Latest news with #Creditreform
Russia Today
18 hours ago
- Business
- Russia Today
12,000 German companies went bust in six months
Germany endured the highest wave of corporate bankruptcies in a decade in the first half of this year, a study by economic tracking agency Creditreform has suggested. The first six months of this year saw some 11,900 German companies go bust, the study released on Thursday indicates. The figure represented a 9.4% increase over the same period last year, according to the agency. Some 141,000 employees worked at the companies affected. 'Despite some signs of hope, Germany remains mired in a deep economic and structural crisis. Companies are struggling with weak demand, rising costs, and persistent uncertainty,' Creditreform chief economist Patrik-Ludwig Hantzsch said. The situation is expected to remain difficult as Germany continues to struggle with a recession that has dragged on for two years already. The wave of bankruptcies might ultimately increase in the next six months, given that the 'persistently high level of insolvencies is increasingly triggering chain reactions,' Hantzsch warned. While German GDP grew by a slight 0.2% in the first quarter of 2025, weak global demand and uncertainty in trade policies continue to take a toll on its economy. According to a new survey conducted by the Ifo economic institute released this week, expectations have worsened among German exporters this month over uncertainty regarding a potential trade war with Washington. The US was Germany's top trading partner in 2024, with bilateral trade in goods totaling €253 billion (around $280 billion), according to official data. Earlier this year, US President Donald Trump imposed 20% tariffs on all EU goods, with 25% on steel, aluminum, and cars. When Brussels signaled its readiness to retaliate, most of the levies were put on hold for 90 days to allow for negotiations. A 10% base tariff and the 25% targeted duties remained unchanged. 'The tariff threats from the US are still on the table. An agreement between the EU and the US has yet to be reached,' Klaus Wohlrabe, head of Ifo surveys, said, adding that the uncertainty has lowered exporters' expectations, with the respective index falling to -7.4 points in June from -5.0 in May. The index measures how optimistic or pessimistic German manufacturing companies are about their prospects for selling abroad over the next three months.
Zawya
3 days ago
- Business
- Zawya
German corporate insolvencies at highest level in a decade, study shows
Corporate bankruptcies in Germany were at their highest level in a decade in the first half of 2025, as firms in Europe's largest economy struggle with weak demand, rising costs and uncertainty, a study by economic tracking agency Creditreform showed on Thursday. Some 11,900 corporate insolvencies were registered in the first six months of this year, 9.4% more than in the same period last year, the agency said. "Germany remains in a deep economic and structural crisis," said Creditreform chief economist Patrik-Ludwig Hantzsch. Companies are increasingly having problems as their financial reserves dwindle and loans are sometimes no longer being extended, added Hantzsch. He warned that the risk of insolvencies remains high for the rest of the year as Germany, which has been in recession the past two years, is not seen making a significant recovery. More economic momentum is not expected until next year, when the government's 500 billion euro ($586 billion) investment fund is expected to take effect. Roughly 141,000 employees worked at the affected companies, an increase of 6%, driven by large-scale insolvencies, the agency said. "The persistently high level of insolvencies is increasingly triggering chain reactions," said Hantzsch. Consumer insolvencies have also been on the rise, up 6.6% to around 37,700, as households are under pressure due to a rise in the cost of living and job losses, particularly in industry. Germany's federal statistics office reported final first-quarter insolvency figures earlier this month that showed corporate insolvencies rose by 13.1%. ($1 = 0.8529 euros) (Reporting by Klaus Lauer, Writing by Miranda Murray; Editing by Hugh Lawson)
Euronews
23-05-2025
- Politics
- Euronews
Price of power: Does Germany need to return to nuclear?
