SMALL ENTERPRISES’ INSTITUTE
HELLENIC CONFEDERATION OF PROFESSIONALS,
CRAFTSMEN, AND MERCHANTS (GSEVEE)
Thessalonica, 18 March 2014
46, Aristotelous str., GR-104 33, Athens,
tel.: +30 210 8846852, fax: +30 210 8846853
www.imegsevee.gr, [email protected]
PRESS RELEASE
Subject: IME GSEVEE Survey - February 2014 - Biannual portrayal of economic climate in
small enterprises (with 0-49 employees, which make up 99,6% of Greek enterprises)
Real economy lies in a deep investment sleep, GSEVEE Small Enterprises’ Institute finds out, which
portrays economic climate in small enterprises (with 0-49 employees, which make up 99,6% of
Greek enterprises). The survey, which was presented today in Thessalonica by GSEVEE/IME
GSEVEE President, Mr G. Kavvathas, and IME GSEVEE Vice-President, Mr I. Papargyris, at the
Crafts Chamber of Thessalonica, finds out that for 70,3% of small enterprises the situation in 2014
has been deteriorated, and that about 1 in 2 faces a risk of closure during the next months, which
is due to the reduction of turnover, and debts towards OAEE (the social security fund for selfemployed), Public Utilities, tax authority, and banks.
IME GSEVEE survey main findings, which was carried out in cooperation with the company MARC
S.A. on a sample of 1204 micro and small enterprises (with 0-49 employees), throughout the
country, from 10 to 14 February 2014, read as follows:
A. OVERALL ECONOMIC SITUATION OF ENTERPRISES
1)
Real economy lies in a deep investment sleep. The much-vaunted structural reforms have
led to no essential result. According to the economic figures that enterprises show, liquidity
indicator and the investment activity are still at a historically low level. It’s about a selfsustained vicious circle of lack of liquidity and disinvestment, which in fact deprives
private sector from its growth dynamic and its autonomous potential for recovery.
2)
The assessment of the 2nd half of 2013 is still negative, as for 70,3% of small enterprises
the situation has been deteriorated. The negative track which had begun in 2010 is still on the
same way. Practically, it concerns a de facto shift to a much lower equilibrium point of the
economy, as a result of the internal devaluation procedure. Given the fact that more than
200.000 enterprises have closed during the last four years (a moderate estimation according to the
official data by the European Commission), the accumulated debts and the freezing of
employment, the prospects for recovery seem extremely uncertain.
3)
All economic indicators in enterprises are still on the negative side. 66,6% of enterprises marked a
decline in turnover, with the largest one been recorded in micro enterprises (81,7%). The
average turnover decrease for the second half of 2013 amounts to 22,9%. Since the very begging
of crisis and according to IME GSEVEE calculations, it is estimated that the overall fall in
turnover amounts on average to 65%. A decrease in demand is recorded by 66% and in
orders by 71,2% of enterprises.
4)
47,1% of enterprises faces a risk of closing down during the period to come. As a matter of fact,
about 40% of those say that there will be a shutting down during the current half. This figure is
still invariably high despite the accumulated decrease by 200.000 enterprises since 2009.
1
According to IME GSEVEE estimations, in the year to come the net reduction of enterprises
is estimated, based on the current economic facts, to be close to 27.000-30.000. The
data for micro enterprises are particularly negative, as 2 in 3 state that they are at risk
of closing down.
5)
Self-employed, surrounded by debts. One out of the most important issues unveiled by the
survey is the problem of accumulated debts by small enterprises. It’s about a constant
“stage of siege” by arrears and debts in various forms (towards the private and the public sector)
that has led enterprises to their limits. Enterprises still have very high debts towards all “creditors”
categories. The largest part of arrears by enterprises has to do with social security
contributions towards ΟΑΕΕ (about 40%). OAEE latest data mention that more than 370.000
enterprises, out of a 700.000 total, have arrears towards the organisation, which means that many
enterprises with arrears are set in a state of inactivity or have already closed. Arrears towards
Public Utilities follow (34,9%) and the ones towards tax authority come next (32,7%). During the
past half, the percentage of enterprises with arrears towards suppliers has been enlarged (28,7%
from 27,8%) - a worrying fact for the prospects of private sector- and towards IKA (25,9% from
22,6%). Non-performing or late bank loans amount to 28,1%.
