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European edition, Thursday, August 30, 2007

Two weeks after post allowance climbed to a point not seen in at least a decade in Germany, the allowance dropped back last week to its pre-high level.

The cut, which amounts to a decline of roughly 16 percent, was caused by an exchange rate adjustment, according to a U.S. State Department memo.

U.S. employees who receive post allowance will see their post allowance supplement fall by between $67 and $375 a month in most parts of Germany. With a few exceptions, most other European countries were not affected by the most recent adjustment.

In July, the euro peaked at more than $1.38 to set an all-time high against the dollar. But the dollar gained some ground on the euro in the weeks before the latest allowance changes.

In the week prior to Aug. 19, the date the most recent post allowance reduction went into effect, the euro had fallen below $1.35, according to Federal Reserve Bank of New York data. The euro has since climbed back above $1.36.

An Aug. 5 increase in post allowance, which resulted from a retail price survey for the Frankfurt area, drove the supplement to its apparent record high. A review of online State Department records stretching back to 1997 — the earliest records available — indicates that post allowance had not reached that level in Germany in at least the last decade.

The State Department officials in Washington who set allowance rates could not be reached for comment by deadline Wednesday.

At the current post allowance rate, a single employee who makes between $39,000 and $41,999 per year will get about $661.50 per month in post allowance. That is a decrease of $126 from the higher rate.

A married employee with two children in the same wage range will get about $868 per month in post allowance — a decrease of $165 from earlier in August.

Post allowance, designed to reimburse eligible employees for certain excess costs they encounter as a result of their overseas employment, can be adjusted as often as every two weeks and varies by location.

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