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Small businessmen prefer a bank to go bankrupt instead of being funded by the state

09 February 2011 / 17:02:18  GRReporter
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Victoria Mindova

It is better to close a bank that can not cope with the financial crisis than the state to continue to fund it. This is the opinion of 90% of the businessmen that took part in the survey of the MARC agency commissioned by the Union of Craftsmen and Tradesmen in Greece. Almost all respondents believe that the government should pay more attention to supporting small and medium companies in the country which are the backbone of local economy.

Only about 30% of the respondents applied for credits in 2010 to fund their activities. Less than half of them were approved to get a loan. At the same time, the issue of uncovered checks in trade remains.

About 50% of the entrepreneurs surveyed received uncovered checks in 2010. This made the payments to employees, the state, to creditors and suppliers difficult. Regardless of the risks posed by this type of payment, checks remain an essential tool in the trade of the country. Almost half of the respondents are forced to pay by checks because the market lacks cash.

The lack of liquidity and the recession make local businessmen especially pessimistic about the future. About 50% of the respondents expect the country to declare bankruptcy in the next year. "You understand that when the expectations are so grim even successful businessmen will not start investing until these doubts disperse," said the president of the union Dimitris Asimakopoulos.

Nine out of ten people said that the operating government programs for small business funding were ineffective. Local entrepreneurs have no confidence in the initiative of the Minister of Regional Development and Competitiveness Michalis Chrysohoidis for the establishment of a state fund to grant low-interest loans.

Only one in ten said that the new tax policy of the government would lead to real results. 90% were of the opinion that irregardless of the increase in the tax burden there won’t be real improvement due to poor management of government revenue. Meanwhile, companies turnover fell overall by around 30%. In some sectors such as trade and import the decline was the most serious and exceeded 30%.

The most pessimistic are the forecasts dor small and medium enterprises bankruptcy. The union estimated that around 220,000 companies would cease operation in 2011. It is difficult for many of them to cover the increased costs of social insurance funds, operational costs, credits and suppliers.   

The answer of 70% of the entrepreneurs that they were not forced to cut the salaries of their employees in 2010 was assessed as a positive sign. The problem is that it is not known whether this trend will continue this year. A new wave of staff cuts is expected in the first half of 2011 as one of every four respondents said they would have to reduce the number of employees because they could not pay them. Only 4.9% said that they planned to hire new people this year.

80% of the respondents said they agreed with the proposal of the Union of Craftsmen and Tradesmen for deferred payment of the amounts due to health and pension funds concerning the 20% contributions payable every two months. They said from the organization that it was a good solution - the state would receive the money and the people in difficulty would not lose their social and pension rights.

"Market redistribution is taking place now," Dimitris Asimakopoulos told reporters after the presentation of the market analysis. He said that small and medium companies held 60% of the turnover of the country up to now. He also noted that this would change after the market liberalization. Asimakopoulos stressed that after the enforcement of the changes the presence of large retail chains was expected to grow. There would be a boom in the construction of large shopping malls which would displace the small entrepreneurs and the ratio between small and big players would change.

Tags: EconomyMarketsSurveyMarket analyses
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