6)
The findings on employment prospects are disappointing, despite the high unemployment rate
already recorded in the country (27,5%), as, if IME GSEVEE estimations get verified there is a
danger of losing 47.000 employment posts in total (employers, self-employed,
employees) during the next half. The survey shows that jobs losses (that is employees)
for the first half of 2014 will come close to 30.000. Barely, a 7,6% of enterprises is
expected to proceed in recruitments. The trade sector and micro enterprises mark the worst
performance.
7)
As far as the implementation of the new taxation rules is concerned, 2 in 3 enterprises
(67,7%) consider that it increases the administrative costs for enterprises. Additionally,
63,6% of enterprises states that the new taxation rules increases the risk of a closure of business,
which is apparently a result of the strict provisions and complex procedures that an enterprise has
to follow in order to be deemed lawful. Enterprises of the manufacture sector and enterprises with
employees seem to be particularly burdened.
8)
Professionals condemn the effectiveness of OECD proposals, as the vast majority of them
considers that the liberalisation of product market and opening up professions, as approached, will
neither lead to prices reductions, nor will it reinforce the domestic entrepreneurial activity.
9)
The survey shows that the results by shops Sunday opening are particularly poor, as barely 4,2%
of enterprises stated that turnover has been reinforced.
* The survey presented is the first one for 2014, out of a series carried out by GSEVEE Small Enterprises
Institute in cooperation with the company MARC S.A. on a biannual basis since May 2009. It was carried out on a
sample of 1204 micro and small enterprises (with 0-49 employees), throughout Greece, between 10 and 14
February 2014, with the main aim to portray the economic climate in micro and small enterprises, in
manufacture, trade, and services sectors, which make up 99,6% of enterprises in Greece. The findings
of this survey can be compared to the respective ones of the previous surveys (February 2010 - July 2013).
These surveys are the only tool available, throughout Greece, to record the situation and the course
for the largest part of the real economy in Greece.
As in the surveys before, there is a clear record of economic climate trends as well as monitoring of the key
indicators that have to do with small enterprises’ activity during the 2nd half of 2013, while, at the same time, an
economic outlook for the 1st half of 2014 is attempted.
2
DETAILED PRESENTATION OF SURVEY RESULTS

ASSESSMENT OF THE 2nd half of 2013
Overall, the assessment of the 2nd half of 2013 is still negative for all indicators concerned. More than 2 in 3
enterprises (70,3%) record deterioration in their overall economic situation. As to individual indicators for
enterprises, deterioration is shown in:
 turnover for 66,6%of enterprises
 demand for 66,0%
 liquidity for 76,3 %
 orders for 71,2%
 investments: increase is recorded for 6,2%, decrease for 45,9%, and stagnation for 42,8%.
The average decrease in turnover reaches 22,9%, which is lower than the corresponding 27,3% decrease recorded
in the previous half. In total, the overall decrease in small and medium-sized enterprises since the begging of
crisis and after that reaches on average 65% (which is confirmed by National Bank’s recent surveys). Micro and
small enterprises (with a low turnover and few employees) are on a worse position, which is also the case for
enterprises active in the trade sector.
The data show a continuation in the negative track which had began back in 2010, which is practically translated
into a de facto shift to a much lower equilibration point of the economy, as a result of the internal devaluation. Given
that more than 200.000 enterprises have closed down during the last four years (which is a moderate estimation
according to European Commission’s official data), the accumulated debts and the freezing of employment, the
prospects for recovery seem extremely uncertain.
Out of the assessment indicators for the 2nd half of 2013, the maintenance of the high deterioration rate
shown in the liquidity indicator, in conjunction with the decrease in investment activity is noteworthy. It’s
about a self-sustained vicious circle of lack of liquidity and disinvestment, which practically deprives the
private sector from its growth dynamics and its autonomous potential for recovery.
