Germany to set up USD 10.4 bn fund for flood relief

Germany has unveiled a plan to set up an 8-billion euro (USD 10.4 billion) national fund to provide immediate relief to the victims of the worst flood disaster in more than a decade and to finance long-term rehabilitation and reconstruction in the affected regions.
The federal government and the 16 state governments agreed at a meeting in Berlin yesterday to share the financial burden equally between them, Chancellor Angela Merkel said.
The proposed fund will become operational after the Bundestag, the lower house of parliament passes a legislation on July 5.
The exact level of the fund is open as the full extent of the damage caused by the two-week long flooding in nine German states is still not known, Merkel told a news conference after meeting the state prime ministers.

However, the amount agreed is based on a realistic assessment of the costs and it is higher than around 7 billion euros mobilised for a similar fund after the "flooding of the century in 2002," she said.
In addition to around 100 million euros pledged earlier for immediate relief among the flood victims, the central government agreed to contribute half of the flood-hit state governments' emergency aid for the victims.

It will also meet the entire costs for deploying around 12,000 troops as well as hundreds of police and the disaster relief agency (THW) personnel for protecting dykes, evacuating thousands of people from their hones and other rescue operations.

Deployment of the army in the biggest humanitarian operation in its history, is estimated to cost more than 50 million euros.
Chancellor Merkel ruled out increasing taxes to finance the fund and said the federal government's share will be raised by taking more credits and the government will introduce shortly a supplementary budget for that purpose.
The situation in most of the flood-hit regions stabilised as the river Elbe's level steadily declined and the port authorities in Hamburg said they are not expecting any major damage when the river's crest arrives there.