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How can Europeans afford to live in Europe?

How can Europeans afford to live in Europe?

Jan 27th, 2007, 06:15 AM
Join Date: Dec 2006
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If you need ammo to convince your husband to take you to Europe for a vacation, please don't worry yourself about how Europeans "can afford to live in Europe". Instead, do some research and come up with a plan for a wonderful trip to Europe within a budget you can afford. Once he learns of some actual costs and of all the possibilities, maybe he'll come round to the idea.

How much do you normally spend when you go on vacation? There's a number you already know he is willing to fork out, so it's a good place to start even if you end up needing to stretch it.

Going to 1 or 2 cities for a couple of weeks in Jan, Feb, or March probably costs much less than your husband thinks. You could rent an apartment, shop at markets (food in many cases is not only of a higher quality but cheap, too) Some cities have museum passes, and museum admissions are very reasonable. Walking is free, and sitting all afternoon or evening in a cafe costs only the price of your drink.

If the ol' skinflint STILL refuses, contrary to the evidence put in front of him, then recruit a girlfriend or go alone! You'll have a great time, and maybe it'll give him something to chew on, to boot.
Apres_Londee is offline  
Jan 27th, 2007, 06:26 AM
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Import tax on textiles is 12.9%, VAT on the total amount is 19%. Import quotas are in place. Sums up to 34.35%
logos999 is offline  
Jan 27th, 2007, 06:27 AM
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Linda, you requestion is not stupid at all. As an American expat living in Switzerland, we constantly ask how the Swiss can afford to live here. The house I am renting costs about $5,500 per month and it is a small 3 bedroom townhouse...very small compared to US standards. Food, even in the grocery stores, is outrageous. I can buy a pound of chicken for 1.99 in the US...here it costs at least 3-4 times that. We rarely eat out, I wait for business trips back to US to buy all our clothes, shoes, etc and gas is outrageous. However, this is the most fantastic experience of my life!!! As we don't buy clothese or go out to eat, we use all that money for traveling and enjoying Europe. I can't say it strongly enough...stop buying things you don't need and putting it your massive house and get yourself over to Europe...it is an incredible continent filled with unbelievable history and artwork, beautiful architecture, amazing people, fantastic food (not to mention the wine),lakes, mountains, oceansetc. etc. Your memories will last far longer than those pair of shoes....and that is how Europeans can afford to live in Europe!!
swissgirl is offline  
Jan 27th, 2007, 06:29 AM
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To go back to the original question:

People who live in a place don't have a tourist lifestyle, in accommodation, food and drink, or trips and visits. A tourist in London probably goes to the theatre more often in a week than most Londoners do in year (or a lifetime in many cases). You visit places like the Tower of London as often in your lifetime as we do.

Most residents, in all parts of Europe, don't live in tourist areas, and there are very different average levels of income and expenditure across different parts of the continent, so it's hard to generalise - particularly when it comes to things like housing (where there are also different cultural expectations about family, about how much space one should expect, about whether one should buy or rent, and so on) or eating out.

I can afford to live in London because:

(a) I stayed in the same flat long enough to pay off my mortgage when I sold it and moved (but there's a real problem for people to get on the property ladder anywhere in the south-east of England without a long commute)
(b) I don't have a car
(c) I don't do restaurants very often, and pretty close to home when I do
(d) I don't do expensive entertainments very often (I've been to theatres maybe half a dozen times this year)
(e) I'm not out at the pub more than a couple of times a month
(f) I try to use home exchange for foreign travel
(g) I take advantage of free things, like the museums and the public library
(h) I'm not exactly a dedicated follower of fashion when it comes to clothes.

And my earnings are more or less around the average for the UK (though I had a good few years in one of those middle management jobs that were once summed up in C Day Lewis's poem as "Sit on your arse for forty years, and hang your hat on a pension". But if I were thirty years younger and starting out, I wouldn't be able to afford my present lifestyle and a mortgage (and certainly not for the kind of flat I'm in now) - something would have to give. It's particularly a problem for young people: "key workers" in public services get a certain amount of help towards buying property near where they work, otherwise my niece would never have been able to afford to teach in a tough inner-city school, for example.
PatrickLondon is offline  
Jan 27th, 2007, 06:30 AM
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Linda, I didn't mean to imply that you waste a lot of money on things...I just meant that Americans in general do this (I, myself, am guilty too)....obviously, I know nothing about your circumstances...didn't mean to offend!!
swissgirl is offline  
Jan 27th, 2007, 06:30 AM
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"I wonder if you could elaborate on the differences in the way Europeans approach home-buying as compared to Americans."

