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German insolvencies fall further in February

By Reuters

BERLIN (Reuters) – Corporate insolvencies in Germany fell by 21.8% on the year in February, the Federal Statistics Office said on Tuesday, continuing a downtrend that saw them hit their lowest level since 1999 last year thanks to a waiver during the pandemic.

Germany introduced the waiver last March, when the COVID-19 pandemic hit, part of a package of measures aimed at supporting businesses but which gave rise to the charge that the government was simply propping up “zombie companies” with no future.

Insolvencies duly fell. But since October, Berlin has phased out the waiver. This year only firms awaiting state aid provided since November were exempt from filing – until this month.

Commenting on the February data, the Statistics Office said in a statement: “This means that the economic problems of many businesses due to the coronavirus crisis were not yet reflected by an increase in reported business insolvencies.”

(Writing by Paul Carrel; Editing by Maria Sheahan)