The exchange rate, dollar to euro, has fallen eight cents since I arrived in Germany.
This is terrific for me ““ I save 20 cents on a sweater at the flea market, 80 cents on my groceries, $20 on rent.
Before I came to Berlin, I was worried about how expensive living costs would be here ““ for months before my arrival, the euro held steady around 1.44 dollars to one euro.
But because of the weakening euro and Berlin’s notoriety as a cheap European city, my living costs here are actually less than they would be in Los Angeles.
This decline in the euro, however, isn’t a good sign for European or American economies, said Ron Rogowski, a professor of political science at UCLA.
Rogowski told me that as the euro declines, investments in the dollar increase, and the value of the dollar goes up. This makes it more expensive for the United States to export to Europe and the rest of the world, because goods become costlier, he said.
The weakening of the euro is one of the most visible results of the European sovereign debt crisis, which came to head last week when Slovakia voted against expanding the bailout package designed to save a faltering Greece.
Slovakia since re-voted on Thursday and agreed to pay their share, giving the almost 800 billion euro fund the unanimous vote it needed to pass through the European Union.
The euro was originally intended to make European Union cross-border transactions less expensive and encourage trade in one of the biggest economies in the world.
It is especially useful for travelers ““ and students abroad ““ as long as a trip is within the Eurozone. Traveling through France and Italy was easy, but outside of the Eurozone’s 17 countries, I have found the euro to be hit or miss.
Exchanging euros for Swiss francs in Switzerland, I found that stores charged the same rate, even though the exchange rate was higher.
In Prague, on the other hand, paying in euros was sometimes a better deal than using Czech crowns. One of our tour guides there said this may be because the Czech Republic wants to adopt the euro in the next five years.
The economic crisis began in 2009, when the newly elected government of Greece announced that the previous prime minister had lied about the size of the country’s debt.
In fact, Greece was about to default on all of its debts ““ a whole country would go bankrupt and threaten the euro if its debts weren’t paid immediately by other European countries.
Since then, four governments ““ Ireland, Portugal, Slovenia and, most recently, Slovakia ““ have been forced out of office by the crisis, and there is still no clear solution to save the euro.
The current rescue effort is called the European Financial Stability Facility. The 16 non-Greek countries using the euro have approved the allotment of billions of euros to reassure investors that the Eurozone countries have enough money to pay their debts.
Slovenia voted to pay 3.5 billion euros to the bailout fund in late September, after the prime minister was voted out of office.
“Even though we weren’t (responsible for) the Greek crisis, we are willing to pay our share,” said UrÅ¡ula Jenko, a business and economics student from Slovenia. “Everyone knows the euro brings so many good things.”
Miroslav Kardoš, a student from Slovakia, said his country has more reservations about the euro fund. As the second-poorest country in Europe, Slovakia initially voted last week against broadening the bailout plan, but re-voted and approved the expansion on Thursday.
“We shouldn’t (pay), but we have to cooperate,” KardoÅ¡ said. “We have to do what the other countries tell us to do.”
German, French and other European Union leaders are expected to present a solution to the economic crisis at the G-20 summit in November.
The atmosphere in Germany, who along with France will loan the most money to the bailout fund, seems to straddle Slovakian and Slovenian attitudes.
My roommates, two Germans, discuss the situation often over dinner ““ neither believe the euro will survive the next five years. They are unhappy about the billions of euros Germany is paying to save the euro, but they are also proud Germany has the money to do so.
Esi Rudolf, a five-year resident of Berlin, said this pride partly stems from the guilt the country incurred for starting two world wars. Germany will keep giving, because it feels it owes something to the rest of the world, she said.
Bruin reporter Elizabeth Case is living in Berlin, Germany, reporting on life abroad while taking classes at Humboldt-Universität. This biweekly column is a collection of tips and insights from a student traveler. Email Case at ecase@media.ucla.edu and follow her on Twitter, @elizabeth_case.