World Economy

Greek Firms Escape From High Payments

Unemployment figures have improved.Unemployment figures have improved.

Hikes in social security contributions and taxes, coupled with rumors that contributions for 2017 will be calculated on the basis of earnings in 2015, have spurred thousands of self-employed professionals to move the headquarters of their businesses to countries with more favorable conditions.

Initial estimates suggest that between 65,000 and 70,000 transfer applications by Greek businesses are currently pending, while the finance ministry is considering bilateral agreements with Bulgaria and Cyprus to be allowed to inspect companies that have relocated to those countries, Scoopnest reported.

Another measure being adopted by troubled business owners is changing the legal status of their firm so that they or their shareholders do not have to be insured, raising more concerns about the sustainability of the social security system.

  Wages Fall

Within a year of the Syriza-led government taking power, the percentage of qualified workers earning wages below those of unskilled workers increased from 36% at the end of 2014, to 38%.

In 12 months, the proportion of those earning less than €1,000 ($1,120) per month reached 58.8%. The figures show a rise in IKA-insured employees, with 85,053 more people registered in 2016 compared to 2015.

Unemployment figures have improved as the number of employees increases. But this rise is due either to part-time jobs or to employers trying to avoid fines and insuring formerly uninsured staff for even a few hours.

As a result, well-paid jobs in the private sector continue to decline.

There have been times over the last few years when, under financial and political duress, Greeks’ appetite for remaining in the euro has waned but ultimately the desire to return to the drachma has always been the choice of a minority. There is no guarantee that public opinion will always be in favor of the single currency, especially if the much-heralded but never-seen economic recovery continues to remain elusive. However, as things stand, after years of sacrifice, wrangling and controversy, the majority of Greeks do not want to take the risk of leaving the euro. They do not seem keen to experience even more strenuous conditions during what many economists believe will be an extremely painful and perilous period of readjustment to a national currency.

Even Prime Minister Alexis Tsipras, who a few years suggested that the discussion of the possibility of leaving the euro should not be a taboo, is now encouraging Greeks to stay the course. He hopes the country, and its people, will start to come out of the dark economic period next year, when Greece is forecast to see growth of 2.7%.