The president of Greece’s Confederation of Commerce and Entrepreneurship (ESEE), Vassilis Krokidis, on Sunday called for the European Union to better support small to medium-sized businesses, warning that almost 50 percent of new enterprises don’t survive the first five years after their establishment.
Krokidis, who heads up the biggest SMEs federation in Greece, underlined that “…an average of 200,000 firms go bankrupt across the EU each year, resulting in direct job losses of 1.7 million people. It is essential to have modern laws and efficient procedures in place to help businesses, which have sufficient economic substance, to overcome financial difficulties and ensure that entrepreneurs get a ‘second chance’.”
He adds that “….Insolvencies are a fact of life in a dynamic, modern economy. Yet, insolvency frameworks in many EU countries continue channelling viable enterprises in financial difficulties towards liquidation rather than restructuring while experience shows that the earlier companies in difficulties are able to restructure, the higher their chance of succeeding. But early restructuring (before formal insolvency proceedings are started) is not yet provided for in several EU countries. Furthermore, long discharge periods and conditions for failed entrepreneurs are often so strict that bankruptcy effectively bars a failed entrepreneur from a quick second start and sometimes even results in a "life sentence" away from business.”
