dan

Now that the lira, the franc, the mark, and all the others are no longer in effect, how will this affect European visitors traveling from country to country budgetwise? Will certain countries be better deals than they may have been before? Conversely, will some countries be not as attractive from a 'tourist's budget' viewpoint?<BR><BR>Intuitively, I might think the 'weaker' countries [exchange rate-wise] like Italy and their lira would become not as good a value for a tourist, while Switzerland would seem not as expensive as before. any thoughts?

Sjoerd

While prices for some goods (cars) will have a tendency to get nearer to each other, prices for other goods and services are not much affected by the euro. The tourist cities in Italy have never been cheap and Venice is one of the most expensive cities in Europe. Amsterdam is about 25% more expensive than a small town just 20 km away. <BR>The USD is the currency in all of the USA. But still, a hotel room in Small Town, Wyoming is much cheaper than a hotel room in New York City. <BR>So: the euro will have little effect on the cheapness or expensiveness of different countries and cities. <BR>

Gar

hi there,<BR>for shure the first thing is that prices gone up a little since the Euro started. For ex. in Germany food is about 5 - 10 % more. I think this will be the same in all other Euro-Countrys. (Swizzerland isnt one of them.) But travellers shure will safe money for not needing a lot of exchanges when going to the next country. For ex. changing back Portugal currency You lost 20 to 30 %. Greece also. This thing dont happen anymore. <BR>have fun<BR>Gar

dan

Sjoerd, I see what you're saying, but is that really the right analogy, though?<BR><BR>Remember, the states are 'United' under one common culture, one common economy, and one common government, while the European Union is a union of separate, Individual countries which now share a common currency, but little else.<BR><BR>You are correct in describing how cities are more expensive than towns 20 km away, and this is true the world over. But I think it's a valid question if one country with its Own strong currency is normally expensive, like Switzerland, and one country with a weaker currency such as Italy, were to 'join forces' and share a new currency.<BR> The answer could ultimately be as simple as you suggest, but I think there must be a level of parity establishing itself in the very near future, and that parity would naturally take away from the 'good deals' while making the pricy places not-so-pricy. But then, i could be way off, as well...

dan

and by the way, i'm a stupid dork.<BR><BR>yup, i thought for certain that the Swiss were participating, but a quick check confirms that you're right Gar.<BR><BR>[You can tell I haven't been back to Europe in a few years, huh?] Anyway, the rest of my statement remains, however... I just can't use such an extreme example as Switzerland [damn, they were an expensive visit]

Christina

I don't understand your concerns exactly, Dan. The Euro is just a different way of denominating the same amount of money. The vendor still sets the prices. The correspondence between the currencies and the Euro was fixed a long time ago, wasn't it? Barring products that are regulated in some way, doesn't the owner/vendor still set the price based on the same factors of supply and demand (and actual cost to product, of course)? I'm not that up on fiscal policy and economics, but I don't understand your point. I don't accept your analogy to the US as everywhere being identical culture and economy any more than in Europe (nor govt, true at the Federal level, but many taxes, for example, that affect hotel prices are local). There are vast differences in local economics across the US from my perspective that affect prices for the type of products that a tourist would buy (hotels, meals, car rental, etc) which is what you are inquiring about.

Bob

Each nation had its own exchange rate. For example 1.95583 marks to the euro, 6.55957 francs to the euro. When I compared that to the dollar it came out just about the same. What has happened in the real world is that people have used the change over to raise prices. I went back to check some B&B prices in France that I had checked in November and they have increased about 10%.

dan

Interesting Bob... See Christina, that's the sort of thing I'm getting at.<BR><BR>I agree with you that the US is fragmented in many ways, but I guess what I'm thinking is this...<BR><BR>When I'm hiking through Europe, and a hostel in France costs so many francs and ends up costing me about US$20.. then I go to the next country in Belgium and get a hostel in Brugges for X amount of Belgian Francs, costing me just US$8.50...<BR>But there's a difference in the currencies used, so the discrepancy can be explain a little easier since the Belgian franc isn't as strong.<BR><BR>Now with the same currency, wouldn't it make sense that the Belgian hostel owner says, "Hey, the hostels over there charge 22 euros [about $20]; why would I want to charge only 9 euros [8 dollars]? Now that we have the same type of money, my hostel should be closer in cost to the other one."<BR><BR>I know it's an in-depth economic question, becuase there truly Are many factor involved... but-- Make a little more sense with that example?

