BUSINESS

State takes two or three times as long as it should to pay suppliers

DIMITRA MANIFAVA

The average time of payment by the Greek state to utility providers, such as Public Power Corporation (PPC) and Athens Water Company (EYDAP), amounts to almost three months.

TAGS: Economy

The Greek state has turned into a strategic defaulter of sorts, further threatening the already limited liquidity of Greek enterprises and therefore their sustainability, especially those whose main client is the state.

The average repayment time for the state’s obligations to private enterprises for the procurement of goods and services is four-and-a-half months, and that’s based on conservative estimates. In the case of real estate, that period is usually much longer than that originally agreed and more than three times the European Union average.

Often payment delays are so long that businesses are forced to write them off, which in some cases leads to losses of as much as 5 percent of total revenues.

According to a study by Swedish credit management company Intrum that Kathimerini has seen, the sectors of real estate and commerce (wholesale and retail) are the worst off in this sense.

In real estate (mainly rent payments by the state) the real average payment time for dues comes to 139 days, which is almost two months more than originally agreed, which was a comparatively long period in the first place: In the EU the average contractual period for state payment in the real estate sector amounts to 35 days. It is therefore hardly surprising that some 3.9 percent of revenues of the real estate sector in Greece is considered lost to the benefit of the state.

It is hardly any better in commerce: The state agrees to pay the commercial enterprises within 99 days on average, but actually does so after 128 days. In the EU the respective periods amount to 36 and 47 days.

Delays in state payments cause a chain reaction, holding up transactions between commerce and industry, with the latter ending up the biggest loser.

The average time of payment by the state to the already mired construction sector amounts to almost three months. The same applies to utility companies, such as Public Power Corporation (PPC) and Athens Water Company (EYDAP).

Payments to the transport and logistics sector take more than twice as long as the contractual period (83 days against 40). This is the sector with the highest rate of debt write-offs, amounting to 4.7 percent of the sector’s revenues.

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