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Hundreds of shopkeepers, small businessmen, restaurant and pub owners from Haifa and the north drove in a convoy to Jerusalem yesterday, to protest inaction by government to save their businesses.

The businessmen claim that the agreement reached by the Finance and Industry Ministries does not address their problem. They warned that if their problems are not solved, most of the small businesses in the north will close after the war.

Yona Yahav, the mayor of Haifa, expressed support for the demonstrators.

"We demand that the ministers of finance and trade look us in the eye and talk to us directly," Yahav said. "Otherwise, most of the businesses will close after the war. A strong homefront is a good thing, but it requires financial support."

Finance Ministry director general Yossi Bachar met with representatives of the demonstrators, and dismissed their claims. According to Bachar, the agreement was reached between the treasury and all of the economic organizations in the country. "Even if it is not a full solution, it is a worthwhile arrangement which gives substantial help to the residents of the north," he said.

Meanwhile, TheMarker has learned that the director general of the Prime Minister's Office, Raanan Dinur, has arranged a meeting between senior northern business figures and top Finance Ministry officials. The meeting will take place this evening.

The treasury has thus far refused to discuss the compensation demands of the small and medium businesses, saying that they were represented in the previous compensation talks by Shraga Brosh, the president of the Manufacturers' Association, despite the fact that the representatives of the small and medium businesses say that Brosh has not represented them for the past six months.

According to a survey by the Israel Small and Medium Enterprises Authority, more than half of the businesses in the north are closed, and 72 percent of all tourism-related enterprises there are not functioning, The deputy general manager of the authority, attorney Lilach Nehemya, said that the survey shows that 46 percent of industrial plants in the north have shut their doors. In 54 percent of businesses there, no employees have come to work since the third day of the war. In 26 percent, between one-quarter and one-half of workers have stayed away. Only 17 percent reported that most of their employees are working.

Forty percent of businesses in the north reported that their indirect losses are between NIS 10,000 and NIS 30,000; 31 percent say they have suffered damages totaling NIS 30,000-NIS 100,000; and 12 percent claim that their losses are higher.

In addition, 36 percent of the various enterprises in the north said that that their chances of recovering after the war are slight. Specifically, in the food and tourism sectors, 25 percent estimated that their chances of recovery were slight, while in the services and industrial sectors, the figure was 10 percent.

Two-thirds of business owners in the north said they did not understand the compensation arrangement signed 10 days ago by the government, the employers and the unions. Out of the 27 percent who did understand the agreement, half do not know whether it provides a solution to the damages caused them by the war or what coverage they will receive. Sixty-nine percent of the owners want help in receiving grants to cover their damages, and 23 percent said they wanted that help to take the form of a loan.

Lahav, the umbrella organization for the self-employed, yesterday claimed that the banks in the north are exercising a "tough policy" toward small businesses and the self-employed in the north. The organization charged that despite promises from local bank managers that they would be flexible in their dealings with these elements, in practice the opposite is true.

Zeev Wiener, president of Lahav, said that the banks are not honoring checks and standing orders of many businesses and self-employed people on the north. The banks are also reducing their credit limits, demanding "unrealistic securities" and rejecting requests to postpone repayment of loans. Wiener called on Finance Minister Abraham Hirchson and Trade Minister Eli Yishai to find an immediate solution to the cash-flow problems of businesses in the north.

Merchants' organizations in the north rejected the compensation agreement that was reached 10 days ago. Israel Merchants' Association chairman Avraham Birnbaum said yesterday that it does not provide any compensation for damages suffered by businesses in Haifa and the north. "Merchants who are stuck with stocks of summer fashions will not be able to sell them because of the lack of customers ... and unlike the national retail chains," he said, "they cannot move the stock for sale in the center of the country."