Mercer's 2009 Cost of Living survey highlights - Global

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08/20/2009 - 05:33

Tokyo knocks Moscow off the top spot as the most expensive city for expatriates; Johannesburg is the cheapestAsian and European cities dominate the top 10Significant currency fluctuations and strengthening of dollar cause major  reshuffle in the rankingLondon drops 13 places to rank 16, New York joins the top 10 listMercer's Cost of Living survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. It is the world’s most comprehensive cost of living survey and is used to help multinational companies and governments determine compensation allowance for their expatriate employees. In Mercer’s survey, New York is used as the base city for the index and scores 100 points, all cities are compared against New York and currency movements are measured against the US dollar. Tokyo scores 143.7 points and is nearly three times as costly as Johannesburg with an index score of 49.6.” Milan 96.9 (11), London 92.7 (16), Rome 91.2 (18), Madrid 82.3 (37)(Figures in brackets are current year’s rankings) Living both in the London and in Tuscany I have noticed how, because of currency movements, how expensive Italy has become.  Of course I am using Sterling as my base for comparison.  London has moved from the third most expensive city in the world in 2008 to the 16th most expensive in 2009, because of currency movements.   The most noticeable difference I have found is the price of eating out.  In central London, for example I pay £1.50 for a small glass of draft beer, in my Tuscan village I pay 3 Euro.  Chicken and chips in my Tuscan village is €7.50: London less than  £5.  My Italian friends and neighbours are very happy: they now go more often to London! Madrid seems very reasonable: I have been to Barcelona and loved it: prices were reasonable in the Tapas bars and the food was exquisite.  I should check out Madrid! Rome is less expensive than Milan, which is more expensive than London.  I heard a couple of weeks ago on the news (Sky Italia) that the north of Italy is 16% more expensive than the south. Currency movements mean that people in the “Eurozone” on a fixed Sterling income take a big hit.  Italians in the UK with a Euro income are better off.  Property owners in Italy who are selling now and converting the money into Euro make a good Forex gain, for example selling a flat at €200k and converting it into £ at 1.15 €/£ would yield £173,917.  Before at €1.40 to the Pound the Sterling yield would have been £142,857: (21%) difference.  Obviously buying with Sterling is 21% more expensive.  


HiI've just come back from a week in Liguria and I also noticed the rise in prices from say this time last year. even though the recession was already underway last year and the £ weakened. Eating and drinking out has certainly gone up considerably. A primo piatto at 10-12 Euro is in many cases dearer than London. The best value are the set menus. I found food shopping also expensive on last summer, however we live as we do in the UK and shop seasonally and take advantage of the 'offerti' It always amazes me how very basic Italian produce eg tomatoes, cheese,milk, bread can seem comparatively  more expensive. Going for a beer or an apperitivo has become a bit of a luxury.  In our town it appears that some restaurants have really jacked up prices and inevitably, apart from the tourist magnet establishments, there are fewer punters.  

There are a number of these all (presumably) accurate or realistic depending largely to the differing parameters used and by the different organizations who conduct them.On the more man in the street side of things one can say ,yes,Italy is a VERY expensive country.Partly this is due to one of the most inefficient and fragmented distribution systems amongst modern european countries,the enormous number of specialist wholesale fruit and vegetable and meat markets out number say the UK TO 100:1, The fragmented large number and the small size of most of the retail outlets (despite shopping malls ertc) the almost total dependance on expensive road haulage of goods ,topography and other factors make foodstuffs increasingly expensive in Italy all be it that in your local supermarket you are more likely to find good quality even local fruits and vegetables against the intensively farmed long distance stuff in Tesco's.Another important factor which is seldom indicated ( largely due to the conviction that Italians don't pay taxes) is the high levels of both direct and indirect taxation and the very high labour costs which apart from the tax level itself have added the social security contributions cost.The  frequent and vexatory controls to which the majority of hotels/bars/restaurants/shops etc are subjected nowadays.Today anyone with even just a few emplyees has to build in these high costs to whatever service they are offering mean that the prices paid are inevitably higher.On top of all this one has a +34% higher cost for say car insurance than the rest of europe,high bank charges,expensive gas and heating costs costly electricity ( my last electricity bill for a small business was Euro 470,00  for july 2009) the costs of our accountant ( essential for survival in the fiscal jungle) are Euro 720,00 per quarter.the cost of elaboration of data for the wage packets of the employees Euro 207,00 per semester,Euro 600,00 per annum for a private laboratory to undertake quarterly micro biological analysis of our home produced foodstuffs and verify the state of conservation (vis a vis health and safety laws)these are just a few of many other things..sorry this was getting tedious but only wanted to demonstrate the incredibly high costs that small businesses particularly in hospitality or food services that have to be born BEFORE anyone has a plate of pasta.The days of unqualified (mamma's) in the kitchen or the young girl from round the corner in the dining room if not totally gone have their days numbered as  do uninsured working personel, in general so large numbers of "venues" have had to get their act together as never before in the past and the cost of all this is simply passing on to the consumer..... 

