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).
Switzerland maintains open borders with its neighbors, and more than 2 million people live close to the frontiers. But since the Swiss live outside the EU's economic union, they're eligible for refunds on the 19-20 percent value-added tax they pay in German, French, Italian and Austrian stores. They come out ahead even after paying the 8 percent VAT that Switzerland requires on items brought over the border.
For evidence of what the strong currency is doing to Swiss business, consider the plight of a new 120-store shopping mall in Basel, Switzerland, close by Germany and France.
All the Swiss have to do is drive a few minutes more past the Stuecki Shopping Center to get to the eurozone, where their potent franc can buy the same trousers, detergent, contact lenses, stoves and magazines for half the price.
"The Swiss people are doing a little bit of cherry-picking. Of course, we feel it," said Jan Tanner, the mall's director and board president of the Swiss Council of Shopping Centers and director of the mall.
Inside the mall, which cost more than a quarter-billion francs to build and boasts climate-friendly heating and cooling, the lunch crowd swelled the fast-food court, but there were few other customers wandering its stylish glass and steel corridors, where new BMWs were parked on display.
Zurich-based Location Group declared the mall a "disgrace" in a retail market study earlier this year, saying at least one-third of all tenants would move immediately if they could because sales "fall well short of the worst-case hopes." It partly blamed the franc.
The towering white monolith also was supposed to revitalize a rough section of this northern industrial city, but Tanner says the mall will need to attract a quarter to a third more customers over the next several years or it won't succeed.
"It's a big challenge for all of us," he said. "Because a lot of the Swiss are doing their shopping in Germany and France."
Tobias Mueller, managing partner of a Basel firm that evaluates other companies' performance, said he stopped by the Stuecki mall to replace a broken cell phone but usually goes to Germany for major purchases. He said he worries about what that does to the Swiss economy — but not too much.
"I know that it's complaining on a comfortable level," he said. "I don't think that we, as Swiss people, have to worry as much as our neighbors, because our national economy is much healthier."
At the mall, some managers said they, too, go to Germany to shop. They said the mall just isn't attracting enough people and faces still more competition from downtown stores near popular sidewalk cafes and bars.
They said the only times there's plenty of customers is during bad weather or special marketing events but emphasized that when the mall opened in 2009, the euro was worth about 1.60 francs.
"If the borders weren't here, things would be better," said Melanie Franz, manager of a hair products store that opened in May.
Swiss consumers, particularly those farther away from the borders, are increasingly angry at businesses that keep prices high without passing along savings from their increasing purchasing power thanks to the strong franc.
The price checks in Swiss newspapers and by consumer groups haven't exactly gone unnoticed in government as the Swiss Cabinet and some federal agencies get involved, holding talks with producers and wholesalers.
The worst retail impact of the strong franc is on the smaller merchants and stores near the borders that don't sell food, since grocery chains are somewhat protected by government restrictions on imports such as meat and fresh produce.
"It's really a very, very serious moment for some of those retailers," said Rudolph, the professor at St. Gallen. "Some of the stores will be killed. Probably the smaller ones. If you're near the border, and the price difference was 10 percent, and now it's 30 percent — it's not going to work."