Economic organizations push for compensation for lost trade volume

The economic damage as a result of the hostilities in the North has ballooned into a NIS 10b. loss in the proceeds of businesses, according to the Federation of Israeli Economic Organizations.

By SHARON WROBEL
August 16, 2006 07:26
1 minute read.
clos stor88 298

clos stor88 298. (photo credit: Ariel Jerozolimski)

While negotiations over the compensation package for August are expected to commence by the end of the month, the Federation of Israeli Economic Organizations has put forward a call for a compensation path for businesses on the basis of lost volume of trade. The economic damage as a result of the hostilities in the North has ballooned into a NIS 10 billion loss in the proceeds of businesses, according to the Federation of Israeli Economic Organizations. The Federation of Israeli Chambers of Commerce claims the trade and services sector in the North lost NIS 5.9b. in proceeds during the war. Some 60,000 businesses in the North lost an average of 60 percent of their proceeds during the war, amounting to 1% of gross domestic product, an FICC survey showed. On Monday, the Manufacturers Association of Israel estimated the damage to industry in Haifa and the North at NIS 4.6b. In a meeting with Chairman of the Histadrut Federation Ofer Eini, Finance Ministry Budget Director Koby Haber and Shraga Brosh, chairman of the Federation of Economic Organizations, it was demanded that the Finance Ministry offer businesses in the North the choice between two kinds of compensation packages for the month of August. As requested, businesses could choose between the compensation deal agreed by the government for the month of July, which goes as far as financing wage payments for employees who were absent from work, and a compensation package that would entitle businesses to 50% of their lost proceeds based on their proceeds during the same period last year. Separately, Finance Minister Avraham Hirchson has passed a proposal to the Knesset Finance Committee for the approval of state- backed loans of up NIS 135,000 to small businesses in the North. The loans would be available for small businesses with annual revenues of up to NIS 2.4m. Small business owners would receive a grace period of six months after which the loan would have to be repaid in 18 installments over a period of 18 months on the maximum of the prime interest rate plus 1.5%. They also would be exempted from bank commissions. The loans, which would be an additional credit line to the regular credit framework, will be made available until September 15. The State will provide the banks with certain guarantees totalling NIS 750m. for the loans.


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