US, WASHINGTON (NEWS OBSERVATORY) — The number of bankruptcies in Germany will increase this year for the first time after the financial crisis of 2009, the head of the Association of Managers for Insolvency Affairs said, warning that state aid will not help protect all companies, reports Reuters.
Europe’s largest economy is going through a difficult period as the coronavirus pandemic spreads around the world, breaking supply chains and reducing demand for exported goods.
“For the first time since 2009, there will be an increase in insolvency, and it will be a clear increase,” said Christoph Niring. “I expect a percentage increase in double-digit rates.”
Germany’s insolvency fell 2.9% in 2019, the lowest since 1999.
Niring said that the impact will be felt far beyond the directly affected industries, such as tourism, and will primarily affect companies that have already suffered from market volatility and the outbreak of coronavirus.
“This will mainly affect companies that have already weakened,” Niring said. “The best government assistance programs cannot save all companies.”
But he said that the government’s plan to simplify the reduction of staff time was correct, adding that this approach has already proven to be effective during the financial crisis of 2007-2009.
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