, Columnist
We Can't Hold Off the Bankruptcy Wave Forever
A cataclysm may yet be avoided, but insolvencies won’t stay this low.
More of this kind of thing.
Photographer: TOLGA AKMEN/AFPThis article is for subscribers only.
When Covid-19 first plunged Europe into lockdown last spring, there were plausible predictions of a tidal wave of corporate insolvencies. That hasn’t happened, at least not yet.
The number of companies declaring bankruptcy declined by about a fifth in the euro area last year, even as economic output contracted more than 6%. Firms were saved by overwhelming government support, including hundreds of billions of euros of public loan guarantees, wage subsidies and loan forbearance by banks. Rules were relaxed on when businesses must file for insolvency.