ASSESSMENT OF THE PAST HALF- CHART 1
Increase
Decrease
No change
NA
TURNOVER
12,4
66,6
20,4
0,6
DEMAND
13,4
66,0
20,4
0,2
LIQUIDITY
7,1
76,3
16,1
0,4
3
ORDERS
8,7
INVESTMENTS
6,2
EMPLOYMENT
5,4
0
71,2
17,3
45,9
42,8
13,0
10
5,2
81,3
20
30
40
50
60
2,8
0,3
70
80
90
100
3

BUSINESS CLOSURE
1) The percentage of small enterprises that consider very of fairly probable that during the period to come they
will be facing major problems to an extent that they will be at risk of closing is still very high (47,1%). It
should be noted that, in May 2009, the corresponding indicator stood at 11,7% (chart 3).
2) In absolute numbers, for 65.000 enterprises there is an “alarm”. It is estimated that the net decrease in
enterprises during next year will be 27.000-30.000 and that It will mainly concern micro enterprises.
3) It should be underlined that according to a moderate scenario the probable closures of enterprises, which
are on a state of “alarm”, imply a risk of losing 47.000 employment posts in total (employers, selfemployed, employees).
CHART 2
CHART 3
Do you consider probable or not that your enterprise will be facing major
problems during the period to come to an extent that it will be at risk of closing?
Fear for a probable business closure
Comparative Chart
60
52,7
53,3
51,2
49,6
51,2
50
44,4
Not at all
probable
26,2%
NA
1,8%
47,1
44,5
40
Very probable
22,2%
Not vey
probable
24,9%
30
20
11,7
10
Fairly probable
24,9%
ar
y
20
14
20
13
Fe
br
u
Ju
ly
13
20
y
12
20
12
Ja
nu
ar
Ju
ly
20
11
20
y
Ja
nu
ar
Ju
ly
y
20
11
20
10
Ja
nu
ar
Ju
ly
M
ay
20
09
0
PROSPECTS FOR THE 1st HALF OF 2014
The prospects regarding the course of enterprises during the next half in every indicator concerned are
decreasingly negative, and steadily follow, even at lower levels, the trend in the assessments of the previous half.
Entrepreneurial prospects for the first half of 2014 are negative (51,1%). Enterprises act in an era of a decline in
prospects, in an economic environment that is still volatile and uncertain.
Overall, in all economic climate indicators there is pessimism recorded by more than half of the enterprises. It
should be noted that the degree of pessimism is larger in the smallest enterprises of the sample. It is estimated that
government’s palinodes on taxation decisions and the inability to adopt a stable and effective taxation plan, realistic
towards market needs, have a decisive share in this situation.
In particular, and with regard to the specific indicators, deterioration is foreseen in:





turnover by 53,8% of enterprises
demand by 52,5%
liquidity by 56,3%
orders by 54,6%.
investments: increase is foreseen by 9,0%, decrease by 39,0%, and stagnation by 46,3%
4
OUTLOOK FOR NEXT HALF- CHART 4
Increase
14,3
TURNOVER
ORDERS
56,3
9,0
EMPLOYMENT
10,3
0
27,1
3,2
3,4
4,8
46,3
5,8
64,8
21,3
20
3,9
26,3
39,0
10
28
26,4
54,6
14,3
INVESTMENTS
NA
52,5
13,9
LIQUIDITY
No change
53,8
17,3
DEMAND

Decrease
30
40
50
60
3,6
70
80
90
100
EMPLOYMENT – WORKING CONDITIONS – WAGES
 The data on employment are still on the negative side, despite the high unemployment rate already recorded





in the country (27,5%, ELSTAT official data). The effects of crisis on employment are obvious. A reduction of
personnel during the past half has been recorded by 13,0 % of enterprises, while an increase was mentioned
by 5,4%.
In absolute numbers, the net jobs loss (i.e employees) during the 2nd half of 2013 exceeds 50.000
persons, a fact confirmed by ELSTAT surveys on labour force and IME GSEVEE forecast in its climate
survey, July 2013.
The findings by IME GSEVEE statistical pre-estimations are worrying, as the balance between recruitments
and lay-offs is still negative. For each enterprise recruiting in the private sector, there about 2 enterprises
laying off (in the previous survey this balance stood at 1:3, July 2013). The declining trend in lay-offs rate
of increase is shown in the newly-established Ergani system, but it is linked to the generalised
implementation of flexible forms of employment and the existence of a high long-term unemployment
rate.
