BERLIN (Reuters) - The number of bankruptcies in Germany is set to rise this year for the first time since the financial crisis in 2009, the head of Germany’s insolvency administrators’ association said, warning that government aid could not protect all companies.
Europe’s largest economy is braced for a difficult period as the pandemic spreads around the world, severing supply chains and leading to collapsing demand for the exporting powerhouse’s goods.
“There will be a rise in insolvencies for the first time since 2009, and it will be a clear increase,” Christoph Niering told Reuters. “I’m expecting a percentage rise in the double digits.”
Insolvencies fell 2.9% to 18,749 in 2019, their lowest level since 1999. Niering said that the impact would be felt far beyond directly affected industries like tourism, and would hit primarily companies that were already struggling.
“It will mainly affect companies that are already weak, with margins of 2% to 3%,” he said. “The best state aid programmes can’t save all companies.”
But he said the government’s plan to make it easier to reduce employees’ working hours was right, adding that the approach had already proven effective in the 2007-9 financial crisis.
Reporting by Rene Wagner; Writing by Thomas Escritt; Editing by Douglas Busvine
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