(Alliance News) - Corporate bankruptcies in Western Europe rose to their highest level on record last year, underscoring the deepening impact of an economic downturn that is increasingly seen as structural rather than cyclical, according to a report by private German firm Creditreform.

The number of insolvencies climbed 4.8% year-on-year to around 197,610 cases in 2025, marking the fourth consecutive increase and the highest level since records began in 2002.

"The crisis is not only cyclical, it is structural. Weak global trade and geopolitical risks are weighing on European companies," said Patrik-Ludwig Hantzsch, head of economic research at Creditreform. 

High energy costs and bureaucracy are also undermining competitiveness, particularly compared with the US and China, he added. "This double burden is eroding the very foundations of many businesses."

A further increase in insolvencies is expected this year.

Hantzsch said the current level of bankruptcies in Western Europe exceeds that seen after the 2008-09 financial crisis. Although the pace of increase has recently slowed, insolvency levels remain elevated.

The sharpest increase in the region was recorded in Switzerland, where cases jumped 35%, largely due to a legal change at the start of 2025 that tightened enforcement of public claims and lowered the effective threshold for insolvency.

Above-average increases were also recorded in Greece, up 24%, Finland, up 12, and Germany, up 8.8%. Germany, Europe's biggest economy, saw more than 24,000 insolvencies, the highest level since 2014.

By contrast, six countries - including the Netherlands, Ireland and Norway - reported declines. 

Insolvency trends varied across sectors, according to Creditreform. The sharpest increases were seen among service providers, up 8.7%, and manufacturing, up 3.6%, compared with trade and hospitality, up 3%, and construction, up 0.1%.

source: dpa

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