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'No upper limit' to flood aid

June 12, 2013

Germany's chancellor has pledged "no upper limit" to financial aid to flood hit regions during a tour of affected areas. She will hold talks on Thursday where a relief fund is up for debate that could be worth billions.

German Chancellor Angela Merkel (L) talks to a lifeguard on a dyke at the swollen river Elbe (photo via Reuters)
Image: Reuters

Angela Merkel was in Lower Saxony and Schleswig-Holstein on Wednesday, touring the current flashpoints in Germany's worst flooding in over a decade.

Speaking in Lauenberg, 40 kilometers (25 miles) upstream of Hamburg on the River Elbe, Merkel said her governing coalition had set "no upper limit" to relief funds, without elaborating on specific figures. The town is currently under around 30 centimeters (1 foot) of water.

Next stop was the town of Hitzacker in Lower Saxony, where around 4,000 people have been told to leave their homes.

Germany is still counting the cost of the floods, which have devastated large areas of eastern, northern and south Germany over the past two weeks and claimed at least 19 lives across central Europe.

Putting a price tag on the flood damage will be one of the topics up for debate on Thursday when the chancellor meets Germany's sixteen state premiers. The details of how to cobble a relief package together are also set to be discussed.

Media reports have quoted coalition sources as saying the fund could reach as much as 8 billion euros ($10.6 billion), with Germany's federal and state governments likely to split the costs 50-50.

If confirmed, that figure would exceed an aid package of roughly 7 billion euros used to deal with the "flood of the century" in 2002, which left much of the country under water.

'No tax rises'

According to a letter sent by Germany's finance ministry to the parliamentary budget committee, acquired by news agency DPA, Germany's federal government has compiled a list of potential means whereby the relief fund can be financed. Flood-affected states like Baden-Württemberg, Bavaria, Saxony, Thuringia, Saxony-Anhalt, Brandenburg and Schleswig-Holstein - in cooperation with the federal government - were reportedly considering various tax rebates or moratoria and other possible write-downs to help people cover their own flood damage costs.

Separately, German Economy Minister Philipp Rösler has reportedly touted the idea of creating a separate budget in order to quickly raise money for flood victims. The Bundestag press office quoted Rösler as saying that a separate budget may become necessary when "all the numbers are on the table."

Rösler has, however, reportedly ruled out the idea of raising taxes to fund the relief package, as was required in 2002. Martin Kotthaus, spokesman for Finance Minister Wolfgang Schäuble, also offered reassurances that talk of tax rises were "not relevant."

"The finance help will be sufficient and quickly available," he said.

Germany votes in a federal election in September. Both the ruling coalition parties, the Christian Democrats and the Free Democrats, are expected to promise either tax reductions or stable rates in their manifestos.

ccp/msh (AFP, dpa, Reuters)