9006 German companies bankrupt in the first half of 2020

The German Statistics Office said that the number of companies that filed for bankruptcy in Germany decreased by 6.2 percent compared to the first half of last year, despite the coronavirus crisis, due to reasons, including a law established to keep companies able to continue operating during the pandemic.

The bankrupt companies reached 9006 in the first half of 2020, a sixth of them coming from the retail sector, which was particularly affected by the general isolation measures that aimed to curb the spread of the virus, and more than a thousand bankrupt companies belonged to the construction and hospitality sectors.

The office said in statements yesterday, "The economic difficulties that many companies have suffered in the coronavirus crisis have not been reflected to a large extent on the number of companies that have declared bankruptcy, and the reason is that the pledge to declare bankruptcy has been suspended since the first of March."

In addition, the expectations of the German Economic Research Institute "DI Bleu" indicated that the German economy will return to growth next year, after the crises that followed it during the current year, due to the spread of the new Corona virus.

Claus Michelsen, head of the economic conditions department at the institute, said yesterday, "We expect to reach a level close to the pre-crisis level (Corona) by the end of 2021 or the beginning of 2022."

Michelsen added, "Production is already recovering at the present time, due to the increase in exports again to countries such as China," expressing his belief that the subsidies to reduce working hours and financial assistance to companies contributed to Germany's overcoming the crisis better than other countries.

He said, "The corona crisis did not affect the economy with the same force, which was assumed at the beginning, and we have become more optimistic than we were in the summer."

Michelsen expected the German economy to record a contraction of 6 percent this year, while the institute's forecast in the summer indicated that Germany's GDP would decrease this year by more than 8 percent compared to 2019.

On the other hand, the German Industrial Supplies Company "Schaeffler" announced its intention to write off 4,400 additional jobs in Europe by the end of 2022 due to the crisis that the auto sector is currently going through.

In statements yesterday, Schaeffler said that it hopes to achieve a reduction in annual expenditures of 300 million euros (350 million dollars), and to achieve 90 percent of this target by 2023. The cost of the restructuring plan is estimated at 700 million euros.

The job removal plan includes 12 industrial sites belonging to the company in Germany, including its main site in the city of Herzogenaurach and other manufacturers in Europe outside Germany.

The company, which produces a wide range of products used in machinery and aerospace industries, added that it did not rule out a complete shutdown of its factory in Wuppertal.

The "Schaeffler" has reduced its production capacity in recent years, and implemented a voluntary retirement program that included about two thousand workers, while its total employees decreased by about 8,250 workers at the end of 2018 to 84,223 jobs.

"Despite the recovery in demand in its three main units and the four main regions in recent months, the ambiguity surrounding the developments of the coronavirus pandemic and the deterioration in the business environment remains high," the company said in a statement.

The news of the job cuts at Schaeffler came one day after the German government met with representatives of the auto industry companies to discuss measures to aid the sector. Participants in the meeting agreed to form a working group that includes the sector and its suppliers.

In the tourism sector, the German Federal Statistics Office said yesterday that the number of tourist nights in the country decreased by 22.8 percent, on an annual basis in July, to 45.4 million, due to the sector being affected by the epidemic.

The number of tourist nights for foreigners decreased by 56.7 percent, while for local tourists it decreased by 14.9 percent, in July. In a statement, the office said that between January and July, the number of tourist nights decreased by 42.2 percent year on year.