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European edition, Wenesday, August 1, 2007

There’s good news across the board for U.S. troops serving in Europe: Your cost-of-living allowance is going up.

Allowance rates for the first half of August, posted Monday by the Per Diem, Travel and Transportation Allowance Committee, will increase the supplement, known as COLA, by roughly 5 percent for troops in Italy and by about 12 percent to 14 percent for troops in Germany and the United Kingdom.

U.S. servicemembers stationed in the Netherlands, Belgium, Luxembourg and Spain will see their supplements increase by 4 percent to 7 percent.

Exchange rate adjustments were responsible for the changes in each country, according to a message posted on the Per Diem Committee’s Web site.

The U.S. dollar hit an all-time low against the euro less than two weeks ago. The euro was worth $1.383 on July 20, according to the Federal Reserve Bank of New York’s Web site.

The dollar must move up or down at least 5 percent against the euro to affect a change in COLA, said James Greer, command and administrative program director for Navy Region Europe.

At RAF Mildenhall, England, on Tuesday, Senior Airman Cindy Hernandez said her COLA level has affected how much she spends on the economy.

It’s a lot harder to justify impulse purchases in a country where the pound has been worth $2 for a while now.

“When you do go out, you realize more what you’re spending,” she said. “I’ll hold back on dessert or buying beer.”

Hernandez said she might be more inclined to buy on the economy if more COLA money was coming in. Today’s increase will put about $3 more a day in her pocket.

When he first arrived at Mildenhall a few years ago, Staff Sgt. Demetrik Hill said he spent more of his earnings outside the base. But a few years dealing with the pound changed that for him.

“I don’t go out at all,” he said. “That exchange rate keeps going up and up,” Hill said.

The British pound hit its highest level in two and a half decades July 24, trading at a fraction more than $2.06 according to the Federal Reserve Bank of New York.

Today’s COLA increase brings the supplement to its highest level in at least four years in the U.K., according to Per Diem Committee data. That might make it easier for Hill to swallow the costs of things like car repairs.

Airman 1st Class Heather Labadie, an information manager at Ramstein Air Base, has lived in Germany a year and said the allowance doesn’t keep up with the cost of living overseas.

“Yeah, it’s a good thing,” Labadie said of COLA. “But it’s only good for a little while and then it goes down.”

COLA increased only one other time this year in Germany, but had decreased three times for a net loss of about 17 percent through July.

“I don’t have a solution to the problem, but I don’t think it is enough,” Labadie said.

This year’s drops in the cost-of-living allowance affected the budgeting of Christine Monroe and her husband, who is a senior airman at Spangdahlem Air Base. The couple had to start watching how much they spent on food, Monroe said.

“It hurt us because we have a kid,” she said. “When you have a kid, every little bit helps.”

Christine Monroe works, but about half her paycheck goes to pay for her 15-month-old’s day care, she said. The increase in COLA will be a welcome relief, she said.

Petty Officer 1st Class Grant Knight, a single sailor living off base in Italy, said he’s not likely to notice the few extra dollars each month in his paycheck. In Naples, where he’s stationed, his COLA increased about $1.50 per day today.

“Personally, I don’t feel the difference; I don’t scrutinize my finances so closely that it will make any significant difference,” said Knight, a member of Naval Forces Europe, 6th Fleet.

“Of course, it’s nice to have the extra money, but will I notice it when I’m paying extremely high costs for everything already? No,” he said.

To put it in relative terms, he said, it’s about enough to cover what he pays in tolls, about 70 euro cents each way, driving to and from work every day.

The mid-July drop in COLA in Naples didn’t affect Petty Officer 1st Class Vic Rosado’s lifestyle, according to the single sailor, who lives and works in Naples. “I just don’t have extra spending money,” he said.

As for his COLA going up about $20 for the first two weeks of August, “Um, I guess that means I get an extra 3 liters of gas coupons,” the sailor said jokingly.

Stars and Stripes reporters Sandra Jontz, Geoff Ziezulewicz, Scott Schonauer and Steve Mraz contributed to this report.

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