Corporate insolvencies in Western Europe reach record high

Berlin - The economic crisis is having serious, and for many, existential consequences for companies in Western Europe. According to the credit agency Creditreform, the number of corporate insolvencies rose last year to its highest level since records began in 2002. In 2025, a total of 197,610 insolvencies were recorded, an increase of 4.8 percent year-over-year. This marked the fourth consecutive increase.

“The crisis is not just cyclical, it is structural. Weak global trade and geopolitical risks are putting pressure on European companies,” said Patrik-Ludwig Hantzsch, head of economic research at Creditreform. At the same time, high energy prices and bureaucracy are hampering the competitiveness of many companies, especially compared to the US and China. “This double burden is eating away at the core of many businesses.” A further increase in cases is expected this year.

According to Hantzsch, the level of insolvency in Western Europe is higher than after the 2008/2009 financial crisis. The numbers have risen significantly in recent years. Although the momentum has recently slowed somewhat, experts report the situation remains at a high level.

Europe is increasingly diverging

Last year, the number of corporate insolvencies increased in most Western European countries. The increase was particularly sharp in Switzerland (+35.3 percent). According to Creditreform, this is mainly due to a change in legislation at the beginning of 2025. The enforcement of public-law claims has reportedly been tightened, which lowers the de facto threshold for bankruptcy.

An above-average increase in insolvencies was also recorded in 2025 in Greece (+24.4 percent), Finland (+12.1 percent)and Germany (+8.8 percent). In Germany, just over 24,000 cases were recorded, the highest level since 2014.

In contrast, a decrease was recently registered in six countries, including the Netherlands, Ireland and Norway. “Europe is increasingly diverging, and the economic weakness of the central industrialised countries is a burden for the entire continent,” said Hantzsch.

The picture is different for insolvency rates. Luxembourg leads the ranking with 243 insolvencies per 10,000 companies, followed by Switzerland (197) and Denmark (168). The rates are lowest in Greece (three) and the Netherlands (13). Germany is in the middle of the range with 77. However, the significance of this is limited.

Service sector most affected

According to Creditreform, the figures are only comparable to a limited extent. The insolvency laws of the countries differ considerably in some cases. Company closures cannot always be handled through formal insolvency proceedings. In addition, there are often multiple and differing statistics on the number of existing companies.

Insolvencies have recently developed with varying momentum across the main economic sectors. The increase in cases was more pronounced for service providers (+8.7 percent) and in the manufacturing sector (+3.6 percent) than in the retail and hospitality sector (+3 percent) and the construction industry (+0.1 percent).

The crisis is no longer limited to industry, said expert Hantzsch. Weak consumer sentiment and persistent price pressure are particularly affecting consumer-facing sectors. The majority of corporate insolvencies in 2025 were again in the service sector, accounting for a share of just over 43 percent.

In Central and Eastern Europe, the number of insolvencies has recently fallen. Experts see this as a catch-up effect following the Covid-19 pandemic. The level of insolvency remains high in many sectors.

This article was translated to English using an AI tool.

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