ECONOMY

Applications for bankruptcy rise 150 pct this year

Bankruptcy applications since the beginning of the year have soared 151.9 percent compared to the previous year, according to data released yesterday by Justice Minister Philippos Petsalnikos. According to the data, this year, thus far, including Monday, a total of 1,189 companies had submitted bankruptcy applications compared to 471 in the first five months of 2002. A total of 2,960 bankruptcy applications were filed last year. According to the General Accounting Office, 489 companies were declared bankrupt last year. Government spokesman Christos Protopappas, who presented the Justice Ministry data at yesterday’s daily briefing, told reporters that he would present more detailed data today, including the size of firms applying for bankruptcy and declared bankrupt, as well as data on hirings and layoffs so far this year. For the latter, he would have to consult with Labor Minister Dimitris Reppas. Protopappas insisted that the unemployment rate is slowly, but steadily, falling, despite the recent wave of bankruptcies and company closures. Christos Polyzogopoulos, president of the General Confederation of Greek Labor (GSEE), said yesterday that the recent bankruptcies could be part of a plan by employers to pressure the government into deregulating the labor market and taking away hard-earned employee rights. «How else can one interpret the fact that a very short time after SEV (the Federation of Greek Industries) ‘forecast’ that the unemployment rate will more than double, we have these companies shutting down too?» Polyzogopoulos asked. Earlier this month, German-Swiss company Schiesser Pallas announced that it would shut down an undergarment factory in Athens that employs 500 and move production to a lower-cost country. This prompted SEV Chairman and Executive President Odysseas Kyriakopoulos to say that, given the rigidities of Greece’s labor market, unemployment might well reach 18 percent in a few years, from slightly under 10 percent now. He was attacked by ministers and unionists alike for this prediction. Yesterday, Schiesser Pallas executives met with Deputy Labor Minister Lefteris Tziolas and ministry officials in a last-ditch attempt by the government to convince the company to keep the factory open. The meeting was unsuccessful and the ministry announced that it will not give its approval to the 500 layoffs. Given that Schiesser Pallas is determined to close the factory, the ministry’s statement is little more than bravado. Today, the bankruptcy applications of cosmetics retailer Yvonni Stores and Antonopoulos supermarkets will be discussed. At least two more bankruptcies, including one by the owner of retail chain Musses, are on the way. Antonis Makris, president of the Hellenic Retail Business Association (SELPE), yesterday called the recent bankruptcies «a temporary phenomenon that does not reflect a general crisis in the market.»