More bankruptcies in EU; Netherlands an exception to the trend
The number of bankruptcies in the Netherlands is considerably lower than in many other EU member states, Statistics Netherlands (CBS) announced. CBS recently also announced that the bankruptcy rate remained at historically low levels in May. Additionally, a more optimistic forecast about the potential for an upcoming bankruptcy wave caused by Covid-19 in the Netherlands was revealed by ING.
"Since the pandemic broke out, the number [of bankruptcies] has decreased from a quarter to quarter, but the opposite is happening within the European Union. In the second quarter of 2020, the number of bankruptcies there fell, only to rise for several quarters in a row," CBS stated.
On average, the number of bankruptcies in the EU is lower than before the corona crisis. Many countries have reported an increase in bankruptcies. The Netherlands is an exception to the trend. This is likely due to the government's extensive support measures, CBS suggested. "Not all countries provided support to the same extent."
Just like in the Netherlands, the number of bankruptcies within the EU was lower in 2020 than in 2015. From the third quarter of 2017 to mid-2019, the Dutch bankruptcies showed a slightly increasing trend, around 60 percent of the number recorded in 2015.
"The number of bankruptcies within the EU was stable for several years from the end of 2016 at about 80 percent of the level of 2015. This was followed by a decline in early 2020, which continued into the second quarter. After that, the number of bankruptcies within the EU rose, while the number in the Netherlands fell sharply," CBS stated.
The number of bankruptcies in the first quarter of 2021 was higher than one year earlier in only three EU countries that provided data. The rise was most visible in Romania, with a 150% increase, and the number of bankruptcies has also more than doubled in Spain.
In May, 130 Dutch companies went bankrupt. That was 5 more than in April, about half as much as in May 2019 and 2020. For a long time, it was expected that the number of bankruptcies would increase at the end of this year with the support packages being phased out. ING economists still believe that the number of bankruptcies will increase in the future, but have recently adjusted their forecast about the severity of the crisis.
In addition to the broad support from the government, the ING cited two more reasons for the revised forecast. Companies have reduced their workforce faster than during the financial crisis. Simultaneously, the sectors hardest hit by the crisis generally have fewer companies in total.