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100,000 companies closed in the period January-September 2010

04 November 2010 / 11:11:35  GRReporter
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16,000 companies in Greece ceased activity оnly during the summer. Four thousand companies per month on the average declared bankruptcy from June to September and the total number of bankrupt companies from early 2010 until now is 100,000. The deep recession in the country that started at the end of the last year combined with the general instability of the economic and political life of Greece proved disastrous recipe for local entrepreneurship.

The data were announced at a press conference by the Minister of Regional Development and Competitiveness Michalis Chrysohoidis and representatives of business organizations in the country. Only the Chamber of Commerce of Northern Greece has deleted 1200 enterprises from the registers till June and the actual number with those registered in other unions exceeds 4000 for Greek Macedonia. Entrepreneurs in the regions of Xanthi, Thrace, Heraklion, Grevena and others experience major problems. It is particularly embarrassing that sectors, which were considered permanently profitable until recently as gas stations and fuel retail, now only survive.

Since the beginning of the year 600 in different parts of the country out of 8000 stations in total in the country have ceased their activities. The main reasons are the sharp increases in excise duties and taxes in the sector and the delay in VAT return from the state, which further reduced the liquidity of traders. In the end, they were faced with the dilemma to operate at a loss because turnover has decreased and costs have gone up or simply to declare bankruptcy and leave the old business behind. Changes in tax legislation have negatively impacted and the smallest traders – owners of kiosks and pavilions. At least a thousand of a total of 15,000 newsstand and cigarettes kiosks in the country closed until June and it is expected another 4000 to close in 2011 because they break down under the weight of the current economic conditions.

Bitter are the data of the Athens Chamber of Craft Industries. It reported that 2657 artisans and small businesses in the Greek capital have declared bankruptcy since the beginning of the year till October. The ratio of newly created to closed companies is one to two and the trend for the next year is the number of failed to increase again. "New companies unfortunately do not have the same quality compared to the old ones that closed," the Chamber President Pavlos Ravanis told reporters. Besides the reduction in productivity as a result of the closure of a series of small enterprises there remains the problem of the increasing unemployment because of lost jobs. Entrepreneurs, however, are in the worst position, because the law on employment currently in force does not allow them to be included in the programs of none of the labour offices nor entitles them to compensation in case of liquidation.


Tags: EconomyMarketsBankruptcyGreece
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