Fewer German insolvencies in 2011 as economy defies crisis | Business| Economy and finance news from a German perspective | DW | 08.03.2012
  1. Inhalt
  2. Navigation
  3. Weitere Inhalte
  4. Metanavigation
  5. Suche
  6. Choose from 30 Languages
Advertisement

Business

Fewer German insolvencies in 2011 as economy defies crisis

In spite of the worsening of the eurozone debt crisis, Germany recorded the second consecutive drop in corporate and household bankruptcies last year. But market analysts believe the trend could reverse in 2012.

The number of corporate bankruptcies in Germany declined by 5.9 percent to 30,099 last year, according to data published by the national statistics office Destatis Thursday.

On the back of 3 percent economic growth, the annual drop was the second in a row and the steepest since 2007, Destatis said.

The number of German corporate failures last increased in 2009 when the financial crisis was at its peak and substantially hitting the real economy.

In 2011, the number of household insolvencies also declined for the second consecutive year, dropping by 5.1 percent to a total of 103,289 cases.

Destatis attributed this to a "high demand on the labor market" which employed "more Germans than at any time in the past two decades."

German creditors in insolvency cases had outstanding claims of around 31.5 billion euros ($41.4 billion), Destatis said, well down from 39 billion euros in 2010.

Prospects clouding

The number of insolvencies in Germany this year is expected to "rise to 32,000," according to an estimate by Creditreform, a German business information and debt collection service.

The organization published latest European insolvency figures on Tuesday, showing numbers edging up 0.3 percent for the 15-nation eurozone plus Norway and Switzerland, to 174,917 cases in 2011.

In addition, Creditreform said 1.5 million jobs in the currency area were "under threat from insolvency" last year - an increase of 7.1 percent over 2010.

The reason for the expected rise in bankruptcies, said Creditreform, was "shrinking economic expansion in Germany" as well as "full-blown recession" in many other European countries.

However, the German Association of Insolvency Administrators (VID) said it didn't expect "a wave of new bankruptcies" this year.

"Cheap money provided by the ECB [European Central Bank] has lead to a substantial easing of the credit and debt situation, notably in German mid-sized companies," Christoph Niering, president of VID, told Reuters news agency.

uhe/mll (dpa, Reuters, AFP)