EU promises funds for stricken region as floods surge onwards

The Central European flood disaster prompted the European Union to consider the creation of an emergency "solidarity fund" as workers still toiled across the region yesterday to hold back the surging floodwaters.

The EU also said it would apply its rules as flexibly as it could to make money and credit available for the stricken countries, although no specific sums were agreed at a summit meeting in Berlin. Setting up the disaster fund is expected to take years and cost as much as €20bn (£12.8bn).

The German Chancellor, Gerhard Schröder, mentioned no specific figures "so as not to raise expectations". Berlin estimates the cost of flood damage in Germany alone at between €12bn and €15bn. A figure of €1bn has been mooted as the likely amount of EU aid to the whole disaster zone.

Mr Schröder was speaking after meeting in Berlin the president of the European Commission, Romano Prodi, and heads of government from Austria, the Czech Republic and Slovakia. Stressing that the EU currently has no fund for disaster relief, Mr Schröder said that Mr Prodi had agreed that any money from existing EU programmes for poorer regions that had not yet been earmarked could be made available for flood relief.

He said the EU was also prepared to provide credit guarantees to local banks and would not call Germany or other afflicted countries to account if they temporarily breached the Stability Pact, which sets budget deficit limits to safeguard the euro.

In a clear election message to Germans, Mr Schröder said the outcome of the meeting had shown that "Europe is not an abstract concept, but an institution that is there for people in their hour of need".

While he spoke, several hundred German troops and volunteers worked in stifling heat to shore up the dykes and defences of the small town of Torgau on the Elbe, as the crest of the Central European floodwaters made its way inexorably downstream.

Army helicopter crews tried to repair a flood wall – which could only be reached from the air – to protect 30 villages north of Wittenberg from inundation.

Most of Wittenberg's residents had left by the afternoon. Three thousand people were removed from Magdeburg, the regional capital of Saxony-Anhalt, to the north as a precaution. The water is expected to reach its highest point there tomorrow or on Wednesday, before speeding on towards Lüneburg and Hamburg.

Communications have been seriously disrupted, with the inter-city rail line between Berlin and Dresden and Leipzig to the south cut in two places, and water cutting the main Berlin-Munich A9 motorway near Dessau.

Torgau, which nestles in a bend of the river, was the first town to be seriously threatened with flooding since the reinforced defences at Bitterfeld partially failed on Saturday. Bitterfeld's 16,000 residents had been relocated on Friday night. One third of the town was reported to be under water, but, to universal relief, the area of a chemical plant outside the town remained dry.

The epic scenes of hundreds of people filling sandbags and passing them from hand to hand to reinforce existing barriers have been repeated down the Elbe and its tributary, the Mulde, for almost a week as the flood crest has passed from Prague, through Dresden and on to Magdeburg and beyond.

While last week's floods on the Danube in Bavaria and Austria have largely subsided, Hungarians feared that Budapest and smaller river resorts could be in danger. In Dresden, which saw unprecedented floods earlier this week, the clearing up operation is in full swing and the first evacuees were being allowed home. Civil engineers making a preliminary inspection of the city's Baroque landmarks, said that the Frauenkirche had borne up well and was not in danger. Rebuilding of the much-loved church, destroyed by British bombing in the last months of the Second World War, was nearing completion when the floods struck.

Nearby buildings were less fortunate. Emergency workers were pumping thousands of litres of water a minute out of the cellars of the Zwinger Palace in the hope of reducing the risk of moisture damage to its priceless art collection.