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200,000 SMEs have closed since the beginning of the crisis

26 September 2014 / 10:09:09  GRReporter
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Simona Peneva

Small- and medium-sized enterprises (SMEs) represent 95% of enterprises in Greece and their exports constitute one third of Greece’s total export rate, as announced by Minister of Development Nikos Dendias at a conference organized by the European Commission Representation in Athens. "Development requires a change in the current model. We must make provisions for this and take measures because if we continue in the same way, within a few years we will find ourselves in an even greater economic crisis," added the Minister of Development. He stressed that Greece needs more SMEs, not government officials, but also a more capable and efficient financial sector, 100,000 new enterprises, facilitating their establishment, reducing their start-up capital, liquidity, and a second chance for those entrepreneurs who did not succeed are part of the Minister’s objectives.

Over the past five years, however, the number of SMEs in Greece has declined by 200,000 because of the economic crisis which is one reason for the high unemployment in the country. "The state does not have a monitoring plan for enterprises and needs infrastructure. The social partners have informed the government of the problems that hamper enterprises as well as of the measures it can take to eliminate them," said George Kavatas, president of the General Confederation of Entrepreneurs, Craftsmen and Tradesmen.

According to Vassilis Korkidis, president of the National Confederation of Greek Trade, there should be development in all trade sectors, including import, export, transport. "It is easier to maintain a company than to create a new one," he said.

Greek tourism is the most successful sector of the economy in terms of development and it can serve as a model for the other industries. "Tourism has managed to resist the crisis in recent years as well as to support and accelerate the Greek economy. It will continue to do so in 2014 too by creating 80,000-100,000 new jobs," said Yiannis Retsos, vice president of the Association of Greek Tourism Enterprises. The plan of the Association until 2021 is for Greece to be able to attract 24 million tourists and create 48 billion euro in GDP and 300,000 jobs. If this happens, Greece will become one of the 10 most popular tourist destinations in the world.

The social partners presented the problems and proposals for the development of SMEs in terms of competitiveness, bureaucracy, extroversion, consultative and innovative structures, access to finance, taxation and the social security system. The twelve most important proposals according to them are as follows:

1. Reforming the legal and institutional framework for the licensing of enterprises and investments.

2. Further simplification of administrative procedures by streamlining and digitizing.

3. Reducing both the tax burden on SMEs and the excise duty on energy consumption.

4. Promoting the certified electronic payments between the public sector and the enterprises.

5. Strict monitoring of the market in order to avoid oligopolistic situations and reducing the anti-competitive behaviour of illegal trade through strict inspections of warehouses and the trade network.

6. As regards the financing by the European Union funds directly available from the European Commission, the proposal is to give preference to small enterprises in the process of assessing the applications for funding.

7. Ensure the effective performance of the Foundation for Development, especially in the sectors of debt and equity.

8. Improved planning of financial recourses using the funds of the programme period 2014-2020 to better meet the requirements of SMEs.

9. Supporting the export activities through programmes for additional funding.

10. Improving the development policy to promote clusters and business parks.

11. Improving the legal and institutional framework for certification of professional qualifications.

12. Freedom for choosing a lower insurance category from the insurance organization for free contractors.

It became clear at the conference that SMEs are the backbone of not only Greece but also of the European economy in general. "They are the enterprises that determine the good economic situation of Europe. They must be productive and provide new jobs, work together and have a common goal. This will ensure their long-term development," said Horst Reichenbach, head of the European Commission task force for Greece. In his opinion, the support for these enterprises should be minimal, they should be export oriented, have faster start-up operation and commercial financial resources should be provided to them.

Joanna Drake, Director of the Directorate General for Enterprise and Industry of the European Commission explained that SMEs create 77% of Europe’s GDP. "Investment in them should increase, they should modernize and have access to financial resources and markets. These companies have to become competitive and innovative," urged Joanna Drake.

Tags: Small- and medium-sized enterprisesGreek economyImportExportTransportGreek tourismGDPJobs
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