Interview of ESEE & PCCI President Vassilis Korkidis to Japanese «KYΟDO News» & Italian «RAI TV» regarding Hellenic trade & real economy targets in 2018

ESEE, recently offered the results of the annual research activity as a safe and documented guide to developments in trade and SME entrepreneurship. The long-term follow-up of the Report, as well as the quarterly and monthly bulletins published by INEMY, show the willingness of ESEE to strengthen its documentation and make a real contribution to the public debate with realistic proposals. If there is anything that the crisis has shown is that any decisions must come through fruitful and documented dialogues rather than slogan aversion.

The Annual Report is the opportunity for Greek trade every year to read the present and appreciate the future. The logic of the Report has always shown the correlation of trade with the overall economic environment. At the same time, it monitors the evolution of the sizes in the trade with the developments in the economy as a whole. This is because we consider that the course of trade is an indicator of the course of the economy. It is not the trade, whether large or medium or small, an entrenched activity as some people claim. It is a multiplier of growth. It is a condition and a prerequisite for the recovery of the economy.
ESEE throughout the crisis has been a helper and an expression of the interests of small and medium-sized businesses in Greece and Europe. With our dynamic participation in the European organizations UEAPME and EUROCOMMERCE, as well as our interventions in the Committee, we have as a central strategic goal the consolidation of the position of the Greek company in the promotion of its prospects, within the current programming period of Europe 2020.

The first signs of recovery are indeed here and the trend seems to continue. At the same time, however, the recovery on the horizon is not self-evident that it will be durable, that it will come quickly and that it will be viable. One might argue that internal recovery is related to improving the European and global economic environment. However, we should not underestimate the efforts of the citizens of the country. External economic conditions will still play an important role, but it will be crucial how we will move inside. Therefore, the country’s need for return to growth is linked to improved fiscal, smooth completion of the program, continuation of reforms, debt regulation and the consolidation of a climate of political stability which is a prerequisite for any development effort.

Sustainable growth of the real economy for small and medium-sized businesses will depend on when tax cuts will be implemented, strengthening domestic investment and domestic production, promoting innovation, expanding export activities, increasing trade reducing the trade deficit, curbing bureaucracy and corruption, restoring confidence in the domestic banking system, returning liquidity deposits and, of course, increasing income and salary respectively.

If all of this does not fit into a national development plan that will ensure the diffusion of the recovery in the whole of Greek society, any improvement in the situation will be limited to the level of economic indicators and will not have a real impact on the everyday life of Greek citizens. The most optimistic forecasts indicate that at the current pace we will approach the 2009 levels in the year 2030 at constant prices.

However, if the reform effort is accelerated in our country, the social impact of the crisis is reduced, the mismanagement phenomenon has been eliminated, and the economic environment favorable to the business is organized in a systematic manner, then we will talk about the dominant political and economic issue of the decade since we will be able to bring the anticipated improvement much earlier. It is even possible for this to happen even by 2022.

So now is the opportunity for the country’s political world, to reflect on the present and the future, to regain the lost territory of the Greek economy and to win the country over the next three years for a whole eight years.

Now it is also an opportunity for us, the market representatives, to see the prospect of our action and interventions. Let us respond directly to the questions of “where we move” and “how we move” and “how fast we move”.

If we have so far struggled to rescue, let us fight for development. As Greek entrepreneurs , as small-mediums of the market, this suits us, and that’s what we want. So here’s our chance!

We call on everyone, to recover the lost eight years of the crisis.

In 2018, we are in serious danger, dominating the view that finally the recovery has come. This silent complacency is critical to our course and fearful, since it can hide the real image and lead us back to the tragic mistakes of the past, which we do not want to repeat in any way.

In 2018, a lot of attention is needed, since many of the “thorns” remain like the non-inclusion of Greek bonds in QE, stress tests, “red loans”, capital controls, and the muddy landscape to alleviate debt. The lenders, for their part, do not see a “clean” exit, pretending to apply a three-year surveillance period, with the term “framework” replacing the “memorandum”. I hope that we shall not as many frameworks as the memorandums needed and one framework will be enough for the final exit. 2018 may indeed be the “key year”. But the key turns from both sides. The point is to turn it from the right side. It may be a year of pleasant developments and possibly unpleasant reversals. It can be redeeming, but it can also be painful.

