Record number of bankruptcies in Western Europe

Export-based Dutch economy hit

AMSTERDAM – Credit insurer Euler Hermes reports that there was a sharp increase in the number of bankruptcies in 2009 with the Netherlands, Spain and Ireland on top of the bankruptcy table of Western Europe.

In its recent annual report, the German firm surveyed the number of bankruptcies in 35 countries. The Dutch economy took a bad hit in 2008 when world trade came to a standstill due to the banking crisis. It had a huge effect on the Dutch business sector, with the number of bankruptcies rising by 73 percent in 2009 over the year before. The number of business failures was 8,040, up from 4,635 in 2008, and 4,602 in 2007 and 5,941 in 2006.

On the bankruptcy index for Western Europe, Spain and Ireland fared still worse in percentages (97 and 82 respectively), but their economies are much smaller and the number of failures lower (4,984 and 1,405).

In Central Europe, small Estonia reported 1,055 business failures, a rise of 149 percent over the previous year. Neighbouring Lithuania experienced a rise of 92 percent.

Drop

In total, the 17 Western European countries lost 205,472 businesses, up 19.5 percent over 2008. Euler Hermes expects that number to rise to 206,700 in 2010, while it anticipates the Dutch insolvency rate to drop somewhat, along with that of a few other countries. The credit insurer forecasts that this trend for the Dutch will continue into 2011.

The index does not provide an overview of the monetary value of the insolvencies, nor does it offer a consumer insolvency index.