Too many ‘zombie’ firms in 2021 weighed on NPLs

Nearly one in 10 firms in Greece in 2021 were "zombie" companies, according to a recent report by the Foundation for Economic and Industrial Research (IOBE), which revealed that 4,500 of 51,000 firms surveyed were at least 10 years old and had an interest coverage ratio of less than one percentage point for three consecutive years.

Stressing that such a large number of underperforming firms harmed healthy competition in the product and service markets, IOBE found that the ratio of "zombies" rose between 2004 and 2013, from 10% or 3,400, to 18.6%, or 7,200 companies. However, their number started to decline in 2014, dropping from 16.5% or 6,900 to 8.9% and 4,500 companies in 2021.

The study links the increase in the number of companies that struggle to repay the interest on their loan obligations over the course of several years to the non-performing loans (NPL) crisis...

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