A prominent German researcher reported that corporate bankruptcies in Germany have risen to levels similar to the 2008 financial crisis.
“We are in the range where some months could easily reach their highest levels in 20 years,” said Steffen Müller, head of bankruptcy research at the Halle Institute for Economic Research.
“At the time of the financial crisis, we had about 1,400 insolvent partnerships and companies per month, and now we have reached that level again,” Mueller added.
Bankrupt companies
Mueller pointed out that the number of small bankrupt companies at that time was similar to the number of large bankrupt companies, but today it amounts to about 500 small companies, which are those that include up to 10 employees, adding that in light of the bankruptcy of more larger companies, this means Loss of more economic assets.
A report issued by the credit agency “Credit Reform” last December confirmed this trend, showing that bankruptcies among German companies in 2024 reached their highest level since 2015.
In total, about 121,300 bankruptcies were recorded in Germany in 2024, including individual bankruptcies and others, which means an increase of 10.6% compared to 2023.
“The crises of recent years are now hitting companies with a certain time lag in the form of bankruptcies… This means that bankruptcy numbers may soon be on par with the record levels of 2009 and 2010, when more went bankrupt,” said Patrick-Ludwisch Hantzsch, head of economic research at Credit Revork. From 32 thousand companies.
Mueller indicated that some of these bankruptcies are due to the remaining repercussions of the Corona pandemic, and years of very low interest rates set by the European Central Bank.
Corporate confidence
In a related context, a survey last month showed that German business confidence declined more than expected last December, affected by a negative assessment of the coming months amid a state of geopolitical uncertainty and industrial stagnation in Europe’s largest economy.
The Ifo institute said its business climate index fell to 84.7 points in December from 85.6 in November.
The survey, which included about 9,000 company managers, observed an improvement in the assessment of current conditions, but the expectations index suddenly fell to 84.4 points in December from 87 in November.
Donald Trump’s victory in the US presidential elections, along with the political stalemate in Germany ahead of early elections in February, has reinforced the state of uncertainty at a time when the economy is facing strong headwinds.
