German insolvencies return to pre-pandemic levels-Xinhua

German insolvencies return to pre-pandemic levels

Source: Xinhua| 2024-04-13 00:09:45|Editor: huaxia

BERLIN, April 12 (Xinhua) -- The number of businesses filing for insolvency in Germany has returned to pre-pandemic levels after the expiry of government relief measures introduced during the COVID-19 pandemic and energy crisis.

Between April 2023 and March 2024, the number of insolvency applications was back at roughly the same level as in the period from April 2019 to March 2020, before COVID-19, the Federal Statistical Office said on Friday.

But insolvencies continued to increase last month, with 12.3 percent more cases filed than a year earlier. The increase was 27.6 percent in January.

The development of the European Central Bank's key interest rate "will play an important role in insolvency activity over the rest of the year, particularly regarding the real estate industry," said Christoph Niering, chairman of the Registered Association of Insolvency Administrators.

Niering added if the rate remains at 4.5 percent, there will be little reason to expect the situation in the real estate industry to improve in the short term. Other sectors in Germany that continue to be affected are retail, hospitals and care facilities.

Many traditional companies in Germany have gone bankrupt in recent months. Retail giant Galeria Karstadt Kaufhof filed for insolvency for the third time within three and a half years, local media Frankfurter Allgemeine Zeitung reported Wednesday. It said many branches of Europe's second-largest department store chain have already been closed, with more than 20 to follow, although a new investor has been found.

The Halle Institute for Economic Research expects insolvency figures to slow down from May, but to still remain above the pre-pandemic levels for many months to come.