Well, no. Europeans differ massively from each other in attitudes to housebuying. In some countries, the issue scarcely matters: in Britain, and I'm told Spain recently, it's a national obsession.

So all I can talk about is Britain, and some of our provincials will probably leap in to say all I'm talking about in SE England. Our problems are:

- limited housing supply, and limited ability to extend house supply
- so economic growth usually means house prices rise faster than earnings
- and all sorts of people see bricks and mortar as a sound investment, so prices just keep on rising.

When all this gets seriously out of control (like now) the problem for many first time buyers might be close to insoluble, though as I said above I think this problem is exaggerated. But when prices get seriously out of kilter with earninghs, they will start to move down, at least relative to earnings, sooner or later.

Most of the time, what happens is:
- couples buying typically cohabit somewhere small. Many, still, find a place that'll increase in value if they put a lot of work in (you always think there aren't any left: but each generation finds a new wave).
- usually they'll go through two cycles of buy-improve-sell at higher price-take more equity to the next house and leverage on higher earnings before starting a family. Irrespective of inflation, wages rise very fast when you're in your 20s for many people
- mortgage companies increasingly understand that, over time, house prices can only go up, as long as they get their timing right. So they constantly extend the proportion of earnings they'll lend - typically 4 times gross - and the period they'll lend over. All of which, as long as interest rates remain reasonably low and the economy doesn't do anything silly, gives borrowers longer to see equity appreciate on a larger investment.

Because Britons rarely move house except for marital breakdown or to up-or down-size (ie, rarely for work: moving an office in London a few hundred yards can be devastating bevcause it messes up so many people's commute), the assumption is that most buyers will generally make their next move only when the market lets them make a reasonable profit. So htere's an element of long-termism in all this.

flanneruk is offline  
Jan 27th, 2007, 06:35 AM
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Hope I'm not getting too far off track but I believe part of the reason items are more expensive in Europe because of government control of prices set by retailers. A few years ago I worked for an American retail chain in Germany and we were repeatedly fined and issued warnings for selling goods below the minimum price set by the government or below the actual cost of the goods. Most of these were food items such as milk, bread, or household goods such as detergents, cleaners, etc. These items are loss leaders and they help get people in the stores but also keep competitors sharp, it's an open market and their is rarely price fixing by the government in the U.S. I would guess that more of an open market in Germany (not sure about other EU countries regulations) could save the average family a couple hundered Euro's a year.
jeremygil is offline  
Jan 27th, 2007, 06:38 AM
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Thanks flanner. I meant to say England.

Doesn't sound too terribly different from the urban U.S.
Cimbrone is offline  
Jan 27th, 2007, 06:40 AM
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EU Import duty on textiles isn't 12.9%.

Import duty on some clothes, from a handful of countries is 12%: on textiles, and some other clothes, it's a great deal lower - usually 5 or 6%

VAT is charged at the same rate on all clothes, wherever they come from. So the discrimination against some foreign manufacturers (in practice, only those in Greater China, Burma and Korea, since - unlike America - we give tariff reductions to EVERY other poor country) is simply the import duty. 12% against America's 32%

Or, when bought from countries like Bangladesh, or Sri Lanks, 0% against America's 32%

flanneruk is offline  
Jan 27th, 2007, 06:47 AM
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>I can buy a pound of chicken for 1.99 in the US.<


Our local Ingles has whole chickens for $0.89/lb. Organic is $1.79/lb.

ira is offline  
Jan 27th, 2007, 06:52 AM
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In France in the early 1980s, the standard term of home loans was 15 years, with 30 percent downpayments very common. So people here at or near a "certain age" - if they own - may have struggled and stretched early on, and now may have paid off their mortgages, a big chunk of the budget in some parts of the world.

French enterprises over a certain size are required to set aside a small percentage of their revenues for use by workers committees, which among other things, arrange SUBSIDIZED VACATIONS for employees. One still pays a percentage, but not a lot.

