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A wave of bankruptcies in Germany. Why?

Too high taxes, too heavy bureaucracy – all this leads to a record number of bankruptcies of companies in Germany

Apr 23, 2025 23:01 169

A wave of bankruptcies in Germany. Why?  - 1
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Production at the door and window company Meeth in Wittlich will only continue until the end of April. After that, the medium-sized company will be closed - forcibly. The company is bankrupt. Almost 90 employees will lose their jobs, writes the German public media ARD in a report.

The bankruptcy proceedings have been assigned to the lawyer and receiver Alexander Jüchser. “In 2025, the construction industry continues to be in crisis. Companies are losing money due to rising construction prices, a shortage of qualified labor and fewer building permits being issued. When less is built, fewer windows and doors are ordered“, explains Yuchser.

However, the receiver does not hide that among the reasons there are also purely company problems: The computer systems were faulty, which further worsened the company's economic situation. The search for a new investor has ended unsuccessfully and now the last employees will have to leave after fulfilling the last remaining orders, ARD points out.

Numerous company bankruptcies in Germany

The company Meeth is just one of many examples. The number of company bankruptcies in Germany remains high: Last year it reached its highest level since 2015 – almost 22,000. In March this year, there were 1,459 companies in liquidation - two percent more than a month earlier, according to data from the Leibniz Institute for Economic Research in Halle (IWH).

In the first quarter of this year, the number of companies that declared bankruptcy was the highest since 2009. In important economic sectors - such as industry, construction, trade - a historic peak was reached. At the same time, too few new companies are being created, say the IWH.

Is the situation in Germany really that bad?

“We are currently seeing a significant increase in the number of companies in bankruptcy“, says Tobias Wahl from the Anchor law firm. The lawyer specializes in the field of corporate bankruptcies and company reorganizations. He made the reservation to ARD that the situation is not as dramatic as it seems at first glance: “During the Covid pandemic, many companies that were no longer competitive were still able to stay on the market thanks to financial support from the state. So, on the one hand, we are now observing a natural process of normalization“, explains Wahl, quoted by ARD.

On the other hand, the German economy is in a structural crisis. “This can be seen, for example, in the suppliers to the automotive industry and energy-intensive companies, which were severely affected. Added to this is the political and economic uncertainty“, says the bankruptcy expert. However, he does not believe that things will change quickly: "I think that this year and next year we will still have a lot of work to do," Wall told ARD.

His colleague Alexander Jüchser says the following about the main problem in Germany: "Many companies, especially manufacturing companies, are suffering from high energy costs, increased costs for raw materials and supplies, a shortage of skilled labor, high interest rates and high wages. If companies fail to pass on the increased production costs to end users, things will become really difficult."

The economy is still waiting for a turnaround

The German economy is also troubled by the large number of bankruptcies. At the beginning of the month, the Federal Confederation of German Industry (BDI) published a statement by more than 100 industry organizations with an appeal to the future coalition partners CDU/CSU and SPD: "The economic situation has deteriorated dramatically in recent weeks, and the facts are undeniable: Germany is in a serious economic crisis. A comparison with other countries shows that this crisis is mainly due to internal reasons," the document, quoted by ARD, says.

Jürgen Philippi has been selling off the remains of companies in liquidation for 30 years. He claims that the situation is now worse than during the economic crisis of 2008. "More and more sectors are affected. I have never seen anything like this before," Philippi said, quoted by the public media ARD. According to him, he receives inquiries about a new procedure almost every day, and there are so many of them that he is now having to turn down offers.

In addition to the increasing number of company bankruptcies, there is also hesitation among potential buyers at auctions. There is great uncertainty everywhere. “I increasingly see that managing directors do not want to continue running their struggling companies, even though there are still market opportunities. Their arguments: too high taxes, too much bureaucracy.

Is the worst yet to come?

Filippi warns that the structural crisis will deepen. “It is particularly severe in the automotive and construction industries. The subcontractors are now severely affected: If you don't build houses, you don't need roof tiles, blinds, transport companies, etc. This domino effect will be felt in all sectors“, the expert adds.

He is also not hopeful about the coalition agreement reached by the future rulers, as he believes there is a lack of fundamental reforms and confidence in the economy. Jürgen Filippi fears that the worst is yet to come, ARD also points out.

Author: Axel John ARD