MNI BRIEF: German Insolvencies Hit 20-Year High - IWH Report

The number of German firms going bust rose sharply in April, reaching the highest level since 2005, data published by the Leibniz Institute for Economic Research Halle (IWH) showed on Thursday.

A total of 1,626 companies were declared insolvent last month - 11% more than in March, and 21% more than a year earlier - the largest number since July 2005. However the number of jobs lost fell 14% compared with March, with 14,000 workers affected at the biggest 10% of employers.

The IWH attributed the unexpectedly high number of firm closures in part to an unusually high proportion of small insolvency proceedings in both months. “If the proportion of smaller insolvency proceedings now returns to the long-term average, I expect insolvency figures to fall in the coming months,’ IWH’s Steffen Muelller said. “Nevertheless, we will see more company insolvencies in Germany than last year for the foreseeable future." (See MNI SOURCES: ECB Heads For June Cut, But Debate To Be Lively)