European Stars and Stripes (Newspaper) - March 4, 1990, Darmstadt, Hesse                                Business new markets edgy Over elections in e. Germany Willi elections in East Germany two weeks away currency markets arc nervous about what the future holds. For americans living in West Germany that a Likely to mean their dollars will be Worth a few More pfennig in the next few Days. A the Market is still nervous about How monetary Union Between East and West Germany will be achieved a said one foreign Exchange trader in Frankfurt West Germany who asked not to be identified. A a there a a Lack of information and  on the one hand Karl Otto Pohl the steady economic giant guiding policy at West Germany scentral Bank wants monetary Union with East Germany to move As slowly As possible. Last week Pohl told the new York times that he thinks it Randy Mcclain will take several months to Iron out an agreement after East Ger Man elections March 18. Pohl said no one knows what an East German Mark is really Worth and it will take lengthy negotiations to Settle on a method by which citizens in the East can get West Marks in return for their East Marks. Horst Kaminsky chief of East Germany scentral Bank said last week that his country will insist on a on for on Exchange rate for the billions in East Marks held in citizens private savings accounts. Not to do so would turn the East into a nation of paupers he said. West German Chancellor Helmut Kohl is a a sympathetic to the East German demand. But Many private economists say an Exchange rate that is too Liberal for the estimated $ 170 billion in East Marks circulating in the once communist state could spark runaway inflation in the West. Pohl a who unlike Kohl Isnit running for reelection this year a is sceptical of a on for on Swap. The wide difference in opinions has currency dealers confused. A right now rumours and assumptions arc moving the Market a the Frankfurt trader said. A once the details arc on the table it might not be so  for now though the Dollar is gaining against the West German Mark. The Buck jumped 4 pfennig last week moving from 1.678 Marks for a Dollar Early in the week to 1.717 Marks Friday afternoon. The Dollar also gained 4 cents against the British Pound. Late Friday one Pound was Selling on world markets for just More than $ 1.66. A week earlier one Pound sold for $1.7085. The military Exchange rate in West Germany also shot up Over the past week to stand at 1.68 Marks this weekend. That rate will apply to military banking transactions through monday afternoon. Gunter Teich currency analyst with the Bank of Boston in Frankfurt thinks the Buck will continue edging higher in the week ahead. A the Dollar should creep up slightly until March 18 when it May be clearer what will happen in Germany a he said. Look for the Buck to reach 1.73 Marks on world markets in the next few Days the other Frankfurt trader said. Skittish Ness about the political situation in the two Germany is the main reason the Dollar is Likely to rally but some Long awaited positive economic news from the United states also has been helping the Buck. The Dollar first topped 1.70 Marks wednesday following a revised report that the . Gross National product increased by 0.9 percent in the fourth Quarter last year instead of 0.5 percent As had been previously reported. The Gross National product is the value of a country a total goods and services. A the economic numbers coming out of the . Are still a Little confusing a the Frankfurt trader said. A but the latest figures show the american Economy May not be As weak As once thought. Economic growth there is slow but there wont be a  the stars and stripes tax break May be Given to some military families by William j. Bartman Washington Bureau Washington a the earned income credit which gives Low income families a tax break of several Hundred dollars a year could soon be extended to military personnel overseas. Such a move would put More Money in the pockets of As Many As 25,000 Low income military families who could qualify for a tax savings of up to $910 a year. Currently overseas  with families done to qualify for the credit unless they have maintained a Home in the United states More than half the year and make less than $19,340 a year. The non commissioned officers association the defense department and several congressmen have been trying to Correct that inequity since the tax credit took effect 14 years ago. All say their chances of Success arc Good this year. The credit is intended to Grant Low income couples with children Relief from the social Security tax deducted from paychecks. Extending the tax break to overseas  nearly became Law last year but it was deleted from the budget at the last minute. This year however the House ways and Means select Revenue measures subcommittee has Given a warm reception to the legislation by rep. Jim Slattery d-kan., amending the lax code. Subcommittee chairman Charles Rangel. D-n.y., said the change is needed. Similar legislation by sen. John Glenn a Ohio. Is advancing to the Senate finance committee. A i think it has a very Good chances to become Law said Sydney Hickey of the National military family association which endorsed Slattery a Bill. Several House and Senate staff workers offered similar assessments. Based on an estimate of military earnings by the Nymfa Only e-4s and below stationed overseas would qualify for the tax credit when housing and subsistence allowances Are added to base pay. The typical savings would be $600 or less according to the defense department. The Nymfa calculated that an e-2 with a spouse and child would qualify for a $463 tax credit. Thais $38.58 per month which a would Purchase approximately 11 quarts of milk 28 jars of baby food. 6 pounds of ground meat. 7 pounds of Chicken 10 pounds of potatoes seven cans of Vegter tables. 