Higher costs of production will eventually filter through  to higher end prices to the customers as producers seek to recover their costs.  In this highly competitive world super profits are very rare and where they exist they are very short-lived as competitors will enter the market.  I have seen this with the restaurant trade in the Italian village where I live part-time.  Some 10 Years ago there were 3 restaurants for a population of 4000 and a summer population of almost double.  These restaurants were thriving!  Now there are 16 restaurants with a slight increase in population.  Prices have to be inflated to recover costs and profits are less,Although I am a relatively small investor it is for the reasons you mention that I have slowed down my investment in Italy to concentrate more in the UK. It is interesting to note that Italy is not exactly full of foreign investors, except perhaps in the holiday properties business!

Sebastiano......................Thanks ever so much for a very honest 'rant'........................Whilst I do not run a business, I am a bit of a newby here and am astonished at prices, I am going back to the UK in a few months for a break and will be interested to see prices there.Car insurance costs are bordering on criminal, absolutely outrageous!...3rd party only is much more expensive than fully comp in the UK!I do feel at times that the prices in supermarkets tend to reflect the habits of the foreigner, how much (if you buy it!) would you expect to pay for 100g of Nescafe instant coffee ?? 4.35euros at our local supermarket, Schweppes Tonic Water (1 litre) 1.38euros........................where are our MEPs !!!???European Union my A**e!!! S

 The same is true of anywhere - you would expect to may more in Tuscany with people cashing in on the tourist trap restaurants.  Eating in Piccadilly Cirucs is undoubtedly more expensive than eating in Deptford - it depends where you choose to eat.   I find it hard to agree that italy has become more expensive - prices have remained the same if not lower than last year - its the comparison that makes it seem more expensive.Here in Sicily, Taormina has prices which are totally out of kilter with the rest of the island - even though Sicily is an island and suffers from the archaic distribution system - most foods in shops are strictly local and consequently much cheaper - here an entire meal costs 12 euros, not just a primo- I agree with Sebastiano about the total inability to function  with the state burden on small businesses.  It is almost impossible to make money with a small business in Italy - you are penalised heavily not only in employee taxes and contracts, but in IVA, IRPEF/IRPEG imposte, even down to the comune giving you a hard time about your office sign.   However, the plus side for me is that being in Sicily, professional costs are much much lower  - my commericialista costs 900 euros pa and does everything bar make the tea.    Here, if you exclude the car, you can still live quite comfortably on 10.000 euros a year - eating out, and not lacking much - the idea of trying to get by on 10.000 euros a year in London would reduce me to a diet of rice.   

