October 14, 2011

The Euro, Café, and Personal History

Photo by Fotosipsak of iStock Photo
While living in Spain, I learned volumes about history by talking to individuals whose stories will never appear in a history book or program.

I'll never forget hearing a friend tell me what it was like to survive the poverty of the posguerra (the years immediately after the civil war) in southeastern Spain. "A neighbor of ours slaughtered a hog," she told me, "and  shared it with my family. I hadn't eaten in a week, though, and after eating the meal we made from the hog, I threw it all up, and was soon hungry again." 

I happened to be in Spain during another transition, though not a violent one. It was an economic transition, the coming of the euro. I remember vividly the public service announcements on how to calculate the value of pesetas to euros. In fact, Doña Letizia herself presented many of those PSAs in her pre-princesa days.

I dreaded the change. A conversion formula of 1,68 pesetas per Euro was not something I could figure in my head. In spite of the contrasting rims, the denominations on the euro coins were harder for me to differentiate from each other than the former Spanish coins had been. It was too easy to drop the wrong amount in a machine or give erroneous change to someone. Yet, these problems were mere discomforts compared to the major problem the Euro stealthily brought to Spain's economy.

Photo by Kenni Caraballo, of iStock Photo
With the change to the euro, countless businesses and corporations raised prices. Pre-euro a delicious, rejuvenating cup of Spanish coffee cost 50 pesetas. Suddenly, it cost 1 euro; technically 1,68 pesetas.  Soon, it was 1,5 euros in many places, and friends in Spain tell me now you can pay more than that for coffee. 

Take that little coffee price maneuver and transfer it to: food, utilities, housing, transportation .... and remember that--¡surprise!--salaries did not share this rounding-up move that accompanied the euros Spaniards now had to spend.  Salaries stayed static. 

I can't speak to what happened in other European countries, but I'd have no trouble believing that rounding up of prices and expenses happened in other euro zone countries, as well.

When I hear reports about the euro zone, cynicism rises within me. Yes, people in their respective countries voted to join the euro zone, but these votes were based on information regarding increased future prosperity and security. The opposite is what took place. My cynicism also remembers NAFTA. Much of the information regarding NAFTA was like the information regarding the euro: much more projection and conjecture than proven, dependable information. Watch one half-hour of news from Mexico and ask yourself what in the world did NAFTA do? For that matter, watch the US economic news, and ask the same question.

I pay close attention to economic news (I'm a big fan of Nightly Business Report, Marketplace, and The Economist) and try my best to understand the "big stuff," the financial trends, bank bailouts, exports / imports, trade deficits and surpluses, but I didn't need to know any of that to know that the euro was going to be a big problem for lots of people, such a big problem that it now affects economies far outside the euro zone. All I needed was to buy a cup of coffee that, from one day to the next, had jumped 30 percent in price.

Strangely, the euro now looks to be as difficult to digest for many Europeans as that plate of pork was for my friend in those terrible conditions many years ago.


Jeff Damron said...

A fantastic essay, Ysabel. I cancelled my subscription to the Economist recently for 2 reasons - (1) each issue is so jam-packed with information I never read more than a tiny fraction; (2) my issue typically arrived only a day or so before the next issue hit the stands (if only there were "stands" where I live). But it provides a worldview that is hard to get anywhere else here in the US. I try to compensate by listening more to BBC news on my car's Sirius radio. The reporting is good in the Economist, on BBC and NPR, but the "news" itself is seldom good it seems.

Ysabel de la Rosa said...

Yes, I have put myself on a news diet. I like the Economist, because it tends to put economic conditions in a broader context, and I simply enjoy the good writing. Still, there are article in there that make my eyes glaze over and I think, so what? all this will be different by the next issue! Ha!

Glad you liked the essay.