Germany has not seen corporate bankruptcies reach this high since 2005 in yet another worrying sign for Europe’s largest economy, according to the Leibniz Institute for Economic Research Halle (IWH).
Construction and retail are coming under increasing pressure in Germany, while the IWH is warning of persistently high insolvency figures in the future as well.
The number of corporate bankruptcies rose in the first quarter to its highest level in more than 20 years. According to the Leibniz Institute for Economic Research Halle (IWH), 4,573 insolvencies of partnerships and corporations were recorded in the first three months of the year — a figure that surpasses the levels seen during the 2009 financial crisis.
The last time values were higher was in the third quarter of 2005, when 4,771 insolvencies were registered, according to data from the Federal Statistical Office.
The increase was particularly sharp in March, with insolvency figures running 71 percent above the average for the same month in the years 2016 to 2019. Record highs were recorded above all in the construction sector and in retail.
Regionally, Bavaria, Baden-Württemberg, and North Rhine-Westphalia were the hardest hit.
According to the institute, the rise is concentrated primarily among smaller companies. As a result, fewer employees were affected in March than in February or in the same month of the previous year. Nevertheless, the IWH does not expect a rapid easing of the situation, as leading indicators continue to point toward high insolvency numbers.
“It is possible that the very high figures from March will repeat themselves,” said Steffen Müller, head of insolvency research at the IWH.
At the same time that companies are facing soaring rates of bankruptcy, Germany’s fiscal picture is also darkening, with municipalities and cities reporting record levels of debt. This reality limits the government’s freedom to provide more financial stimulus to an economy that is quickly souring.
This 20-year-high for the first quarter in Germany comes after a 20-year-high for the entirety of 2025. The wave of insolvencies grew significantly toward the end of 2025, affecting the lives of thousands of employees. According to the Leibniz Institute for Economic Research Halle, the annual total reached a historically high 17,604 bankruptcies. This translates to an average of 48 partnerships and corporations going out of business every day in Germany, according to Bild newspaper.
Jonas Eckhardt, an economic expert from the transformation consultancy Falkensteg, told Bild just three months ago that “the German economy is no longer just struggling with headaches. She’s got a fever. That won’t change anytime soon.“
With energy prices exploding, Germany has been hit with additional economic pressure at a time when the economy has already proven extremely weak. Earlier this year, Chancellor Friedrich Merz stated that parts of the German economy are in a “very critical state.” In the article from Bloomberg, it notes that while Merz did not specify which sectors, the car industry is seen as especially hard hit. This is due in large part to Chinese competition slowly crushing German companies, a topic Remix News has written extensively on.
Germany is not the only country struggling in Europe. In December of last year, French President Emmanuel Macron went to China essentially to beg for help, saying, according to Politico, that “European industry is facing a ‘life or death’ moment.”
Instead of embracing mass immigration, China is rapidly replacing its workforce with robotics at an incredible pace.
Meanwhile, the pro-immigration EU is floundering. Macron was just in China calling for technology transfers, support and investment. pic.twitter.com/gmT26Udcx4
— Remix News & Views (@RMXnews) December 9, 2025“I am trying to explain to the Chinese that their trade surplus is untenable and that they are killing their own customers, mainly by not importing much from us,” Macron said, according to Politico.
Now, after Europeans complained about Trump issuing tariffs against China and Europe, Europe is considering pursuing the same tactic. At least, that is the threat Macron just issued to China if the country does not refrain from relentlessly outcompeting the EU on trade, exports, and innovation.
Following the meeting in China, notably, no major business deals were signed, and on most key points, analysts say Macron walked away mostly empty-handed in regard to the major issues.
