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 self-employed), 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 self-sustained 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. 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.
IME GSEVEE Surveys 
