Experts Warn of Prolonged Bankruptcy Wave in Germany Through 2027 Amid Economic Strains

Germany is currently grappling with a severe economic crisis marked by a significant surge in company bankruptcies. By mid-2026, approximately 12,900 company bankruptcies were reported—the highest figure since 2013. Experts from Creditreform have sounded the alarm, predicting that this wave of insolvencies will continue at least until mid-2027 if economic conditions fail to improve.

Patrik-Ludwig Hantzsch, an economic expert at Creditreform, highlights that about 27% of companies are at risk of failing to meet their debt obligations, pointing to a substantial insolvency threat. Despite a lower total number of bankruptcies compared to previous crises, the financial damage has already reached €28.5 billion, surpassing that of many past years.

Several factors underpin this challenging business environment. Geopolitical tensions, including conflicts and US tariffs, dampen global demand, particularly from China. Domestically, companies face escalating energy costs, high taxes, and bureaucratic hurdles that exacerbate financial pressures.

Additionally, labor costs in Germany have risen to €45.70 per hour by the end of 2025, placing the country seventh in the EU for labor expenses, though it experienced the fifth-lowest increase (3.4%) among 27 EU states. This rise is attributed more to weak productivity growth than to actual wage hikes. Experts from the Institute for Macroeconomics and Business Cycle Research (IMK) note that productivity stagnation stems from insufficient investment in digitalization and modern technologies.

Experts recommend that businesses take control of their financial health and invest in future-proofing their models while urging policymakers to reduce energy costs and taxes to alleviate the burden. They caution against suppressing labor costs further, as this could hinder Germany’s economic recovery.

The sustained insolvency risk underscores the fragility of Germany’s economic recovery amid global and domestic pressures, with the road ahead requiring decisive action to stabilize and support companies at risk of collapse.