How much will the flood cost us? There is a chance that it will be less than in 1997

Several cities are still struggling with the flood, so it is too early to estimate the losses caused by the great water, which within a few days passed through the Lower Silesian, Opole and, to a lesser extent, Silesian voivodeships. It will take many weeks to add up the losses suffered by local governments, state institutions and private individuals. – The losses are huge, we will estimate them in tens of billions of zlotys – this was the vague answer given by the Deputy Minister of Internal Affairs and Administration, Wiesław Szczepański, who was asked about the scale of losses on Polskie Radio 24.

How much will the losses be after the flood?

Rafał Benecki, chief economist at ING Bank Śląski, shared more specific calculations. He used losses after the floods in 1997 and 2010 as a reference point. Total losses of the “flood of the millennium” 27 years ago were estimated at 2.3-2.5%. GDP, which in terms of current realities gives a huge amount of PLN 78-90 billion. The 2010 flood consumed private and public assets worth approximately 1%. GDP, which translates into approximately PLN 34–36 billion in losses at today’s prices.

Economists still believe that a less drastic scenario is possible, especially since the water bypassed Opole and Wrocław, where most people live. It is still possible that the losses will not exceed 1%. GDP.

In turn, Piotr Bielski, economist at Santander Bank Polska, recalled that according to the Supreme Audit Office’s report, in 2010 the state budget allocated approximately 20 percent to removing the effects of the then flood. total estimated losses. The rest of the costs were borne by insurers, private individuals, enterprises, local governments, and a large part of infrastructure expenses were also covered by EU funds.

This shows how much has changed in the topic of removing the effects of floods over 13 years. Today’s situation is even different, because we have access to large EU funds.

– Unlike 1997, this year most of the direct aid to the victims is to be provided in the form of non-repayable support, on the other hand, most of the reconstruction costs will come from EU funds. In my opinion, budget expenditure on flooding this year will amount to no more than 0.5%. GDP – estimates Rafał Benecki.

Karol Pogorzelski, economist at Bank Pekao, adds that at the moment it seems that the costs of this year’s flood will not burden state expenses beyond the budget’s capabilities. – We currently estimate that the deficit will increase from the expected 5.4%. GDP before the flood to 5.6-5.7%. GDP – said Pogorzelski.

Billions from the European Union

On Thursday evening, the President of the European Commission, Ursula von der Leyen, arrived in Wrocław. Her visit is an expression of solidarity with Poland and other countries affected by the flood. – We must join forces to face the element. EUR 10 billion from the Cohesion Fund will be available to countries affected by the flood, she announced. This means 100 percent. financing.

On Thursday, the European Parliament passed a resolution in which it appealed to the European Commission to increase funds for aid to flood victims and to better prepare the EU to respond to natural disasters. In the document, MEPs expressed dissatisfaction with the recent budget cuts in the EU civil protection mechanism and called on the Commission to provide sufficient funds and make the financing system more flexible for victims of natural disasters, including floods.

This financing would also be included in the next multi-annual EU budget.