Dramatic deterioration is recorded in the latest economic data for Germany, as 2025 saw the highest number of corporate bankruptcies in the last 20 years, despite promises from the Christian Democrat (CDU) government for economic recovery. The wave of insolvency intensified particularly toward the end of the year, directly affecting thousands of workers. According to the Leibniz Institute for Economic Research Halle (IWH), the total number of bankruptcies reached 17,604, a historic high. As reported by the Bild newspaper, this corresponds to 48 corporate bankruptcies daily in Germany. "Even after the great financial crisis of 2009, the number was about 5% lower," the institute points out.
Explosion of bankruptcies in December
December proved to be particularly heavy, with 1,519 bankruptcy filings, a figure increased by 75% compared to the average for the 2016–2019 period, before the pandemic. Jonas Eckhardt, an economic analyst at the transformation consulting firm Falkensteg, told Bild that "the German economy is no longer just suffering from a headache—it has a fever. And this is not going to change anytime soon." For his part, Professor Dr. Steffen Müller, head of insolvency research at the IWH, noted that the increase in bankruptcies was widespread, with a particularly strong hit to the catering, construction, and real estate sectors. As he explained, the rise in interest rates at the end of 2022 halted investment plans in these areas.
From small businesses to large groups
Bild cites characteristic examples of businesses that collapsed. In Saxony, a sausage production company laid off its entire staff, while in Lower Saxony, the Leifert bakery chain affected 220 employees. Similarly, large bakeries such as Hansen Mürwik filed for bankruptcy, with 145 jobs lost. The crisis, however, is not limited to small and medium-sized enterprises. Research by Falkensteg shows that 471 companies with an annual turnover of over 10 million euros were led to insolvency in 2025, marking a 25% increase on an annual basis. Since 2021, large bankruptcies have nearly tripled.
Economy in a "very critical state"
Less than a week ago, Chancellor Friedrich Merz admitted that parts of the German economy are in a "very critical state." According to an analysis by Bloomberg, although he did not name specific sectors, the automotive industry is considered among the most affected, mainly due to intensifying competition from China. Steffen Müller notes that, theoretically, bankruptcies can function as a market adjustment mechanism, creating space for sustainable businesses. However, Jonas Eckhardt warns that for many medium-sized enterprises, the situation is no longer a simple recession, but a struggle for survival. Experts do not expect a substantial recovery in 2026 and predict a further increase in bankruptcies, especially among large companies.
The European dimension and the eye on China
Germany is no exception in Europe. Last month, French President Emmanuel Macron visited China, stating—according to Politico—that European industry is at a "moment of life or death." "I am trying to explain to the Chinese that their trade surplus is not sustainable and that they are destroying their own customers, mainly because they do not import enough from us," Macron said. Despite Europe's criticism of the tariffs imposed by Donald Trump, the EU is now considering similar measures, with Macron leaving open the possibility of trade retaliation if China continues to aggressively dominate in trade, exports, and innovation. However, after the meeting in Beijing, no significant business deals were announced and, according to analysts, Macron left without substantial concessions on critical issues. It is noteworthy that China has almost completely rejected mass migration and hosts approximately as many foreigners as correspond to the population of just one German city, Berlin.
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