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Economy

Thousands of Greek Businesses Face Closing Over COVID-19 Lockdowns

ATHENS – Being forced to close 19 weeks since March of 2019 – and counting – under lockdowns aimed at slowing the spread of COVID-19, thousands of Greek small and medium sized businesses are on the brink of bankruptcy, the New Democracy government trying to devise a way to save them.

While their landlords had been required to lower their rent and the government initially put 17.5 billion euros ($21.39 billion) into subsidies for businesses and workers temporarily laid off.

Prime Minister Kyriakos Mitsotakis’ administration is trying try to stave off further disaster to an economy that was just beginning a faster recovery from a near decade-long crisis worsened by austerity, and three international bailouts of 326 billion euros ($398.53 billion) ending on Aug. 20, 2018.

One step, said Kathimerini, is subsidizing the loan installments of businesses after the current moratorium on payments ends, the state using a Bridge (Gefyra) program, through which it pays corporate and mortgage loans with the primary residence as collateral.

As of last March, some two billion euros ($2.44 billion) in liabilities to tax authorities and insurance funds have been essentially frozen as have installments for loans totaling 30 billion euros ($36.67 billion,) half of which are business debts, the report added.

Restaurants, bars and taverns have been among the hardest-hit along with retail stories especially after a click-and-collect scheme letting people order online and pick up at stores was suspended, although its volumes were low.

The worry is that even when the pandemic ends that it will be too late to save businesses who racked up huge debts, spilling over into another spike in unemployment with jobs of their employees lost.

For the transition phase, until the recovery of the economy, the companies will be asked to pay the banks part of the initial installment, which depending on the sector will start from 25-30 percent and will gradually escalate from 50-100 percent once a recovery is underway.

Despite the ambitious government scheme, retail sector leaders have said smaller businesses could close anyway because the losses have been too devastating even with state aid.

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