Businesses in Katyusha range areas to be compensated

Finance Ministry representatives including budgets director Kobi Haber, representatives of the employers and employees sectors signed late last weeka compensation deal for damages caused to businesses by hostilities in the north
 
The deal is estimated to cost the government over NIS 800 million. The fighting in Lebanon began two weeks ago when Hezbollah guerrillas killed three Israeli soldiers and captured two others in a cross-border attack.
 
Israel responded with air strikes and, later, a ground offensive. Hezbollah has fired hundreds of rockets at northern Israel. Following the signing of the agreement Finance Minister Avraham Hirchson said that "This is the first time ever in the history of the State of Israel that a compensation deal for war damages has been signed during the time of war rather than after."
 
Israel entered the war unexpectedly, but in a rather good economic shape, with annual growth of around 5% and a budgetary reserve. The war effort itself is estimated to be costing the country around $50 million a day, but this figure does not take into account lost productivity in the north, where much of the economy has ground to a halt.
 
Moreover, as additional reserve units are being called up, the costs to the economy will undoubtedly increase. Under terms of the signed agreement, all businesses affected by the conflict in the north of the country will be compensated by 180% for the absence of workers.
 
The government, employers and employees will share the cost of the compensation package. The rate of compensation includes payment of workers' salaries at a 100% rate plus 80% compensation for indirect damages caused to businesses as a result of revenue and profit losses.
 
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, however, rejected the compensation agreement as "inappropriate" for the commerce and services sector.