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After the flood disaster: Who can expect how much help from the reconstruction fund

After the flood disaster : Who can expect how much help from the reconstruction fund

The federal and state governments want to provide up to 30 billion Euro in compensation for victims of the flood disaster. The most important questions and answers about the reconstruction fund.

When will the first money be made available?

The wording aid is to be introduced by the grand coalition in a special session of the Bundestag next Wednesday in order to speed up the legislative process. Parliament is then expected to finally pass the fund in the first week of September, and the Bundesrat on September 17 at the latest. At the same time, the German government is currently holding final talks with the states on a reconstruction aid ordinance. This will set out the specific compensation rules, in particular for hardship cases. Once the Bundesrat has also approved this ordinance in mid-September, the first applications for compensation can be submitted.

How is the reconstruction fund financed?

The federal government is setting up a new special fund for the reconstruction fund, as it did for flood aid in 2013 or the German Unity Fund. It will fill the fund with 16 billion Euro from its budget. If further money is needed in the coming years, it will replenish the fund. The federal government borrows the money on the capital market. A supplementary budget is not necessary for this, as the government had already been authorized by the Bundestag to take on up to 240 billion Euro in new debt in the current year. However, the amount borrowed is far from being exhausted: Budget experts expect new debt of around 180 billion Euro at the end of the year, including reconstruction aid. All the German states contribute 14 billion Euro to the fund. In return, they will cede sales tax shares to the federal government over the next 30 years. The federal government alone finances two billion Euro from the fund for the rehabilitation of federally owned transport routes.

Who can apply for compensation?

Compensation is paid to private households, farmers, businesses, and state and local governments whose infrastructure was damaged by the flood.

Who should those affected contact?

The affected states are responsible for the payment conditions in the respective regions. They have promised unbureaucratic, rapid application procedures. The local authorities are to take over the actual processing of compensation payments on site.

What compensation can flood victims expect?

According to initial plans, homeowners will be reimbursed for up to 80 percent of the costs of reconstructing their buildings, as was the case with flood aid in 2013. However, the exact details are still being negotiated. The draft for the reconstruction fund states that compensation will be paid "insofar as the damage is not covered by insurance or other third parties." A good half of those affected in the flood regions had not taken out insurance. In cases of hardship, 100 percent of the costs are to be reimbursed. This is still being negotiated with the federal states. The reconstruction aid will be provided in addition to the emergency aid of 400 million Euro that was immediately promised to the flood victims to tide them over.

What sums will the insurance companies bear?

Insurers expect to incur their own expenses of more than five billion Euro. So far, insurers had paid out advances of around 700 million Euro to their customers. Of that, private customers have received a good 500 million Euro for their claims, and just under 200 million Euro have been paid out for commercial claims, according to the German Insurance Association. Customers should be compensated quickly. "There is no long search for invoices and receipts, instead there are lump-sum advance payments from insurers," said GdV CEO Jörg Asmussen. In total, insurers expected 190,000 claims, 160,000 from private customers and 30,000 from companies. In terms of numbers, North Rhine-Westphalia had by far the highest number of claims, with 135,000 cases and 400 million Euro paid out in advances. However, citizens and companies in Rhineland-Palatinate had to cope with the proportionally heavier claims. There, 275 million Euro have already been paid out for a much lower number of 33,000 claims, according to GDV.

What do the affected state governments say?

NRW Minister President and CDU candidate for chancellor Armin Laschet described it as "a strong sign of solidarity" that the federal and state governments were getting this multi-billion euro reconstruction package off the ground so quickly. The Minister President of Rhineland-Palatinate, Malu Dreyer (SPD), spoke out in favor of the "fastest possible" disbursements. Her government was working flat out on this.

In mid-July, heavy rainfall triggered a flood disaster in Rhineland-Palatinate and North Rhine-Westphalia. Entire regions, including popular tourist destinations such as the Ahr Valley, were literally swept away or devastated by the masses of water. Around 190 deaths have been counted so far.

(Original text: Birgit Marschall; Translation: Mareike Graepel)