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New army of unemployed is expected to splash the labor offices in Greece from the beginning of autumn, after the end of the tourist season in the country. The forecasts for 2011, however, are even more pessimistic. According to data of the Athens Chamber of Commerce and Industry 150,000 new unemployed are expected next year. They will remain on the street after the closure of at least 60,000 small and medium enterprises and retail outlets as a result of the economic crisis in Greece. This does not include the 16 thousand retail stores across the country adjudged in bankruptcy from the beginning of the year till now.

”Many businesses in the country fall into a deadlock and declare bankruptcy. We are dumbfounded by this situation. We are losing their number already,” expresses his concern the Chairman of the Hellenic Chamber of Commerce and Industry Kostadinos Mihalos. He explains that in a recession the government is obliged to comply with the new economic conditions. He said the government should quickly trigger mechanisms to support new investments and open new jobs, starting first by market liberalization and promotion of competitiveness. Mihalos expresses his concern about the rising inflation, but the biggest problem of the domestic market remains the reduced demand and the lack of cash. The Chairman of the National Confederation of Greek Commerce Vassilis Korkidis said that banks have restricted the granting of business loans average to one of ten and this trend will continue until the internal economic situation is not stabilized. Seven out of ten business loans are rejected, and eight out of ten consumer loans are not approved either, Korkidis says. The experts at the Chamber of Commerce have analyzed the data of the Bank of Greece and the final results show that 11 times less in loans were given for the first four months of this year compared to 2009.

Greek households are also starting to make significant savings that lead to shrinkage of the market. As a result, the manufacturing enterprises in the Greek light industry that still resist the pressures of recession work with about 35% fewer orders compared to the last year, says Pavlos Ravanis, Chairman of the Athens Industrialists. According to a survey of the Union of Industrialists of Northern Greece eight out of ten companies register a dramatic drop in turnover compared to 2009. The carpentry and furniture industries in northern Greece, which recorded a 55% drop in net profit, have suffered the most severe impact. Exports of electrical appliances, machinery and equipment declined by over 62 per cent for the first six months of this year. Expectations for market development, according to the report of the North-Greek Chamber are extremely pessimistic, as two out of three respondents in the survey expect economic conditions in the country to deteriorate further in the near future.

The situation in other regions of Greece, where the data also suggest a catastrophic decline in turnover of enterprises, is not better. According to the industrialists from central Greece the companies work with between 10% to 50% below their capacity because of the reduced market demand. Larger companies (even state ones) resort to cuts in staff, to withstand the economic stagnation and keep their companies “alive” until better times. Companies that avoid cuts of jobs are smaller companies, where job losses would end the operation as a whole. In an effort to retain as many businesses and shops operating, the leaders of trade and industrial unions urged property owners, who rent premises for commercial purposes, to reduce the monthly rentals. Thus the small businesses can reduce part of their basic operating costs and to withstand the recession. The Mayor of Attiki municipality Nikitas Kaklamanis joined the call but that did not change the situation on the market and the rental for a shop in the city center remains at the last year’s levels. This is indicated and by the growing number of abandoned stores in central Athens and Thessaloniki. Even the commercial part of the Plaka area in the capital, which is usually full of tourists and citizens, now is desert.

In the present economic situation, traders and industrialists agree that the state must take immediate measures to improve liquidity of the business and to increase the public investment in times of crisis. The government must take into account the recommendations of the business in the country and reduce tax rates, and immediately put into operation the projects of the National Programme for Economic Development to support the small and medium enterprises in the country. One of these projects is connected with the granting of financial aid to small businesses to repay their duties and bills to state-owned enterprises. This is to cover bills for electricity, water and other municipal fees. And social security funds (if the company is in difficulties to cover social and health insurance payments of its employees). Vassilis Korkidis and Kostadinos Mihalos agree that these programs would help to save the small entrepreneur and the government should not lose more precious time to activate them.