Once a world market leader, today, Germany is considered the "sick man of Europe", as the country remains mired in recession for the third year in a row. Economic experts predict zero growth for this year, as the figures continue to show a dramatic decline. Last year, almost 200,000 companies shut their doors, according to a study by Creditreform, the highest figure since 2011. The numbers will continue to plummet in 2025. A new high in insolvencies was reported in April. According to the Leibniz Institute, 1,626 company insolvencies were registered — 21% more than in April 2024 — exceeding even the figures from the 2008 financial crisis. The high electricity prices in particular are causing problems for industry. Some steel giants now have to temporarily shut down their production on a single day to protect their company from financial damage. Meanwhile, other companies are relocating their production to Eastern Europe — or even to China. Entire industries are under threat. Foremost among them is the automotive industry: VW, Mercedes and BMW are cutting thousands of jobs. "Made in Germany" has simply become too expensive. "We now only have 24 months to save the energy-intensive industries," well-known German economist Daniel Stelter warned in an interview with Euronews. The losses suffered by industrial companies to date can no longer be reversed, he said. Economics Minister Katherina Reiche (CDU) has correctly recognised Germany's energy cost problem. She is in favour of energy security and lower electricity prices. This is why she wants to subsidise industrial electricity, for example. However, the EU is threatening not to go along with this. Reiche also wants new gas-fired power plants as a solution to the problem — but the price of gas is also higher than ever. Does the minister have the right recipe to save the German economy? Stelter explains that Minister Reiche is taking the right step. "When the wind isn't blowing and the sun isn't shining, we need a secure supply. Now that we have switched off nuclear power plants and we also want to switch off coal, the only thing left is gas-fired power plants," he said. Only with renewable energies, "it just won't work." However, Reiche's measures have not yet been enough to revive the economy so that Germany can remain an industrial nation. "Anyone who believes that renewable energy in combination with gas-fired power plants will lead to cheap electricity is living in a dream world," Stelter told Euronews. "Many people only ever look at the costs of solar cells and wind turbines. Only when the wind is blowing and the sun is shining is it favourable. In reality, we have to include the system costs such as storage and batteries - then renewable energies are the most expensive," he explained. "Reiche's policy, as it stands today, is actually the continuation of (former minister) Robert Habeck's policy," Stelter added, and is not suitable for "supplying an industrialised country with energy sustainably and cheaply." Instead of gas-fired power plants, nuclear power plants would be a better solution, says Stelter. "If you ask me personally for my opinion, I would of course not have phased out nuclear power in the same way. And I would now do everything in my power to reverse the nuclear phase-out by reactivating the old nuclear power plants." Energy expert Björn Peters takes an even more critical view. He has just launched his new book on the market titled "An End to the Energy Transition." In it, he argues that the economy should dare to be more ecologically realistic. "You can't reduce the price of electricity with gas-fired power plants alone. They are very expensive to operate. Gas is expensive. Then there are the CO2 costs on top. That would mean that in the long term you would have producer prices of between 15 and 20 cents per kilowatt hour," said Peters, emphasising this is too expensive. "That would make us uncompetitive." Instead, the supply must be expanded quickly. "This consists of the decommissioning of nuclear power plants, domestic production of natural gas and CCS, which is CO2 capture from coal-fired power plants," he explained. "We have enough coal for 200 years. It would be in the interests of national security to continue using coal, but with the appropriate filters." Nuclear power plants such as Brokdorf and Emsland could be reactivated by 2026. Six other nuclear power plants could also be recalled, and the process could continue into the 2030s. The consequences of the previous "bad energy policy should not be subsidised down", warns Peters. "Of course that won't work." "Politicians are focusing on solving the industrial crisis through subsidies - in other words, less taxes and state subsidies instead. That doesn't make sense. The principle is that the greater the supply, the better," Stelters said. Nevertheless, he is optimistic about his expectations of the new economics minister. Reiche wants to "seriously take stock" of the economy, he said. "We have spoken to individual government representatives in the last few days. And they at least seem to be reflecting on the nuclear phase-out."
Euronews
23-05-2025
- Business
- Euronews
Does Germany need to return to nuclear power?
