Given the strong Rally in the DAX,MDAX and SDAX ask many investors, justifiably, whether the German economy has survived the great Corona Crash already? However, there is no reason to sound the all-clear is, despite an impressive recovery rally in many of the German stock, now for a long time.
The Federal statistical office provides Surprise
Despite the rampant Corona ends of the pandemic and the drastic protection measures were reported by the local courts according to the Federal Statistical office, between January and March 4.683 bankruptcies in Germany. Thus, the number of insolvencies in the first quarter of 2020 fell, compared to the first quarter of 2019, around 3.7 percent.
These cases consist largely of 788 bankruptcies in the area of in trade and Motor trade, 761 bankruptcies in the construction industry, and 514 insolvencies in the hospitality industry. In spite of a decline in bankruptcy numbers, the total claims of the creditors were € 7.3 billion, however, far in excess of the sum of € 4.7 billion from the previous year.
In addition, 20.672 other debtors reported in the first quarter of 2020 their inability to pay. What it means in relation to the prior-year period, a decrease of 6.5 percent. The number of 20.672 cases, is composed 15.095 personal insolvency and is 4,659 Insolvency of formerly self-employed.
Bankruptcy remains for the time being
The number of the rule to insolvency proceedings is not, however, favor just between the first three months of the year, but also in April. So, the number of registered bankruptcies fell in the fourth month of the year by 13.4 percent compared to the same month last year. “The Corona of a pandemic and the measures for its reduction caused by economic crisis, is reflected in the March and April, not in an increase in the insolvency proceedings opened,” said a communication from the Federal Statistical office.
Three reasons for the paradoxical development
The decline in insolvency figures, currently there is no reliable Basis for the assessment of the situation within the German economy depends Essentially on three factors. So it is because of the pandemic, at the moment, very long processing times with the competent courts, whereby the decisions of the individual procedures to be seriously delayed.
Furthermore, the Federal government has decided to the obligation to apply for Insolvency to 30. September 2020 to suspend. While companies must disclose in the normal case within three weeks of its inability to pay or over-Indebtedness, in order to avoid civil and criminal liability, the entrepreneurs can now, provided the Bankruptcy is to do with the Corona pandemic, with your request wait and in the meantime, even a renovation to make. “The lack of applications and has thus significantly on the statistics,” says Christoph Niering, the Chairman of the Association of insolvency administrator, told the Reuters news Agency.
In addition, the Figures from the German Federal statistical office does not only refer to the provisional rule, insolvency proceedings, however, the so-called “protective shield” and self-administration procedures, which are currently used primarily by larger corporations in the claim.
No all-clear signal from the economy
The above-mentioned factors to sugarcoat the current insolvency figures in Germany, on massive way. Thus, the lack of bankruptcies suggest current economic strength, in reality, a different Wind is blowing, however. Thus, many experts assume that the number of bankruptcies will only rise after the end of the Corona-measures.
“The customers are not able to follow up so quickly to the pre-crisis period, because the health risks are more and there are more than ten million workers on short time, the need to cope with significant Wage cuts,” says Niering in relation to a possible recovery in the German economy.
According to this assessment, Niering expects to close the current year with a considerable increase in the regular insolvency proceedings. “As the number of insolvencies has fallen continuously in recent years, would in itself be an increase of 20 per cent to 23,000 still little in comparison to the financial crisis”, the Chairman of the Association of insolvency further. Accordingly, it is possible that the Corona-broke wave rolls due to the number of measures with a certain delay on the German economy.
Pierre Bonnet / editorial finanzen.net
Image sources: Travis Wolfe / Shutterstock.com, ramcreations / Shutterstock.com