Egypt Creates Compensation Fund to Make Up for Loss of $300 Million per Day of Unrest

Mubarak met with ministers holding economic portfolios and central bank head; concerns continued to mount over state of economy as protests continue for 12th day.

Egypt's finance minister said on Friday the country had suffered huge economic losses during political protests that broke out 10 days ago.

"Certainly it's going to be huge," Samir Radwan said in an interview with Reuters Insider television. "It's too early to put the loss in terms of pounds and pennies."

egypt - AP - January 30 2011

Egyptian President Hosni Mubarak met with ministers holding economic portfolios and the head of the central bank, as concerns continued to mount over the country's economy.

One estimate said Egypt has been hemorrhaging over $300 million a day for the past week due to the unrest.

Radwan said that the Egyptian government would honor all financial commitments once banks reopen on Sunday.

Egypt has created a 5 billion Egyptian pound ($854 million) fund to compensate people for property damaged during the political protests that have rocked Egypt, Radwan said. Much of Egypt's economy has ground to a halt since the increasingly violent unrest broke out on January 25, and banks and the stock exchange have been closed for a week.

"We have made the calculations and found we could bear the expenses without damaging the position of the budget," he told Reuters by telephone.

Tax collectors throughout the country would immediately begin accepting compensation requests from owners of cars, shops and other businesses, Egypt's official news agency quoted him as saying.

Asked about the ability of the government to handle an expected outflow of capital from Egypt when banks reopen on Sunday, Radwan said this was the responsibility of the central bank.

"We are watching the situation closely. We are cooperating with the central bank closely," Radwan said by telephone.

The Finance Ministry, which has 4 billion pounds in Treasury bonds maturing on Feb. 28, will be able to be able to handle its bond obligations, Radwan said.

"There is no problem," he said.