It would be difficult to make ends meet on €10,000 per annum in London, however consider the following. For the over 60's one would be entitled to a senior citizens travel card, travelling free on a any public transport after 9 am (estimated value 2 to 3K a year depending on one's movements).  The are numerous free libraries where access to the internet is free for an hour at a time and one can still  borrow new and old book titles without charge and they run numerous literary events.  There are no prescription charges, no optical, nor dental charges (if one can find an NHS Dentist) for the over 60's. One would certainly not get bored: plenty of free entertainment and parks!  One can survive, in a fashion, on ready meals from Tesco, Waitrose, Marks and Spencer and Sainsbury and they would cost less than going to the restaurant, although one could get bored very quickly.  One could always look at these products in the supermarket and order them through the intenet for free delivery at home. The odd trip to the much improved McDonald would allow anyone to eat a simple meal for less than £4.  (I notice london MacDonalds are always full of tourists).  The odd outing out to "Greasy Joe" round the corner would provide an English breakfast as a brunch for between £3 to £4 and some great English classic meals for less than £5 (Meat and 2 vegs, not ellied eels as they are now very difficult to find and are expensive.  The quality of the 'grub' could not always be guaranteed!) .  Eating in Piccadily can be expensive if one wants to go to Marco Pierre White's restaurant, but a short walk down to Chinatown would see one get a meal for a fiver in a small Chinese style cafe (rice or noodle with meat and vegetable) and some great homemade chinese cakes for breakfast.  Alternatively, a take-away Indian would cost less than £5 (rice and curry).On the odd occasion a trip to any Wetherspoon pub would satisfy one's thirst for a pint of  cask-conditioned real ale for between £2 to £2.50 a pint.   Wine is expensive because of excessive duties, but one could indulge during one's off-season holiday to Italy or France.  If one does not mind wearing one's labels inside and do not care too much for "la bella figura" there is always Primark for clothes (there is always a queue a mile long at the cash desk).  The Oxford Circus Primark store is always full of tourists! For kids in London there are  free parks and museums (except for the private ones).  Healthcare is free until 16 (I think).  Free public libraries offering free internet acess are available. Local authorities run numerous free play schemes during the holidays. Kids travel free on public transport (up to certain age).  Of course there is always Primark for clothes (I know a few anlo-italian mothers who go to London at regular intervals to shop for children's clothes). Of course the chioce of country and lifestyles is a personal one, but in many respects there are more living and  working choices and opportunuties in London. Perhaps that is why it is so popular with young Italians!

I have to disagree with you based on my experience this year compared to last year.Yes I can find small places where you can have 2-3 courses for 12 euros here in Liguria because I know where to go but  I can see some establishments are penalising those still willing to treat themselves and families to a meal out. I refuse to pay 3 euros per kilo for tomatoes or 5 euros per kilo of bread notwithstanding the weakened I vote with my feet. I know the little shops and markets which offer good value and patronise them.There was a time when household items were as cheap,sometimes cheaper than UK. Now I bring things like bedding, cookware crockery etc over from the UK.  I don't think I'd manage to live comfortably on £10,000 euros a year in Liguria and I'm not an extravagant person

In the NY area my property taxes alone are much higher than 10,000 euro/year.  And if you were not a property owner? you could not rent a garage for that kind of money - even an hour or so away from the City you couldn't.  ARE there still places where one can live on 10,000? hmmm...will have to look now ;-)

I don't see that post as a rant ,its just very, very good advice and it would be helpful to lots of people considering the move to Italy.5 years ago we seriously considered swopping working as artist designers in the UK to Italy.However after spending 5 years making regular trips out to work on our house we have changed our minds totally as we just could not survive in Italy on our income.We don't earn much so we don't spend much here but at least I can chose to run a small car for £35 road tax and £250 insurance a year .In Italy no matter what car I ran it would cost 3 times that amount. We use wood burning stoves and keep energy use to a minimum but we do have wi fi and enjoy entertaining and visiting friends as well as making trips out to Abruzzo so we by no means live like paupers! We'd certainly have to in Italy.In the uk we can prepare own own tax return with no need to employ an accountant and its a simple matter to phone the inland revenue if there is a problem.What would be the alternative in Italy?We both rely on people buying our work online and contacting us through our websites but I know from talking to Italians there is little interest in  online shopping.I love our home in Italy but I just cannot afford to live there - luckily we discovered this fact before we moved out !