Larger French enterprises without in-house cafeterias are required to pay 50 percent of the cost of employees lunches, up to a modest limit. This is done through "meal tickets," which you may have seen the natives detaching from the booklet and laying on the table when the check comes.

As others have noted, the costs of education and health care are lower. It isn't just that taxes are paying for health care. Drugs are generally less expensive and health professionals do not earn, or charge, as much.

Of course, there is much more to it. The consumption habits are different. the very well dressed person dining alongside you in a nice Parisian restaurant may live on the fifth floor of an apartment building without an elevator, in an apartment no larger than your family room, and may not dine out all that often.

Traveling in Europe does not need to be crushingly expensive. There are great values in Paris hotels. As lodging providers, we have guests who proudly report spending less than $800 dollars, (total: lodging, food, and sights) during a weeklong stay in what is arguably the most wonderful city in the world. This kind of thrift, which we admire, isn't for everyone. It's limited to a very small minority, but it can be done. That's where choice comes in.
Dave_in_Paris is offline  
Jan 27th, 2007, 07:09 AM
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Comprehensive info on import taxes here:
logos999 is offline  
Jan 27th, 2007, 07:11 AM
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A few years ago I worked for an American retail chain in Germany and we were repeatedly fined and issued warnings for selling goods below the minimum price set by the government or below the actual cost of the goods.

Isn't the latter called dumping?
Pvoyageuse is offline  
Jan 27th, 2007, 10:17 AM
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A combination of 3 factors:

Europeans are paid in the local currency - so their income hasn't lost 30% of it's value like the income of anyone being paid in US$

Europeans in general do live more modestly than Americans - generally their houses are smaller/simpler, they have fewer cars per household and they're usually small and not gigantic expensive gas guzzlers. And they rely on inexpensive public transit much more than we do.

Although europeans do pay much more in income taxes than Americans they also receive much more in the way of benefits (income taxes are used to pay for schools, universities, medical care etc - not massive spending on "defense")

It's true that food is more expensive in comparison to ours (ours in the cheapest in the world) but other factors listed above more than make up for it.

(And the cost of food is certainly not a reason not to travel to europe - you can eat just as cheaply there as here if you stick to simple places.)
nytraveler is offline  
Jan 27th, 2007, 10:51 AM
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"A few years ago I worked for an American retail chain in Germany and we were repeatedly fined and issued warnings for selling goods below the minimum price set by the government or below the actual cost of the goods."

Sounds like Walmart.

Not being able to offer loss-leaders is one of the reasons Walmart sold out and left the German market.
Lovejoy is offline  
Jan 27th, 2007, 11:35 AM
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Bob the navigator.....spot on!! Why do Americans (usa) think of Europe as one country. If you put this question (the post title),to every European country,you would get a different answer each time.
If you want to fly in a plane that is half empty, then it might cost more than one which is at full capacity....at least, that's how it works in Europe.
Take a look at Mrs Beetons Houehold Management!
Live more simply than Americans??? Please elaborate......this could be most entertaining!
I think hubby is 'kidding you'!!!
LeighTravelClub is offline  
Jan 27th, 2007, 12:09 PM
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Just maybe, the difference in social classes isn't as visible in the US as it is over here. Everybody rides the same train (in 2nd class btw.), and in fact dresses similar, but you only talk to and meet people of "your" kind. The others share the same space but not a common ground. As a foreigner, you're likely not to recongize those "small?" differences and might get the impression of a "classless" society. The differences in the German society are in income and status are huge. It has been like this for centuries and hardly will ever change.
logos999 is offline  
Jan 27th, 2007, 12:14 PM
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> isn't as visible in the US as it is over here.
as visible over here as it is in the US of course.
logos999 is offline  
Jan 27th, 2007, 12:14 PM
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Lovejoy - I thought that the main reason Walmart left Germany was the difficulty in competing with already existing Metro and privately held Aldi.
It has also struggled against Tesco in Britain.
robjame is offline  
Jan 27th, 2007, 01:32 PM
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robjame-Well as I said its one of the reasons they pulled out. According to published reports it seems the hillbilly culture just didn't seem to fit well with the German populace.
All kidding aside it appears that it was a combination of culture clash,and simply lacking the scale to compete effectively against the likes of Aldi and its ilk.
Lovejoy is offline  

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