To summarize, there are three ways to lose money unnecessarily at an ATM in Europe, and unfortunately all of these extra charges are becoming more frequent--and larger--every year. Do not do these things:
Use an ATM card from a financial institution that charges fees for use of an ATM belonging to a different bank. Those fees will not be mentioned on the ATM (except perhaps via a vague warning that they may apply), and there's nothing you can do about them once you're in Europe, other than minimizing ATM withdrawals by using a credit card as much as possible. Once you return home, try to find a local credit union with no foreign-ATM fees or much lower fees. There are also some internet banks that don't charge such fees.
Use an ATM that charges a usage fee. This type of fee will be disclosed on the ATM during the transaction. You can then cancel the transaction and walk away to try a different bank's ATM.
Accept the ATM's offer to "lock in" the withdrawal amount in US dollars. This will always involve an exchange rate that is very, very poor. Do not ever accept this. You always want to conduct the transaction in the local currency. (Note: Something similar can happen when you use your credit card; always pay in the local currency.)
Every one of the above things can happen even if you use a bank ATM in most countries in Europe. Just avoiding Euronet ATMs is not enough.
In 2016, Santander Bank ATMs didn't charge usage fees, but more and more bank ATMs are doing that now, and I wouldn't be at all surprised if Santander Bank does so. The ATM-fee situation can change from month to month.
I agree that the math here is surprising. Even running into all three problems detailed above, I'd have expected something more like this:
- Withdrawal: 140 euros
- Official exchange rate: about $155 today (varies)
- ATM-usage fee: 5 euros (converted to about $5.60; if percentage based, could be higher)
- Home-bank fee: probably no more than $5 + 5% (about $12.80)
- DCC impact from poor conversion rate: not sure, but I'd guess probably not more than 7% (about $11.55)
So I'd have expected the total cost of that withdrawal to be about $185. However, if there are no laws to prevent it, the swing on the conversion rate used when you accept DCC could be worse than the 7% I estimated above.