The number of German companies going bankrupt is only increasing. Last year there was even the strongest increase since the credit crisis of 2008. This is shown by research by credit insurer Allianz, and that may also mean bad news for the Netherlands.
According to chief economist Carsten Brzeski of ING Germany, the high level of bankruptcies is mainly due to the fact that German consumption has fallen sharply. He argues that companies could not actually go bankrupt in the corona pandemic, but the protection has now expired. ‘In addition, the companies that have run into problems due to lockdowns are now being hit very hard by inflation and high energy prices.’
And so there are catch-up bankruptcies, and a serious situation, thinks Brzeski. According to him, it shows that the energy crisis is weighing very heavily on the German economy. In recent months, German economists have asked themselves more than once how serious the crisis is and whether a recession will follow, “and we have now seen that the German economy has contracted in the fourth quarter,” said Brzeski. A shrinkage that is particularly visible in the catering industry, small shops and, for example, hairdressers.
No fear
But, he emphasizes, the Germans are not panicking yet. According to Brzeski, Germans have become accustomed to such bankruptcies in recent years. However, he expects that this will make people think. “That people wonder whether it is a catch-up effect of the pandemic, or whether it is indeed the beginning of longer economic damage.”
Economic damage that will not only be felt in Germany, but will, according to Brzeski, fester in a lot of European countries. Also the Netherlands. He states that there are enough companies in Europe that did not go bankrupt due to the corona measures, but are now experiencing major problems. ‘Which comes on top of the problems of high energy prices,’ he continues.
The Netherlands
It is difficult for Brzeski to say how big the problems will be for the Netherlands. He thinks that the initial effect is not too bad, because the bankruptcies are currently mainly taking place in the German catering industry and small shops. ‘If it is mainly in consumption, the Netherlands will not be hit so hard.’
However, Brzeski warns that the same phenomenon can indeed be experienced in the Netherlands. The Netherlands would only be hit harder if large German companies collapsed. ‘Industrial companies, for example, but that is not to be expected’, he concludes. ‘If we look at the nature of the crises, you see that it is mainly the small companies that collapse – the companies that were already under pressure.’
