EC seeks $1bn disaster relief fund

Hitzacker was one of the towns flooded when the River Elbe broke its banks

BRUSSELS, Belgium -- The European Commission has called for a disaster relief fund to be set up in the wake of floods that have devastated towns and cities across central Europe.

Unseasonal flooding brought chaos to Germany, Austria, Russia, the Czech Republic and Slovakia and claimed the lives of up to 100 people.

Historic European cities such as Prague, Hamburg and Dresden are still counting the huge cost.

The cleanup and rebuilding operations are expected to cost about 20 billion euros ($20 billion) across Europe.

IN-DEPTH Special report: Floods ravage Europe    MORE STORIES • Eyewitness: Towns, farmland devastated  • German floods head north  • Prague begins clear-up  • Despair and solidarity    EXTRA INFORMATION Gallery: Images of flooding  Map: Severely hit areas

The EC has already allocated 516 million euros ($516 million) in advance aid for German farmers and more than 55 million euros for the Czech Republic.

But on Wednesday, EC President Romano Prodi proposed a new fund for "natural, technological and environmental catastrophes."

He said it could reach one billion euros ($1 billion).

"This will be an expression of European solidarity," Prodi said after the European Union executive announced that it would form the fund.

He said 500 million euros would initially go into the fund, which he expected to be available for disaster relief.

"The fund could be doubled in future years," he said.

It would be available for member EU states as well as those negotiating entry, such as the Czech Republic, he said.

Prodi said he hoped the European Parliament and EU member states would agree to the formation of the fund and that it could be set up as quickly as possibly.

Meanwhile, Pope John Paul II has offered prayers to the victims of the flooding in Europe and beyond.

"All of them are close in my thoughts and prayers. I encourage and offer solidarity to the countries and people who have been victims of such horrible events," he said at his regular mid-week audience.

Residents fought to save property in Budapest

He offered support and encouragement to Germans and Czechs cleaning up the damage.

The German government has promised $500 million in immediate aid and $6.9 billion over the long term.

It also announced a delay in tax cuts, due to take effect in 2003, to help pay for reconstruction.

According to preliminary estimates, the total damage in Prague could climb as high as 90 billion Czech crowns ($2.83 billion).

On Monday, the government's Central Bohemian Crises Headquarters set the first, direct cost of the rescue work and emergency measures at 77.9 million Czech crowns.

The Czech Association of Insurance Agencies (CAP) has so far registered approximately 130,000 claims. They estimate the total cost for those claims will be 19 billion crowns.