Unless .... We don't earn much so we don't spend much here but at least I can chose to run a small car for £35 road tax and £250 insurance a year .In Italy no matter what car I ran it would cost 3 times that amount.  If you buy a classic car - like a Fiat 500 old style it would cost you 120 euros pa all in - tax, insurance and bollo - thats why fiat 500 cost so much nowadays! Liguria seems to have frightening prices!  Here at the moment toms are about 50 cents a kilo, melons - 15kg for 5 euros, spuds 12 kg for 5 euros,  peaches 80 cents a kilo.  Serge, I know - I lived in London for 20 years before I fled - but Im not a pensioner - so I was paying 50 quid a week for my travelcard, 60 a week on taxis as I worked antisocial hours,   1.50 for a cup of drinkable coffee, ( in Italy - why would anyone want Instant Nescafe?).  its true I could have eaten a Macdonalds, filled up on monosodium glutamate from a Chinese, but I ingested enough filth in London just by living there without adding to the payload.  Only the British Museum and the Tate save your soul living in London.   It's true, its a great place to visit, take in a show all of that - but living there day in and day out becomes too much a toll on mind and body!

Would we still be having this conversation if the pound was still at €1.45. The main problem is surely the exchange rate as, if we went back 18 months it would be like taking 1/3 off the price of everything.  Blame idiot Gordon, Tony, the banks or anyone else you can think of before blaming Italy, and with the balance of payments deficit at an all time high we can expect to be the paupers of Europe when travelling abroad for some time yet I suspect.What confirms this to me is mixing with other nationalities such as Irish, Danes, who find it incredibly cheap here. You can't really do price comparisons on things like Nescafe, the Italians here don't drink it so its imported in for a very small market.Where we live we can have a four course meal at a very good fish restaurant, including wine, water, coffees and very good service, for €30 each, I could not get this in England. All the fish is caught that day and the accompanying vegetables locally grown (not under a plastic Spanish sheet). Fruit and vegetable prices are excellent and we find that we are spending far less to live here than we did in the UK as there we bought mostly fresh (foriegn) produce and no ready meals. Add to that the fact that nearly all the produce here is grown nearby, tastes wonderful and would cost three times as much on a market in England and I feel very happy to be here. The local wine is pretty damn good as well.I know that electricity and insurance are very high but I knew this when I came out so cannot really complain and have planned alternative energy sources into our build.Any comparison to the way we live here in Italy and eating at MacDonalds, Wetherspoons or any of the other fast food places defies belief and its like comparing fillet beef with scrag-end. Thank God as well that Italy retains its "fragmented distribution system" as far as food is concerned, I like to buy my food from local producers who I know and whose quality I can rely on rather than the mass produced crap we "enjoyed" in England. The Tesco approach to food distribution, all food to central disribution points and then out to shops, may sound good but it has increased prices on fresh food and reduced quality, so long may Italys fragmented approach continue. Our rather poorer neighbours could not afford to live any other way. Imagine the fishing boats all loading into freezer lorries, going to a central point and then being driven back to us three days later, no thanks.Complaining about Italian politicians seems rather rich to me as well, no Italian PM has taken its soldiers into an illegal war in Iraq just to cosy up to the Americans and I don't  see Italian body bags being loaded into planes in Afghanistan. I am more than happy to leave that kind of politics behind.Personally I find that the glass is very much half-full in Italy and a year down the line I wouldn't swap a second here for a visit to MacDonalds or Tescos.

"Complaining about Italian politicians seems rather rich to me as well, no Italian PM has taken its soldiers into an illegal war in Iraq just to cosy up to the Americans and I don't  see Italian body bags being loaded into planes in Afghanistan"Actually Berlusconi did take Italy into Iraq, whether to cosy up to the Americans is a point of view,  and yes  there are Italian body bags from Afghanistan. 

