Wednesday, April 6, 2011

Euro and the £

Chart copied (with permission) from
The Euro was worth about 67 pence in 2006 and May 2011 is now worth about 88 pence. This is a fall in the value of the £ of about 31%.
The British media so often informs us of the poor condition of the Euro and how Ireland, Portugal and other Euro-countries have such a bad time. Yet it seems the Euro is strong or the £ is astonishingly weak.
The British media so often tells us that inflation in the UK is soaring, yet in France we read the following [from le Canard Enchainé, a satirical publication]

Official statistics state that the purchasing power of the French has increased by 1.9%.  Is it possible? 
Yet in the last year..
Electricity has  increased by 6.4%
Rents have increased by 12%
Train tickets by 2.4%
Petrol by 18%
Gas by 5%
Flour by 20%
Bread by 5-7% and pasta by 5-10%
Coffee by 10-20%
Chocolate by 5-7%
Edible oils by 8%
Camembert by 2-4%
Biscuits by 3-10%

How is it that one can buy goods from the UK more cheaply (including carriage) than similar items in France?  In my experience in this last year we have so purchased from the UK- garden seep hose, electric fencing, walking trousers, spices, food mixer, bread machine, microwave, women's clothes [M&S].
The French Government, nevertheless,  aware of inflation, has asked supermarkets to propose a basic basket of nutritional food for less than 20 euros.  
The Secretary of State for Trade and Consumer matters, M. Lefebvre, signed the agreement on April 6, 2011.
Appropriate items will be indicated with a yellow basket label.

Here is the offering of Carrefour for 18 euros for four people (for two meals) or one person for a week....
- des pommes de terre (potatoes), des carottes, des courgettes et des oranges ;
- une brique (tetra-block) de jus d'orange 100 % pur jus ;
- 2 pièces de viande (meat) d'origine France : demi-longe de porc 'sans OGM' [not genetically modified], et de la basse côte de bœuf à griller ; (cheaper cuts indicated)

- 1 kg de poisson (fish) goûteux (tasty) et peu onéreux (le Pangasius) ; [Panga is a fish farmed in Vietnam and some environmental lobbyists claim it is polluted.]
- 1 baguette de pain (bread) (0,43 €) ;
- du fromage à blanc à 0 % gras (soft cheese with 0% fat).

Undoubtedly the expatriate pensioner has seen his purchasing power fall by something more than 30% [even 40%] in the last 4 to five years.

This tangle of economics is impossible to unravel and quite inexplicable. 
But the tale of economic hardship from the UK is getting wearisome.

Disability Living Allowance

David Burrage [Legal advisor to the Spanish Association of British Expatriates] has received correspondence from the European Commission.
You can link to David's comments and also the letter from the Commission.
It can be difficult to follow the discussion but essentially it is this.
The UK Government had posed a 26 week rule which stated that DLA recipients should have spent 26 weeks out of the last 52 within the UK to reclaim this benefit which was previously illegally removed from the recipient, perhaps some years before!  The Commission make it clear that this 26/52 rule is itself illegal.
There is also debate on the 'mobility fraction' of the DLA, on which again the UK Government is wriggling.
Links (click) below..
David Burrage's note
The EU Commission's letter -the third page of this puts the situation lucidly.
It is important to understand that there are pensioners who wish to retire to Continental Europe, perhaps to join their children who have previously moved there.  They may well be invalid and have received and need this support, but have found it difficult or impossible to have it continued once they have moved.  This infringes the concept of 'freedom of movement' integral to the condition of Europe.