Crisis in Germany as 1,500 businesses collapse into administration – just in December | World | News

In Germany, around 1,500 businesses have gone into administration with corporate insolvencies rising to the highest in two decades. Germany‘s economy has remained stuck in a phase of inadequate growth, and planned higher government spending will likely provide only limited momentum, Reuters reports.

On Thursday, the latest data was published by a leading economic research institute. In December, the number of bankruptcies increased, sitting 75% above the average level for the month in 2016 to 2019 (pre-pandemic). In total, 1,519 insolvencies were listed for December alone. As for the whole of 2025, the figures are much higher, reports Daily Finland.

In total, there were 17,604 insolvencies reached in the year, which is around 5% higher than during the financial crisis of 2009.

Following the pandemic, many insolvencies were explained by the difficulties this posed to businesses.

However, the increase in insolvencies can no longer be explained by the impact this had, says Steffen Müller, head of insolvency research at Halle Institute for Economic Research.

Steffen says the insolvencies show the struggles of the economic challenges in Germany.

In 2023 and 2024, the country’s economy contracted. There is no recovery expected in 2026.

Reuters says the situation will not change unless the government provides tangible relief, the German Chamber of Commerce, or DIHK, warned on Monday.

October 2025 also showed a similar pattern to December, with 2,108 insolvencies, an increase of 4.8% year-over-year, according to official statistics.

“Month after month, we are seeing new records in corporate insolvencies,” said DIHK chief analyst Volker Treier. “We are experiencing the highest number of insolvency-related business closures in 11 years.”

Friedrich Merz, the German chancellor, recently outlined the near-term challenges in a letter to his coalition partners in the Bundestag, reports The Telegraph.

“The situation of German industry is very critical in some places,” he warned.

“Industry giants as well as considerable numbers of mid-sized and small businesses are facing major challenges, in many companies jobs are being lost.”