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Over 65 thousands of small and medium enterprises will go bankrupt by 2012

16 March 2010 / 18:03:46  GRReporter
3448 reads

Victoria Mindova

Over 65 thousands of small and medium enterprises will go bankrupt by 2012, including small industries, sole proprietorships, family businesses and professions. Last year a total of 110 thousand people were laid off, and expectations for the first half of 2010 still at least 60 thousands to remain unemployed. This is a tragic study carried out after the stock market's statistical agency of the MARC. The study was made General Confederation of traders and producers in Greece in order to outline a more complete picture of the impact of financial crisis on small and medium enterprises in the country. 

"In the middle of 2009 the worst scenarios for the expansion of the financial crisis has proven optimistic compared with the economic reality today," said representatives of the investigative agency. In a consultation conducted in May last year only one third of respondents said that they expect worsening economic conditions in the country by the end of 2009. In the poll conducted in February 2010 on the outcome of the second half of 2009, nearly 80 percent of respondents have made a significant deterioration in business and finance your business.Evidence suggests that the impact of the crisis is most pronounced in the manufacturing and commercial sector, companies with a turnover of less than 100 thousand euros per year. Over 70% of all respondents say that during the period July-December 2009 recorded a significant drop in turnover and profit but expectations for the first half of 2010 are even more pessimistic. 

The main problem is that with the deepening crisis at the end of last year, demand for goods and services is significantly decreased and businesses have begun to have difficulties to cover the projected costs and time commitments. 80% or three out of four production companies and small companies (with turnover of less than 100 thousand euro) participated in the survey said they experienced lack of liquidity. Due to the lack of available funds have resorted to additional borrowing, redundancy costs and reducing orders. 

Lack of liquidity and falling profit and will inevitably lead to staff reductions in those undertakings. One of every five companies resorted to exempt employees, this percentage is higher for larger companies with annual turnover of over 300 thousand euros. Smaller companies do not reach the cuts, which analysts say is due to the fact that many of these companies are on the verge of bankruptcy. Cuts in manpower will in these cases is directly related to the suspension of business or in other words liquidation. 77.3 percent of respondents say that for the first half of 2010 will try to keep the number of employees, but will not find new jobs. 

Particularly worrying is the increasing percentage of businesses, sole traders and professions who have difficulty to cover their obligations to social security funds. In 2007 their number was 17 percent of all registered in 2009 this percentage increased to 33%, while expectations for 2010 are that 40% of all small and medium enterprises will be able to cover pension and health contributions of its employees.

Tags: Economy Greece Layoffs
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