Buck Up, America: Dollars Buy More Again in Europe : Currency: Italy, Spain, Portugal and Greece offer the most vacation for your money.

Most Americans heading to Europe this year--and the European Travel Commission predicts that there will be a record 8 million of us--will arrive with this question hanging somewhere in their heads: How far will our money go?

The answer is far indeed, if your destination is Italy, Spain or Portugal, and if you’re comparing this year’s prices with those of last year and the year before that.

If you’re bound for Greece or Turkey, the dollar’s strong exchange numbers will cheer you up. But racing inflation has been grinding away at the drachma and the Turkish lira, and your dollars will be left with only slightly more clout than they had last year at this time.

Similarly, if you’re bound for England, France or Germany, your 1994 dollars will carry essentially the same weight that 1993 dollars did.

On the whole, travel professionals and currency traders say, Europe remains a reasonable bargain, with lingering weak economies holding down inflation in most nations. European Union officials calculated that 12-nation group’s combined inflation rate at 3.3% for the 12-month period that ended in February.

Michael Wallace, a senior analyst for Ruesch International Financial Services, foresees a stronger dollar in coming months--though as usual, jarring political developments could change that.

Rolfe Shellenberger, senior consultant for travel management firm Runzheimer International, suggests that “the banner year that they’re going to have (in Europe)--largely from U.S. money spent on tourism--is going to help them turn around faster. I think they’re probably at the nadir of their economic cycle right now.” And as they grow, our dollars will buy less.

Here’s a quick look at the dollar’s prospects in several popular European destinations, all scenery and character aside. The exchange rates quoted below come from Thomas Cook Foreign Exchange, as reported on March 25, 1992; March 23, 1993, and March 22, 1994.

(Travelers should keep in mind three important caveats. First, rates vary from one company to another. Second, you may get better rates at financial institutions in foreign countries, rather than exchanging money in the U.S. before you leave. And third, the rates below are those available to individual travelers. Other statistics, including the tables in this newspaper’s Business pages, instead use the rates granted to currency traders dealing in $1 million or more. Those rates are usually 2%-5% more advantageous than the rates individual travelers get.)

In England, a dollar bought 55 pence two years ago, 65 pence one year ago and 64 pence last month. Inflation ran 2.4% in the year ended in February. Runzheimer International, which calculates per diem rates for executives using first-class hotels and restaurants, in February, 1994, set its daily London figure at $315.85. (Keep in mind that the per diem numbers measure top-notch places in the center of principal cities--some of the most expensive places a traveler can find in most countries.)

In France, a dollar bought 5.31 francs two years ago, 5.25 francs one year ago and 5.45 francs last month. Inflation barely existed, running 1.7% in the year ended in February. But Paris may never be cheap. Runzheimer’s last per diem figure there, set in August, was $352.80.

In Germany, Austria, Belgium, Holland, Ireland and Switzerland, fluctuations of the dollar against local currencies have been relatively minor in the last year, and inflation rates have run at or below 3.4%.

Now to the countries that seem to offer larger bargains:

* Italy. In March, 1992, a dollar bought 1,178 lire. In March, 1993: 1,488 lire. Last month: 1,570 lire. That’s a 33% gain over two years. And if hoteliers and restaurateurs are racing to keep their tariff cards and menu prices up with those exchange rates, their efforts don’t much show in the nation’s inflation figures. Italian inflation ran 4.4% for the year ended in February, 4.5% for the year before that. Runzheimer cut its daily rate for Rome from $349.85 in August, 1992, to $259.25 last August.

* Spain. In March, 1992, a dollar bought 96.6 pesetas. In March, 1993: 107.7 pesetas. Last month: 128.1 pesetas--another 33% gain over two years, matching Italy. Spanish inflation ran far behind at 5% for the year ended in February, up from 4.1% the year before. Runzheimer, which assigned Madrid a $359.05 per diem figure in August, 1992, slashed it to $260.60 last August.

* Portugal. In March, 1992, a dollar bought 129.87 escudos. In March, 1993, 137.63 escudos. Last month, 158.1 escudos--a gain of 22%, while inflation was falling from 8% to 6.1% in the year ended in February. Runzheimer’s per diem for Lisbon has fallen from $245.75 in February, 1993, to $192.40 in February, 1994.

* Greece. In March, 1992, a dollar bought 172 drachmas. A year later, 200 drachmas. Last month, 222 drachmas. That’s a 29% gain, but against inflation it’s 11% for the year ended in February, 14.5% the year before. Runzheimer, which was assigning Athens visitors $249.35 in February, 1992, adjusted that to $251.30 in February, 1993, and $259.15 in February, 1994.

* Turkey. Turkey’s economy leaves an outsider wishing everyone would just hold still for a moment. In March, 1992, a dollar bought 5,263 Turkish lire. In March, 1993: 7,874 Turkish lire. Last month: 19,231 Turkish lire--up 265% in two years. Meanwhile, inflation advances at an estimated 70% per year, neutralizing nearly all of the gain. Runzheimer gave Istanbul a $221.40 per diem in February, 1992, cut it to $204.95 in February, 1993, then cut it again, ever so slightly, to $203.05 in February, 1994. Bring a calculator.