The findings on the prospects for employment are discouraging, as if IME GSEVEE estimations get verified,
there is a risk of losing 47.000 employment posts in total (employers, self-employed, employees) during
the next half. As far as the prospects on the first half of 2014 are concerned, it is expected a loss of 30.000
jobs (i.e. employees). Only a 7,6% of enterprises is expected to proceed in recruitments. The trade sector
and micro enterprises show the lowest performances.
The scheme of implementing flexible forms of employment is getting stabilised and wider. The grounds of
this phenomenon lie upon, except of the need of entrepreneurial restructuring, the actual burden by
the increase and accumulation of enterprises’ financial liabilities (immovable property fees, trade
taxes, over-taxation). Just to mention a typical example, 60,5% of enterprises stated that during the second
half of 2013 it has proceeded to a reduction of working hours, or/and to a reduction of wages. 43,5% of
enterprises has proceeded in a direct readjustment of labour cost, by reducing wages. In addition, 47,7% of
enterprises with employees has proceeded in a indirect decrease of the labour cost, by reducing working
hours or days. The respective figure for the same period in 2012 stood at 37,4%, and in 2013 at 47,7%
(Charts 5 and 6).
About 1 in 2 enterprises faces difficulties in paying wages in time, a figure confirmed by the Labour
Inspectorate’s reports.
5
CHART 5
CHART 6
They had to reduce wages for some employees
-Out of enterprises with paid employees -
Had to reduce, even occasionally, working hours or days for some
employees
-Out of enterprises with paid employees -
49,3
50
43,6
43,5
45
50,5
47,7
50
40
33,2
28,6
40
30
37,4
32
35
25
19,4
30
15
15,6
25
15
20
10
15
5
10
20
14
20
14
20
13
ru
ar
y
Fe
b
Ju
ly
ry
20
13
20
12
Ja
nu
a
Ju
ly
20
12
ry
20
11
20
11
Ju
ly
Ja
nu
a
ENTERPRISES’ DEBTS AND REQUIREMENTS
ry
Ju
ly
20
10
0
Ja
nu
a
20
13
5
ru
ar
y
Fe
b
Ju
ly
ry
20
13
20
12
Ja
nu
a
Ju
ly
ry
20
12
20
11
Ja
nu
a
Ju
ly
Ja
nu
a
ry
20
11
20
10
0
Ju
ly
30,2
30
20

47,7
40,5
45
35
 Self-employed, surrounded by debts. One out of the most important issues unveiled by the survey is the
problem of accumulated debts by small enterprises. About 4 in 10 enterprises estimate that they will not be
able to meet in 2014 their tax obligations. Respectively, 37,7% of enterprises estimates that it will not be able
to meet the social security obligations of the current year. These figures hike at 60,1% and 62,9% for the
categories of enterprises stating already arrears. The successive taxation regulations, as well as the
ineffective settlements for social security debts seem to have a negative effect on enterprises and form
a regime of continuous insecurity that undermines any prospect for investments.
 Enterprises still have very high debts towards all “creditors” categories. The largest part of arrears by
enterprises has to do with social security contributions towards ΟΑΕΕ (about 40%). OAEE latest data
mention that more than 370.000 enterprises, out of a 700.000 total, have arrears towards the organisation
which means that many enterprises with arrears have been set in a state of inactivity or have already closed.
Arrears towards Public Utilities follow (34,9%) and the ones towards tax authority come next (32,7%). During
the past half, the percentage of enterprises with arrears towards suppliers has been enlarged (28,7%
from 27,8%) – a worrying fact for the prospects of private sector- and towards IKA (25,9% from 22,6%).
 Non-performing or late bank loans amount to 28,1 %.
 As far as the health system is concerned, 30% of entrepreneurs states that it is not entitled to health care
due to accumulated debts towards OAEE. This figure is higher in micro enterprises (34,8%) and enterprises
that are 5-10 years in operation (36,9%).
 The data that have to do with matured receivables of enterprises are also interesting. The survey also finds
that 26,2% of enterprises are forced to retain an outstanding cheque (of a value above EUR 10.000 for 16,9%),
while 17,5% expects receiving by the public sector. These findings, in conjunction with the matured debts,
make imperative a swift drawing up of an overall financial plan which will include realistic settlements
for arrears, debts cross-entry, and partial write-off of loans.
