John Heilprin., AP Photo
GENEVA — The city bus is packed as it leaves downtown, winding away from the sparkling waters of Lake Geneva and through neighborhoods sitting hard along the border with France.
Hardly anyone gets off. Then, 20 minutes later, the F bus stops just on the other side of the frontier near a Carrefour supermarket, where the parking lot is awash in Swiss license plates. Dozens of Swiss pile out, shop and return loaded with groceries half the price of those in Switzerland.
The value of the Swiss franc has soared 18 percent against the euro over the last 12 months as global investors buy up billions of francs as a safe haven from stock and bond values battered by the U.S. and European financial crises.
The cost of goods in Switzerland was already high compared to those nearby in Europe thanks to the booming Swiss economy. Now, the prices are astronomical, driving down tourism, curtailing exports and sending hundreds of thousands of Swiss across their small country's borders with France, Germany, Italy and Austria in search of euro bargains.
The Zurich daily Tages Anzeiger recently published an index showing that an IKEA stove selling for €549 ($790) in Germany cost 1,299 francs ($1,669) in Switzerland. A deodorant selling for €2.15 ($3.10) in Germany cost 5.90 francs ($7.58) in Switzerland, and a child car seat selling for 104.90 euros ($151.12) in Germany cost 239 francs ($307) in Switzerland.
The Swiss franc was gaining — again — against other major currencies after the Swiss National Bank tried to weaken the currency Wednesday, but stopped short of pegging the franc's value to the euro. The franc had reached near equal value with the euro earlier this month, but then fell over the past week as speculation mounted about an intervention.
The Swiss Cabinet announced plans on Wednesday to spend 2 billion francs ($2.57 billion) from an expected surplus this year to counter the rise of the franc and keep jobs from heading over the borders, in what Johann Schneider-Ammann, the economics minister, called "a bold and impressive step" aimed at propping up exports and tourism.
Outside Carrefour, software engineer Marco Bonifazi grappled with four bags brimming with prosciutto, broccoli and pasta. He carried a backpack that was stuffed with couscous, melons, canned corn and a huge plastic jug of dish detergent strapped to the outside.
"It's just great to save money," he said, as he and his wife Marta headed back to the bus.
As many as a half-million Swiss in this country of 7.8 million cross the borders for bargains at least once a month, costing the economy close to 3 billion francs ($3.86 billion) a year, said Thomas Rudolph, a professor of marketing and retail management at the University of St. Gallen.
It's a bitter lesson in the interconnectedness of the European economy for a nation that has proudly rejected integration into the EU.
"Everyone just told us, 'Don't bother shopping in Switzerland anymore. Go to France. Because the franc goes a lot further,'" Claire Till, a British woman who works at a marketing company, said as she closed her Peugeot wagon's trunk, filled with grocery bags.
Strong exports, low unemployment and moderate government debt have buoyed the Swiss economy since it bounced back from a 2009 downturn, particularly when compared with European neighbors struggling with massive national debts that have eroded confidence in their stock markets and in their ability to repay their government bonds.
Geneva and Zurich are consistently ranked among the priciest cities on the planet, and the International Monetary Fund ranked Switzerland last year as the 19th biggest economy in the world, with a gross domestic product of more than 487 billion francs ($626 billion).
- NORAD 'tracks' Santa's journey across globe
- Photo gallery: Christmas around the world
- Officer kills armed 18-year-old near Ferguson
- Our six heroes of 2014
- Ex-President George H.W. Bush to stay...
- Final goodbye: A roll call of some who died...
- Blizzard gives Hawaii summits a White Christmas
- CDC monitoring laboratory technician for...
- NYPD: Cop ambush killer told passers-by... 15
- Going it alone, Obama rocked the boat... 13
- Officer kills armed 18-year-old near... 10
- Pope in blistering critique of Vatican... 9
- Key developments in the case of slain... 9
- Killings of 2 New York officers trigger... 6
- Senate, CIA agree torture program was... 6
- Sony announces limited release for 'The... 5