Why Are Bankruptcy Rates Soaring in Germany? Analyzing the Causes and Economic Impact for 2025
Germany is facing an unprecedented wave of corporate bankruptcies, which is threatening the foundations of its economy. In the last quarter of 2024 alone, 4,215 companies declared bankruptcy, leading to the loss of around 38,000 jobs. This marked the highest rate of bankruptcies in 15 years. According to official data, bankruptcy cases surged by 22.9% in November 2024 compared to the same month in 2023. The first half of the year saw 10,702 bankruptcy filings, a 24.9% increase from the previous year. The German government seems to be struggling with the crisis. A spokesperson from the Ministry of Economy acknowledged the significant challenges facing the economy, citing the need for improved competition, better energy prices, and expedited reforms such as the Talent Migration Act and initiatives to foster business creation. The wave of bankruptcies is affecting nearly all sectors except real estate, housing, and hospitality. Experts attribute this to rising energy costs due to the war ...