Euro Falls To A 9 Year Low

Gabe

Gabe

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Nov 9, 2014
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Will the fall in the value of the Euro help tourism in Italy and other EU countries? Money goes further, but at a cost. The flip side is that businesses will have bought goods at a higher price and have lost value, so businesses will struggle.

While tourists from non Euro countries may benefit, many Euro countries may feel the effects by the summer holiday period and that isn't good for tourism or trade. This is not a good time for the Euro, so maybe countries do need to consider an exit plan to protect themselves?
 
I think tourism from the US may improve as the country is some what stable and those who have jobs and income are back to leading normal lives and taking vacations. It is unfortunate for those business that may feel the brunt of the economy. Hopefully increase in sales from tourists may make up for it some what.
 
They say it's a good time to buy property that is priced in Euros, so there may be a boom in house sales because of this across Europe? It is hard to predict what will happen, but the slump will take a few months to make an effect and retailers profits will be lost, but perhaps not with fellow Euro countries. If a recession occurs then that will be bad news for the whole of Europe, hopefully people will have learned and not to over extend their lines of credit.
 
Housing markets vary a lot over Europe and a lot within Italy. Housing prices have dropped quite a but in Itsky but now because of the Euro, but taxes. As a response to the economic crisis Italy imposed a heavy tax on those with second homes. This seems like it would only affect the richest but it fact has been devasting on normal families who are barely getting by. For example, my husband's grandparents but a 6 apartment complex for the family. Aunts and cousin occupy the apartments. When the grandparents died the apartments went into the name of my father in law. Usually you would think that then my FIL could just put the extra apartment into my husband's name but that would cost upwards of 8-10,000 euro that no one has to change the name. And now with this new tax it's an extra 5000 per year (more depending on the properties) they have to pay. How is this helping people who worked all their lives and aren't getting paid regulary from thier employers??? Italy is a mess which is a big reason we got out.
 
That would be good for trades and tourism, but I cannot imagine that it would be good for the everyday European... And to think that countries like Bulgaria are switching to the Euro (or are supposed to) this year. I wonder if a lower Euro value would benefit them or the opposite...
 
Joie d'Etre said:
That would be good for trades and tourism, but I cannot imagine that it would be good for the everyday European... And to think that countries like Bulgaria are switching to the Euro (or are supposed to) this year. I wonder if a lower Euro value would benefit them or the opposite...
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The drop is fairly drastic and not a couple of cents, so the effects will be seen in the next couple of months. I don't know much about Bulgaria, but the days of the Euro are on thin and melting ice, so if you are not in, it maybe be better the devil you know. I am sure there a few countries behind closed doors that wished they hadn't joined so other countries about to join should really weigh up things before opting in. If there are people wanting to get out, it would be unwise to not evaluate why they want to.
 
I think that from the economical point of view the Euro dropping is good news because this means more exportations. In the last week the price has been stable though, at 0.85USD, but I would mind that the Euro price dropped more.
 
Gelsemium said:
I think that from the economical point of view the Euro dropping is good news because this means more exportations. In the last week the price has been stable though, at 0.85USD, but I would mind that the Euro price dropped more.
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I think you've got it backwards? It's around 0.88EUROS for 1.ooUSD, not the opposite. So 1,13USD/euro. Which is really low.

And yeah. And euros used to be such a force to reckon with. I was at first thinking, "Well, if the lev changes to Euro, the exchange rate will be good and they will not loose out too much!" but yeah, long term, it might not make much sense in a crumbling economy...
 
In business it is bad, because how most businesses work, they buy at a price and then are invoiced later and pay 30 days afterwards, so companies are paying more for goods that are worth less. Currently it is 0.74 pounds to the euro and 1.13 dollar to the euro which was 1.4 at the end of last year. Basically orders made last year and now that are to be paid will have devalued stock. It's like going to store to buy something at full price and you paid a deposit, but the item goes on sale, but you still have to pay the full price because you agreed and paid a deposit for that price.
 
