Monday 29 March 2021
15 percent more bankruptcies
Insurer does not expect bankruptcy wave until 2022
In the Corona crisis, many companies can only survive with state help. The credit insurer Euler Hermes therefore does not believe in a significant increase in corporate insolvencies this year. The calculations for 2022 look different.
Despite the extended lockdown, the credit insurer Euler Hermes does not expect a drastic increase in corporate insolvencies in Germany this year. In a published study, Euler Hermes predicted that the number of company bankruptcies will probably only increase by 6 percent and thus remain well below the level of the pre-crisis year 2019.
The reason for this is the extension and expansion of the federal government’s package of measures, which partially cushioned the consequences of the Covid 19 pandemic for companies.
The credit insurer does not expect a significant increase in bankruptcies until the course of 2022. Then bankruptcies are likely to increase by around 15 percent, forecast Euler Hermes. This means that Germany is doing well in an international comparison. Because it means that the number of bankruptcies in 2022 will only be about four percent higher than in the pre-crisis year 2019. This corresponds roughly to the level of 2017.
The bankruptcy development is currently not dependent on market mechanisms, but on the further development and the continuation of support measures, said the Euler-Hermes boss for Germany, Ron van het Hof. You have disconnected from the actual state of the company. “It won’t go on forever. But even with the gradual return to a new normal, an immediate or sudden increase is not in sight for the time being.”
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