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A falling dollar may be bad news to some. But Americans living on military bases in Europe, doing most of their shopping at military facilities and rarely traveling will probably see their wallets get a little heavier.

Cost of Living Allowance is on the upswing for many servicemembers across Europe. With the rapid decline of the dollar, one of the mechanisms the U.S. government uses to offset currency fluctuations becomes a more significant factor.

COLA is set by the Per Diem, Travel and Transportation Allowance Committee at the Pentagon. In times when the dollar is strong, military members see the amount they receive shrink and Department of Defense civilians often see the allotment disappear. When the reverse is true, the money sent to individuals grows, after taking into account factors such as duty location (sometimes varying even between neighboring cities), pay grade, number of dependents and years in the service.

The amount can be significant. A few examples:

An E-1 stationed in Hanau, Germany, with less than two years in the military and no dependents was receiving $258 in COLA each month following a May 1 adjustment.An E-5 based in Naples, Italy, with six years in the service and two dependents was taking in $735 in COLA supplement.An O-3 with four years and one dependent at RAF Alconbury in England was getting $495.And the COLA rate was set to be adjusted upward again starting Friday.

If people choose to spend some of that extra money at exchanges and commissaries on base, they won’t even be using the money to offset a change in the exchange rate. Because much of what’s sold there comes from the States and customers use dollars in their purchases.

Jeanne McDonald, a spokeswoman for the Army and Air Force Exchange Service in Europe, said a series of deployments makes it hard to determine if more people are shopping at exchanges now.

But “when the dollar is weak, our customers do tend to shop more frequently at the exchanges,” she said.

Of course, those living on the economy — especially those staying in places close to the ceiling the government will pay — may find the COLA increase doesn’t offset the extra money they’re paying to their landlords.

And while it may not seem like the bill at your favorite restaurant is any more pricey, if you’re paid in dollars, it’s effectively costing more.

Information on COLA rates, as well as per diems and housing allowances, can be found on the Internet at: www.dtic.mil/perdiem/

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