Rise in the number of insolvent companies in Europe: Eurostat report -

Brussels: The Coronavirus pandemic, fuel shortage, and inflation have led European companies to go bankrupt. Eurostat, known as the ‘Statistics Agency’ of the European Union, recently published a report in this regard. According to the report, the number of insolvent companies has increased by 2.2 per cent in three months, from April to June.

By the end of 2021, European countries had largely relaxed their restrictions as there were indications that the Coronavirus pandemic was coming under control. After that, there were claims that the European economy would pick up the pace. However, the Russia-Ukraine conflict and problems in the global supply chain seem to pose a new challenge to the European economy.

The European countries supporting Ukraine in the Russia-Ukraine conflict have imposed massive economic and trade sanctions on Russia. However, these European countries are the most affected by these restrictions and most of the countries, including Germany, France, Italy, and Spain, are facing energy crisis and inflation. Energy shortages and rising prices for most things, including fuel, have begun to hit Europe’s industrial sector hard.

The Union had announced financial support for the industrial sector during the Coronavirus pandemic. But the industries had complained that they did not get any special benefit from it. In addition, due to the electricity shortage and inflation, it is becoming difficult to run industries, and many industries have declared bankruptcy. Eurostat’s report said that companies in almost all sectors are declaring bankruptcy.

In Latvia, part of the Baltic region, the largest number of industries have declared bankruptcy. The proportion of companies declaring bankruptcy in this country has gone up by 74 per cent in just three months. Belgium and Denmark have also seen an increase of more than 10 per cent in the proportion of bankrupt companies. Eurostat’s report also revealed that the number of bankruptcy declarations by European companies has been increasing for six consecutive months. The report said that while the number of bankrupt companies is rising, the number of newly registered companies in European countries is also decreasing.

According to the report, the decline was 2.3 per cent in the first quarter of 2022 and 1.2 per cent in the second quarter.