Historically low number of bankruptcies partly due to corona support

Despite the corona crisis and the various lockdowns, there have never been as few companies that went bankrupt this century as in 2021. 1536 companies were declared bankrupt, according to figures from the Central Bureau of Statistics. Only in 1990 there were fewer: 9 units. In 2020, when it was already extremely quiet in the bankruptcy industry, 2703 companies went bankrupt.

Since the start of the corona crisis, employees’ organizations have been warning about an impending bankruptcy wave, but for the time being it has not materialized. Government support keeps many companies going. For example, companies have collectively been granted more than 18 billion euros in deferral to pay their taxes. They still have to transfer that money to the tax authorities in the coming years.

In addition, companies received support in 2021 to pay salaries and fixed costs. For example, through the NOW scheme, 22,500 companies receive support for paying salaries in November and December.

Little in the catering industry

Most bankruptcies were in trade, construction and financial services, but all of those sectors declined. The number of bankruptcies was remarkably low, especially in the badly hit catering sector. Fewer than 100 companies went bankrupt, putting the sector in 7th place. At the start of the corona crisis in 2020, the increase was the largest in this sector.

In November the number of bankruptcies rose slightly and for a while there seemed to be a turnaround, but in December there was again a decline.

According to the Council for the Judiciary, judges look at all the circumstances of a company when filing for bankruptcy, including the corona crisis. According to the Council, this means that judges will currently not allow companies that are essentially healthy to go bankrupt.

Economy frozen

The Central Planning Bureau warned last year that the support also keeps non-viable companies afloat.

“The current support is freezing parts of the economy to the situation at the beginning of 2020, blocking normal economic dynamics: companies closing down and new companies starting up, people finding new jobs elsewhere,” said director Hasekamp earlier in the year.

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