The floods sweeping through Europe and leaving devastation in their wake could cost local people and companies billions of euros.

Insurers, farmers, consumers and governments are set to foot the bill for the floods which have left about 90 people dead and hundreds of thousands homeless.

Only a couple of weeks ago we were expecting an excellent harvest, now we are facing disaster

German wheat trader

The Austrian government is considering drastic cuts in its defence budget to pay for the damage, while German politicians have to reconcile the pressures of an election year with the constraints of a budget in deficit.

Consumers could face higher food prices thanks to the damage caused to crops at the start of the harvest season.

Insurers, meanwhile, are bracing for thousands of claims from homeowners who have lost out to torrents which have hit cities including Dresden and Prague.

Austria's Chancellor Wolfgang Schuessel described the floods as the country's "worst natural disaster in living memory".

Ivo Menzinger, head of the flood group at reinsurer Swiss Re, said: "It is exceptional that such a vast area of Europe, ranging from Great Britain to the coastal areas of the Black Sea, is affected at the same time."

Totting up the bill

As the crest of the flood rushes through the rivers Danube, Vltava and Elbe, officials are trying to add up the costs of the damage.

In Austria the governors of the hardest hit provinces estimate a bill as high as 3bn euros.

The government has already abandoned a plan to slash taxes next year, and is now thinking of cutting back its 1.8bn euro order of 24 Eurofighters for its air force, possibly to just 18 fighter planes.

In the Czech Republic, where the government budget has already been hit by a weak economy, the damage is expected to amount to 2bn euros at least.

"There's a lot we can't see right now because things are still under water", a Czech government minister told the Reuters news agency.

'State of shock'

German farmers fear that even wheat spared by the flooding has been rendered fit only for animal feed.

"We estimate that nationwide there will be grain losses of 1.5bn euros," said Gerd Sonnleitner, president of the country's Farmer's Association.

"The market is in a state of shock," one wheat trader said.

"Only a couple of weeks ago we were expecting an excellent harvest, now we are facing disaster."

Wheat prices had already started to rise, thanks to drought in the south west of America.

Wide impact

In Italy, where southern farmers are tackling the effects of a recent drought, the agricultural association Coldiretti estimated the damage to crops from the recent storms was more than 300m euros.

"You've got a drought in southern Italy, floods in northern Italy, Austria and Germany, so on face value this is likely to lead to higher prices for fresh foods," said Julian Callow, chief eurozone economist at investment bank CSFB in London.

But other analysts urged against overstating the impact of the floods.

Jean-Francois Mercier, at Schroder Salomon Smith Barney, predicted their effects on food prices would only last for a couple of months.

German price monitoring agency ZMP said so far the impact on prices had "not been as bad as it might have been... the consumer has got off lightly".

Payouts

Conflicts too surround the cost to insurers of the floods, which German Chancellor Gerhard Schroeder estimated had caused billions of euros of damage, particularly in the south and east of the country.

With homeowners in cities, such as Dresden, accustomed to flooding and well insured, German insurers are braced for relatively high levels of payouts.

And Mr Menzinger warned that an estimate by the Austrian Insurance Association of in-country losses of around 100m euros was "very low".

But Mr Menzinger said the losses would be palatable, adding: "It is not a problem at all [for insurers]."