THE Andreas Papandreou in 1981 he attributed small and medium enterprises as the backbone of the Greek economy, glorified their role and participation in the progress and development of the country and insisted on policies that favored their growth. Four decades later, that assessment is fully confirmed.
According to data from Alpha Bank, as presented in the bank’s weekly financial report edited by its financial advisor Panagiotis Kapopoulossmall and medium enterprises form the core of the Greek economy. The numbers are impressive and indicative of the care that the economic authorities of the place owe. So, according to the bank’s data, small and medium-sized companies make up 99.9% of all businesses in the non-financial sector. They employ 84.6% of the workforce and contribute 67% of the gross added value to the Greek economy.
Crises and challenges
It is characteristic that in 2023, despite being faced with a multitude of crises and challenges, energy and other, they managed to improve their gross added value by 3%, the third best performance in all of Europe. Interestingly, the largest contribution to this result was made by micro-enterprises, which employ up to nine workers.
The productivity improvement from the very small reached 13.2%, surprising everyone. In total now, in 2023 the number of small and medium-sized enterprises increased to 780,600 and their employment by 1% to about 2.4 million workers. The very small ones make up 94.7% of the total, the small ones employing between 10 and 49 employees 4.8%, the medium ones with 50 to 249 employees 0.5% and the large ones with more than 250 employees 0, 1%.
Auspicious prospects
The European authorities and in particular the Commission consider the prospects of small and medium enterprises to be favorable, predicting that this year their productivity will improve by 5.7% and employment by 5.4%. It is critical to point out that 44.1% of them are concentrated in the services sector and 24.1% in the trade sector, while their participation is significantly lower in the construction sectors and elsewhere.
The truth is that despite the progress of the last three years, their productivity falls short of their European counterparts. However, everyone knows that productivity depends on the size, investments, mechanical and technological equipment available to each company.
That is why it is important that micro and small enterprises acquire the critical size that will allow them to achieve economies of scale, secure a higher credit surface, acquire other investment possibilities and thus gradually create the conditions for their growth through acquisitions or mergers. One would expect that, based on the above facts and data, economic policy makers would devote more time to the “core of the Greek economy” and obviously more supportive and promotional policies.
Unprecedented obstacles
The responsible Minister of Finance Kostis Hatzidakis shows how it starts from the end. He has announced that he will soon bring to Parliament a bill that will favor mergers between small and medium enterprises, mainly offering tax incentives. It could, however, ensure that their access to the credit system is preceded and that their participation in the European programs of the NSRF and in those of the Recovery Fund, whose resources have been committed mainly in favor of 0.1% of large companies and not 99.9% of small and medium businesses.
And this when everyone recognizes that their access to European programs, the Recovery Fund and the credit system is limited. Needless to say, the obstacles they encounter are unprecedented and indicative of a perception that wants small and medium-sized businesses excluded from the supposed circle of great opportunities that, according to the declarations, offers the current economic policy.
It is characteristic that the problem is reflected in the relevant European surveys. According to European analysts, small and medium-sized entrepreneurs recognize as major issues access to the credit system, the obvious lack of competition in the individual markets and of course the institutional environment which is almost punitive. Characteristic for this is the digital lag of Greek small and medium enterprises. They are only 24th in Europe in terms of their digital transformation and 16th in their use of e-commerce, covering just 5% of their turnover.
Liability of banks
And the question that directly arises is why they are absent from the Recovery Fund, at a time when digital transformation is a central goal of the said Fund. Here, obviously, there is also the responsibility of the banks, which present various obstacles. They raise issues of accounting and the reliability of their balance sheets, as well as technical support and the inability to write business plans, to explain their own reluctant attitude towards small and medium enterprises.
However, they no longer acknowledge their own backwardness, which is not unrelated to their own digital transformation. The closure of stores and their slow replacement with modern and easily accessible digital platforms is preventing access for most.
“The old is slowly dying and the new has not yet arisen” as a friend puts it to describe the inability of credit institutions to seek out and attract the mass clientele and so they are limited for their profits to ready-made “big deals” and “great deals” with the high commissions that usually accompany them. Except these choices don’t stand the test of time.
Banks after so many years of losses and disasters cannot survive for a long time relying on high fees and the unprecedented difference between interest rates on deposits and loans. They must now build the loan portfolios of the next 20 years and of course contribute to the rapid growth of the economy, without which they will not succeed either.
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