Can social enterprise help fix the Greek crisis?

Despite youth unemployment at 53%, Greece's young entrepreneurs face state obstacles and hostility

Myrto Papadogeorgou and her business partner Nikos Konstantinou chose not to join the exodus of 200,000 people from Greece over the past five years. Instead they've stayed, hoping to help drag their country out of crisis. For them, and many other young Greeks, starting a social enterprise has become a way to capitalise on their frustrations in the face of 52% youth unemployment.

But Papadogeorgou and Konstantinou have hit a dead end. After four years unsuccessfully applying for funding from organisations at home and abroad for City of Errors, an interactive platform they've developed that encourages users to fix their city’s problems, the defeated pair have stopped trying. Now they talk about leaving Greece.

"We tried to make a living but we can't," says Papadogeorgou “There’s no money here and the taxation is huge. We are trying to stay positive, but we’re lying to ourselves.”

Papadogeorgou and Konstantinou believe their lack of success is down to Greek attitudes towards social enterprise. A relatively new concept in the country, it was only recognised through legislation in September 2011, and attitudes have been slow to follow.

The two describe, for example, how Greek companies are reluctant to invest in the social economy. Papadogeorgou says some meetings are like talking to a brick wall: “Social entrepreneurship is not understood in Greece. It’s really hard to get funding because people don’t understand how you can have an impact.

People power

The pair believes their fellow citizens, not politicians, have the power to change Greece and they want to empower their audience to think the same. "Athens really suffers from a lack of socially responsible local authorities, leaving the city to the people who love it," says Papadogeorgou.

One person filling the gap is Thanos Spiliopoulos, the 22-year-old co-founder of Ithaca, a laundry service for homeless people. “I started Ithaca because the homeless situation in Athens is getting worse day by day and there are very limited hygiene services for [homeless] people,” he says.

Like Papadogeorgou and Konstantinou, Spiliopoulos believes a lack of knowledge about the social enterprise sector creates obstacles for social entrepreneurs. Lawyers, banks and some government departments are not used to dealing with social enterprise, making it difficult to set one up, he says.

State hostility

For social enterprise to play an active role in Greek society, entrepreneurs need support. Although organisations offering help do exist, Dr Ioannis Nasioulas, director at the Social Economy Institute, believes that state hostility towards social enterprise is still a major barrier to progress.

Nasioulas thinks the 2011 law had a negative impact on many social entrepreneurs because it identifies "social cooperative enterprises" – defined as having a minimum of five members – as the main type of social business. Any initiative that does not fall within this definition will struggle to get funding. “This negatively affects any spontaneous or innovative types of social economy organisations and non-incorporated entities,” he says.

Tax is another difficult issue for young Greek entrepreneurs, says Nasioulas, because startups receive no preferential treatment.

But Yannis Ioannides, Greek economist and professor at Tufts University in the US, does not believe social enterprise should be a priority for Greece right now. “It could play a role in wealth creation if it is recognised that it could complement profit-seeking efforts. But ultimately Greece needs investment and I am not sure that social enterprise would help in that area.”

Michael Printzos, director of the Hellenic Initiative, a community that encourages Greeks living abroad to invest in their home country, disagrees. He believes social enterprise can play a role in Greece's healing process. “It is important to get over the discussion about the past and what brought us to this dreadful situation and think about a brighter and more promising future,” he says.

How we can get there and what solutions we should implement on the ground are questions that social entrepreneurship can provide some answers to.”

Social entrepreneurs such as Papadogeorgou and Konstantinou could help bring Greece back to life. But for them, and many other young Greeks – skilled, ambitious and educated abroad – the feeling of frustration is overwhelming.

The above article by Morga Meaker first published on in Nov, 2015.