The Greek economy is entering a second cycle of deterioration, which is reminiscent of the picture seen four years ago, according to the first signs recorded in an employer survey. The difference is that the burden has grown after so many years of harsh austerity and recession.
Economic sentiment among small and medium-sized enterprises (SMEs) is dominated by strong pessimism, unlike the major optimism recorded a year ago on the high expectations generated by the change in government.
The survey by the Small Enterprises Institute of the Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE) showed that 52.2 percent of respondents expressed the fear that their company would be forced to shut down in the next six months, which is the highest such rate recorded since July 2012, when it was 53.3 percent. A year ago that rate had stood at 32.9 percent, while even in July, after the government introduced capital controls, that rate was 46.3 percent.
The institute’s projection points to another 21,000 companies shutting down in the next six months. Combined with the fact that the surviving enterprises will not make any investments and will likely resort to redundancies, the survey estimates that the sector will lose some 52,000-55,000 jobs in the next six months, of which 14,000-18,000 will be salaried positions.
GSEVEE argues that part of the companies that shut up shop in Greece subsequently head to neighboring countries, mainly Bulgaria. In other instances, SMEs close down but continue their activity in Greece in the sphere of the illegal economy: GSEVEE president Giorgos Kavvathas said on Tuesday at the presentation of the survey that the confederation has received many complaints about companies closing down (for instance, hairdressers, beauty salons, foreign language tuition institutions etc) but their owners continue to supply their services at home, without declaring their incomes.
Three in every five SMEs (61.2 percent) expect their position to deteriorate in the next six months, which may be down from last July’s 67.9 percent but is far above the 31.4 percent of January 2015.