I can't see skipping London and Paris, or at least skipping both of them because of cost. These are two of the greatest cities in the world. In London in the summer, you can stay at a very reasonably priced student residence, with separate room for the parents and teenager, with cooking and laundry facilities included. In Paris, there are various cheap hotel deals you can do, or even get an apartment.

That said, they can have an excellent trip without setting foot in either of those cities. Germany is a very reasonably priced country for the most part, and very easy to travel in, with lots to see and do. Although hot, muggy weather is possible, it's going to be much better than Spain or Italy (except for a few locations). In the Netherlands, I've only seen Amsterdam and some surrounding towns, but this is a very pleasant place to go, and again usually without extreme summer heat (more so than many German locations). Berlin is an extremely appealing city for both adults and teenagers. To my slight surprise, one of my daughter's favorite cities is Cologne, in large part because of some other interesting teenagers she met there.

Edinburgh during the festival is an excellent destination, but it would really crimp the budget if they were not willing to stay in a student residence. We did that in 2006, me and my teenage daughter, and we had a great time.

I'd highly recommend that they consider 3 or 4 major destinations, with daytrips from each if they want. This will save money and avoid a hassled feeling, which can be exacerbated by a teenager, and there should be plenty to do in each.

Even if the exchange rate gets worse, that budget should stand them in good stead, if they do any advance planning at all.