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Half of Small Greek Businesses on Brink of Closure

padlock-greek-companies-louketoThe combination of increased financial obligations and reduced income is driving small businesses in Greece to the verge of closure, new research shows.
According to a study by the Small Enterprises’ Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants (IME-GSEVEE), one in two businesses employing up to 49 people are in danger of closing in the coming months, with balance sheets most notably hit by reduced turnover and higher debts to insurance companies, Greek tax offices and banks.
Two-thirds of small businesses surveyed said turnover fell in the first half of 2013, notably 81.7 percent very small businesses. The average reduction in turnover amounted to 22.9 percent less than the same period in 2012. Since the start of the Greek financial crisis five years ago, turnover has tumbled 65 percent.
Close to half of businesses surveyed (47.1 percent) foresaw an imminent risk of closure in the near future are around, with 40 percent expecting to wind down within six months. The closure rate remains persistently high, and 200,000 businesses have now folded during the crisis. IME-GSEVEE estimates that another 27,000 to 30,000 will cease operations this year.
The biggest chunk of the businesses’ delayed payments is owed as insurance contributions (about 40 percent), as over 370,000 companies are revealed not to having paid their obligations to the Freelancers’ Insurance Organization (OAEE). Significant debts are also owing to state-owned enterprises (34.9 percent) and tax offices (32.7 percent), while the non-performing or delayed loans to banks amount to 28.1 percent.

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