Business Bankruptcies in the EU Reach Record Highs: A Reflection of Economic Uncertainty

Recent data paints a concerning picture of Europe's economic health, as business bankruptcies in the EU have surged to their highest level since 2015. According to Eurostat, the European Union's official statistics agency, the number of corporate bankruptcies in Q2 2023 rose by 8.4% compared to Q1, with the hospitality and food service industries hit hardest.

This marks the sixth consecutive quarter of rising insolvencies—a trend not seen since Eurostat began tracking this data. The peak was recorded in Q4 2022, coinciding with the phase-out of state support provided during the COVID-19 pandemic.

The Role of COVID-19 Relief Measures

In April 2020, the European Commission allocated over €8 billion to support small and medium-sized enterprises (SMEs). While this aid helped businesses stay afloat during lockdowns, the post-pandemic recovery has been far from stable.

Since Q2 2022, corporate bankruptcies have steadily risen alongside national debts. However, there is a silver lining: new business registrations in the EU have reached an eight-year high in 2023, signaling a potential rebound in entrepreneurship.