COLA allowances up across most of Europe
March 15, 2008
There’s good news and bad news for nearly all overseas troops: The cost-of-living allowance given to U.S. troops in all of mainland Europe will rise Saturday. The increase, however, is little more than a reflection of worsening exchange rates, which have pillaged the pocketbooks of Americans stationed overseas.
Among the European countries where significant numbers of U.S. troops are stationed, only the United Kingdom will not see an increase in the allowance. Rates increased in all countries where the euro is used as the local currency.
The allowance, a supplement to troops’ pay to offset high living costs in many overseas areas, is based on local prices, buying habits and local exchange rates.
In Germany, COLA rates in most of the country will rise nearly 12 percent, to their highest point in at least a year. In Kaiserslautern, Heidelberg, Grafenwöhr and Stuttgart, an E-6 with four years’ service and one dependent will see his daily COLA rise from $23.42 to $26.18 per day through the end of March, or about $100 a month.
Rates in most parts of Italy, Belgium, the Netherlands, Spain and Portugal will go up by roughly the same amount. Rates in Luxembourg will rise by an even greater margin.
Local exchange rates were cited as the cause of most of the COLA rate changes by the Per Diem, Travel and Transportation Allowance Committee. In Italy, a recent retail price survey, along with the dollar-to-euro exchange rate, caused an across-the-board increase for all areas of the country.
The new COLA rates don’t take into account the most recent of the dollar’s declines against European currencies, but instead are based on exchange rates available through about March 9.
Recently, the dollar has taken a pounding, trading at record lows against many major currencies, including the yen and the euro.
The euro traded for an all-time high Friday of $1.5657, surpassing the previous peak of $1.5625 achieved Wednesday. The British pound rose to $2.0344 from the $2.0292 it bought in New York late Thursday; however, that rate is far from the record of more than $2.11 set in November.
The dollar, which Thursday fell below 100 Japanese yen for the first time since late 1995, again dipped as low as 99.85 yen Friday but clawed back some ground and traded at 100.11 before noon in the U.S.
To calculate expected COLA payments for this pay period, go to http://perdiem.hqda.pentagon.mil/perdiem/ocform.html.
The Associated Press contributed to this story.