Much will be made if economic developments prevail over the politics this year, as geopolitical developments can not wait. But there will be no longer excuses for new mistakes, since we keep our luck in our hands and for whatever happens, we will be worthy of our fate.

In 2018, our country needs political realism more than ever, since this is the only basis for a nationwide survival plan for the future. The post-memorandum period requires national dialogue and national consensus. We must all agree on some basic principles so that August 21 will be a landmark date for Athens and Brussels and, if the completion of the third program as a whole, is to be described as the “next day”. It is not, however, possible that the important litigation for the next day is the subject of a barren political controversy, but a political consensus, conciliation and agreement for Greece. This is what 7 out of 10 Greeks want.

The “title”, indeed, of the post-programming period, by itself, is totally indifferent to us. The demand for the purchase is the status of the post-programming period with the content, terms and conditions to be agreed. Let us not, therefore, leave the opportunity to lose and co-shape a clear and clear exit plan so that 2018 is the last year of tough fiscal adjustment.

According to the annual report and the “barometer”, let’s look at some encouraging elements and indicators of the past year:

  •  In 2017 global growth is at 3.5%.
  •  World trade gained momentum and grew by 4%, at a higher pace than expected.
  •  The Greek economy is characterized by macroeconomic stability, but also lagging behind its growth.
  •  Forecasts for GDP and employment remain positive for the next two years.
  •  Trade participation in economic activity is boosted.
  •  The Turnover General Index (LCI) in retail trade recorded an increase of 2.3%.
  •  Wholesale trade that was more squeezed throughout the recession recorded an increase of 4.1%.
  •  Trade throughout the economic crisis remains the most important employer in the country with an 18% share in total employment
  •  Employment increased significantly by 5.2% this year, with 30,000 new full-time jobs.
  •  An improvement in the General Image of Retail Trade between the first half of 2016 and 2017 is recorded, with the trade Barometer Index rising from 49.7 to 50.1 units.
  •  Sales to SA & Ltd and their gross profits increased by approximately 9%.
  •  Even small businesses have seen a marginal increase in turnover since the average turnover has increased from 130,000 euros in 2016 to 150,000 euros in 2017.

As can be seen from the figures I mentioned, the country can not go back on the path of development without the active involvement of small and medium-sized enterprises.

The mythological dimension of the big business collapsed, as many large businesses merged, bought, sold out, and mostly emigrated. Demonstration of the free fall of fixed capital formation in the Greek economy, because the 8 years that the Greek economy needed the large multinational enterprises, they were absent.

SMEs, however, we were and we are here, because we are not moving the “capitals of the swallow” and because, despite the “disadvantage” being small, we have shown great economic patriotism. I ask, therefore, to stop punishing us for this and to treat us, like the rest of Europe.

The ‘small companies’, offer the 60% of jobs, almost twice as much as the ‘micro’ companies in Europe offer. Let’s make it clear that: for Greece when talking about SMEs we mean the 98% of the business. The performance of small and medium-sized enterprises in Greece is mainly influenced by over-taxation, which unfortunately is the privilege of few, as 20% of taxpayers pay 83% of taxes and are far from the equal distribution of tax burdens among citizens. As a result, the middle class disappears with the sole responsibility of the political and economic system. A large proportion of the population has been driven to poverty by taxes and social security contributions, which, with a total of at least 53%, are more than half the annual income of many of us. This affects to a large extent consistent professionals and tends to shrink the Greek middle class to a 20% micrometer at 52% from pre-crisis.