I understand where you're coming from SanG, comparisons are always difficult. I can only speak as I find. This time last year the pound had already weakened but the differential did not feel as marked as it did this summer. We are in a coastal town the population of which more than doubles in the summer (most of the 'visitors' are Italians) which may have some bearing on the increase in prices. It will be interesting to see if they go down after the summer season.  I too can find good fresh food in restaurants....three courses for 15-20 Euros...because I know where to go. I can also find excellent locally produced fruit and vegetables very reasonably priced...again i know where to find them. What surprises me is the sheer number of outlets there are and how a shop a few doors away can sell the same or similar produce at double the price AND still survive. Some people are obviously happy to pay the inflated prices.  On the other hand public transport is far cheaper than the UK.I agree, comparing the price of Nescafe is unrealistic...yes why would one want to drink Nescafe in the land of real coffee drinkers? And why would anyone want to eat McDonalds or ready meals when you can 'take-away'  fresh pasta and sauces or beautifully prepared deli meals from the little artisan shops. My budget is not huge and  this year I found myself doing the maths more carefully when shopping and eating out.

Yes its all very well quoting figures for eating out and buying new clothes but these things are 'optional' surely?If I am having a 'bad month' I wouldnt choose to eat out at a pub or restuarant or buy someting new to wear; If I was doing well then I can treat myself ( I do own a credit card but I've never used it).What I was trying to point out that the unavoidable costs of living and working in Italy are much higher than in the UK comparing things on a like for like basis.There are many people coming to Italy trying to set up tourism businesses and it may be quite a struggle for them financially until they get regular bookings. They can cut out luxuries and concentrate on establishing the business but if they are then clobbered by massive tax, vat and insurance costs even when they are not actually making any money then its tough going.

RamYou are quite correct and I apologise for my lack of accuracy. Yes Berlusconi did send a token force into Iraq but the main reasons the Americans went in was because the Brits gave unequivocal and vocal support, history will judge whether they would have done it without us but I doubt it. I watch both italian and English news and can't remember the last time I saw an Italian body bag though and its difficult now to remember a day when there hasn't been a British casualty. I got a bit carried away at the memory of that vile creature Blair trying to suppress that annoying grin when the American Senate rose to applaud him and I take your point withour reservation.As for the rest I just wonder how the British would react to a lot of foreigners going to Britain and then complaining about the price of everything, you have the very obvious choice open to any migrant or tourist anywhere. Italy still seems to attract a huge number of tourists so they must be doing something right.Again, for fresh  food, Britain can't touch Italy on prices or quality. It costs me €10 per month here (plus standing charges) to telephone as much as I want anywhere in Europe, less than €20 per month for wireless broadband, if you want clothes which are Primark standard, then Emmezeta/ Conforama is not much more expensive and all of it would be much cheaper if the exchange rate improved.The last time I visited the UK we went to Reading to visit friends. Very few English accents were audible, buying a sandwich for lunch was a nightmare with mostly processed rubbish on offer, awful fast food restaurants polluted the air with their smell, going into town in the evening had that tension which only northern Europeans seemed to manage to cause and I enjoyed it as much as having ears syringed. I won't be returning any time soon.  

This is all very interesting, but perhaps rather than measure like for like on monetry terms, the biggest consideration when making choices for me regarding staying in the UK or living in italy has been quality of lfe. And if that means living on a much reduced budget, and it does, then thats fine. I think what would be difficult would to be alot younger and have a young family, without the safety net of pensions kicking in. For that group of people it would be very hard indeed .And for me the thought of living in London has me hiding under the duvet!, the noise the traffic the pollution, the lack of personal space, but for others the buzz, the entertainment...we go to the local bar for ours!. I digress a little but was watching an interview with Stephen Fry yesterday and he was asked what he disliked about England now, he said the greyness of the people the negativity, the lack of positive feeling. In the end with the resources you have its is some sort of choice as to where you live, poorer in a material way in Italy but richer in that hard to define quality.A

I agree A&R, but most contributers to this thread were not comparing quality of life but merely comparing prices of everyday commodities from their own experience. Not a crime is it? Some people get very defensive about their little bit of 'la colce vita'

