European Stars And Stripes (Newspaper) - February 12, 1989, Darmstadt, Hesse                                Page 18 the stars and stripes sunday february 12,1989 business news Bush program sent the Buck into nose dive remember november when traders on the world s foreign Exchange markets reacted to George Bush s election by knocking the Dollar Down a few notches Well last week they were at it again. Just when it looked As if the Buck were poised to make a run toward the 1.90 Mark level and per haps higher traders lost Confidence in Bush s ability to improve the . Budget and Trade deficits. The result the Buck fell four pfennig on the week. The biggest drop came thursday when the Dol Lar fell More than two pfennig. More losses Fol Lowed Friday. By Randy Mcclain what caused the decline currency traders in Frankfurt West Germany said the Market Mak ers Don t believe president Bush s $1.16 trillion budget for fiscal 1990 is a sound one. They say it does t go far enough in addressing the United states twin budget and Trade deficits. It became Clear this week that or. Bush does t have a lot to offer said one trader in Frankfurt who spoke on the condition that his name not be used. He expects the budget Defi Cit to reduce itself through continued economic growth in the United states of 3 to 3.5 percent a year. And without any tax increases. The Market in t convinced that will  the trader said he expects America s deficit problems to persist. There is a growing belief in the Market that Bush does t have a plan he said. Apparently this trader s View is the majority one. After starting the week at 1.88 Marks for a Dollar the Buck fell to 1.84 Marks by week s end. The military Exchange rate dropped from 1.86 to 1.82 Marks during the same period. That rate will hold at least through monday based on a Price fixing at midday Friday. Ironically the Dollar s Steep drop came just one week after traders talked confidently of test ing the european Central Banks resolve to hold the Dollar below 1.90 Marks. Some traders predicted the Dollar would hit 2 Marks by Spring. It was not to be. Tough times for the Buck actually started last monday when Bush s budget proposal had t even been unveiled yet. The Federal Reserve Bank West Germany s Bundesbank and at least eight other Central Banks joined forces to sell dollars and hold the Dollar under 1.88 Marks. Ginter Teich a currency specialist with the Bank of Boston in Frankfurt said the Dollar Selling was unexpected and was particularly effective. Teich said traders were afraid the big Banks had secretly agreed among themselves on a new read that lower trading Range for the Dollar and were willing to spend millions to make their Point. The Market monday tried to read things and it got nervous he said. At week s end though currency traders at Tention had shifted somewhat from fears of Cen trial Bankers intentions to concern that Bush s fiscal policy won t be Strong enough to get the . Government out of the red. I see the Dollar slipping further Down to a level of 1.82, and then Well have to see from there Teich said. The other Frankfurt trader quoted above sees things much the same and it s not Good news for service members in Europe. I Don t think we can move above 1.86 Marks per Dollar at this time the trader said. Well have a new Range Between 1.82 and 1.86 Marks. I doubt Well see for now the level of 1.88 Marks that we saw a fortnight  the stars and stripes army of commissaries report sales Rose in 88 by Deedee Arrington Doke Kaiserslautern Bureau spurred by the Dollar s loss in buying Power on local european economies military Consumers in Europe spent More Money at air Force and army commissaries in 1988 than they did in 1987, according to fiscal year end figures. Total sales at air Force commissaries in Europe increased nearly 12 percent in fiscal 1988, climbing from $226.5 million in 1987 to $253.2 million. Army commissary total sales went up by 8 percent in the same period from $361.1 million in 1987 to $390 million in 1988. Citing the West German Mark s leverage against the Greenback As an example capt. Dennis Lee of the air Force commissary service said unless the Mark rate gets to 2 Marks per Dollar i think we re going to continue to see these big  asked if Price increases accounted for the higher Dollar amounts spent Lee said the greatest Price in creases in 1988, which affected cereals and fresh tur key were very slight and would t add up to that much  the commissaries Are not allowed to sell items for More than they paid for them. Prices May differ at commissaries because Stock was purchased at different times or because local managers opt not to participate in certain sales promotions among other reasons. Accompanying the higher sales in 1988 were higher surcharge collections Over the previous year. The 5 percent charges added to commissary customers Bills to finance new stores and other improvements amounted to $19.4 million in army commissaries in 1988, up from $17.9 million in 1987. Air Force sur charge tallies surged from a 1987 total of $9.4 million