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It should certainly attract visitors that are dollar-denominated, as it's simply looking a lot cheaper than a year ago. It should also attract more foreign investment as well. These dynamics could have an interesting long-term impact on the country.
 
Onionman said:
It should certainly attract visitors that are dollar-denominated, as it's simply looking a lot cheaper than a year ago. It should also attract more foreign investment as well. These dynamics could have an interesting long-term impact on the country.
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True, it will attract dollar visitors, but I doubt any business would want to set up where the currency is unstable and that has fallen. Companies go where the costs are low and the currency is stable and with favorable tax laws. Foreign investment would probably steer clear or be apprehensive, especially when the EU laws are so fickle and with talk of the Euro being scrapped, I am sure there are better places to invest in.
 
Joie d'Etre said:
I think you've got it backwards? It's around 0.88EUROS for 1.ooUSD, not the opposite. So 1,13USD/euro. Which is really low.

And yeah. And euros used to be such a force to reckon with. I was at first thinking, "Well, if the lev changes to Euro, the exchange rate will be good and they will not loose out too much!" but yeah, long term, it might not make much sense in a crumbling economy...
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LOL, so now you really got me thinking, I am a little confused about this, but one thing is certain for me, the euro is worth more than the dollar, so basically the dollar is 0.85 from the euro as today I think.
 
Gabe said:
True, it will attract dollar visitors, but I doubt any business would want to set up where the currency is unstable and that has fallen. Companies go where the costs are low and the currency is stable and with favorable tax laws. Foreign investment would probably steer clear or be apprehensive, especially when the EU laws are so fickle and with talk of the Euro being scrapped, I am sure there are better places to invest in.
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I think it will still attract bargain-hunting investment, such as from China. Their investments in Africa have been in countries with less stable regulatory environments than Italy, but there are end-to-end benefits in investing in the region, linking raw materials with manufacturers. For Italy, it's more likely to be access to mainland Europe and key Italian specializations. China has already been doing this.

http://qz.com/280247/china-is-buying-up-italy-one-company-at-a-time/
 
Onionman said:
I think it will still attract bargain-hunting investment, such as from China. Their investments in Africa have been in countries with less stable regulatory environments than Italy, but there are end-to-end benefits in investing in the region, linking raw materials with manufacturers. For Italy, it's more likely to be access to mainland Europe and key Italian specializations. China has already been doing this.

http://qz.com/280247/china-is-buying-up-italy-one-company-at-a-time/
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China does buy up companies, but also have a foot holding in the EU helps with import tax so it can be more profitable from that point of view already if they own companies that are part of their corporations. As China has disputes with the WTO, this is one way they can get around things too, but it is good for the Italians, but whether it will bring in new jobs, that is another matter. they may be saving jobs, but creating new jobs is how an economy survives.
 
Unfortunately, the fall of the Euro does not mean cheap holidays this summer. If you're wondering what it means, this analysis written in Q&A style from The Guardian might help you understand it. For me it means that it's a good time to save money, but a better time to make money. But maybe there are other advantages.
 
It will be cheaper for everyone coming from outside of Europe, but if we do want to go outside it's more expensive. As for me, I want to go to Italy, but as I am in Portugal I think the price will be the same regardless of Euro variation.
 
I really do feel like this could increase tourism in Italy due to the lowering of the cost of visiting. However, like said above, the businesses will begin to struggle because of the economic loss. It is a win-lose situation that can benefit people, but will mostly be a downfall.
 
And the euro keeps dropping and dropping. I don't know about tourism, I feel that people visiting Italy will feel the prices more expensive, so the effects on economy are a little confusing at this point.
 
Gelsemium said:
And the euro keeps dropping and dropping. I don't know about tourism, I feel that people visiting Italy will feel the prices more expensive, so the effects on economy are a little confusing at this point.
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That depends on where they are from! Basically US tourists and ones form the UK will have 15% more spending power as the Euro is so low, the lowest for over seven years. It will only seem expensive if you are from a Eurozone country.
 
That's true, when they come to Italy the US dollar will be worthing more so they can spend more, so it's good for the economy. Just for us in the Euro zone everything will be more expensive.
 
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