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Another 375 000 closed companies and 305 000 unemployed till the end of 2011

26 August 2010 / 12:08:04  GRReporter
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Тhe report of the Institute of Employment Studies contains pessimistic outlook for small and medium-sized enterprises for the third and fourth quarter. According to it, another 375 000 companies will close which will lead to increase in the number of unemployed by 305 000 by the end of 2011. It is believed that only in the second half of this year other 120 000 unemployed will be added to the 88 000 people dismissed at its beginning. This means that 1 in every 5 companies has been forced to close and lay off employees.

An important conclusion of the study is that 8 out of 10 business owners in Greece want to keep the 13th and 14th salary of the employees, saying that “the biggest problem in times of crisis are not the wages,” reported Ethnos newspaper. 21.9 percent of the companies were forced to lay off staff, but only 3.6 percent of them employed new one. This means that 88 000 jobs were lost in the first six months of 2010 and the most serious is the situation in processing plants and larger companies. 3 of 10 business owners said they will undertake new layoffs over the next six months and only 2.8 percent said they would need new employees.

6 of 10 business owners believe that there will be no changes in the number of their employees during the next six months. Companies employing between 5 and 9 people or 47.4 percent expect staff reductions. The results of to the survey show that the number of employees will decrease mainly in companies with a turnover of over € 300 000, which are 32.7 percent of the total. Companies that have a lower turnover are more stable in terms of keeping the employees.

Most of the owners did not resort to creditors despite the financial difficulties. It should be noted that 31 percent of the companies in the processing industry have requested a bank credit. 8 out of 10 companies with low turnover replied that they did not request a bank credit in the last six months. Half of the company owners replied that their bank loans applications  have gone to earth. Only 3 of 10 business owners said they were approved. Almost half of the companies in the Attica region considered a possible scenario to stop their activities.
According to 7 out of 10 business owners new large increases in value added tax, which the government considers, will have detrimental consequences to their turnover. 26 percent of the company owners said they are ready to relocate their companoes’ headquarters not to pay such high taxes. Important finding of the study is that smaller companies have so far managed to cope with VAT increases without reflecting them in the prices, while half of the companies employing more than ten people said they had increase the prices of their products. The conclusion of the Institute for Employment Studies is that any increase in VAT (from 11% to 23% for products and services) will be a "bomb" for their turnover, the jobs, the inflation, the companies closings and ultimately for the revenue in the treasury and insurance funds.

Squeezed by the high prices, company owners plan to block tax, insurance and other payments. The study of the Institute for Employment Studies at the Federation of professional traders and industrialists in Greece questioned owners of shops, small factories and companies employing up to 49 people as such are 98.7 percent of the companies in the country.

Tags: NewsShopsCompaniesTradersEconomic crisisGreeceTurnover
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