Germany Sees Record Company Insolvencies in 2024

Germany has seen a significant surge in corporate insolvencies, with 4,215 companies declaring bankruptcy in the last quarter of 2024, marking a 36% increase from the previous year and the highest level since 2009. The rise is attributed to high interest rates imposed by the European Central Bank and the withdrawal of pandemic-era subsidies that had previously supported businesses. Nearly 38,000 jobs were affected by these insolvencies, highlighting the strain on the economy as companies struggle with increased operational costs and declining consumer spending. The services sector was particularly hard-hit, experiencing a 47% rise in insolvencies, followed by manufacturing at 32%. Experts view this spike as a necessary market correction following years of artificially suppressed bankruptcy rates due to low interest and government support. The outlook for 2025 remains bleak, as further increases in insolvencies are anticipated.