Americans cope as euro hits new exchange record
July 17, 2008
As news on the U.S. economic front worsened, the dollar dropped to a new low against the euro in mid-day trading Tuesday, sending the cost of a euro at military banking facilities to a record high $1.6407 on Wednesday.
The dollar-to-euro exchange rate was relatively stable through May and June, but in the past week crept toward rates last seen in late April, when the dollar last dived to record lows.
Because of the greenback’s woes, off-base jaunts for everyday activities — such as going to the movies or the gelato stand — are now as fiscally unattractive as they ever have been for Americans stationed on the continent.
Nevertheless, at least some Americans in Europe aren’t pinching euro pennies just yet.
"For me, not so much (impact) yet," said Elizabeth Meggett, who moved to Germany six months ago with her husband, Air Force Maj. David Meggett, and their 3½-year-old daughter, Ashley.
The Meggetts recently took a three-overnight trip to Baden-Baden, Colmar and the Bodensee.
"I am still new here and enchanted by it all — ‘Hey, I’m living in Germany,’" she said. Exchange rate or not, they only have so many dollars to spend, she added.
"Instead of taking a trip every month, we might take a trip only every other month, but we still enjoy ourselves. But I don’t know anything different (than the poor exchange rate)."
Cost-of-living allowances — which, like the euro, are near record highs — help foot part of the bill for such excursions. But they don’t cover everything, and aren’t intended to. COLA and post allowance rates in countries that use the euro are poised to rise in coming weeks if the dollar doesn’t improve.
Dave Doran, a civilian employee who has lived in Stuttgart for 20 years, said he doesn’t sweat the smaller off-post purchases, such as those for milk. But his wife drives a Germany-registered car, and the cost of filling up its tank at off-base prices is something they have to keep an eye on as the dollar plunges and gas prices skyrocket.
Another Stuttgart couple said they moved back on post because of the escalating cost of living outside the wire.
Eric Jones, who is going to be a senior at Patch High School, doesn’t yet have to worry about housing expenses or filling his gas tank, but the paycheck from his summer job doesn’t stretch very far in the German stores downtown.
"I like to buy shoes and clothes," Jones said. He’s turning to a tactic many Americans in the U.S. are using in the slow economy: "I buy fewer things."
"And if you want to get something to eat for 3 euros (such as a döner), it’s really 5 dollars. You’re losing money," Jones said.
Stars and Stripes reporter Charlie Coon contributed to this report.