In March 2026, German courts recorded 2308 corporate insolvency filings - 15.8 percent more than in the corresponding month of the previous year. The German economy is entering a phase of marked deterioration, in which a rising wave of bankruptcies. Instead of the expected recovery after years of energy, inflationary and geopolitical challenges, one sees an acceleration of destructive processes, which government policy and EU bureaucracy only deepen.
Across the entire first quarter of 2026, 6275 corporate bankruptcies were registered, which represents an increase of 6.5 percent compared with the same period of 2025. At the same time, the number of consumer insolvencies rose, by 18.9 percent in March and by 6 percent over the whole quarter. High energy costs, the regulatory pressure of the Green Deal, supply-chain problems, staff shortages caused by demographics, as well as growing bureaucratic and tax burdens, create a toxic mixture that kills above all smaller and medium-sized firms, which were the backbone of the German economy.
The highest insolvency rate was recorded in the transport and warehousing sector, at 32.1 cases per 10 thousand enterprises. Just behind it came gastronomy and the hotel industry with 30.3, and construction with 26.7. These three sectors, which until recently were regarded as pillars of economic recovery, are now falling victim to a combination of high operating costs, declining demand and a lack of flexibility in adapting to the new realities. Construction is suffering from the collapse of infrastructure and housing investment, gastronomy is grappling with price inflation and a lack of staff, and transport is feeling the effects of the slowdown in international trade as well as rising fuel costs and emissions regulations.
It is worth noting the paradox that, despite the rise in the number of bankruptcies, in the first quarter of 2026 the total value of claims fell to around 9.3 billion euros compared with 19.9 billion euros a year earlier. In the previous period, larger, more economically significant entities were going bankrupt, whereas now the wave is affecting above all smaller firms. The mass bankruptcies of small and medium-sized enterprises mean an erosion of the economic base, the loss of jobs at the lower levels, and the weakening of local economies in the regions. These firms often do not generate spectacular debts, but they create the majority of employment and added value in the German “Mittelstand”. Their collapse will have long-term, dispersed effects.
For years, politicians from the green-red-yellow coalition and their predecessors promoted a vision of the energy transition and the green economy as a path to prosperity. In practice, it has turned out that this is a path leading to deindustrialization. The closing of coal-fired and nuclear power plants without adequate, stable replacement sources, combined with enormous subsidies for renewable energy sources, which destabilize the grid and raise costs for industry, has produced effects opposite to those intended. Transport and manufacturing firms are drowning under the weight of electricity bills, and the bureaucratic requirements of ESG reporting and EU regulations additionally burden above all the smaller entities, which do not have compliance departments.
An additional factor is the weakening of domestic and external demand. An ageing society, attested to by earlier demographic data from Destatis, limits consumption while at the same time increasing the burdens on the social system. Firms are losing not only customers but also workers. At the same time, competition from Asian countries, which do not apply such rigorous climate standards, is becoming crushing. German export enterprises, until recently the pride of the economy, are losing market shares. In such a situation, the rise in bankruptcies is a logical consequence and not a coincidence.
Government policy, instead of reacting to these alarm signals through deregulation, the reduction of energy and tax burdens, and real support for firms, is concentrating on the further ideologization of the economy. Successive packages of “climate aid” and EU directives only deepen the problems. The lack of flexibility in the labour market, the rigid rules on the minimum wage and worker protection, combined with the demographic crisis, create a situation in which firms cannot adapt to changing conditions. The effect is not only a rise in insolvencies, but also a slowdown in investment and a flight of capital abroad.
The statistics also record a rise in consumer insolvencies of nearly 19 percent in March, and this testifies to the fact that the difficulties are affecting not only business but also households. The inflation of previous years, rising living costs, especially housing and energy costs, and the stagnation of real wages in many sectors lead ordinary Germans into debt and loss of liquidity. This closes a vicious circle: weaker consumption strikes at firms, and corporate bankruptcies generate further unemployment and social problems.
