The one woman who will benefit from the catastrophic floods in Europe

Angela Merkel has developed quite the reputation in crisis management.
Angela Merkel has developed quite the reputation in crisis management.
Image: AP Photo/Steffen Kugler
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Saxony’s reconnaissance battalion 13 recently returned from what they thought would be their most difficult missions in Afghanistan and Kosovo—and then came the floods. Europe’s latest crisis might be their least predictable, most vicious enemy yet. They are just a few of the over 11,000 Bundeswehr troops—roughly twice as many German troops currently serving in Afghanistan—working around the clock to secure cities and towns up and down the Elbe river, evacuating residents and supporting first cleanup efforts in the hardest-hit areas in southern Germany. It’s an international mission: 200 French and Dutch forces and local US Army volunteers are helping to secure those areas still endangered, and support residents in the South, as they reclaim what is left after the flood waters recede. While the Elbe river continues to swell, breaching damns, displacing thousands and disrupting major infrastructure arteries, there seems to be limited good news from the East: Authorities in Budapest are signaling their city—while underwater—is at least safe.

Economic impact

Across Europe, the tens of thousands displaced in Germany, Austria, Slovakia, Hungary and Poland are beginning to wonder who might be picking up the bill for the second catastrophe of this kind in just over a decade. Early cost estimates for Germany alone could top €11 billion ($14.6)—just €3 billion less than the economic damages left by the “historic” 2002 floods. The German government has promised €100 million ($132 million) for immediate flood relief and government officials indicated on Monday more might be available. Still, the floods will have a sizable impact on east Germany’s economic growth: Already in recession, the region’s GDP continued to contract between April and June, according to the Institute for Economic Research in Halle.

In the south, Bavaria’s Ministry of Agriculture claims its farmers have lost €115 million euro ($152) in farm land alone, to say nothing (yet) of damages to private property. Domestic shipping companies based along the Main, Danube and Elbe rivers are claiming losses in the “multiple millions,” according to their industry association, BDB. It estimates that a normal flow of traffic on these rivers won’t be restored for another two weeks, endangering the economic livelihood of smaller shipping and touring companies. Despite the harrowing images from 2002, many thousands of people impacted across the country were not insured against these damages, which caused the German Institute for Economic Research (DIW) to propose a government-mandated minimal insurance for those in potentially-affected areas yesterday to minimize a future macroeconomic fallout.

After 2002: Could we have seen it coming?

And yet: After the 2002 and 2006 floods—could countries not have been better prepared? Meteorologists say yes, pointing to the relative frequency of these type of weather phenomena. The 2002 floods claimed 45 lives in Germany, the Czech Republic and Austria and left an estimated €15 billion in damages ($ 20 billion). The EU had rushed to help—financially and politically—then, offering €350 million ($462 million) between 2002 and 2009 for flood prevention projects in Germany alone and signing a directive into law in 2007. But are its provisions too little, too late? By 2013, the EU member states would have to map out risk assessments for residents, economic investment and environmental damage in areas likely to be affected by flooding.

Who to blame for all of this inactivity? Political actors are quick to pass it on to individuals: The Bavarian governor, Horst Seehofer, points to individual property owners and farmers reluctant to sell their land for the use of flood defenses. The construction industry and the German insurance giants have also found a convenient scapegoat: private property owners. They blocked the construction of floodwalls and unwilling to shoulder the burden of installing water pumps or property barriers. Resiliency: It might not be pretty, but it could save a pretty penny.

One woman stands to gain

With insurance companies less willing to pay out and financial donations to flood victims trickling in at a much slower pace than 2002, one woman stands to gain from the floods: Angela Merkel. She seems to be taking notes from her predecessor. When embattled German Chancellor, Gerhard Schroeder slipped into a pair of rubber boots and a parka and lent a sympathetic ear (and subsequently €385 million) to the country’s citizens and companies in August of 2002, he claimed a narrow victory in an election that looked lost: He gained seven percentage points in areas affected by the flood.

Good crisis management might allow Merkel to solidify her own grip on power. Her current coalition partner, the liberal FDP is weakened nationally and a grand coalition could be in the offing for the Sept. 22 poll. With EU assistance off the table, Chancellor Merkel has been quick not only to grab her rain gear, but to promise additional financial help, à la Schroeder. She and conservative CSU-coalition leader Horst Seehofer might have to put in a few extra hours adjusting the CDU/CSU party platform, tweaking promised tax cuts to the middle class—but there’s still time for that. The public won’t be expecting it for another two weeks. For now, there are hands to shake, servicemen to praise and damage to inspect.