Economic reality, as described by enterprises, is a constant “state of siege” by arrears and debts in various
forms (towards the private and the public sector) that has led them at the limits for their survival. It should be noted
that both the social security and the taxation burden for small enterprises is not healed but, on the contrary,
enlarged by the measures of enforced payment and the implementation of the ineffective taxation laws.
6
CHART 7- ARREARS
During the past half, did you have arrears towards…
February 2014
July 2013
43,2
34,3
39,5
34,9
34,1
31,3
27,8
32,7
28,7
28,1
28
26,7
22,6
25,9
ΟΑΕΕ (self-
employed Public Utilities Tax authority
social security
fund)

OTHER ECONOMIC ISSUES
Suppliers
Loan
payments
Rent
ΙΚΑ (social
security
contributions)
 As far as the implementation of the new taxation rules is concerned, 2 in 3 enterprises (67,7%) consider that
it increases the administrative costs for enterprises. Additionally, 63,6% of enterprises states that the new
taxation rules increase the risk of a closure of business, which is apparently a result of the strict provisions and
complex procedures that an enterprise has to follow in order to be deemed lawful. Enterprises of the
manufacture sector and enterprises with employees seem to be particularly burdened. GSEVEE before the
voting on these taxation laws, in summer 2013, submitted comprehensive proposals for drafting a modern and
stable set of taxation laws.
 On OECD Proposals for the improvement of the conditions of competition in the market, 48,4% of
professionals, against a 34,7%, believes that the liberalisation of product market and opening up professions
will not lead to prices reductions, while 51,4% considers that it will not help either the domestic entrepreneurial
activity.
 The survey shows that the results by shops Sunday opening have been particularly poor, as barely a 4,2% of
enterprises stated that turnover has been reinforced.
 As far as commercial lettings are concerned, 45,3% of enterprises active in trade sector disagree with the
liberalisation of commercial lettings, which has been recently voted.
The findings above have to be productively evaluated by the government and the decision-making centres, so that
the policies and mentalities on the growth model that the country implements will be reviewed. It is obvious that the
path of horizontal, one-dimensional reforms, without evaluating the specificities of the economy and the local
economies, will lead to deepening crisis and stagnation.
7
CHART 8: Evaluation of the new taxation laws
Increase of administrative burden
No
12,0%
NA
1,9%
I am not aware
of the new
regulations
18,4%
Yes
67,7%
CHART 9: OECD proposals evaluation
Contribution to prices reduction
Yes
34,2%
Contribution to entrepreneurial activity
I don't know
17,4%
No
48,4%
Yes
30,4%
I don't know
18,2%
No
51,4%
8
ANNEX: IME GSEVEE SURVEYS COMPARATIVE DATA (February 2014 - 2010)
The figures below refer to the entrepreneurs’ respondents in percentage points
CHART
FEB.
JULY
JAN.
JULY
JAN.
JULY
JAN.
JULY
FEB.
2014
2013
2013
2012
2012
2011
2011
2010
2010
FEB.
JULY
JAN.
JULY
JAN.
JULY
JAN.
JULY
FEB.
2014
2013
2013
2012
2012
2011
2011
2010
2010
FEB.
JULY
JAN.
JULY
JAN.
JULY
JAN.
JULY
FEB.
2014
2013
2013
2012
2012
2011
2011
2010
2010
FEB.
JULY
JAN.
JULY
JAN.
JULY
JAN.
JULY
FEB.
2014
2013
2013
2012
2012
2011
2011
2010
2010
FEB.
JULY
JAN.
JULY
JAN.
JULY
JAN.
JULY
FEB.
2014
2013
2013
2012
2012
2011
2011
2010
2010
FEB.
JULY
JAN.
JULY
JAN.
JULY
JAN.
JULY
FEB.
2014
2013
2013
2012
2012
2011
2011
2010
2010
Decrease
TURNOVER
It will be
further
decreased
Decrease
DEMAND
It will be
further
decreased
Decrease
LIQUIDITY
It will be
further
decreased
Decrease
ORDERS
It will be
further
decreased
Decrease
INVESTMENTS
It will be
further
decreased
Decrease
NUMBER OF
EMPLOYEES
It will be
further
decreased
* Decrease recorded in the past half
** Decrease expected for the next half
9