<p>A few weeks ago DW and I went to visit Switzerland, France and Austria. It was a shock to find US$ does not work well in Europe, more so than when I visited there few years ago. But regardless, why Switzerland is so expensive? I am not comparing the price with US local prices, nor I am comparing touristy prices. But I am comparing sandwitches in the same branded supermarkets in Europe. I went to Milgo’s in all countries and found the price is about the same in France and Austria at around 1.50 Euro, but when I went to Milgo in Switzerland it was priced 6.50 SF which is about 3 to 4 times for the same brand sandwitch in other countries!</p>
<p>I also picked up a Real Estate ad book on the train, a Normal 3 bedroom house ANYwhere in Switzerland is offered at around 1.5 MIllion US$, while you may find the same house at around 100K in a better town USA, or $20K in those cities that are highly depressed.</p>
<p>Seriously, I think the reason is that the Swiss franc is very highly valued when compared to the US dollar, because Bush doubled our debt, and then Obama tripled our debt. If you print up tens of billions of dollars in the back room, who is going to take your currency seriously?</p>
<p>^^Possibly due to the strength of the Swiss currency. Switzerland, ever the neutral exception to everything, did not adopt the Euro. All the countries surrounding it did. If the Swiss franc rises in value in currency trading, people accustomed to spending Euros and especially dollars will find everything shockingly expensive to buy in Switzerland.</p>
The most successful Swiss industry feeds of the systemic corruption that the uber rich-and-powerful indulge in across the world. Where do the trillions that western tax dodgers, dictators, third world leaders and their cronies syphon away from the locals go? And when a dictator and allies, are in an Orwellian sense “vaporized”, where does the money stay? I’m probably in a distinct minority in feeling the Swiss, with their superior attitude because of their neutrality, are among the worst parasites on the planet who’ve put together a model of maintaining a very high lifestyle at the expense of the everyone else in the world.</p>
<p>Putting politics asides, I would also like to hear an economic explanation instead. My sister who lives in France said that things are shockingly expensive in London comparing to Paris which is no slouch in the high cost living as is… When she used to work for American Express, her colleagues in London who are paid on par or slightly better than she was, mentioned that they sometimes had to go without heat in their london flats. And this is even before the Euro. Go north to place like Amsterdam and cost rises even faster. Prices are artificially deflated due to subsidies? High tax rates?</p>
<p>^^
That has to do with London being an extremely desirable city for many rich foreigners to park some cash, and buy up properties as an investment, thus driving up housing costs across the board- basic supply and demand imbalance. London took a hit a while back, but now that that financial markets have rebounded, it once again is a desirable city for the very rich to own property.</p>
<p>It’s supply and demand. It’s a very desirable place to live, so it’s more expensive to buy a house. They have a very stable currency, because like the UK they didn’t enter the Euro. Switzerland is not even in the EU. The Swiss franc is one of the few currencies that has appreciated recently also, while the opposite has happened to the Euro and the Dollar.</p>
<p>Also, the welfare system is great there (my sister lives there now). So you have to consider that they might pay more for a sandwich or a house, but they don’t have to save for education or for medical expenses.</p>
<p>As to not taking the dollar, why would they take the dollar there? It’s not like someone in the US would accept Swiss Francs. Granted, the last time I was in Europe was 15 years ago, but they still wouldn’t take dollars. And now, the dollar is not very stable anymore!</p>
I once had a Viennese taxi driver joke about this. He said, “Look at the national flags. Both are red and white. But Switzerland, who did not join the EU, has a big plus on their flag, while Austria, who is a member of the EU, has a big minus on theirs.”</p>
<p>If the current falling value of Euro accounts for the price difference of this Milgro bread between the EU nations and Switzerland, does that imply that at one point when the Euro was riding high before the financial debacle, the price of the bread was more or less on par? I wonder if there is a EU agreement regarding trading and tariff among EU countries to keep prices artificially low… Does any know?</p>
<p>Switzerland has always been more expensive than other European countries. 35 years ago when I went to Europe for the first time, Switzerland had the reputation of being more expensive than other countries. Portugal/Spain/Italy were known as the “cheap” countries if you were a student traveling around. So I don’t think it has a lot to do with currency. I’m not an economist, so I don’t know the economic explanation, but I think it has more to do with Switzerland being a landlocked country, taxation, social services, space being at a premium in cities, and even in the country. I doubt if there is a simple explanation. It probably has more to do with desirability and people’s willingness to pay.</p>
<p>ccreader: “I wonder if there is a EU agreement regarding trading and tariff among EU countries to keep prices artificially low… Does any know?”</p>
<p>Yes, part of the European Union is a free trade agreement, which means the conditions for international trade inside the EU are better for EU members. The European Economic Commission started as a trade union between a handful of countries in the post WWII times, it was not until the late 20th Century that countries decided to create also a monetary union. One of the reasons for this was to make international trade in the region easier, and also for stability. The UK said no way (so they are part of the EU but not the Euro zone), and so did Denmark. Other countries like Switzerland and Norway are not members of the EU.</p>
<p>IMHO, tango probably is correct. Swiss is expensive because it has to do with factors other than currency exchange alone. It is a highly developed country with very little basics industry. Precision, high value added products and service industries are the two major GDP contributors. Per capita income has been high, which fueled the inflation.</p>
<p>I asked a young guy from Zurich on the train about average working class income, the answer was 100K SF.</p>
<p>There were some 3 bedroom houses in the “rich” part of Zurich wich can easily fatch 5 million SF, the city tour guide told us.</p>
<p>I lived in Switzerland for 5 years in the late 80’s early 90’s. Even then it was the most expensive country in Europe. One reason is that everyone in Switzerland earns a very high salary, even low-skilled employees. I made the equivalent of more than $40,000 per year as a newly graduated postdoctoral researcher at a chemical firm. The same position in the US at the time would have been about $18,000. Job security and generous pensions were the norm, facilitated by tight control of work visas for foreigners. High prices posed no problem for those employed in Switzerland, but helped “keep out the riffraff” (as grandpa used to say).</p>
<p>One can learn so much from this forum! The high salary makes most sense to me since currency exchange alone can’t account for triple quadruple rate. I google a bit and found this explanation
[Why</a> is everything so expensive in Switzerland? - Quora](<a href=“http://www.quora.com/Why-is-everything-so-expensive-in-Switzerland]Why”>http://www.quora.com/Why-is-everything-so-expensive-in-Switzerland)
One more thing they mention is the lack of competition in pricing. Seems like it’s a small country with few retailers and people prefer high quality products so there are few budget options. </p>
<p>Planetstate - did you notice the lack of retailer options when you lived there?</p>
<p>"Seems like it’s a small country with few retailers and people prefer high quality products so there are few budget options. " t
the news these days is how Swiss citizens are traveling outside their country to do much of their normal shopping, because of the strength of the Franc, and it is driving some Swiss merchants out of business- hence the recent devaluation of the Swiss franc!</p>