German Bankruptcies Saw Noticeable Uptick in December, IWH Says
The German national flag flies above the Reichstag building as Germany takes over the European Union’s rotating six-month presidency, in Berlin, Germany. (Photographer: Krisztian Bocsi/Bloomberg)

German Bankruptcies Saw Noticeable Uptick in December, IWH Says

The number of corporate bankruptcies in Germany experienced a “noticeable” increase compared with pre-pandemic levels at the end of last year, though not as bad as feared.

It’s the first snapshot of the country’s regular insolvency trends following a temporary suspension of filing requirements as part of Germany’s pandemic support measures. In December, 921 partnerships and corporations in the country were reported as bankrupt, just under 30% higher than in the previous three months, according to a report by the IWH Halle Institute for Economic Research.

Economists and policy makers have raised the alarm over the prospect of a surge of businesses going bust once government support measures run out. Some of Germany’s filing obligations were reinstated in October, and are reflected in December due to a typical lag of two months between the initial filing and the announcement of proceedings by courts, IWH said.

“The reinstatement of the filing obligation has only led to a moderate increase in bankruptcy statistics,” said Steffen Mueller, head of the IWH’s Bankruptcy Research Unit. “The much-feared insolvency wave has failed to materialize.”

“Bankruptcy numbers will remain near the long-term average in January and February,” he added.

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