to $10.4 million in 1988. While shoppers spent More Money last year at local commissaries they also trimmed their supermarket Bills by using coupons. At army commissaries Coupon use skyrocketed by 34.6 percent in 1988 and at air Force stores by 32.6 percent. Army and air Force commissary sales in Europe $390 i army up 8% air Force up 12% $361.1 $253.2 $226.5 1988 1987 figures Are in millions one reason shoppers May be using More coupons is that they can use them six months past the expiration Date a practice that began last year at the commissaries said Denise Gomes spokeswoman for the army food stores. In addition to the $3.5 million Worth of coupons traded in Gomes said shoppers at the army stores saved $10.9 million in other Price cutting measures agreed to by vendors amounting to a 29.4 percent increase from 1987. The Industry is doing a better and better Job of responding to our needs she said. In the first Quarter of 1989, sales were up from the same time last year at both commissary systems again reflecting a trend toward heavy spending at the Mili tary supermarkets in Europe. The army stores reported a 2.1 percent increase while 3.4 percent More Money flowed into the air Force s coffers during the same period. Some . Workers in Germany jittery Over social Security Issue by Randy Mcclain financial writer a Small group of . Government employees in Europe is hoping to stay in the generous West German social Security program but several hurdles must be overcome before the wish becomes reality. Negotiations on the topic will have to be held with German finance authorities and before that can occur the . Secretary of the army must review the situation said Bill Frailey chief of the non appropriated fund Branch of the civilian personnel office at Usa eur Headquarters in Heidelberg. The Issue is on the front Burner in the Wake of a decision by the internal Revenue service and German tax authorities. The ruling has changed the income tax status of some 760 american workers on the cafes and army non appropriated fund Agency payrolls in West Germany. No air Force personnel were affected. The employees in question hold . Passports but were considered local National hires when they went to work for the . Government overseas. The workers some having official residency status in West Germany and others holding German work permits had paid German income tax and no . Taxes for years. But the irs called a halt to that practice Jan. 1. From now on the affected workers will pay Uncle Sam and not the germans. That s based on an agreement hammered out Between the irs the army in Europe and cafes on one hand and the German Federal ministry of finance on the other. One unresolved Issue though is a decision on which country s social Security system the several Hundred work ers should belong to. Right now the workers Are in limbo. No talks at All have been scheduled on the social Security question at this Point Frailey said. That s because the first thing we need is a determination from the Secretary of the army As to whether these folks can be excluded from . Social  Frailey said it s unclear whether any . Citizen can be excluded from the american system even though that s exactly what a Large number of the workers want in this Case. Some of the workers have been paying German social Security taxes for years. The idea of being Cut out of the German social system scares the hell out of me said 30-year-old Richard Radke an cafes computer operator in Stutt Gart. Radke an american citizen born of German parents plans to live and work in Germany for years to come. He said . Social benefits Don t offer the same level of Protection the German system does in terms of retirement pay unemployment benefits and other items. I plan to retire in Germany and this uncertainty about the future is really the pits he said. Radke a Cleveland native said he is thinking about searching for another Job if a decision on the social Security Issue in t made soon. That s his position even though the recent switch from the German to the less expensive . Income tax Rolls will probably mean a Little extra Cash in his pocket every payday. To me it s not a question of having 200 More Marks in my pocket today when i Don t know what s going to happen to me 10 years Down the line he said. Losing German social Security would basically be the Straw that broke the Camel s  the German retirement system pays generous monthly benefits generally based on a worker s highest lifetime salary. And Radke said he also ranks German unemployment benefits and Job placement services Over the american variety. Frailey said he cannot make guarantees about what the future will bring. The German authorities were exceedingly cooperative on the income tax situation last year but i Don t know How they feel about social Security he said. The Ideal solution might be for each american employee to have his or her Choice on which social Security system they want to belong to but Frailey said that idea probably would prove impossible to arrange wit German authorities