When many civilians living in Europe open their pay stubs at the end of April, they can thank Ben Bernanke for that little bump in post allowance.
Or, they can swear under their breath that the Federal Reserve’s moves two weeks ago caused the dollar to sink like a rock.
Either way, U.S. civilians working in Germany, the Netherlands, Spain and Belgium saw between a 16 percent and 20 percent jump in their post allowance starting Sunday because of the dollar’s slide in mid-March.
The Federal Reserve’s announcement March 18 that it would buy as much as $300 billion in long-term Treasury bills and double its mortgage-debt purchases to $1.45 trillion sent the dollar into a tailspin. On the day of the announcement, the dollar was worth .7522 euros at military banks in Europe. Two days later, it was .7134, a 5 percent drop. It was the dollar’s largest one-week slide since 1985.
As a result, workers in Germany will see a 20 percent jump in their cost-of-living allowance. A worker making $45,000 a year who has three dependents will see his biweekly allowance increase to $311 from $259. In Belgium, that same worker will see his allowance jump to $519 from $436 a paycheck. Post allowance rates are determined on a number of factors including annual salary, number of dependents and location.
Allowances did not change in Italy or the United Kingdom.
For more information on the post allowance changes, visit the State Department’s Web site at: http://aoprals.state.gov/content.asp?content_id=346&menu_id=81