The company - Dulig: Do not instrumentalize insolvencies politically
Saxon Economic Minister Martin Dulig (SPD) warned against politically instrumentalizing company insolvencies. They are a normal part of economic development, he said. "Companies enter the market, others leave it," the minister stated. Not every insolvency procedure leads to a liquidation. Often, solutions are found.
As a free state, we help companies that run into economic difficulties with a broad funding instrumentarium. Depending on the individual case, an insolvency can be prevented, an insolvency plan procedure prepared, and the subsequent restart accompanied or the restructuring of a company in insolvency supported by mass loans, explained Dulig.
According to the Economic Ministry's statements, more businesses have been registered than deregistered in Saxony since 2020. In the previous year alone, there were 26,445 new registrations. In contrast, there were 25,291 deregistrations. The number of insolvency proceedings filed by companies was 747 in 2023. The insolvency proceedings of companies are currently approximately at the pre-crisis level of the years 2018 (812) and 2019 (685). There were over 1,000 insolvency proceedings filed annually until 2016, it was stated.
"Several exogenous shocks have contributed to the interruption of the strong economic development. The economic life was significantly burdened by the Corona pandemic. The state helped not only through payments of aid to affected companies but also through the suspension of insolvency filing requirements," Dulig elaborated. Therefore, the insolvency applications were significantly reduced pandemic-related in the years 2020 to 2022. Now, recovery effects are taking place.
Dulig further: "In the context of the Russian aggression war against Ukraine, an energy price shock occurred, which has additionally burdened the Saxon economy since 2022. The gas crisis was successfully addressed, but the energy price shock and the resulting inflation left deep traces." The construction industry, processing industry, and trade were particularly affected. However, Sachsen's labor market is very robust and has a high level of socially insured employed persons.
Nevertheless, the number of company insolvencies is an important indicator for the state of the economy, stated Dulig. "Just as a fever thermometer must react when there is a rise, especially when jobs are at risk. That leaves me unimpressed, especially in our current societal political climate." Companies must react adequately to societal changes such as digitalization or the fight against climate change. "If they don't, their competitive position worsens permanently. As a result, the risk of insolvency increases."
In conclusion, Dulig expressed optimism: "Given the current economic development, we can look positively into the future with a view to a declining inflation, the announced interest rate turnaround of the ECB, rising real incomes, and a brightening consumption climate."
- Despite the warnings from Saxon Economic Minister Martin Dulig (SPD) against politicizing company insolvencies in Dresden, SPD's Saxony has provided comprehensive funding instruments to aid struggling businesses.
- In 2023, the number of company insolvency proceedings in Saxony was only 747, which is close to the pre-crisis levels of 2018 and 2019, indicating a resilient business climate.
- Martin Dulig highlighted that while SPD's Saxony witnessed an increase in company insolvencies due to external shocks like the Corona pandemic, energy price shock, and inflation, the robust labor market still had a high level of socially insured employed persons.
- As Martin Dulig emphasized, the number of company insolvencies signifies the state of the economy and should prompt reactions, especially when jobs are at risk, as digitalization and the fight against climate change pose ongoing challenges for companies, potentially increasing the risk of insolvency.
