High interest rates and the termination of large-scale government assistance provided to companies during the COVID-19 pandemic have hit businesses in most developed economies hard, resulting in double-digit bankruptcy growth rates, the Financial Times reports.
Thus, the number of corporate bankruptcies in the United States for the fiscal year ended September 30 increased by 30% compared to the same period a year earlier.
In Germany, which is the largest economy in Europe, the number of bankrupt companies increased by 25% in January-September. Since June, double-digit growth rates have been recorded every month, the country’s statistical office said.
According to the EU statistics agency, the number of insolvent companies in the community countries increased by 13% in January-September and reached the highest level in eight years. In France, the Netherlands, and Japan, the number of bankruptcies in October increased by more than 30% year-on-year. In England and Wales, the insolvency rate in January-September reached its highest level since 2009.
The Organization for Economic Cooperation and Development recently reported that in a number of countries, including the Nordic countries of Denmark, Sweden and Finland, the number of corporate bankruptcies has exceeded the levels of the global financial crisis of 2008-2009.
The main negative factors are “the cost of debt servicing and the withdrawal of pandemic support, as well as high energy bills, especially in energy-intensive sectors,” according to Capital Economics Chief Economist Neil Shearing.
According to analysts, most bankruptcies were recorded in the transportation and hospitality industries.
Shearing warned that the trend of deteriorating solvency of companies will continue, as many businesses will have to refinance their debt at higher rates in the coming months, even though central banks are expected to have already reached their peak.
The surge in bankruptcies will put pressure on global economic activity and job growth over the next few years, experts say.
The international rating agency Moody’s expects the number of defaults of companies with speculative grade ratings in the world to continue to grow in 2024 after it already exceeded the average for recent years in October.
German insurer Allianz predicts that the global insolvency rate will reach 10% next year, up from 6% in 2023. The hospitality, transportation and retail sectors will be most affected.
“We are seeing an increase in corporate bankruptcies in almost all countries,” said Maxim Lemerl, a leading analyst at Allianz Research.
German Foreign Minister Annalena Burbock said that Germany will send a EUR6.1 million humanitarian aid package to Ukraine, which includes generators and batteries, the German Foreign Ministry’s press service reports.
“With the winter protective umbrella that we are stretching over Ukraine, we are helping the population to survive the cold season. Not only in the form of air defense systems, but also generators, blankets, tents and batteries. Together with the German Federal Agency for Technical Assistance (THW), we are sending additional cargoes this winter for a total of EUR 6.1 million,” the press service quoted Burbock as saying in a statement published on the Foreign Ministry’s website on Friday.
At the same time, German Interior Minister Nancy Feser noted that another 500 power generators worth about EUR3.5 million would be transferred to Ukraine.
“THW is currently preparing to transport more than 500 additional power generators worth about EUR 3.5 million and has already delivered some of them to Ukraine. The goal is to help cities and towns, especially in areas close to the front line. To support Ukraine’s energy infrastructure, THW has already purchased more than 1,300 powerful power generators (up to 1,250 kVA) and 20 batteries,” Feather said.
She noted that more than 800 power generators and 15 storage batteries have already been delivered to Ukraine, which are used at Ukrainian thermal power plants, pumping stations, large bakeries and hospitals, as well as for decentralized supply to the population.
Preparations are also underway to transport more than 900 heaters, 1,700 winter sleeping bags, winter clothing and a mobile field kitchen to Ukraine. In addition, two drinking water treatment plants will be transferred to the State Water Resources Administration in the near future to provide clean water to the population.
The German Federal Government has announced a new military aid package for Ukraine. The list of aid was published by the German government’s press service.
According to the list, the Ukrainian army has been allocated 4 HX81 tractors and 4 semi-trailers for them, 8 Zetros trucks, 3 vehicles and 2 border guard vehicles.
In addition, the Ukrainian military will receive 3,840 155 mm artillery shells, 15 HLR 338 long-range sniper rifles and 60,000 rounds of ammunition, 5 drone detection sensors, 25 laser rangefinders, 1 mobile antenna system, and 250 tool kits with explosive material.
Germany has extended the temporary protection of refugees from Ukraine until March 4, 2025, and residence permits will be extended automatically, the press service of the German Ministry of the Interior reports.
“The residence permits of refugees from Ukraine who fled Russian aggression and were granted protection in Germany will be valid until March 4, 2025. The Federal Ministry of the Interior has provided for this in its resolution. Today, the Federal Council approved this resolution,” the ministry said in a press release on its website on Friday.
According to the report, Ukrainian refugees “do not need to apply for an extension of their residence status, nor do they need to have any related meetings with the immigration authorities. The basis for further extension of temporary protection is the decision of the EU member states at the end of September 2023.”
“All those who were forced to flee the war will remain safe with us and will have access to education and the labor market. We have extended the term of Ukraine’s refugee protection status. The residence permits are automatically valid until March 4, 2025, without the need for refugees from Ukraine to visit the immigration service again,” said Federal Minister of the Interior Nancy Feser.
She added that the German authorities will continue to protect the lives of many Ukrainians and to support Ukraine closely.
According to the German side, there are currently about 1.1 million people living in Germany who have entered the country since February 24, 2022, in connection with Russian aggression against Ukraine. About 350 thousand of them are children and young people under the age of 18. About two-thirds of adult refugees are women.
Nova Posta Group opened five Nova Post branches in Germany in October and plans to launch 13 more by the end of the year, according to a press release on Wednesday.
“By the end of the year we will open 13 more branches in Düsseldorf, Dortmund, Stuttgart, Hanover, Bremen other cities. Our customers can already receive parcels from Ukraine in 7.7 thousand service points. Also in the near future we will provide an opportunity to receive parcels in partner post offices”, – said Sergey Simonov, CEO of Nova Post in Germany.
As reported, the first branch of Nova Post in Germany was opened in Berlin on June 30, 2023. There are already 7 Nova Post branches in German cities: in Berlin, Hamburg, Munich, Dresden, Frankfurt am Main and Cologne. Also, courier delivery is available to customers.
“Nova Posta already operates in Poland, Lithuania, Czech Republic, Germany, Moldova and Romania.
In the network of “Nova Posta” in Ukraine at the beginning of July this year included more than 10 thousand offices and more than 14 thousand post offices.
The Group includes Ukrainian and foreign companies, including Nova Posta, NP Logistics, NovaPay payment system and Nova Posta Global.
Prime Minister of Ukraine Denys Shmyhal says that German construction materials company Fixit has received investment insurance from the German government to build a second plant in Ukraine.
“We want German business to invest in Ukraine, to invest in recovery, and within the framework of the forum we are signing important documents… The building materials company Fixit will build a second plant in Ukraine and will receive investment insurance from the German government for this purpose, which will be signed here on the sidelines of the business conference,” Shmyhal said at a press conference at the sixth German-Ukrainian Economic Forum in Berlin on Tuesday.
According to the prime minister, Fixit will also receive a EUR12 million loan from the German bank KfW. “This is a very important and significant project,” he emphasized.
BUILD, CONSTRUCTION MATERIAL, Fixit, GERMANY, INSURANCE, PLANT
