Germany Faces Sharp Rise in Company Bankruptcies in Q2 2026

Germany is witnessing the highest number of company bankruptcies in over two decades, with insolvencies reaching 4,996 cases in the second quarter of 2026—a 9% increase from Q1, according to the Leibniz Institute for Economic Research (IWH). June alone saw 1,702 insolvencies, marking a 12% rise from May and a 20% increase compared to June 2025. Nearly all major industries are affected, with small and medium enterprises in the automotive, logistics, and hospitality sectors particularly struggling amid high costs and weak demand.

Steffen Müller, an IWH researcher, highlighted that these figures reflect persistent economic stress and potentially signal deeper structural weaknesses within Germany’s economy. A significant concern is the sharp decline in successful restructuring of large firms post-bankruptcy—from 57% in 2020 to just 32.1% in 2025, indicating a growing risk of lasting economic damage, including job losses and disrupted supply chains.

Economic experts urge the government to intervene by reducing labor and energy costs, cutting bureaucratic red tape, and speeding up planning procedures. Though recent reforms have introduced some positive measures, proposed income tax changes have been criticized for potentially burdening the middle class further, risking more insolvencies and weakening Germany's global competitiveness.