Germany was once a world market leader. Today, the industrialised nation is considered the "sick man of Europe". The country is in recession for the third year in a row. Economic experts predict zero growth for this year. The decline is dramatic in the figures. Last year, almost 200,000 companies shut their doors, according to a study by Creditreform. This is the highest figure since 2011. The figures will continue to plummet in 2025. A new high in insolvencies was reported in April. According to the Leibniz Institute, 1626 company insolvencies were registered - 21% more than in April 2024. This even exceeds the figures from the 2008 financial crisis. The high electricity prices in particular are causing problems for industry. Some steel giants are now having to temporarily shut down their production on a single day to protect their company from financial damage. Meanwhile, other companies are relocating their production to Eastern Europe - or even to China. Entire industries are under threat. Foremost among them is the automotive industry: VW, Mercedes and BMW are cutting thousands of jobs. "Made in Germany" has simply become too expensive. The well-known economist Daniel Stelter warned in an interview with Euronews that: "We now only have 24 months to save the energy-intensive industries." The losses suffered by industrial companies to date can no longer be reversed, he said. Economics Minister Katherina Reiche (CDU) has correctly recognised Germany's energy cost problem. She is in favour of energy security and lower electricity prices. This is why she wants to subsidise industrial electricity, for example. However, the EU is threatening not to go along with this. Reiche also wants new gas-fired power plants as a solution to the problem - but the price of gas is also higher than ever. Does the minister have the right recipe to save the German economy? Daniel Stelter explains that Minister Reiche is taking the right step. "When the wind isn't blowing and the sun isn't shining, we need a secure supply. Now that we have switched off nuclear power plants and we also want to switch off coal, the only thing left is gas-fired power plants." Only with renewable energies, "it just won't work." However, Reiche's measures have not yet been enough to revive the economy so that Germany can remain an industrial nation. "Anyone who believes that renewable energy in combination with gas-fired power plants will lead to cheap electricity is living in a dream world," Stelter told Euronews. "Many people only ever look at the costs of solar cells and wind turbines. Only when the wind is blowing and the sun is shining is it favourable. In reality, we have to include the system costs such as storage and batteries - then renewable energies are the most expensive!" This is why "Reiche's policy - as it stands today - is actually the continuation of Robert Habeck's policy" and is not suitable for "supplying an industrialised country with energy sustainably and cheaply." Instead of gas-fired power plants, nuclear power plants would be the better solution, says Stelter. "If you ask me personally for my opinion, I would of course not have phased out nuclear power in the same way. And I would now do everything in my power to reverse the nuclear phase-out by reactivating the old nuclear power plants." Energy expert Björn Peters takes an even more critical view. He has just launched his new book on the market entitled "An End to the Energy Transition." In it, he argues that the economy should dare to be more ecologically realistic. "You can't reduce the price of electricity with gas-fired power plants alone. They are very expensive to operate. Gas is expensive. Then there are the CO2 costs on top. That would mean that in the long term you would have producer prices of between 15 and 20 cents per kilowatt hour," says Peters, who says this is too expensive. "That would make us uncompetitive." Instead, the supply must be expanded quickly. "This consists of the decommissioning of nuclear power plants, domestic production of natural gas and CCS, which is CO2 capture from coal-fired power plants. We have enough coal for 200 years. It would be in the interests of national security to continue using coal, but with the appropriate filters." Nuclear power plants such as Brokdorf and Emsland could be reactivated by 2026. There are also six other nuclear power plants that could be recalled. The process could continue into the 2030s. The consequences of the previous "bad energy policy should not be subsidised down", warns Peters. "Of course that won't work." Stelters also emphasises that: "Politicians are focusing on solving the industrial crisis through subsidies - in other words, less taxes and state subsidies instead. That doesn't make sense. The principle is that the greater the supply, the better." Nevertheless, the physicist is optimistic about his expectations of the new Economics Minister. Reiche wants to "seriously take stock" of the economy, he said. "We have spoken to individual government representatives in the last few days. And they at least seem to be reflecting on the nuclear phase-out."
Local Germany
04-04-2025
- Business
- Local Germany
Everything you need to know about Germany's 'Schufa' credit score
For people who've recently moved to Germany, 'Schufa' is a scary word that comes up time and time again. You may be asked for it while searching for apartments online, or told about checks while trying to open a bank account. You may hear about it as you set up a brand new mobile number, or when hiring a van to move your stuff. As a newbie in Deutschland , it can take time to build up your credit history. If you're unlucky, you may find yourself getting rejected from some services in spite of having a glowing record back home. As time goes on, you should be able to get a more accurate credit score, but you still may have no idea how it's calculated. Critics often nickname Schufa the "black box" because of the agency's top secret methods for picking that magic number. That could all change later this year when a new scoring system is set to be introduced. According to CEO Tanja Birkholz, the new score will be much more understandable for consumers. In future, you may even be able to broadly calculate your credit score yourself. In the meantime, here's everything you need to know about Germany's current Schufa system. What's a credit score and why do I need one? Creditworthiness scores are probability values that predict how reliable you may be as a tenant or borrower. The