Filed bankruptcies in Germany see moderate increase: IWH

Source: Xinhua| 2020-06-05 23:33:39|Editor: huaxia

BERLIN, June 5 (Xinhua) -- With 1,019 companies in Germany filing for bankruptcy in May, insolvencies recorded a "moderate increase" of 53 companies compared to the previous year, the Halle Institute for Economic Research (IWH) announced on Friday.

Although overall corporate bankruptcies in Germany remained almost constant, IWH found that an increasing number of employees was subject to employer bankruptcy.

The five largest German companies, which filed for bankruptcy in May, employed a total of more than 10,000 people, according to the IWH analysis. In the previous months, there had hardly been any company insolvencies that affected 1,000 or more workers.

"During the course of the financial crisis of 2008/2009, we also observed increasingly large firms filing for bankruptcy," said Steffen Mueller, head of IWH department of structural change and productivity and the IWH bankruptcy research unit.

Beyond economic crises, IWH noted that large companies were generally in a better position than small companies to avoid insolvency through a timely implementation of restructuring measures.

In order to mitigate the effects of the coronavirus crisis, the German government temporarily suspended companies' duty to file for insolvency until the end of September if the insolvency was directly caused by the COVID-19 pandemic.

"As a result of this law, it is possible that fewer insolvency applications will be received than usual at present and that these are not expected until autumn 2020," warned Erik Geisler, vice president of a local district court in Darmstadt in March when the obligation to notify was suspended.

"Ultimately, the coronavirus crisis and the bankruptcies associated with it will be visible in increased job loss even if the bankruptcy numbers should stay moderate," warned Mueller, who stressed that the current numbers would just reflect the beginning of the COVID-19 crisis. Enditem