For European tourists the falling dollar is a dream. Never before has a US vacation been so affordable and not just worldly travelers are taking weekend shopping trips to New York City. But for the German economy, Europe’s biggest exporter, the weak dollar is a tragedy.
German automaker BMW already decided to assemble the X3 sport utility vehicle in the United States in the future, and now Mercedes-Benz just announced that it would move the production of the popular C-Class to Tuscaloosa, Alabama. Employees at the Mercedes-Benz plant in Sindelfingen, Germany were shocked and outraged about the news to outsource production to the United States. With a Euro-Dollar exchange rate of $1.50 that could possibly rise - and stay - to $1.70, manufacturing in Germany is not affordable for most companies and outsourcing is on the rise. Steelmaker ThyssenKrupp, located in Germany’s traditional industrial area, the Ruhr valley, will move production to Brazil and the U.S.
What hurts the european economy, helps the United States. Michael Burda, professor of economics at the Humboldt University Berlin, says in Der Spiegel, “a cheap dollar helps the Americans return to exporting more and importing less, which in turn helps them remain solvent”. For Americans, unsless they are planning a well deserved vacation to Italy, the ever rising Euro is a blessing.
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