Greek SMEs pessimistic over future

More than one in four businesses considers the prospect of terminating its business activity by mid-2012 as highly likely, while given a further worsening of business expectations over liquidity and investments, a “battle” is raging in terms of redistribution of turnover, a survey on small-and-medium-sized enterprises (SMEs) stated on Wednesday.

The survey, conducted by the Institute of Small Enterprises of GSEBEE — the association representing SMEs — in cooperation with MARC, was presented by GSEBEE president D. Asimakopoulos. The survey was based on a sample of 1,200 SMEs over the period January 24-31.

Presenting the survey, Asimakopoulos said a clearer picture of the market will be available after the Easter holidays, while MARC chief executive N. Gerakis stressed that several enterprises have “burned their fat and are now proceeding with lay-offs or closures, thereby eating their flesh”.

Conditions changed dramatically in the last six months, Asimakopoulos said, adding that a previous survey in July had shown that businesses expected business closures totaling 170,000 by the end of 2011, while the latest survey raised this figure to 225,000 closings. Another 220,000 SMEs said they would probably terminate their business activity.

Under such a scenario, a total of 320,000 jobs would be at risk.

GSEBEE said turnover was down 30 pct on average in 2010, while around 30 pct of SMEs delayed their payments and 40-pct faced problems in meeting their payroll. Another 30 pct said they were forced to cut working hours.

SMEs said they faced problems in accessing bank funds.

More worrying was the figure of 41.3 pct of business people citing default as unavoidable, a view undermining investments.

GSEBEE urged the government to re-examine the prospect of cutting VAT in public sector enterprises, greater flexibility in the payment of social insurance contributions and a more favourable status in commercial real estate property.