European edition, Friday, June 1, 2007
A two-point drop in the cost-of-living allowance across most of Europe today could leave troops' pockets anywhere from $30 to roughly $150 lighter for the month of June.
For troops in Germany, the decrease resulted from new price data that indicated the gap between prices in the U.S. and Germany is decreasing. A 12 percent to 14 percent drop in the allowance, known as COLA, was expected in Germany by U.S. military finance officials.
"It was going to happen anyway, the only question was whether it would be offset by an exchange rate adjustment," said Steve Bridges, director of finance operations for the Germany-based 266th Finance Command.
But because the dollar has moved up slightly against the euro, there was "chance of getting an exchange rate adjustment," Bridges said.
The 12 percent to 14 percent drop was phased in over two months. However, a weaker dollar offset the first half of the drop last month, and resulted in COLA remaining steady in Germany.
In Italy and the United Kingdom, the drop is due to an exchange rate adjustment. In the Netherlands, COLA rates decreased based on new data and changes in the exchange rate.
Servicemembers will see the latest decrease in their midmonth pay.
In the Kaiserslautern military community, the daily COLA given an E-6 with eight years of service and two dependents will drop from $27.29 a day to $25.58 a day, which amounts to a decrease of $25.58 for the first half of June.
Troops with a similar background and family makeup stationed at Lakenheath will see their COLA drop from $34.11 per day to $32.41 per day, which amounts to a decrease of $25.57 for the first half of the month.
COLA serves to close the gap in what it costs to live overseas versus the cost of living in the U.S., “but that gap is narrowing,†said Maj. Brian Kehl, chief of the Accounting and Finance Operations Branch for the U.S. Air Forces in Europe at Ramstein Air Base, Germany.
That's because prices in the U.S. are going up faster than they are in Germany, narrowing the difference between the cost of living in the States and the cost of living in Germany. The result, Kehl said, is a drop in the COLA for servicemembers in Germany.
“The COLA doesn't carry far enough as it is,†said Pfc. Richard Coleman, a member of the 66th Military Intelligence Battalion.
His wife's boss, a sergeant first class, has three kids, and "she can barely support her family on that," he said, adding it was even harder for lower-ranking soldiers with families to get by in Germany with the dollar so weak compared to the euro.