5 pounds of flour and 5 pounds of bananas a the Nymfa said in a position paper. While thousands of service members overseas stand to gain from the Slattery Glenn Effort thousands of others in the states might lose the tax credit because of a new Federal tax Rule. Service members living in military quarters in the United states have qualified for the credit in the past because they were not receiving a housing allowance that was listed As income. However a new internal Revenue service regulation requires that living quarters be considered As earnings. This change will push the income of some families Over the earned income limit of $ 19.340. When americans Call overseas Trade deficit rings up More debt by John Burgess the Washington Post Washington a to grasp How intractable the . Trade deficit has become consider the following every time an american picks up the phone and dials Paris Singapore or any other foreign locale the United state so a International payments slip a bit further into the red. The United states is leading the world in the communications revolution but with that status is coming an unwelcome byproduct. In effect it is making the country pay out More than it takes in for yet another commodity Long distance calling services. The 1989 Trade deficit figures released last month did not include a breakdown of phone services but in 1988 the United states sent abroad $2 billion More than it got Back for International calling. That amounted to nearly 2 percent of the nations total $ 126 billion deficit that year. The system works like this every time an american dials a foreign country the phone company in that country must be paid a fee for receiving the Call and directing it to the number dialled. The same holds True in reverse. If a resident of that country Calls Here an american Long distance company collects an equivalent fee. What creates the deficit is that for every Call coming in from abroad two arc placed going out. Thus. Mexico receiving More Calls from the United states than it places to numbers Here collected $411 million in 1988. West Germany got about $150 million. In a few cases such As Sweden incoming Calls outnumber outgoing ones and this country records a surplus. With american Telephone amp Telegraph co. And competitors Sci communications corp. And us sprint communications co. Rolling out new discount plans for Calls abroad a sizable shortfall seems certain to remain in the near term. Americans Call a lot partly because their society is affluent and has put telephones everywhere. At the same time the country has led the world in cutting consumer rates. Calls from Here to foreign countries excluding Canada and Mexico Rose almost Twenty fold from 1975 to 1987. The philosophy driving the . Industry is that lower prices will increase calling and bring economic and social benefits even if the profit margins arc razor thin. Different thinking often prevails overseas. Phone systems there Are often government owned and viewed As socially useful generators of Public revenues that can subsidize the Post office local phone Calls or government in general. Accordingly these countries set prices Well above Cost. International callers often learn to work the system to their advantage. If it is cheaper to Call from the United states to West Germany than vice versa firms with offices in both places will tend to dial from the states. Or people living overseas May Call friends and family in the United states just Long enough to ask for them to Call Back. Some countries such As Romania go to elaborate lengths to milk foreign Exchange from the system. Romanians phone Agency charges International callers successively higher  rates the longer they stay on the line according to at amp to. The Federal communications commission has seized on the deficit As a cause for action saying High prices in foreign countries also help keep High the prices that . Consumers must pay to Call them. Acc chairman Alfred Sikes said in a statement last fall that . International Telephone users have to be in a situation where in effect they have to subsidize the social policies of foreign governments. He has promised an initiative to provide Long term Relief. If the prices Consumers had to pay were roughly the same in the United states and abroad calling patterns would come More into line eliminating or reducing that part of the . Trade deficit. Japan and Many european nations Are moving in that direction though not at the Speed . Officials would like. In the meantime at amp to teams travel worldwide renegotiating the rates per minute that must be paid to overseas Telephone companies for connection services. Some countries resist lowering the rates. For its part at amp to does not consider the Del id to be a major concern said Tom Luciano. District manager for International settlements no pointed out that every Call that increases the delian also creates business for . Companies