Germany: More insolvencies in the pipeline, despite significant aid

Insolvencies in Germany dropped significantly in 2020 compared to 2019, despite the worst recession since 2009. This is largely thanks to public support programmes. However, the early-announced applications for regular insolvency proceedings (Regelinsolvenzverfahren) at courts already increased sharply in February and March, signaling a pending increase in corporate insolvencies in the next months.Coface’s forecasting model shows that up to 4030 insolvencies were prevented by the State-support in 2020, which is now in single parts being withdrawn, and could take place in 2021/22. From a corporate perspective, the crisis is far from over.

2020 Recap: Insolvencies decreased, but not everywhere

In 2020, 15,840 companies became insolvent in Germany. Thanks to public support,this is the lowest level of insolvencies since 1993, and the sharpest decrease (-15.5% compared to 2019) since 1975.The gap between both years became particularly important from July 2020 onwards.2021 started as 2020 ended, with very low insolvency numbers.