A strong Currency - the Euro divides Europe

The Euro is on a roll. In 2007 the common European currency gained approximately 10% in value. Our 3-nation investigative report shows how Europe is responding - from complaints to joy. The Finnish company Wärtsilä supplies engines and power systems to foreign marine and energy markets. When the Euro climbs, so does its prices -- reducing sales. But German business man Karl Geiger is pleased. He sells American cars, and the weak dollar is fueling his sales. French travel agencies are feeling the pinch: Europe is simply too expensive for dollar customers. But some tour operators are finding ways to lure Americans onto the Eiffel tower and the Champs Elysées. Grit Hofmann, Hagen Tober and Nina Elter took the pulse of the Euro-mood in the three countries. -------------------------------------------------------------- In Finland, the strength of the Euro has taken many companies by surprise. One of them is Wärtsilä, a manufacturer of engines and power systems to the shipping industry, located 400 kilometers north of Helsinki. The firm's products are in demand: a Wärtsilä diesel engine powers one in every three ships in the world. Wärtsilä's annual turnover is over 3 billion euros a year. Seventy-five percent of its output is exported to countries outside the euro zone -- making its products pricier now. Kari Hietanen, Wärtsilä Vice President: "That affects our competitiveness considerably. At the moment, the situation is under control but things could get more difficult in the future." Wärtsilä is relying on its technical know-how and innovative edge. But should the euro remain so high, the company's sales are bound to fall. And Wärtsilä isn't alone. Finland's economy is largely driven by exports and businesses there have just one wish for 2008: that the Euro doesn't climb any higher. Munich, in southern Germany, is one of the country's most wealthy cities. Some businesses here are profiting from the euro's strength. Like car dealer Karl Geiger, for example. He imports vehicles from the US. Thanks to the weak dollar and the strong euro, he's paying 10 percent less for cars now than he was a year ago. Karl Geiger, Car Dealer: "The dollar (exchange) rate is the best thing that could happen to us....If everything were in euros I wouldn't see any benefits. There wouldn't be any." Each year, Geiger and his employees sell some 500 vehicles. His clients are happy with the low prices he can offer now. Geiger even converts these gas guzzlers to run on natural gas at no additional cost. Karl Geiger, Car Dealer: "Our ad campaign ran in newspapers and on the radio in Munich. It's called the Geiger thrift package. We offer an environmental package with natural gas and give such high rebates that the fuel system comes for free." Geiger hopes the euro will stay just as strong in 2008. The high euro is making American tourists think twice about travelling to Europe. Travellers from the US, like Felix und Angie Guzman, are having to dig deeper in their pockets to pay for their Paris vacation. Felix Guzman, American Tourist: "Luckily I can afford to do so, but most people can't. They'd be more likely to visit the Caribbean because of the strong Euro." That's posing a challenge for the French capital's tourism industry. They've started an ad campaign and invited international tour operators to convince them Paris is the place to be. That's because the number of American visitors has fallen since June and those who do come spend less money. Laurent Queige, City of Paris Tourism Department: "They're taking care to budget very carefully, but so far the situation is good. Of course, if the euro goes on going up it may represent a source of worry for traders and tour operators." The Guzmans surfed the Net for a long time to find the best bargains. It's their first time in Paris and the stunning sights make them forget how much this trip cost. Felix Guzman, American Tourist: "I don't regret it at all, but the cold weather's killing me. I'll probably come another time of the season." Maybe their next Paris vacation will not only be a bit warmer, but also a little cheaper.

DW-World | January 1, 2008

Tags:. .afford. .wouldnt. .twice. .converts. .dig