German Chancellor Gerhard Schroeder has announced Monday a multi-billion euro flood relief package from his own government's coffers, and said it will be topped up with a further 1.2 billion euros from the European Union.
As floodwaters continued to surge down the Elbe River in Germany, Chancellor Gerhard Schroeder announced a big financial package to help the victims.
After meeting with his finance minister, Hans Eichel, and the German cabinet, Mr. Schroeder said he decided to postpone by a year a controversial tax cut that was expected to leave the government with a big deficit next year.
Delaying the tax cuts to 2004 will allow the government to use 6.9 billion euros for flood relief and infrastructure repairs.
The federal government will contribute three billion of that, and the rest will be paid by the states and local county administrations in the areas worst hit by the floods. In addition, one billion euros will be transferred from the Transport Ministry budget to use on rebuilding flood-damaged infrastructure.
The European Union structural fund, meanwhile, has announced it will re-allocate 1.2 billion euros from funds already approved, but not yet earmarked for specific projects.
The funds were originally to go to Germany's poor eastern states, so the re-allocation means there will be less money available for future projects in those areas between now and 2006.
Mr. Schroeder promised the money will be handed out quickly.
He also offered up to 10,000 euros, as well as debt relief, to any small or medium size business rebuilding after the floods, or able to set up shop quickly with new jobs for the region.
He also asked business not to fire workers whose jobs are temporarily lost due to the floods. He said the government will pay their wages for now.
Paying for all that by delaying a tax cut will be politically controversial, especially ahead of federal elections next month.