Greece’s private sector: 244,712 businesses closed and 842,670 work places lost during 2008-2015

Posted by in Economy

The grim picture of Greek entrepreneurship confirmed by numbers: from 2008 until 2015, a total of 244,712 businesses closed their doors causing the loss of 842,670 work places. According to official data of the European Commission, the number of Greek businesses registered in 2008 were 858,685, while by end of 2015, the number was down to 613,973. Between 2014 and 2015 a total 16,077 businesses closed down and 45,000 jobs were lost. In terms of “added value”, the disappearance of more than 244,000 companies from Greek entrepreneurship landscape had also the loss of 30.31 billion euro in products.

The European Commission believes that the the number of businesses in Greece came down to 613,973 in 2015 against 630,050 in 2014. According to the same estimations, this “translates” to 45,000 fewer jobs and to a significantly reduced added value to the economy. The number of the companies that closed down last year is in fact much greater, as the company numbers also include those that were created in 2015.

The declining trend is seen to continue also in 2016 as preliminary data for 2016 are not at all encouraging either: Figures from the General Commerce Register (GEMI) show that in the first quarter of 2016 there were 9,812 businesses written off and just 5,988 new ones registered. This signifies a fresh reduction of 3,824 enterprises within three months.

“To understand the blow that Greek business has suffered in recent years, one needs to look back at the figures since 2008: A total of 244,712 have been lost from the economy in the period to 2015, as eight years ago companies in Greece numbered 858,685, according to the European Commission’s records. This has also meant the loss of 842,670 jobs in that period,” Kathimerini notes and adds that

“The decrease of the number of businesses comes from bankruptcies or simple closure of business as wells as from companies that have moved their headquarters abroad. Also many multinationals departed from Greece.”

Center for Economic Program Research (KEPE) noted last year that closing down businesses is not related only to the economic crisis and the limited access of Small and Medium Enterprises to bank financing. “The economic crisis was probably the one that revealed the structural problems of small and medium entrepreneurship in Greece and especially the heavy reliance on domestic demand and the under-investment in the production of goods and services that can be internationally traded,” KEPE noted.

PS I should also add “mismanagement” and “closure/bankruptcy” as a means to avoid paying back loans to the banks and debts to the state due to overdue tax and social contribution payments.