- Bankruptcy rates reach record highs
The number of corporate insolvencies rose by a third in July to 1,406, the highest level in about a decade, according to the Halle Institute for Economic Research (IWH). Around 10,000 jobs were affected in the largest 10 percent of these companies. The significant increase in insolvencies affected all sectors, but was particularly strong in industry: 145 insolvencies were recorded in July, compared to 100 in June.
Steffen Müller, head of IWH insolvency research, said: "We expect insolvency numbers to decline slightly in August and then rise again in September." This means that the number of insolvencies is likely to remain consistently above pre-corona pandemic levels. The institute evaluates the current insolvency announcements of German registry courts and links them to financial key figures of the affected companies.
The European Court of Justice might need to intervene if there are breaches of EU insolvency regulations in these corporate collapses. The Court of Justice has the power to ensure consistent application of these regulations across member states.