A&R - it's not just the young with families who won't have a pension. We're in our 40's and there'll be no pension for us either (except the pittance we'll get from the state - if it still exists by then). We also have to earn a living in the meantime and that in Italy is very difficult. SanG - I agree the fruit and vegetables are generally higher quality here but I lived in the countryside in the UK and used farm shops where the quality was excellent and prices reasonable. We also had fantastic butchers.  I personally think, like mosts things in Italy, there just isn't one simple answer. Some things are cheaper, others more expensive. As someone else said, it also depends on how you live & shop. In the UK I did a weekly (sometimes fortnightly) shop and threw a lot away and spent a lot more because of it. Here I shop every day and use it that day, because here I have the time to do that. I'm also not paying £500 a month in train fares just to get to work but then I am paying a fortune to run a vehicle. I can't say I have noticed prices increasing here in the last few years. I think restaurants are a little dearer but then again others haven't raised their prices in 6 years. It all depends on where you eat. Bread & petrol went through a phase of being expensive but both have now come down in price and I have always found meat expensive here. Vegetables at the beginning of the year were also expensive due to the ridiculously long and wet winter we had. I agree that it is more expensive to live here than in the UK if you convert everything back to GBP. But that is not a very good comparison in my opinion. I too get paid in GBP so have been very badly hit by the exchange rate change but even so, after nearly 6 years here, I long ago stopped converting things into pounds when shopping. I just do it the once on pay day and that's it. Sebastiano is absolutley right about the horrendous cost of running a business here. Our outgoings for the cycling business are over €7000 per year (excluding tax) regardless of whether we earn a penny. For a seasonal (6 month a year) business that is crazy. Imagine how many bikes we'd have to rent just to cover our outgoings!! So much of this seems to be governed by how you setup in the first place. As ever, there are so many loopholes and "other" ways of doing things (all legal might I add!) that we are still only just learning about. Forget the difficulty of learning the language (at least this you can just apply yourself to and get learning) it is understanding the administrative/tax side of Italy that is the steepest learning curve. In my experience, Italian advisors (e.g. accountants, lawyers etc.) just do not understand that we do not just "know" the same things as Italians. How can we? We are foreigners. Many costly mistakes get made due the the advisor assuming we know and us not knowing to ask. "Piano, piano" as they say   

 is how i see it...  which in reality is not a good thing because with negative inflation it means that the economy is not doing that well ... in fact the only things people are buying here are mobile phones... up 14 % in saleshowever an interesting article from 2008 in the sole 24 puts costs in italy into perspective when people talk about the good old days and it all seems to balance out from my point of view looking at daily spend there is little to no difference... tomatoes at the moment 45 cents a kilo, cafe in a bar 80cents, meal in agriturismo 15 euro, lunch in teramo two course with wine 8-10 euro..  nothing much has changed.. the worst time was when petrol prices went up... noticebale the change in weekly money required to live... but that was for a short period... for Italians at least in my opinion the time that everything went wrong was the day the last left wing government came into power... there was a hike in all things from taxes and energy ...  many more additional costs added to pretty well every form of life here... millions of new regulations introduced... well not literary ... but it felt like it...  the election of the present Berlusconi government was a response to what Italians felt in their pockets... that they could not survive the month on a salary of 1200 euro or even worse the pensioners on 400 euro..  as all the new laws and taxes added to the daily cost of living things haven't got much better since for most... a few regulations have been stopped but the Italian government cannot reduce taxation levels... Europe will not allow it.. which is why ICI was removed because that could be done... and various new rules introduced...  anyway heres the dry version of what things cost in Italy at the moment... pretty well agree with most of the comments from the residents here although i cannot answer any UK comparisons as i havent been there for a few years now and when we lived there we lived in Devon  as Penny says quality was pretty well as good as here in terms of fresh good food available if you lived in the countryside in the for setting up things and costs ... Penny makes a very good point again... work that out first before you jump... tourism venture failures are not reserved to Italy... they are reserved to people that do not research well or cannot cope with the move from employed work to self employment discipline...  millions set up and go bust in the UK... every year...thinking they can make a living with the profit from a house sale or redundancy payments...  by setting up a nice B & B ... do it where you cannot speak the language ...its even worse.... and hours of work required when working for yourself are beyond your worst nightmare...  sebastiano as usual got to the nitty gritty of it all early on... am enjoying reading all the views...  even Rams optimistic life here on euro 10,000,  i think hes referring to the young men who remain at home until 35 who drive their parents cars and mum still cooks and washes for them...   

