the basis of data from the European Union Statistics on Income and Living Conditions (EU SILC), data from the European Credit Research Institute (ECRI) and from Household Finance and Consumption Survey (HFCS). The HFCS provides detailed household-level data on various aspects of household balance sheets and related economic and demographic variables, including income, private pensions, employment and measures of consumption. In this paper we applied cluster analysis techniques to detect some basic patterns in 20 EU Member States in terms of the degree of household indebtedness using the data of the project HFCS.