Greek firms struggle

A wave of bankruptcies is growing among Greek companies which are the first victims of belt-tightening by consumers. Although he tried to present this as something natural, National Economy and Finance Minister Nikos Christodoulakis said yesterday that the government would change legislation so as to provide greater support to small and medium-sized enterprises. The Greek market was rife with rumors yesterday that more bankruptcies would follow those of Yvonni Stores and the Antonopoulos supermarket chain (each of which employs 120) which were announced on Friday and Saturday. This prompted the Avgerinopoulos group, which runs private training colleges and the Beauty and Diet chain to deny rumors, saying, «At this time, it is in the interest of the more than 1,000 employees of our group to avoid a climate of instability.» The Musses dried fruits and nuts franchise, which in 2001 operated about 40 stores, was also expected to deny similar rumors. The Avgerinopoulos group is said to owe close to 20 billion drachmas (60 million euros) to banks, part of which is in the form of consumer loans burdening the parents of students. Earlier this month, the Schiesser Pallas company announced it was closing its Palco underwear factory in Athens, prompting almost daily protests by the 500 workers who will lose their jobs. They staged another demonstration yesterday, while workers of the Papastratos tobacco company met with Labor Ministry officials to press for guarantees that they will not lose their jobs following the recent buyout of the company by US giant Philip Morris International. The situation underlines the growing crisis which has not been recorded by the National Statistical Service and the difficult conditions in the market. It is looking increasingly likely that there will be more such difficulties ahead. Christodoulakis at first played down the government’s concerns, noting the 4.3 percent GDP growth rate in the first quarter of 2003 and the 3.4 percent inflation rate in April. «Many more businesses would have closed in a recession,» he noted. But he added, «The government is following all the developments with great attention and is trying to shape those conditions which will help competitiveness, viability and the operation of businesses.» Later, responding to criticism from New Democracy’s shadow economy minister Giorgos Alogoskoufis, Christodoulakis said: «The government is moving ahead with the restructuring of the Development Law to further support small and medium-sized enterprises and employment.»

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