Sjoerd

Dan: but in a free capitalist economy, a hotel owner in Brugge is not competing with a hotel owner in Paris, but with other hotel owners in Brugge. By the way, the Belgian franc has been as strong as the French franc for many years. <BR>Hotels in Amsterdam are much more expensive than hotels in Rotterdam. Both cities have used the same currency since the 17th century (the Dutch guilder) and still the prices were and are very different. <BR>

Capo

Hi Dan. It may very well be -- as in the example you presented -- that the Belgian hostel may decide to raise his prices to bring them in line with the hostel in neighboring France. But the bottom line is that there must be a market for rooms at his hostel at that increased price in order for him to sustain that price increase. And, if the market for his rooms remains the same, even at this increased price, one could say that his rooms were previously undervalued.

Vincent

Actually, one factor that might explain price discrepancies is the difference in local taxes (like in the US ! ). A book is subject to 0 % VAT in the UK and 5.5 % VAT in France (which doesn't prevent French books from being 20 % cheaper than across the Channel ! ). Where we differ from the States though is in the different consumer habits which make a particular item more popular, hence cheaper in some country than in another one. For instance, Le Monde recently compared prices of different items and services throughout Euroland, and the discrepancies were quite huge. One of the items was a Europe-New York week-end (OK, not an everyday life thing, but it happens ! ). It was 40 % more expensive from Madrid than from Frankfurt because for the Germans it's more common practice than for the Spaniards. Same thing about the famous "big Mac index". MacDonald's Europe themselves recognise that it is prized, among other things, according to the level of "cultural compatibility" of the country. As an example, they said that it was cheaper in the Netherlands than in France because the Dutch consider food (especially a big Mac ! ) as just feeding material, and no special frills have been allocated to the decoration of the restaurants, whereas the French customer has to be pampered more, and the restaurants have to be made to look more like real restaurants, etc. For cars, a "foreign" car will always be cheaper than an equivalent national model, since for instance Fiat is eager to conquer the German market, whereas the Italian one is taken for granted and allows for more margins. So you see the ambivalence of the European market (united, but still national) leads to all kinds of discrepancies that should, IMO, shrink with the years and the use of the Euro.

Leslie

I think there is even a simpler answer as it relates to tourism. The Euro blossomed on January 1st. Traditionally businesses post their new rates at the beginning of the year (yes, I know that it isn't always true), so the currency is new, but the increases are probably traditional from year to year, and you may have never realized it before.

wes fowler

Interesting article in the NY Times of 1/11. Montenegro, of all places, has reduced its inflation rate from 90% to about 15% as a result of the introduction of the Euro. In 1999, having no faith in the Yugoslavian dinar, Montenegro adopted the German mark as its national currency. (Serbia, too, has unofficially established the mark, now the Euro as its national currency.<BR><BR>Marks are pouring into Montenegran banks to be changed to Euros. It's opened up a huge market for money launderers since there's no control on where the money came from or where it's going; only a personal ID is necessary to affect the exchange. Montenegro is attempting to combat the launderers by requiring anyone attempting to change more than 10,000 marks to open a bank account.<BR><BR>As an aside, something to consider in the varying costs of goods and services between countries adopting the Euro are the dramatic differences in VAT taxes charged and the tendency to "round up" the value of an item to a whole Euro. Rounding up might add significantly to an item's cost in Germany, far less so in Greece or Italy.

xxx

neat info vincent; funny how foreign cars are cheaper in europe, here in the states foreign cars are more expensive than domestic because of imports taxes and stuff.