“After the low point in the Covid year of 2021, the global wave of corporate insolvencies continues to build. This year, their number is expected to increase by another six percent, and by five percent in 2026, before a slight stabilization sets in. Five consecutive years of rising numbers: a cycle unprecedented since the financial crisis. There can no longer be any talk of a "catch-up process" after Covid, when extensive government aid froze insolvency proceedings: next year, the number of insolvencies is likely to be about a quarter higher than the average of the pre-pandemic years.
Germany is no exception. After a spectacular 22 percent increase in insolvencies in 2024 to almost 22,000, a strong increase of eleven percent is also expected this year. This will far exceed the pre-Covid level. However, the figures are still significantly below the peaks of previous years. At the beginning of the millennium, insolvencies climbed to more than 39,000 cases per year – Germany is not (yet) as "sick" as it was back then. However, this is only weak consolation, as a trend reversal is not in sight. The economy remains too weak for that. After stagnation this year, growth is unlikely to exceed one percent in the coming years, despite high government investment. This is because the headwinds generated by a turbulent global environment – trade wars, restructuring of supply chains, economic slowdown in the US and China – continue to blow strongly. Furthermore, financing remains tight. High interest rates continue to strain liquidity despite monetary easing. Many companies have to refinance themselves under less favorable conditions. Profit margins are thus coming under further pressure.
Germany is therefore exposed to the risk of insolvencies becoming a permanent feature. They are no longer cyclical, but a structural phenomenon. This reflects the lengthy process of adapting to a world characterized by increasing fragmentation and a breathtaking pace of innovation. But bankruptcies are only one side of the coin. This year's Nobel Prize in Economics served as a reminder that "creative destruction" is part of economic activity—and an indispensable prerequisite for growth.
Therefore, the truly worrying aspect is not the number of bankruptcies, but rather that only one half of this growth process is currently unfolding: A lot of "destruction," but hardly any "creation." The rate of new business formations in Germany has been at a low level for years, less than half of what it was 20 years ago. The wave of startups triggered by AI seems to be bypassing Germany; here, there is still a "startup drought." This is where the real challenge for Germany's economic renewal lies.
The author is the Chief Economist of Allianz.” [1]
1. Insolvenzwelle und Gründungsebbe. Frankfurter Allgemeine Zeitung; Frankfurt. 03 Nov 2025: 16. Von Ludovic Subran
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