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How can Europeans afford to live in Europe?

How can Europeans afford to live in Europe?

Jan 26th, 2007, 06:55 PM
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How can Europeans afford to live in Europe?

Hubby won't take me to Europe (we've never been) because we hear horror stories of how expensive it's gotten. Okay, here's the million dollar question: If Europe is so expensive, how do Europeans afford to live there? I've been told they live more simply than Americans; smaller houses and cars, less "stuff", etc. What about the expensive food, and other things that are so expensive? Thanks!
linda8 is offline  
Jan 26th, 2007, 07:08 PM
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linda8 I think you are pulling our leg (or your husband is pulling yours). It's expensive primarily due to the relative values of the currencies. While that's bad for us as travelers (and maybe in other ways too), it's a complex subject. For example, one could argue that the economics underlying our "weak" currency helps keep our interest rates low, helps us sell things etc... I'm not smart enough to grasp all of this "dismal science'.
billywayne is offline  
Jan 26th, 2007, 07:09 PM
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Is that all it is? Our exchange rate?
(which I've never understood..........)
linda8 is offline  
Jan 26th, 2007, 07:10 PM
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So that means it's not expensive for someone from a country with a good exchange rate? (okay, okay, so I'm a dumb blonde)
linda8 is offline  
Jan 26th, 2007, 07:16 PM
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I think there is alot of urban myths about how expensive Europe is. If you dine 5 star in your home town you will be up for big dollars. Same for hotels. And so on. Europe is no different. You can eat at your "Mom and Pop" spaghetti houses inexpensively. If you rent apartments you can do your own cooking from supplies bought at a supermarket with prices comparable to yours back home. Otherwise there is heaps of very adequate B&B or hotel accommodation in the €100 - €200 range per night. I say go for it. Once you've been you'll want to go again and again!
worldinabag is offline  
Jan 26th, 2007, 07:16 PM
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My German family lives very well because they make good money with excellent benefits!
SusieQQ is offline  
Jan 26th, 2007, 07:20 PM
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Now, Billywayne, let's not delude her. It's a valid question, because it was expensive in 1997 when the pound was $1.40, and 2002 when the euro was $.93.

Their payroll taxes are higher, and in the "old" Europe the income taxes are higher. The housing costs more per square foot, as does the land. So,yes, it's more expensive than it used to be for an American to travel there, and less expensive for a European to travel here, due to degradation in the exchange rate. But it's still expensive to live there for them. How do they do it?
tomboy is offline  
Jan 26th, 2007, 07:37 PM
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How do they do it? Is it because they make enough money over "there" to do so?

I'll bet the OP's "hubby" isn't the least bit concerned about buying something he wants regardless of the price.
Dukey is offline  
Jan 26th, 2007, 07:41 PM
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Disregarding the vagaries of exchange rates, I've always found that once I got to Europe I could travel more cheaply than I can in most US destinations.

I've had the chance this year to travel to NYC, Boston, Chicago, and San Francisco - mor domestic travel than I normally undertake in a year - and despite lots of research I couldn't manage to spend 3-4 days in any of those cities as cheaply as I can in Paris or Rome, for example.

Of course you have to factor in airfare, but I still think it's easier for a traveler to find bargains in Europe than at home.

And by and large it's a myth that food is expensive in Europe. Not to mention that locals everywhere the world throughout know how to find bargains wherever they live.
StCirq is offline  
Jan 26th, 2007, 07:43 PM
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Well linda8 lets look at it this way.

The first year that the euro was introduced as the currency for 12 Western European nations, I could exchange my money for one at a cost of 88 US for 1 euro.

My hotel room in Paris was priced at €100 per night. Given the exchange rate in 2002, the cost to me was $88.00.

Today, the exchange rate has shifted against us: €1.00 now costs me about $1.30 and that €100 hotel room has risen in price to about €120 because of increases in Paris. So the cost to me for that same room in the same hotel has gone from $88.00 to $156.00 since 2002.

I am quite sure you can grasp a price increase of $68.00 for the same item.
There are 2 forces at work here: inflation in prices in Europe and the changes in the exchange rate. Both are working against the buying power of the US dollar.

On a percentage basis, the increase in costs is 77% in 5 years time. If you were paying $1,000 a month for an apartment in 2002, and the rent increased 77%, it would be costing you $1770 today.

Get the idea?

Now if you have to ask what the euro is, then we have to reconsider the whole discussion.

bob_brown is offline  
Jan 26th, 2007, 08:06 PM
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I am inexperienced in European travel, but I do at least know what the Euro is! Isn't that short for "European"?
(just kidding)
linda8 is offline  
Jan 26th, 2007, 08:33 PM
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Well yes Bob you've made some good points but you haven't factored in that salaries/income have generally risen too thus bridging the gap.
worldinabag is offline  
Jan 26th, 2007, 08:38 PM
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Where do salaries rise 77% in five years???
Holly_uncasdewar is offline  
Jan 26th, 2007, 08:54 PM
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Holly, you are still missing the point. The cost of the apartment has obviously gone up in value because of inflation in Paris, but the 70% increase is not the inflation cost, it's the falling American dollar relative to the euro which is the biggest factor. In Bob's example, the cost of the room has only increased 20 euros in local terms.

