Germany is experiencing a sharp rise in corporate insolvencies, as the country enters its third year of economic stagnation. The current environment is, by several measures, more concerning than during the global financial crisis of 2009.
In the second quarter of 2025, the number of corporate and partnership bankruptcies reached a 20-year high. While 1,420 insolvencies were recorded in June—slightly below May’s figure—this still represents a 23% increase compared to June 2024. The most dramatic spikes were observed in economically strong regions such as Bavaria and Hesse, where insolvencies surged by 80% and 79%, respectively.
In total, 4,524 business bankruptcies were registered in Q2 2025, marking a 7% increase over the first quarter. Economists point to two main drivers: the ongoing recession and a broad market correction following years of ultra-low interest rates set by the European Central Bank.
During the pandemic, extensive government aid had kept many fragile firms afloat. That support has now faded, and the market is undergoing what analysts describe as a long-overdue cleansing cycle.