general principle is simple: the higher the score, the higher the creditworthiness. If you regularly miss payments or pay bills late, your score is likely to be lower. The best-known score in Germany is calculated by the Wiesbaden-based credit agency Schufa . However, other credit agencies such as Creditreform or Crif also create their own scores. In German, you credit score is known as a Bonitätsscore . Advertisement Companies, as well as individuals such as landlords, can obtain information about your credit history if they have a legitimate interest in it. However, a bank won't receive full details of your credit obligations from Schufa , but will instead simply see a numerical score. How can I find out my score? Everyone is entitled to a free copy of their Schufa report once a year to keep track of their credit rating. To get the free version, you'll need to go to and order the 'Datenkopie nach Art. 15 DS-GVO'. Simply click on 'Datenkopie bestellen' at the bottom of the home page, fill in the form and upload a scan of your passport or personal ID card. Another option is to download the Bonify app - a free credit-score checking app that was obtained by Schufa . Since the acquisition, users can check their basis Schufa score in the app within minutes. READ ALSO: What to know about the new credit score app in Germany What influence does a Schufa score have? A Schufa score can have a big impact on whether you can access certain goods and services - and on what terms. Banks, online retailers, mobile phone providers, car dealerships and energy suppliers all want to know more about your previous behaviour. This can help them assess how risky it is to work with you, and could have an impact on the interest rates they offer you, for example. Your credit score is a useful benchmark for these risk assessments, and can sometimes be used to decide a 'yes' or 'no' automatically. The Bonify app shows a user their current credit score. Photo: picture alliance/dpa | Peter Kneffel What do the numbers mean? The Schufa credit score is a score from 0 to 100, which is calculated in percentage points. A score of 100 is sheer perfection, while zero is so bad it's pretty much unheard of. Here's a rough breakdown of how the numbers is interpreted by lenders: 97.5 and above: Very low risk 95 - 97.5: Low to negligible risk 90 - 95: Satisfactory to increased risk 80 - 90: Increased to high risk 50 - 80: Very high risk 50 and below: Critical risk Advertisement Though a bad score is certainly a worry, it is worth noting that it is only one piece of information used by companies. As Schufa itself emphasises: lenders, rather than credit agencies, are in charge of making a final decision. When a bank requests a loan, for example, it asks Schufa about the customer's creditworthiness. The bank then looks at its own information, such as the customer's income, expenditure and assets. It then makes a decision based on its willingness to take risks. What data does Schufa collect? The credit agency receives information from its partners about the opening of current accounts, the issuing of credit cards, and the conclusion of leasing contracts and loans. Negative information recorded by Schufa comes from public registers such as debtor directories, for example. Schufa also stores personal data such as name, date of birth and address, but has no information about a person's income, for example. Advertisement According to the latest figures, Schufa has information on 68 million people in Germany - out of a population of around 84 million. More than 90 percent of the information stored is 'exclusively positive', the company claims. According to its own information, the credit agency issues an average of 320,000 reports to companies every day. READ ALSO: How foreigners can improve their German credit score What is taken into account when calculating creditworthiness? There are a number of criteria used to calculate a customer's credit score, including how long you've held certain accounts, how many bank accounts and credit cards you have and how many types of loan you need to pay off each month. Generally, having multiple accounts with high credit balances will work against you, while simple finances with low credit balances will work in your favour. Schufa is also interested in current property loans and whether someone frequently makes online purchases using credit. However, this criteria is set to be shaken up somewhat when the new Bonitätsscore comes into force towards the end of the year. The Schufa headquarters in Wiesbaden. Photo: picture alliance/dpa | Andreas Arnold Why is Schufa working on a new score? According to the credit agency, it's to better reflect changing consumer habits and behaviours. One key example is that consumers are using comparison portals more frequently and are therefore changing their bank more often than ten years ago, which isn't necessarily a sign of lower trustworthiness. READ ALSO: How to avoid the 'catch 22' in Germany's credit rating system How will the new score be calculated? The calculation of the new score takes into account, for example, how long you have been using a credit card or current account. It also takes into account whether there are any negative entries because bills have not been paid even after several reminders. Advertisement Points are awarded for a total of twelve understandable criteria, totalling 100 to 999. The higher the total number of points, the higher the creditworthiness. The 12 new criteria are as follows: Age of oldest credit card Time spent at current address Number of enquiries and contracts for current accounts and credit cards in the past 12 months Loan with the longest remaining term Number of enquiries in the telecommunications & (online) retail sector in the past 12 months Age of oldest bank contract Property loans Instalment loans taken out in the past 12 months Credit status Existence of an identity check Most recent credit line Issues with missed or late payments How will the new score improve things for me? According to the credit agency, the main benefit of the new system will be that customers have a much better understanding of their credit score. Using the twelve new criteria, individuals can make more informed decisions and understand how certain behaviours, like taking out another loan or cancelling a credit card, will impact their score. This should enable people to boost their credit in a more conscious way and better understand what's helping - or hindering - their credit. With reporting by DPA
