THE ECONOMY OF GERMANY WILL FACE THE WAVE OF BANKRUPTCIES

The specialists of the German credit bureaus have come to the conclusion that the country will face a wave of massive bankruptcies this year. The largest European economy is experiencing the difficulties, comparable to the crisis of twelve years before. 34 thousand organizations went bankrupt in the country during the previous crisis, and this year Crifbürgel experts predict the bankruptcy of 29 thousand companies.

The situation is not likely to change for better next year. Even profitable companies that have not previously experienced financial problems might experience difficulties with repayments on the loans.

A negative outlook does not take into account the loans, provided by the state-owned KfW Bank, which should be repaid as well.

The experts note that the country's economy has experienced a significant decline in mid-May. The greatest difficulties arose in the entertainment sector, tourism and catering due to the numerous restrictions, introduced by the German authorities. The automobile industry, exhibition events, and those industries that are most dependent on the exports, have suffered from serious losses.

Germany's GDP for March-May decreased by 2.2% compared with the data on the same period of the previous year.

The representatives of the credit bureaus note that the upcoming massive bankruptcies do not mean the liquidation of the companies and the subsequent collapse in the country's market. They point to the flexibility of German law, allowing the entrepreneurs to maintain their business.

At the same time, the executives of the German companies continue to hope for well-thought-out government actions that will mitigate the effects of the crisis and accelerate a return to the previous indicators. The safety margin, accumulated by the leading European economy, is still not wasted.