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Germany

Bitter Wrangling in Debate on Flood Clean-up Funds

Germany’s governing and opposition parties were at loggerheads over the financing of the billion-euro injection in flood-affected areas at a special debate in the lower house of parliament.

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How are we going to pay for this? - a destroyed house in eastern Germany

The only thing that the government and the opposition could agree upon on Thursday’s special session on flood relief in the lower house of parliament was that flood victims need to be helped as soon as possible.

As far as actually financing the repair of the damages went, heated arguments and acrimonious debates were the order of the day.

Opening the debate, German Chancellor Gerhard Schröder said that the floods had caused the worst damage in Germany since the Second World War. He thanked the scores of voluntary and professional helpers who had laboured to pile sandbags and help people to safety.

"Not just a catastrophic flood, but also an unbelievable wave of solidarity has swept through Germany", he said.

Stoiber on the offensive

Opposition chancellor candidate Edmund Stoiber of the Christian Social Union (CSU) sharply criticised the government’s plan to finance a large chunk of the 10 billion euro (dollar) flood relief package by postponing next year's scheduled tax reform and increasing the corporation tax.

He said that the opposition Union bloc had chosen not to block the government's plans to avoid "fighting on the backs of the victims". But he emphasised that he thinks the government's strategy is wrong.

"High taxes will cripple economic performance, stem growth, destroy jobs", he said. The opposition is pushing instead to use the profits of Germany's central bank to finance flood repairs.

"Higher interest rates are a lesser evil compared to higher taxes", Stoiber said.

Pulling out his main weapon against Schröder in the current election campaign, Stoiber added that that recent floods were Germany's second national catastrophe of the summer, the first being the country's four million unemployed.

Social Democrats deride opposition proposal

But Chancellor Schröder’s Social Democratic Party (SPD) vehemently opposes using central bank profits. Schröder has called it "socially imbalanced" and accused the opposition of wanting to burden future generations with more debt.

German Foreign Minister Joschka Fischer of the Green Party said that higher debts would hurt the country's competitiveness.

Free Democrats want to go third way

The pro-business Free Democrats (FDP) joined the Union parties in opposing the planned hike in corporation taxes. FDP leader Guido Westerwelle accused the government of worsening the flood catastrophe through another "catastrophe" of higher taxes.

But the Union bloc's financing suggestion didn't meet with the Liberals' approval either. The money instead should come from diverting funds and saving in other areas, Westerwelle said.

PDS wants money from military projects

Parliamentary floor leader of the Party of Democratic Socialists (PDS), Roland Claus, called upon the government to cancel planned weapons projects such as the military transporter A400 M in order to finance repairs.

If Schröder says he doesn’t want a military adventure in Iraq, "then he can do without a military adventure gadget", he said.

Will the relief package suffice?

Despite the barbed debates, Georg Milbrandt, the premier of one of the most affected states, Saxony, took comfort in the fact that that the relief package could be coming soon.

But he was skeptical about whether 10 billion euro (dollars) in direct financial assistance approved earlier this week would be enough. For Saxony alone, the premier estimated damage costs could run as high as 15 billion euro (dollars).

The draft flood relief legislation should go through both chambers of parliament before the September 22 federal elections.

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