Getting Your Lira'S Worth
SENIGALLIA, SAVIO F.
OVERVALUED DOLLARS Getting your Lira's Worth BY SILVIO F. SENIGALLIA Rome The current strength of the American dollar, its instability and high United States interest rates have been a source of...
...3. In 1984 there was a satisfactory improvement of the GNP, and the increase CIT, has gone so far as to say that a su-perstrong dollar is only moderately helpful to the industry...
...Italian financial, economic and business circles, meanwhile, are constandy bemoaning the present overvaluation of the dollar against European currencies in general and the lira in particular...
...First, when offered an apparently enticing package deal from a travel agent be sure to check location and features of the accommodations involved in a reliable guide book...
...The reported Mitterrand-Kohl strategy notwithstanding, however, the main obstacle to a strong ecu is still the Bundesbank...
...Although sympathetic to the plight of the Italian economy, I must respectfully recall that when, at the end of 1979, the exchange rate was down to 800 lire to the dollar, Italian industrialists no less gloomily complained that the weak dollar was Silvio F. Senigallia reports regularly for The New Leader//wn Rome...
...Had I attended Mole's press conference I would have liked to ask him how overvaluation of the dollar can be held responsible for the pollution of Italian beaches, the strikes and the generally tarnished image he rightly sees as negatives...
...Lastly, as practically everybody knows, foremost among the good buys here are silk, cotton and leather items, such as gloves, bags, blouses, sport shirts, and scarves...
...Italian officials have virtually confirmed this diagnosis...
...The new President of the Community, former French Finance Minister Jacques De-lors, was very outspoken about the situation in his recent remarks addressed to industrialists, labor leaders and professional men during a meeting of the EEC's Economic and Social Committee...
...Romeis not Casablanca...
...Official statistics for January 1985, issued in the middle of March, tell us why: In the first month of this year the Italian import total was 14.3 per cent higher than in January 1984, while exports suffered a loss of 0.8 per cent...
...Fourth, unless you have a lot of time, do not have clothes made to order...
...In short, shopping in Italy can be fun and a rewarding experience for visitors with discriminating taste...
...tourist influx would not compensate for the loss of a sizable number of French and German vacationers attracted by the lower prices and more modern facilities of Spain, Greece, Yugoslavia, and even North Africa...
...But the hope that savings will almost cover the cost of the trip is a dream, albeit undoubtedly a pleasant one...
...A severe warning to the Rome government from the International Monetary Fund focuses on some highly unpalatable conditions: 1. The level of Italy's national debt is such that a credible program of economic recovery is virtually impossible...
...It would be advisable to avoid the prepaid commitment to take one major meal in the hotel and look for a pleasant trattoria...
...And remember, most Italian shoes are not made for American women's feet...
...Less known is the advantage of buying 18-carat gold jewelry in Italy, particularly in Florence...
...Pessimism even pervades the field of tourism...
...Italian artisans are excellent but not punctual...
...in the cost of labor did not go beyond the programed 7 per cent ceiling...
...Men Eire snapping pictures and women are going shopping, the chief occupations for those not interested in museums and antiquities...
...Taking President Reagan to task for saying that the dollar is strong because "our system works best," Delors condemned this attitude as "particularly unhelpful...
...Indeed Carlo Mole, president of the state-owned tourist corporation, In any case, the relatively slight downward trend of the dollar, whose vagaries nobody here can fathom, has not seriously diminished the advantages to be gained from what remains a very favorable rate of exchange...
...Unlike 1984, the overall forecast for 1985 is not favorable...
...The approximately $1.3 billion deficit in the balance of payments was due to the purchase of oil and oil products in the amount of $1.9 billion...
...Second, in many restaurants one can eat very satisfactorily for less than $10 per person...
...Treasury Minister Giovanni Goria, in the course of voicing deep concern about the balance of payments deficit, has conceded that a mere 2 per cent annual growth rate in 1985 cannot make a dent in the present level of unemployment...
...Looking for bargains is an exciting yet tricky adventure...
...He urged the then-10-na-tion organization (since expanded to 12 with the addition of Spain and Portugal) to cooperate in repelling what he termed a maj or offensive from the United States, and concluded with the dire prediction that "there is going to be a clash and someone, somewhere is going to get hurt...
...Finding oneself in an uncomfortable hotel 45 minutes from the center of town is not my idea of fun, especially if the length of the visit is short...
...As I write, despite a sharp 10 per cent decline inthesecondhalfofMarch, the dollar is worth 2,000 lire—an uncomfortable exchange for a country wholly dependent on foreign oil that has to be paid for in dollars...
...While shopping, keep in mind that American department stores are filled with reasonably priced Italian goods made to American specifications and in American sizes...
...OVERVALUED DOLLARS Getting your Lira's Worth BY SILVIO F. SENIGALLIA Rome The current strength of the American dollar, its instability and high United States interest rates have been a source of serious worry mixed with bitterness among members of the European Economic Community (EEC) for many a month...
...At a press conference he agreed that Italy is quite appealing to the pocketbook of the average American traveler, but expressed the fear that the U.S...
...As an old Roman hand, I would like to put forward a few suggestions and caveats...
...The fare for the drive to town that in a regular yellow cab would be about 35,000 lire may jump up to 100,000 in one of those unmarked cars, as two hapless ladies we know learned at their expense...
...At the next gathering of top EEC leaders, scheduled for June 28 in Milan, they may recommend strengthening the ecu, the European Community's exchange unit, as an across-the-board alternative to the greenback...
...Third, beware of fancy gypsy cabs, particularly at the airport...
...Buon Viaggio...
...Rome or Florence are not Hong Kong...
...Unlike the British companies, Italian manufacturers have not kept prices in the United States high...
...Buses are cheap and taxi drivers generally honest...
...Nor has this fact been lost on large numbers of outsiders, mostly Americans and Japanese...
...One hears notably little here of the positive effect that should derive from the combination of a strong dollar and weak lira—namely a boost to Italian exports...
...it is afraid that a Western European monetary hodgepodge might weaken the currency and the economy of West Germany...
...But the early 1985 data indicating a 10 per cent annual inflation rate, unemployment at 10.8 per cent of the labor force, and low productivity in the area of public services show that Italy is not likely to keep in step with the Western European rhythm of industrial recovery...
...killing their competitiveness in international markets...
...By the way, do not haggle...
...2. The public debt has risen faster in Italy than in any other industrialized country, and must therefore be covered by the massive sale of high-interest, nontaxable government bonds, creating a dangerous spiral effect...
...That Delors' feelings are widely shared may be seen from the fact that, according to well informed sources, French President Franfois Mitterrand and West German Chancellor Helmut Kohl are seriously considering a dramatic European remedy to the dollar's follies...
...Spring has just timidly arrived, after an unusually and even cruelly inclement winter throughout Italy, and already Rome (as well as Florence and Venice) is filling up with camera carrying foreigners, many of whom are dressed as if this were a subtropical town...
Vol. 68 • March 1985 • No. 4
