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Germany's flood recovery fund to be worth 20-30 billion euros - Laschet - Metro US

Germany’s flood recovery fund to be worth 20-30 billion euros – Laschet

FILE PHOTO: Aftermath of heavy rainfalls in Germany

By Tom Käckenhoff and Michael Nienaber

DUESSELDORF/BERLIN (Reuters) -Germany’s planned flood recovery fund will total between 20 and 30 billion euros, the conservative candidate to become the nation’s next chancellor and premier of its most populous state said on Monday.

Two people familiar with internal discussions told Reuters earlier on Monday the fund would top 20 billion euros ($23.5 billion), more than double an initial projection.

“We need between 20 and 30 billion euros for the federal fund,” North Rhine-Westphalia state premier Armin Laschet told the regional parliament, adding that officials were still discussing the details.

Heavy rainfall and flooding last month took many towns in western and southern Germany by surprise despite extreme weather warnings. More than 180 people died in the country’s worst natural disaster in over half a century which also destroyed many homes, roads, railway lines and bridges.

Officials initially estimated costs of reconstruction in the flood zones would top 10 billion euros, but more detailed analysis of the damage since then has put the cost much higher.

Laschet is campaigning to succeed Angela Merkel as chancellor in a Sept. 26 election, and his Christian Democrats have suffered a dip in support following missteps in managing the floods that hit his home state and Rhineland-Palatinate to the south hardest.

In one incident, Laschet was caught on camera laughing in the background as President Frank-Walter Steinmeier offered words of comfort to communities affected by the floods. He later apologised.

EQUAL SHARES

The federal and state governments have already agreed to share equally the fiscal burden for the fund, which is modelled on a similar rescue package launched after the Elbe river burst its banks in 2013.

Finance Minister Olaf Scholz, who is the centre-left Social Democrats’ chancellor candidate, has said people could count on emergency aid worth more than 400 million euros in addition to the reconstruction fund.

Merkel, Scholz and leaders of Germany’s federal states will discuss the emergency aid and reconstruction fund for flood victims during a virtual conference on Tuesday.

The cabinet in June approved a draft budget for next year with new debt of nearly 100 billion euros to finance further COVID-19 measures, pushing up total pandemic-related borrowing between 2020 and 2022 to 470 billion euros.

The packages have been financed with record new borrowing of 130 billion euros in 2020 and 240 billion euros in 2021 after an emergency clause was used to suspend constitutional debt limits. The limits will have to be lifted for a third year to allow for borrowing of 99.7 billion euros in 2022.

($1 = 0.8506 euros)

(Additional reporting by Holger Hansen and Christian KraemerEditing by Caroline Copley, Douglas Busvine, Susan Fenton and Tomasz Janowski)

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