Notwithstanding this, some places, such as Norway and particularly London are very expensive and not just because of the exchange rate. I have several friends who live in London and they all say that they their level of comfort/lifestyle has had to diminish relative to back home - but the excitement of living in London and cheap travel to Europe more than makes up for it
shandy is offline  
Jan 26th, 2007, 11:06 PM
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It's hard to make a accurate comparison as we only get an idea of 'American life' from what we see in the media, and vice versa.

Of course, the exchange rate has a big effect when you travel to another country. Local economies work in different ways. As a tourist you tend to do things more expensively than most locals. It's very hard to compare true cost of living.

for example, we can all go somewhere like Thailand and live for what seems, to us, an absolute pittance. Yet we don't say 'everything in Thailand is cheap so why isn't every Thai person living in a massive house with 3 cars etc etc etc'. Really, that's the same thing as 'everything in Europe's expensive so why aren't all the Europeans poor?'

Anyway, yes there are lots of poor Europeans. In the UK, personal debt is becoming a massive problem, it's almost impossible to be a 'first time buyer' of property these days as prices are from around 10 times average income, most of us live in much smaller properties than you do in the states (less room here) and a lot of people do struggle financially. There are many families who will never own their own home, who do not own a car, who eat very cheap food, buy second-hand clothes, won't go on holidays, etc etc. Then again, a lot of people are wealthy. There is a big range of income and lifestyle within any one society.

I do get the impression that the average American does have a higher 'material' standard of living than the average British person. That isn't necessarily the same thing as a better quality of life though.
nona1 is offline  
Jan 26th, 2007, 11:39 PM
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A first thing is to compare comparable things : for instance the prices for food, restaurants,..i read in this forum for my hometown (Paris) make me jump in surprise each time : US tourists seem to be able to find cofee for 15Euros, a 'cheap meal for 50 Euros', ... but those prices are to be found in very touristy places, not where the locals eat (or even live) :we pay 1.50 to 2 Euros for a cofee, 12-15 Euros for a 3 courses meal if we go to the restaurant (and generally eat home or in a canteen)...
Locals don't leave in hotels or short term rentals...
We don't pay the flight to go to Europe...
We are paid in Euros (or other strong currencies)
Than there is a different costs' distribution : compared to the USA cars and gas are epensive but public transport are efficicient and cheap.
Buying a house is expensive but education is free (elementary and high school) or very cheap (university). Healthcare costs a minimal fraction of what it is in the USA (or is free).
And so on
norween is offline  
Jan 27th, 2007, 12:13 AM
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"If Europe is so expensive, how do Europeans afford to live there?"

Maybe because they can't afford to move somewhere else....
More seriously, how can you compare daily expenses when you are a tourist (room, food, visits) and when you are live permanently in a country? country?
Pvoyageuse is offline  
Jan 27th, 2007, 12:29 AM
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At the current exchange rate, the average income if an American is still higher than of a German or French. So..., what are the Americans doing with their money???
logos999 is offline  
Jan 27th, 2007, 12:42 AM
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It's difficult enough to compare like with like: I've never gone to New York and been amazed at how cheap it is to be there compared with London. And my suspicion is that many of the whiners about prices here are comparing daily life somewhere most of us would pay good money never to go to with a tourist's life in the centre of London or Paris.

But like isn't like. The rules of living are very different in Europe.

We pay relatively high taxes - but they don't disappear into some maw. They pay for highly efficient hwalth services for example: Europeans, on average pay - mostly through their taxes - half as much per head on healthcare as Americans do - largely through inflated insurance handouts to inefficent providers. And we live longer.

We don't, generally, pay - or pay much - for post-18 undergraduate education. Our taxes (except in Britain) subsidise efficient and cheap public transport, so we don't need to keep forking out for cars. Our taxes fund us while we're off work, sick - or during the month or two in a working life most of us will be out of a job.

And it's not just tax where the rules of life differ between the two sides of the Atlantic. High population density, and tight conservation lawa, limit the supply of housing, so making it expensive. That doesn't stop people from buying house: it makes them adopt different strategies from Americans in using the capital appreciation from house 1 to afford the next tradeup, and makes lenders more flexible in adjusting mortgage lengths and borrowing ratios.

The result (and as someone who's relatively recently had to buy a house with zero savings, I know from personal experience that all this whingeing about how difficult it is to afford a first house is highly exaggerated) is that most people are sitting on rapidly appreciating capital assets - which, in later life they can downsize to produce a pension, a gift to dependants or just late-life mad money .

Taken together, good - more or less free - public services, reasonable cushioning during life's crises and capital appreciation mean that Europeans overall are a great deal less worried about (and therefore need to make less provision for) getting sick, getting old, getting fired, having the car break down or getting the kids thrugh college.

And the financial impact of all that is a great deal more important to most people's financial planning than whether a coffee in St Mark's Square is dearer than in its Las Vegas copy.
flanneruk is offline  
Jan 27th, 2007, 12:50 AM
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"I've been told they live more simply than Americans; smaller houses and cars, less "stuff"

My word !! You make us sound like poverty stricken refugees!!

I think a few words will answer your question.
1. Subjectivity. What's considered expensive to some may not be considered expensive to others.

2. Relative. Cost of living is usually relative to earnings.

3. Exchange rates: the current economic climate may make it somewhat prohibitive for Americans to travel to Europe due to the value of $ v £ or €.

"What about the expensive food, and other things that are so expensive"

Please !! what you consider expensive others may not.
If you find something here that is too expensive, then don't buy it..simple.
I can eat in my local pub for less than £4.00 if I want to, I can also go out and spend several hundred too.

Its really not that different.


Mucky is offline  

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