Floods surge through historic towns

Holmes: People are still very, very nervous

TORGAU, Germany (CNN) -- Water levels are slowly dropping in the German city of Dresden, but levels are surging further downstream. CNN's Michael Holmes reports from the historic town of Torgau.

This is a town familiar to many people, made famous in 1945. It was on the bridge across the river from where I am standing now that allied forces met the Russians, shook hands, and a few days later World War II ended.

It is a very historic place to the Germans and others.

And they have just averted possibly making another page in history. We are told by officials that Torgau -- from where 10,000 people have been evacuated -- that the river crested a short time ago at nearly 9.5 metres, that's seven metres higher than normal, and just mere centimetres from breaching the defences here and going into the very important and historic German city.

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The water is flowing very high and very fast. And the river isn't dropping just yet, so the frayed nerves of locals are anything but being soothed.

At the moment a lot of the defences along the riverbanks behind me are sandbagged and they are just hoping that the water levels start to drop. At the moment, it hasn't started to drop, and there are a lot of very nervous people in this important area.

Other places also threatened include Magdeburg, up river, and another village near here where a dyke has reportedly broken.

Dresden had the river cresting at about 9.4 metres, about 36 hours ago, and it is now at about 8.9 metres. However, it will be a long time before people know exactly how much damage has been done.

The damage bill for all of Germany currently stands at about $50 billion, and that is a very, very conservative estimate.

Later on Sunday in Dresden, German Foreign Minister Joschka Fischer will be meeting EU President Romano Prodi and also several EU commissioners.

There is also concern about Bitterfeld, the industrial town you have been hearing a lot about. It is still under threat; several dykes and other defences around Bitterfeld are still at risk.

Bitterfeld is a very large industrial town once known as perhaps the most polluted town on Earth, that was in the days of Communism.

As far as the political situation goes, a very important political meeting takes place on Sunday. Gerhard Schroeder, the German chancellor, will be there as well as several European leaders and ministers.

They will be discussing what aid this region needs and they will be asking how this aid can be delivered and brought into action.

One German newspaper was asking this morning -- will the reconstruction of Eastern Germany have to start over?