Greek austerity moves hit business

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Greek austerity moves hit business

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Increasing numbers of shuttered shops in Greek towns are proof of how the country’s efforts to slash the deficit are hitting spending.

The Confederation of Greek Craftsmen and Merchants (GSEVEE), representing the country’s small businesses, said a recent survey showed one in five of its members are close to closure.

GSEVEE’s vice president, George Kavvathas, said: “The government measures to reduce the national debt, cutting pensions, wages and benefits, have created a massive problem because consumers’ spending power has been reduced and 80 percent of businesses say they have problems.”

Greeks are spending less, cutting down on the nonessentials and planned increases in sales taxes will make things worse.

Athens shop manager Odysseus Maniadakis said: “If it goes on like this we’ll probably have to shut. The future is very uncertain now, we just don’t know what will happen.”

Small companies account for 99 percent of Greek business activity.

The merchants’ confederation said the Greek government is talking to the business community about solutions, but is limited by the strict terms of the European Union/International Monetary Fund rescue package.

“The feeling is the government shows the inclination to help, the will to find ways to help, but of course there is the pressure of the rescue package, and the current real state of the economy,” said GSEVEE’s George Kavvathas.

Greece’s leaders have already cut public spending and raised taxes, and says it is now entering into its next phase of economic reform which will focus on development and growth, which will include measures to support businesses, but businesses believe it is not moving fast enough.