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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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Many European cities have become much more expensive for the international travelers during the last 12 months. According to a recent comparative study, 4 out of 10 most expensive cities in the world are from Europe. Moscow has become the second most expensive city just behind Tokyo. London is also in the top 10. Many Eurozone cities have climbed tens of positions during the last year. According to many analysts, this phenomenon is purely artificial, due to almost 40% Euro rise against the US dollar. Given the actual data, these analysts forget one small detail: London isn't a city in the Eurozone; Moscow, Geneva and Zurich (also included in the top 10) are not even in the European Union. Why did some European cities suddenly become so expensive?

First, there is a truth in the statement about the recent Euro rise. In fact more appropriate should be to say that the US dollar has fallen, because the recent trend has been triggered by the lowest in more than a generation interest rates in the United States. The dramatic fall of the US dollar has been monitored not only against the Euro, but also against many other major international currencies like the British pound, the Swiss franc and the Canadian dollar.

Second, if this explanation was enough, then all cities in the world could remain at their previous places except the cities in the US, affected by the weak dollar. The internal dynamic shows that the currency explanation has only a part of the credit. Not all Eurozone cities have advanced at the same speed, not all cities with stronger national currencies have reached the top of the list. Quite the contrary, the Canadian cities although helped by the stronger Canadian dollar, have maintained their previous positions in the bottom of the list.

Third, Moscow is a very special case that can't be explained only by the strong Ruble. If that was the case, then all major Russian cities could have entered the top of the list. In fact only St. Petersburg has good scores but it's quite normal given the political will of the Russian president to celebrate the city 300th birthday. On the other hand, Moscow is a unique city in Russia given the political and economic power it has over the country. The Russian economy in general is isolated from the global markets so any ups or downs on the real estate market there have rather internal than external reasons. Never mind now deep we dig in, we couldn't find any purely economic reason for the fact that Moscow is more expensive than London. If in the capital of Britain the price levels are result of the huge amount of money competing for smaller space, in the Russian capital these are the administrative regulations that push up and down the prices.

The cities in Switzerland are also special case that can't be explained only by the weak US dollar against the Swiss franc. Switzerland benefits from other factors that have nothing to do with the currency's volatility. The first is linked with the low stock markets because the luxury real estate is considered to be a safe investment in times like ours. Second, staying outside EU, Switzerland still offers better opportunities for some European investors.

Thus, the picture we have in the world is far more complicated than just a mechanical transfer of US dollars into Euros. The new exchange rates play a certain role in the new most expansive cities' list but they can't explain everything.

World's 10 Most expensive cities

1. Tokyo
2. Moscow
3. Osaka
4. Hong Kong
5. Beijing
6. Geneva
7. London
8. Seoul
9. Zurich
10. New York

(Mercer Human Resource Consulting)

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