Agreement on emergency aid

Flood disaster Agreement on emergency aid

The Federal Government and the Heads of Government of the Länder held a video conference in which they agreed on a comprehensive aid package for those affected by the floods. Federal Chancellor Angela Merkel described the events as “unprecedented devastation”.

The graphic shows the headline “Aid following the catastrophic floods” (More information available below the photo under ‚detailed description‘.)

Further financial efforts will be necessary over the next few years to fix the damage caused by the floods and to reconstruct infrastructure that has been destroyed. 

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Photo: Federal Government

She said that the Federal Government was infinitely grateful for the enormous support shown by volunteers and private individuals. Angela Merkel pointed out that the Federal Government was “of course aware of the fact that this is a task of national importance” and that extensive financial support would be available for the federal states’ emergency aid programmes, as well as for the reconstruction measures to be carried out over the coming months and years. Regarding the volume of aid, the Federal Chancellor said: “This is a lot more than we had after floods that occurred in the past.”

The Federal Chancellor and the Heads of Government of the Länder passed a number of resolutions for handling the recent catastrophic floods. Here is a brief overview:

Contributions to emergency aid

As agreed on at the end of July, the Federal Government is going to contribute half of the federal states’ emergency aid – initially up to 400 million euros. In other words: each euro provided by the respective federal state will be supplemented with one euro from federal funds. Planning does not provide for the total amount to be capped. The emergency aid is intended to help citizens in distress and to remedy immediate damage in agriculture and forestry, business and municipalities

Recovery fund

Further financial efforts will be necessary over the next few years to fix the damage caused by the floods and to reconstruct infrastructure that has been destroyed. The Federal Government is going to contribute financially to the required reconstruction measures, and will take quick action to rebuild any affected federally owned infrastructure. A national 30-billion-euro Recovery Aid 2021 fund is to be established by the Federal Government for this purpose. The reconstruction measures will be financed equally by the Federal Government and the federal states. Planning provides for contribution of the federal states to take place via a modified distribution of value added tax revenues over the next 30 years.

The Federal Government will arrange for the required legal regulations to be introduced swiftly, and the Bundestag and Bundesrat will discuss the matter as soon as possible.

Reimbursement of costs

The Federal Government will claim no reimbursement for costs incurred to date and that continue to be incurred for the activities of the Technisches Hilfswerk, the federal police force, the customs authority, the Federal Armed Forces and the Federal Waterways and Shipping Administration.

Siren funding programme

The Federal Government and the federal states are also going to improve centralised warning of the population in the event of a disaster. This will take place through a federal siren funding programme in particular: a total of up to 88 million euros will be made available to the federal states for upgrading and installing sirens up until 2023.

Cell broadcasting

A cell broadcasting system is to be established as an additional measure. This system allows for a text message to be sent to all mobile phones that are located within a particular network cell at the time. This type of warning is sent in a way that is similar to a radio signal rather than a personal text message. The Federal Government is currently working to establish the appropriate legal basis for this system. At the same time, technical upgrades are to be implemented on all mobile phone masts in Germany in the near term.

Mandatory insurance under review

As many real estate owners as possible should have insurance cover for damage caused by natural hazards. German citizens are currently not taking full advantage of the option to take out private insurance against natural risks. The question of whether it is possible and reasonable to make insurance against natural hazards mandatory is currently being examined.

Requirement to report insolvency proceedings suspended

The participants also confirmed a resolution passed in the previous week that provides for the requirement to report insolvency proceedings to be suspended so as to allow affected businesses extra time to negotiate funding or renovation work.

After all, many businesses were also hit hard by the flood disaster. There are various options for preventing a possible insolvency, such as public aid, compensation or insurance payments, a moratorium on interest or repayment obligations. The suspension of the reporting requirement will take effect retroactively from 10 July and will remain in place until 31 October 2021.