ESEE has repeatedly mentioned the need to replace the practice of raising taxes, from a concerted effort to tackle the underground economy and tax evasion. If instead of insisting on tax increases, we effectively hit tax evasion and the shadow economy, the result would be a recession of less than 7 percentage points of GDP. With the shadow economy stagnating at 21.5 percent of GDP, each increase in tax revenue by one unit grips about 2.8 percent of Gross Domestic Product. It should be noted that the underground economy in Greece reaches € 37.5 billion, tax evasion of € 14 billion, tax evasion of € 6 billion, and fines are almost never collected. We must understand that we are seriously harming all of us, since we are burdened with extra taxes.

Small and medium-sized businesses also believe that responsible for the lack of liquidity are those who have never made investments in the capital of development funds, and those who made subsidies and loans, deposits. Banks are constantly revealing strategic bad payers holding 35% of 20 billion euros of non-performing business loans, while private individuals are approaching 25%. Of the 39 borrowers of red business loans, 13 are strategic bad payers and I’m sure we are not among them, since few owe a lot and many owe a little, but they risk losing them all.

To confirm, I note that only 12,335 VATs owe 86 billion of 100, 7 billion euros of total debts from 4.2 million debtors to a total of 7.4 million Greek taxpayers. We also do not forget that in 2017 we had 114 billion euros in official income and 121 billion euros in financial obligations, leaving a black hole of 7 billion euros, while 2018 came up with additional measures of 1.9 billion euros and with negative records, with 1.5 millions of people have been notified of forced measures, 1 million are threatened with seizures, 800,000 are at risk of auctions and 700,000 have committed accounts.

In order to end this negative record of debtors and debts, Greek small and medium-sized businesses are demanding “payment” of five government’s “post-dated” checks issued last year that are in danger of being sealed off the market as “uncovered”
First check, the introduction of a simplified, fair and stable tax system, with the basic characteristics of adopting lower tax rates starting with consistent taxpayers and employers.

Second check, the application of the business account with the parallel force of the unrestrained limit and its “builder”, through the universal use of electronic transactions and receipts, for repayment of liabilities of the company to the State, payroll, banks and suppliers.

Third check, the channeling of resources to the real economy, with emphasis on micro-loans in smaller-sized enterprises, many of which have and are in line with the prerequisites for gaining orientation and expansiveness.

Fourth check, the liberalization of entrepreneurship by lifting capital controls and the exclusion of banks’ recapitalization scenarios with the risk of the haircuts of deposits.

Fifth check, the promotion of better regulation in the framework of the Extra-Judicial Mechanism to regulate red loans, and the regulation of 120 installments for company debts to public and social security funds, by easing the integration criteria, in order to benefit as much as possible more businesses that are sustainable but face serious financial problems.

A fatally torturing 8-year period marked the course of the country and left us wounds that hardly heal. What has dramatically happened in its duration, we must treat it as the last bad performance of a thriller that should never be played again. However, the great sacrifices of the Greek people must be honored in a safe and steady manner. This vindication is most important, because any other type of supposed vindication will not be acceptable.

If we do not pay attention, there is a danger that the political system will slip back into its logic yesterday, follow the logic of the ostrich, deny the root causes of the crisis and seek a return to practices that are a source of pathogenesis. The crisis was the result of the collapse of a whole social and economic model that has characterized our country for decades. We must, to see the light of the next day, learn from mistakes and create conditions of overcoming. Greece can move towards progress with substance, self-knowledge, moderation, responsibility and a clearly defined plan.

The Greek economy can actually turn page in 2018. But to do this some people have to back up and these will be again, the Greek SMEs entrepreneurs and traders. After all, in the crisis, we showed resilience, we have tremendous experience and stubbornness, we have the capacity, we want to improve the situation and we will be present for the years to come, because we are “citizens of our country and traders of the world».

The small and medium-sized enterprise is not just an economic unit, it is an institution of national scope, inherent in the Greek identity. We are therefore optimistic, but also determined that we can do it.

We wish 2018 to be a constructive year for the Greek economy and, by extension, for Greek entrepreneurship. We wish for better days with growth, liquidity, profitability, and new jobs. We wish to overcome the serious challenges that we are going to face, by passing this difficult crossroads of business.

We know that the dangerous ones may have been passed, but the difficult ones are still ahead of us.