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

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.

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6 comments

  1. SME are the engine of an economy and society. Austerity hit these companies hard because often they just live from month to month and have little financial resources to be resilient. If then people don’t have money to spend in these places due to austerity measures(and often they provide services that people will economize on the first when crisis hits) then they are in trouble. Your local green grocer or corner shop will have little potential to compete with often foreign retail shops. SME also often service big economic players but when these go down then they go down. Or when big companies are privatized or liberalised then SME are at the mercy of the new owners.
    Not withstanding KTG’s argument regarding mismanagement and deliberate bankruptcies, it is vital for an economy to have a big SME sector. It is also good for social cohesion.

  2. Twenty years ago, the EU published a series of “research papers” about various aspects of each member state’s economy. Greece topped the list in self employment by a significant margin. When the bailout package was structured, no consideration was given to this aspect of the economy and the impact that austerity would have on it. In a contracting economy, large enterprises can contract via layoffs, reducing inventories and cutting other expenses, but their capital investments remain, ready to support a response to improved economic activity.

    The self employed and small business do not “enjoy such a luxury”. When the economy shrinks as dramatically, as was the case in Greece, they simply go out of business, and ultimately lose all their capital investment. When economic activity increases, they will have to accrue capital to return to business, and from where would they get such capital? Typically, they will no longer have access to credit, either due to a long period of unemployment or due to having defaulted on the loans that made their business possible in the first place. While in a nation such as Germany, where self employment is only 11%, the decimation of that portion of the workforce would require only modest access access to capital for employment recovery, in Greece, where the self employment rate was some 43% in 2010, the capital required to restore employment is staggering.

    But then, the disciples of austerity do not take into account that all economies and cultures are not identical. They truly believe that “one size fits all”, even though they wear custom tailored clothes to avoid the pitfalls of such a mentality.

    Lastly, the disciples of austerity paint exports as the road to economic vitality. I wonder, if every nation were a net exporter, who, exactly, would be buying all those net exports?

  3. The eurozone was never an economic project, with clear strategy and goals. It was always a political project (ever since the expert report was rejected in 1999) with the Germans being tempted in with the promise of a cheaper currency so they could export more easily. From the very outset, all European politicians have shown a complete disregard for economic reality, for the interests of ordinary people, and concerned themselves only with big business, international finance and personal profit for themselves. These political criminals belong in gaol — instead of which, they are currently running the EU and the eurozone.

  4. Giaourti Giaourtaki

    Sure they took this into account and this is one main reason for the whole shit-story lasting that long, their aim is always destruction of small business, they want to have the lorry-driver, the pharmacist, the small supermarket and the fastfood owner be killed off by big-biz chains and call this “liberalization” and at the end of the day there will be so much more millions of “independent” contractors working for chains like Amazon, DHL, deliveryhero aso… and for this great job all these European public servants and politicians want the former “Gastarbeiter” to sell off cheap to them their from 16 hour work per day earned “villas”, plus the former owners to clean them their fat asses while in retirement “at the seaside” and they won’t stop in Greece, there are millions of former “Gastarbeiter” in Turkey, Spain and Italy.

  5. There is no question of the neo-liberals being an anti small business cabal. Also among those 1995 EU research papers was one on housing. In addressing the every high rate of primary residence ownership and lack of subsidized cheap rental units in Greece, the authors made quite a point of saying it inhibited the ability to bring in cheap migrant labor! Sadly, neo-liberals see human beings as numbers, not souls. Or as a neighbor put it, “To the neo-liberals, high unemployment means the potential for cheap labor, not humans suffering poverty.”

  6. keeptalkinggreece

    neighbor is right.