Bankruptcies Surge Across EU as Legions of Companies Succumb to Energy Crisis
Authored by Nick Corbishley via NakedCapitalism.com
The number of bankruptcy declarations in the EU as a whole, initiated by businesses increased substantially (26.8%) quarter-on-quarter in the fourth quarter of 2022, reaching the highest levels on record since Eurostat began collecting EU-wide bankruptcy data in 2015. The number of bankruptcy declarations increased during all four quarters of 2022. At the current rate of business destruction, it won’t be long before businesses are closing at a faster rate than they are opening.
Large swathes of Europe’s economies saw legions of businesses succumb to the final straw of Europe’s largely self-inflicted energy crisis. In 2022, inflation in the EU tripled to 9.2%, its highest reading ever. According to Eurostat, all economic sectors witnessed a rise in the number of bankruptcies in the fourth quarter of 2022 compared with the previous one. But the hardest hit sectors were transportation and storage (+72.2%), accommodation and food services (+39.4%), education, health and social activities (+29.5%), sectors that had already suffered significantly during the pandemic.
The contrast with the pre-pandemic bankruptcy rate is particularly striking with a surge in bankruptcies in the accommodation and food services sector while the transportation and storage industry registered a similarly noteworthy increase.
