ECONOMY

Companies face uncertainty

companies-face-uncertainty

The year is closing with fewer registrations of new enterprises on the General Commercial Register (GEMH) compared to last year and with even fewer shutdowns than in 2019. It was a year that got off to a good start for entrepreneurship – until the pandemic struck.

In the first couple of months of 2020, before the coronavirus hit Greece, new registrations on the GEMH exceeded 4,000 per month, well above a year earlier, before crumbling as of March 2020 onward.

The fact that fewer companies closed in 2020 than compared to 2019 should not be seen as a sign of optimism. The reason is that a large number of enterprises, especially in the food service sector, are waiting to see whether they will have to close down for good next year. For the time being, they are relying on the government’s support measures. After all with the public administration and justice in slow mode due to the pandemic, even striking a company off the GEMH register is a difficult proposition, let alone a declaration of bankruptcy.

According to the statistics from the GEMH database for the period from January 1 to Wednesday afternoon, the number of enterprises of all types created came to 35,957, against 39,064 throughout 2019; this means an 8% annual reduction. The development puts an end to a growth spurt that began in 2017, when the economy started recovering from the crisis years and the shock of 2015.

The number of enterprises taken off the register in the same period this year came to 12,722, against 19,282 throughout 2019, which constitutes a 34% reduction. Departures from the register increased after the end of the first lockdown, coming to 1,206 in June and 1,378 in July. In November, they went down to 776 before increasing again this month to 1,040.

According to a recent survey by the Athens Professional Chamber, 23% of enterprises believe it is possible that they will have to shut down for good, a rate that grows to 41.7% in the food service sector and to 34% in retail commerce.