Company insolvencies surge in Germany by highest number since October. (picture alliance/dpa/Andreas Arnold)
Bankruptcies surged in Germany in July, with the number of registered insolvencies rising higher year on year than in any previous month since October 2024.
Preliminary figures from the Federal Statistical Office showed 19.2% more insolvencies were recorded by local courts than in July 2024, suggesting that Chancellor Friedrich Merz's efforts to revive Europe's largest economy are yet to make an impact on private businesses.
While May saw the first decline in bankruptcy figures since March 2023, the figure rose again in June.
"The economic crisis continues - and that's why the wave of corporate insolvencies continues to grow," said Jupp Zenzen, economic expert at the German Chamber of Commerce and Industry (DIHK).
After two years of recession, the liquidity of many companies has taken a hit, with high energy prices and excessive bureaucracy proving a significant burden.
The economy needs "relief across the board," warned Zenzen, calling on politicians to implement "urgently needed reforms very quickly."
According to Germany's VID professional association of insolvency administrators, however, the rise in bankruptcies could also be due to companies reacting too late to structural changes in their industries.
"People are too quick to look for the cause of business failures in rising customs duties or high energy costs," said VID Chairman Christoph Niering. "This is a dangerous misjudgement, as it means that restructuring measures are tackled too late or not comprehensively enough."
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