The Federation of Hellenic Enterprises (SEV) has urged for a fast resolution of the non-performing loans problem and criticized the government’s policy of raising taxes during the recession. In its weekly bulletin, SEV commented that bank deposits that fled the country in the last 15 months were not expected to return to Greek banks and that if bank deposits fail to increase, capital controls are unlikely to be lifted. “Capital controls will be always with us, at least as long as confidence is not restored to the economic outlook. And with capital controls on enterprises there cannot be economic growth.Therefore, to cover this gap, a faster resolution of the non-performing loans problem must be sought,” the Federation said.
SEB, however, stressed that capital controls have not hit well-organized Greek enterprises are hard, nor those that have access to revenue from exports. “The situation for smaller enterprises could be worse than with larger enterprises, but companies have developed a wide-spread transaction system through the use of foreign bank accounts, (mostly Cyprus, Bulgaria, etc),” write the Federation.
SEV added that the result of excessive taxation would be catastrophic leading to a collapse in available income and incentives for work and business activity. This could lead the economy back into recession.
