Bankruptcies in Europe reach historic high

The number of bankrupt companies in the European Union in the second quarter of 2022 reached an absolute record since the start of statistics collection in 2015.

Compared to the first quarter of 2023, the number of bankruptcies in the EU increased by 8.4 per cent. Growth was recorded in all sectors of the economy without exception. The number of bankruptcies in the hospitality and catering sectors grew especially noticeably – by 23.9 per cent, Gazeta.ru reports, citing Eurostat data.

Experts attribute the sharp jump in bankruptcies to the consequences of the coronavirus pandemic and sanctions pressure on the EU economy. Many companies that received government support during the 2020 lockdowns ended up unable to restore business and filed for bankruptcy.

At the same time, the number of newly registered companies in the EU decreased by 0.6 per cent compared to the first quarter of 2022. Experts do not exclude that in the coming quarters, the number of bankruptcies in the European Union will only grow against the background of the economic downturn.

EU governments are trying to support business by imposing moratoriums on bankruptcies and financial incentives. However, these measures only delay the inevitable closure of the most vulnerable companies, which have accumulated large debts due to the crisis.