ECONOMY

Corporate sector arrears to state, banks add up to about 150 billion euros

corporate-sector-arrears-to-state-banks-add-up-to-about-150-billion-euros

The debts of the corporate sector in Greece to banks and the state add up to some 150 billion euros, putting at risk the existence not only of the private companies but also the country’s entire economy. That figure does not even include the debts companies owe to each other.

Estimates by the Hellenic Confederation of Commerce and Enterprises (ESEE), based on official data, put the debts of corporations to the tax authorities at 58.5 billion euros up to early January 2016, plus another 3.7 billion owed to the customs authorities.

The private sector’s debts to the social security funds came to 27.4 billion euros at end-2015, most of which (17 billion) concerned arrears to the Social Security Foundation (IKA). As for companies’ bad loans, it is estimated they owe some 60 billion euros to the banks, of which 11 billion concerns the dues of just 800 enterprises.

The high amount of corporate arrears is not only attributed to the economic contraction and the climate of mistrust in the country’s economy, but also to the culture of non-payment which was embedded even before the crisis erupted, and the incapacity of the state’s tax collection mechanisms. This weakens any effort for a return to growth as the debts deprive the companies, the banks and the state of vital cash flow.