Study: Starting new business costs double in Greece than European average

Friday, 02 December 2016 12:00
UPD:12:01
REUTERS/ALKIS KONSTANTINIDIS

Essentially what the report shows is that prospective entrepreneurs in the country must often double their efforts to get a business started, as opposed to counterparts in more advanced and innovation-based countries.

By S. Zisimos

Business activity in Greece remains plagued by sluggish state services, high taxes, red tape and even corruption, a report by the Foundation for Economic & Industrial Research (IOBE) - undertaken as part of the international study Global Entrepreneurship Monitor (GEM) - confirmed this week.

Essentially what the report shows is that prospective entrepreneurs in the country must often double their efforts to get a business started, as opposed to counterparts in more advanced and innovation-based countries.

Study results show that a mere 14.2 percent of respondents, as opposed to 20 percent in 2014, predict business opportunities in the country over the coming six months. The figure is among the lowest worldwide, and indicative of the depressed economic juncture in the country, in tandem with the uncertainty that was rife throughout much of 2015, Greece's "annus horribilis".

Based on the findings of the GEM study, half of the new business ventures that began in Greece in 2015 required capital exceeding 30,000 euros, a figure that is nearly double the average European figure of 16,400 euros. The figure is even higher than the sum required in so-called high-income countries, where the average is 24,000 euros.

Additionally, new Greek companies with business activity aimed at foreign markets need an even greater sum as startup capital, calculated at 66,000 euros -- a little more than double the European average of 32,000 euros.

In terms of financing, various vehicles are used, especially with the maturity of the National Strategic Reference Framework (NSRF) funding programs over recent years, with 44 percent of respondents saying they have exploited some form of subsidization via state-run EU programs, as opposed to 24 percent of respondents on a Europe-wide level.

In a more traditional form of funding, 35 percent of respondents said they turned to family members for startup capital, up from 24 percent in so-called "innovation-based" countries.

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