Simon Calder: Coping with our comedy currency
Saturday 26 September 2009
Italian banks, I learnt from a recent report on Radio 4's Today programme, are lending money secured against Parmesan cheeses. The BBC's man in Rome, Duncan Kennedy, explained how putting hard cheese in hock could soften cash-flow crises for cheesemakers. In the event of the dairy defaulting, the banks sell the cheese "to recuperate their losses".
After a further slide in sterling, British travellers to Italy and beyond this autumn may need time to recuperate after the pound's failure to recoup its losses.
"I have just returned from 'rip-off Rome'," writes Andrew Field. "I could not believe the cost of the basic things: a pint of lager for €18, a scoop of ice-cream for €7." Those kinds of prices were unreasonable when £1 was worth €1.45; now, they are scandalous.
At London City airport this week, I asked the Travelex foreign-exchange desk how much, in our comedy currency, it would cost me to buy €100. With a riffle of the keyboard and a smile, the lady told me the answer: an astonishing £104.61. "Which makes a euro worth nearly £1.05," as they thankfully don't (yet) say on the Today programme. But with the European currency now worth a guinea, at least at airport bureaux de change, it is time to tackle travel money myths.
Myth 1: "The day's exchange rates are handed down by God, the Queen or at the very least that nice Adam Shaw on the Today programme. Therefore if a company offers 'Commission Free' rates, it's the best deal".
Tosh. When Mr Shaw declares the pound to be worth €1.11, he is referring to the rate used between banks to trade vast amounts of money. In the olden days, the UK government locked sterling to the dollar. But when Harold Wilson said the pound in your pocket was worth $2.40, he did not mean you could take a £1 note to your bank and exchange it for two dollar bills, a quarter, a dime and a nickel. The prevailing exchange rate is merely a starting point for companies to set their own figures for buying and selling. The only way to compare rates is to ask "how many euros will I get for £100?" or "how much will it cost to buy €100?".
Myth 2: "The rates that an individual bureau de change advertises are final." If you are changing, say, £500 or more, you can happily ask for a half-cent improvement in the rate offered. That will earn you around £2.50 – enough for a pint in Portugal, though not in Italy. Nor Finland.
Myth 3: "Cash is so 'last millennium' – use a debit card to withdraw money from an ATM." Yes, if you have a Nationwide card: the building society offers excellent value. But other financial institutions are far less generous, both in the rates they offer and in the fees they levy. Paying for stuff also costs you dearly: settle a £20 lunch bill with a typical debit card, and your bank will charge you £2 for the privilege.
Myth 4: "Life is cheaper outside the euro zone." Croatia and Turkey have done well for British tourists this summer, while the "PIGS" – Portugal, Italy, Greece and Spain – have been squealing. But the perception that anywhere outside the euro zone offers better value is wrong. When the pound slumps against the €, it also deteriorates against other European currencies. Prices may be lower further east, but that is not a benefit of being outside the euro zone.
Myth 5: "We've never had it so bad." Anyone old enough to remember the French franc will recall it always seemed to be worth 10 to the £. Yesterday the pound bought the equivalent of 7.30. But it has sunk even lower in the past. We didn't stop travelling then, and the present pathetic pound will not deter us now.
The city that dare not speak its name
Radio 4's Today programme appears to have a house rule that precludes presenters from attempting to pronounce the name of Honduras' scruffy capital, Tegucigalpa. Twenty years ago, during the late, great Brian Redhead's reign (at Radio 4, not the presidential palace), there was an unfortunate spate of accidents at the city's mountain-fringed airport. Mr Redhead proved adept at conducting interviews on the disasters without saying a name that is, admittedly, trickier than "Lima" or Rio".
His excellent successor, Evan Davis, this week adopted the same policy in an item about the the present political turmoil (at the presidential palace, not Radio 4). But today is the European Day of Languages and a good moment to master Latin American placenames from Tijuana to Tierra del Fuego. The BBC Languages website provides better pronunciation advice than I can muster, but tay-goosey-galpa seems to work.
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