Thank you Marcella, I was in no way being defensive, I have really no need to be, merely voicing another view point in the debate, I do realise it was prices and cost of living that was being compared in this thread, but was perhaps trying to widen the debate, no matter.A

"As for the rest I just wonder how the British would react to a lot of foreigners going to Britain and then complaining about the price of everything, you have the very obvious choice open to any migrant or tourist anywhere." Just seen this.  I am gobsmacked!  Being a migrant to the UK and Italy I do not seem to have the basic human right to comment.  Perhaps it is time to leave this Forum. Bye, will not be posting again!

Oh dont go Serge I am sure we all value your comments, I know I do, I totally misunderstood Marcellas post, but that is all fine now, sometimes the written word can be misinterpreted and misunderstood in the context of the thread, and other peoples options can vie with your own strong held views, hang around a little longer!.A

 Oooh Adriatica! - The cost of living in Sicily is much lower than on the mainland - but then wages are also much lower - 600 euro a month (net) is a standard wage in Sicily - and as I said 'excluding the car' you can get by fine on that if you dont want Versace, Sky multivision and a daily delivery from Amazon books! Regarding the taxes though, its a different argument.  Berlusconi is doing exactly what Thatcher did in Britain in the early 80's - pile up the indirect taxes, and 'cut' the direct taxation - the overall buren rises but the apparent tax burden is less - Europe does not control member states taxation regimes, at least not for the most part - it is purely a political choice by the party in power.  Prodi raised taxes I agree, but also tried to cap a crippling national debt that Belrlusoni is allowing to soar and could bring about the ejection of Italy from the eurozone - and that would be catastrophic to a heavily indebted economy such as Italy.    Prodi also started the long, very long, process of cutting down on fiscal evasion whcih will eventually negate the need for further tax rises. italy, as all western countries know has a time bomb with pension provision and health care and taxes will have to rise steeply to pay for a rapidly ageing population in need of hospitalisation.  In Italy, with the interest of organised crime and the strange way provinces are funded, there is too much 'lost at source' but even this wouldnt fill the black hole.  ICI was removed as a purely votecatching ploy - it doesnt cost central government hardly anything and merely penalises the comunes who have to provide services with less money in the kitty - hence the rise in TARSU and water rates and all the rest. Quality of life is a fair index to use, in addition to purely economic indices - your coffee may cost a little more but at least you can drink it in a nice place - it's the choice we all make all the time whether we live in Italy or London.   

If people don't get too touchy this is a great thread and so interesting to read other people's views.I suppose I'm living in the uk most of the time so I tend to compare everything in Italy to UK prices and that's things I really like buying like books ( 50p for a brand new paper back in my mum's charity shop).If I was much better off I would totally share Angie and Robert's philosophy and consider that what I'd lost on the financial side I gained on the Quality of life side.But I'm not,sadly.As a self-employed person I agree with Adriatica's comments regarding setting up businesses in Italy. People may see it as an escape from the rat race but what about when the bills come in?And a great big earthquakes hits -  meaning that tourism drops by 95% !!!! I love working for myself and my family tell me I shout less but I'm not sure what I'd have been like if I was doing it in Italy! 

Some intresting reading!!Just returned to the uk Lakedistrict!! Got say, think cost of a lot of food stuffs here same sort of price if not cheaper than Italy and have to say most of the food as good and some  better than Italy. We are very lucky that we have lots of local produce and must have some of the best meat you can buy.

Serge, my apologies if you were upset by my words, I had no intention to upset you and would also miss your posts. The one on herbs I have retained for future use for example. What I was really trying to say is that the main problem is the exchange rate (as you said initially) so the real fault lies with GB politicians. Whilst Italy may be inefficient in many areas the way of life here is to be preserved at all costs and not changed to suit foreign people who don't like it when they get here. The English seem to be the worst for trying to create their own little enclaves wherever they go and the Australians don't call us "whingeing Poms" for nothing.