Italy’s 2013 elections have raised serious new questions about that county’s ability to resolve its complex economic issues. The re-entry of former Prime Minister Berlusconi and his party into Italy’s political power base as well as the unexpected 25% of all votes’ victory by the new Five Star party, headed by comedian Beppe Grillo, create a political tragi-comedy worthy of a Fellini classic.
As one on the cusp of a departure for a month’s travel to this beautiful country, I am consoling myself that the Euro– though remaining fairly strong– is at least falling against the dollar from a recent 2013 high of close to 1.35 per dollar to current retreats closer to 1.30 per greenback. My hope is that Italy’s political uncertainty of the next few weeks or possibly months may create just enough tension to halt the Euro’s rise and even create a small drop. This gives US traveler’s a bit of an advantage against a currency that started out on par with the dollar and quickly overtook it by as much as 1.5 : 1 and more at some times.
The last 12 months have seen a mercurial Euro spanning an exchange rate of from a low of about 1.22 to the dollar to a high around 1.37. This means that a traveling couple having a lovely meal in an outdoor restaurant in Rome, for example– or even Madrid, Paris, or Berlin– could save as much as $17 on a 140 Euro restaurant bill or about 12.5%. Add similar savings to the cost of train tickets, taxis, hotel rates converted into dollars and, to paraphrase the late, great Illinois Senator Everett Dirksen,”… pretty soon you’re talking about real money.”
Additional ways to take full advantage of falling Euro rates include:
- · Use ATM’s in Europe so you get the bank’s best rate of exchange instead of exchanging currency in banks, or, worse, in so-called “commercial” exchanges.
- Look for and use an ATM card with the lowest possible fees for using the machine
- · Use credit cards for purchases but only those with very low or preferably NO foreign currency transaction fee like Capital One, for one example. The Andrews Federal Credit Union card (available even to non-members for a small one-time fee) is one of the very few that has the computer chip right in the card as opposed to the magnetic strip all US cards usually have. Pretty soon the magnetic will be unacceptable in Europe, and already many automatic purchase places (eg. train station kiosks) may reject your US card.
- If you make major purchases (over 150 Euros usually) be sure to save your receipts and get you Value Added Tax (VAT) back at the airport or point of departure. Check the EU countries you will visit on this link for information on how to do this
I wish Italy well in its struggle to regain economic equilibrium, as we and other countries struggle in similar ways with economies pulling the fiscal rug out from under most of us. In the meantime, however, the falling Euro represents– at least for a little while– the proverbial silver lining behind the dark economic cloud.
Travelers have every reason to use that to their advantage, so, Buon Viaggio!