ECONOMY

Shops hit by riots offered state aid

Prime Minister Costas Karamanlis yesterday pledged financial support to hundreds of businesses hit during the five days of rioting across Greece that left the economy with a bill in excess of 1 billion euros. Retailers and banks have been left to clean up and count the cost of the damage left in the wake of the rioting sparked by the fatal police shooting of a 15-year-old boy on Saturday. Karamanlis announced an aid plan that offers a 10,000-euro lump sum payment for small businesses, compensation for 50 percent of costs incurred and subsidized loans. «The riots mainly hurt small and medium-sized businesses that are already being tested by the consequences of the international crisis,» said Karamanlis. Other benefits include a suspension of payments to the tax office and social security funds for up to three months and assistance with staff payroll expenses if the business is not up and running by December 20. The worst civil unrest seen in Greece for decades has left behind a massive bill. Damages – including lost income – incurred by more than 200 retailers in Athens and Thessaloniki has been estimated to reach 1 billion euros. The figure does not take into account the impact of protest action in other cities such as Patras and Larissa. According to the Athens Chamber of Commerce and Industry (ACCI), 435 businesses in the capital were hit during the violence – with 37 completely gutted. The Athens Traders’ Association called on its members to take legal action against the state for failing to adequately protect their property against acts of violence. National Economy and Finance Minister Giorgos Alogoskoufis said the government has exhausted all fiscal means to help the firms. «We are obligated to help all those affected, get them back on their feet and help them keep their staff,» the minister told reporters. Government sources refrained from giving an estimate of how much the package will cost the national budget. The Association of Greek Retail Businesses (SELPE) has sought permission to operate every remaining Sunday in December, as opposed to a single Sunday on December 21, in a bid to help restore some balance to the market during the Christmas period. [email protected] Political uncertainty disturbs investors Political uncertainty created by five days of rioting across Greece has increased the chances of early elections, in what may be «bad news» for government-controlled companies such as lottery operator OPAP and telecom giant OTE, according to Citibank. In a note assessing the market implications of the riots, the bank said the tension is likely to result in more calls for early elections. «The risk from any early elections is not with a change in government… but, as it stands now, both key parties will be unlikely to get a majority in any elections,» the note said. This possible outcome may result in political changes, creating management uncertainties for companies such as OTE, OPAP and Public Power Corporation (PPC) or delays in expansion plans. «Political uncertainty is also bad news for the construction sector (delays in public works),» it added. Other negative implications from the riots include weakening consumer sentiment in the busiest trading month of the year, the note said.