Rising Corporate Insolvencies and Pension Fund Losses Signal Economic Strain in Germany

Germany is witnessing a significant surge in corporate insolvencies and pension fund losses, painting a challenging economic landscape for 2025. Würzburger & Co. KG, a bus and rental car company with over 25 years in the transportation sector, recently filed for insolvency. The Mainz District Court initiated the process on October 31, appointing attorney Jörg Lehr as insolvency administrator. This case exemplifies a broader trend, with insolvencies across individuals and corporations rising by 5% from the previous month to 1,553 cases, a 2% increase from last year, and a staggering 68% increase compared to the 2016–2019 average. Economists such as Steffen Müller from the IWH predict the highest insolvency rates in two decades, attributing this to geopolitical crises, labor shortages, succession challenges, bureaucracy, and intense competition (Research ID 145675).

Parallelly, the financial turmoil extends to pension funds, notably the pension scheme of the Berlin Dental Chamber (VZB). Approximately 10,000 dentists in Berlin, Brandenburg, and Bremen face pension risks as the VZB lost hundreds of millions, possibly up to one billion euros, due to risky ventures in corporate shares and real estate, nearly half its assets. These precarious investments include an 80% stake in the bankrupt Element Insurance and stakes in various struggling startups and luxury hotels. Previous write-offs included 45 million euros in 2022 and 65 million euros in 2023. The situation echoes in the Lower Saxony Dental Chamber’s pension fund, which reported a 45 million euro loss partly linked to a bankrupt real estate company. The low-interest rates from the European Central Bank until 2022 prompted such risky investments. The new VZB board is contemplating legal action against the Berlin Senate for state liability, alleging oversight failures during the previous administration’s mismanagement (Research ID 145670).