Tens of thousands of companies fear closure in coming months

Many of the country’s very small enterprises believe the returning recession and the capital controls are likely to finally put them out of business, with about 30 percent of them facing the threat of closure in the next six months, a survey by the Small Enterprises’ Institute of the Hellenic Confederation of Professionals, Craftsmen and Merchants (IME GSEVEE) has shown.

It is estimated that the number of enterprises in Greece will drop by about 63,000 in the next six months, and the toll will be higher for very small companies. Indications that appeared in the second half of last year suggesting that the country was finally emerging from its recession have been eclipsed in the last couple of months.

According to the study’s baseline scenario, business closures will lead to some 138,000 people losing their jobs (including employers, the self-employed and salary workers), of whom about 55,000 will be salary workers. In the first half of the year, total job losses in small and very small enterprises amounted to 25,000, of which 15,000 concerned salary workers.

The marginal decline in the jobless rate, which came to 25 percent in May according to the latest ELSTAT figures, seems unlikely to be reproduced in the second half of the year: The survey showed that over 20 percent of enterprises consider it probable they will have to lay off staff in the next six months. This rate is considerably greater (40.2 percent) among enterprises employing more than five people.

Three in every seven businesses (43 percent) are facing difficulties in making salary payments, while one in every four reduced its employees’ salaries during the first half of the year. Over two in five enterprises (41.1 percent) say they are likely to cut salaries or working hours during the latter half of the year.