The State Department is losing millions as a result of the free-falling dollar, forcing its overseas missions to lay off local staff, reduce energy consumption, put facility repairs on hold and cancel travel, officials said.
Although the dollar’s weakness is affecting embassies and consulates around the world, the most drastic measures are being taken in Europe, where the euro has been trading around $1.54.
“It’s beginning to hurt — there is no question about it. It’s tough on us,” said Christopher R. Hill, assistant secretary of state for East Asian and Pacific affairs.
Another official said that 24 percent of the State Department’s main operating account, which is $3.8 billion for 2008, is disbursed in foreign currencies.
“We already have a tight budget, and the buying power of those limited resources is further affected by the decline of the dollar,” the official said.
He noted that the department has a “buying power maintenance account” where it puts money when the dollar’s value goes up, but “there is no money in it now.”
“The biggest impact I have seen is our ability to program events,” a Foreign Service officer in Europe said. “We have had to become very creative in finding cost-saving measures.”
Public diplomacy programs are among the most affected, officials said.
The officers spoke on the condition of anonymity because they were not authorized to speak to reporters.
“The weak dollar has made it much more expensive to do our work, limiting our ability to travel around the country to monitor events and engage contacts, limiting the number of representational events we can organize for visiting U.S. and host-country officials,” said another officer in Europe.
Several officials said the higher cost of maintaining existing facilities abroad reduces the funds available for renovations and new construction.
“We’d like to put in new embassies in some places, but the price tag is going up every day,” Mr. Hill said.
A third Foreign Service officer in Europe said that at his embassy “electricity usage is being cut by reducing lighting and turning off hot water heaters.”
“We have turned off every other fluorescent light in our offices and hallways,” he said. “We can still work, but it feels like permanent sunset.”
Another major expense in foreign currency are the salaries of thousands of local employees at U.S. embassies and consulates. The first officer in Europe said that her salary is now lower than that of her assistant, who is a national of the host country.