COLA falls in Europe
November 2, 2008
Cost-of-living allowances given to U.S. troops in Europe plunged Saturday to their lowest rates in 2½ years in reaction to recent gains by the dollar against major European currencies.
Depending on location, troops’ COLA dropped anywhere from 11 percent to 21 percent. The biggest cuts affect troops stationed in Spain, the Netherlands, and at RAF Fairford, England, and Naples and Camp Darby, Italy.
The COLA cut will mean about $45 less in mid-month pay for an E-6 with two dependents in most areas.
Exchange rates used by the Defense Department’s Per Diem, Travel and Transportation Allowance Committee to calculate improved dramatically; the euro from $1.397 to $1.295, and the British pound from $1.796 to $1.666, according to a message posted Friday on the committee’s Web site.
The cut came three days after the dollar suffered its biggest one-day loss against major European currencies in 13 years. Prior to Wednesday’s plunge, the dollar had been trading stronger than it had in more than two years.
COLA has dropped by more than one-third since July. Since then, the U.S. dollar has soared, improving from an all-time worst of roughly $1.60 against the euro, to a recent best of nearly $1.24.