Economy: corporate insolvencies in Europe increased significantly

The rise in energy and raw material costs and the turnaround in interest rates caused the number of corporate insolvencies in Europe to rise significantly last year.

In total, there were 139,973 company bankruptcies in 2022 in the 14 Western European EU countries as well as Norway, Switzerland and Great Britain. This means an increase of 24.2 percent compared to the previous year, reported the credit agency Creditreform in a study published on Thursday. In Eastern Europe, the number of corporate insolvencies increased by 53.5 percent to over 60,000.

“The end of the Corona Pandemic was the beginning of a brief economic upswing in Europe before it was choked off again by the war in Ukraine,” said Patrik-Ludwig Hantzsch, Head of Creditreform Economic Research. The energy crisis that followed hit the economy unprepared and with full force. Many ailing companies could no longer have withstood the multiple burdens.

“Probably not yet the end of the road”

In Western Europe, the number of insolvencies increased in the majority of the countries considered. Austria (plus 59.7 percent) recorded a significant increase, followed by Great Britain (plus 55.9 percent), France (plus 50.0 percent) and Belgium (plus 41.7 percent). The number of corporate insolvencies also increased in Switzerland, Ireland, the Netherlands, Spain, Norway, Finland, Sweden and Germany.

A decrease in the number of cases was reported from Denmark, Luxembourg, Portugal, Italy and Greece. In Eastern Europe, seven of the twelve countries surveyed recorded an increase in the number of insolvencies. The increase in bankruptcies was particularly evident in Hungary, Bulgaria and Lithuania.

“The trend reversal in the insolvency figures has been heralded. The end of the road has probably not yet been reached. The pressure remains on the boiler, so that increasing numbers can also be expected in the coming months,” said Hantzsch.