Opens in a new tab

Breaking news

Greece’s €42.3 Billion Problem: The Persistent Shadow Of Zombie Companies

One in ten businesses in Greece is a “zombie” company—unable to service loans, collectively holding a staggering €42.3 billion in bad debt. These businesses, accounting for 8.9% of the corporate sector, have long been a drag on the Greek economy, earning their unenviable label as zombie firms.

In its latest quarterly economic report, the Foundation for Economic and Industrial Research (IOBE) underscores the urgency of resolving these bad business loans. It highlights that these firms, by their nature, cannot restructure their debt independently, posing a perpetual obstacle to entrepreneurial growth.

The Scale Of The Problem

The unresolved bad loans from these zombie firms include €8.9 billion still managed by commercial banks and an additional €33.4 billion transferred to loan servicers by the end of 2022. This combined figure of €42.3 billion remains a significant burden on the banking system, stifling its ability to finance new ventures and economic growth.

The origins of this debt crisis trace back to Greece’s prolonged economic downturn. Non-performing business loans peaked at €58 billion in 2015, representing 47% of all business loans. Although this figure has declined significantly—down by €49.1 billion to €8.9 billion in 2022—the remaining €42.3 billion underscores the persistent challenge. Since 2015, the “real” reduction in business-related bad loans totals €15.7 billion.

Zombie Companies By The Numbers

The phenomenon of zombie businesses—firms unable to meet loan or interest payments—escalated during the 2010-2018 economic crisis. Between 2005 and 2013, their share rose from 10% to 18.6% of all businesses, before receding to 8.9% by 2022.

Interestingly, while smaller businesses have historically shown higher rates of zombification, large firms also exhibited notable vulnerability during the 2005-2016 period. However, since 2013, the share of zombie companies has declined across all business sizes.

A Leading Indicator Of Financial Distress

According to IOBE, the prevalence of zombie businesses closely correlates with the rate of non-performing exposures (NPEs) on bank balance sheets. Notably, the rise in zombie companies typically preceded the increase in NPEs, suggesting that the zombie rate serves as a leading indicator of financial distress in the banking sector.

More recently, the decline in zombie businesses has outpaced the reduction in NPEs. This trend, IOBE explains, stems from the protracted liquidation of companies that have ceased operations but whose debts remain unresolved. These defunct firms are excluded from databases like ICAP, which track active businesses.

Moreover, the size of the average zombie company has shifted. Before the crisis, and again after 2017, zombie firms were generally smaller, reflecting a change in the economic landscape over time.

The Path Forward

The persistence of zombie companies is not merely a banking issue; it is a systemic challenge for the Greek economy. Resolving these bad loans swiftly and effectively is essential to unlocking entrepreneurial potential and enabling Greece’s financial sector to support new business ventures.

As the IOBE report makes clear, addressing this issue isn’t just about cleaning up balance sheets—it’s about paving the way for sustainable economic growth.

Limassol Port Electrification Awaits Grid Connection And EU Funding

Plans to equip Limassol port with shore-side electricity are advancing at the technical level, but unresolved administrative procedures, a pending grid connection and the need to secure European funding continue to delay implementation.

The proposed shore-power system, also known as cold ironing, would allow vessels to connect to electricity while berthed, reducing reliance on onboard engines and cutting emissions and noise in the surrounding area.

Technical Studies Near Completion

Transport Minister Evi Tsolaki said work is progressing through the EU-backed DecarbonLim programme, which is preparing the technical assessment and feasibility study required before construction can begin. The ministry is seeking regular updates from the Cyprus Ports Authority on the studies’ completion timetable.

The initiative also involves Frederick University, Eurogate Container Terminal Limassol, DP World Limassol, the Electricity Authority of Cyprus, the Cyprus Transmission System Operator and Limassol Municipality.

Grid Connection Remains A Key Hurdle

Despite progress on the studies, construction cannot proceed until the project secures a connection to the national transmission network.

Tsolaki said the ministry has requested land from the Department of Lands and Surveys for an electricity substation. Once the site is allocated, the relevant applications can be submitted to the Cyprus Transmission System Operator to advance the grid-connection process.

Until these steps are completed, the project will remain in the preparatory phase, even if the technical studies are finalised.

European Funding Adds Urgency

The feasibility work under DecarbonLim will support an application for construction financing, Tsolaki said. A competitive European funding call is currently open, and the ministry intends to submit an application within the required timeframe.

The funding window has raised concerns in parliament. MP Fotini Tsiridou warned that further delays could undermine Cyprus’ chances of securing EU support, noting that similar port electrification projects elsewhere in the bloc have already received funding.

Speaking to Entrepreneurial Limassol, published by the Limassol Chamber of Commerce and Industry, Tsiridou said she had observed some progress but had yet to receive a formal response to her parliamentary question.

Environmental And Commercial Benefits

Tsiridou argued that shore-side electricity would deliver benefits beyond emissions reductions, including less noise and air pollution for residents near the port.

“Our port should not be disconnected from the rest of the city,” she said, describing shore-power infrastructure as both a necessity and a European obligation.

Across Europe, port electrification is increasingly linked to environmental performance and competitiveness. By allowing compatible vessels to switch off auxiliary engines while docked, shore-power systems can reduce local emissions and noise while supporting wider decarbonisation goals.

Construction Timetable Still Unclear

The Cyprus Ports Authority signed a contract with DBA S.p.A. in July 2025 for a comprehensive study of the system’s technical, economic and environmental requirements. The work was intended to establish the basis for installation and identify any necessary port infrastructure upgrades.

More than a year later, key steps concerning land allocation, grid connection and financing remain unresolved. No timetable has been announced for completing these procedures or submitting the final funding application.

Limassol’s shore-power project therefore remains between planning and implementation. Its next milestones are securing the substation site, progressing the transmission-network application and obtaining construction financing. Until these are in place, the port’s transition to shore-side electricity cannot move into the construction phase.

eCredo
Uol
Aretilaw firm
The Future Forbes Realty Global Properties

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter