"Worse Than The 2008 Financial Crisis" – Germany Becomes A Nation Of Bankruptcy With No End In Sight
Allianz Trade forecasts an overall increase of 11 percent in corporate insolvencies in Germany this year, reaching approximately 24,400 cases. A further 3 percent rise to 25,050 cases is anticipated for 2026. These insolvencies put an estimated 210,000 jobs at risk across Germany.
In the first quarter of this year, 16 large German companies—those with revenues of €50 million or more—filed for insolvency. While this is a slight decrease of three cases compared to the same period last year, it's double the number recorded in the first quarter of 2023.
Milo Bogaerts, CEO of Allianz Trade in Germany, Austria, and Switzerland, expressed concern over the persistently high number of major insolvencies, attributing it partly to U.S. President Donald Trump's tariff policy. He warned that no respite is expected, even after 2024, which was a record-breaking negative year for insolvencies.
'Given the bleak economic outlook both in Germany and in global trade, and the many uncertainties caused by the tariff storm, we expect many major insolvencies and thus significant losses to continue in 2025,' Bogaerts stated. He added that these large-scale insolvencies will likely have a ripple effect on supplier companies, potentially creating 'particularly large holes in their coffers' and impacting supply chains.
However, alarm bells are ringing across the country. The Federal Association of German Industry (BDI) published a declaration by more than 100 associations at the beginning of April where they directly addressed the ruling CDU and SPD. At the time, they were still working on a coalition agreement.
The BDI stated: 'In the past few weeks, the economic situation has deteriorated dramatically. The facts are undeniable. Germany is in a serious economic crisis. A comparison with other countries shows that this crisis is primarily homemade.'
The BDI is also apparently unhappy with the coalition's details on tax policy.
'In terms of tax policy, the coalition lags behind what is necessary. In the future, every scope must be used to relieve companies in order for the tax burden to quickly become internationally competitive,' said Tanja Gönner, BDI's general manager. 'The contract rightly formulates an ambitious modernization agenda for the state and administration, which must now also be followed by a determined implementation…. The bottom line is that we will measure the federal government by whether it will make the state more efficient and modernized.'
🇩🇪🚨 Ford Germany plans to cut 4,000 jobs as Berlin's economic disaster continues to unfold."The entire automotive industry is in crisis all over the world, in Europe and especially in Germany. This transition to electro-mobility is hitting us very, very hard." pic.twitter.com/oeqkDg0TBi — Remix News & Views (@RMXnews) November 22, 2024
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