Pan-European report: Greek corporate insolvencies down 42.7 pct in 2015

Greek business bankruptcies fell 42.7 pct in 2015, according to a “Corporate insolvencies in Europe 2015/2016) annual pan-European report, conducted with the participation of ICAP.

The total number of bankruptcies in Western Europe was 174,891 in 2015, from 182,132 in 2014 (a decline of 4.0 pct, or 7,191 enterprises), offering the first signs of economic recovery after several years of rising numbers and for the first time since 2010/2011 (-0.7 pct).

Greece recorded the highest percentage decline (-42.7 pct), followed by Spain (-25.1 pct), Holland (-20.7 pct) and Finland (-12.9 pct). Only four countries recorded a positive trend, Portugal (7.6 pct), Switzerland (3.9 pct), Luxembourg (3.3 pct) and France (0.9 pct).

The report noted, however, that in some cases the number of insolvencies represented only a fraction of total corporate insolvencies in a country, as very small enterprises prefer to close down operatons without triggering official bankruptcy procedures. In Mediterranean countries, these cases are multiple the number of official corporate insolvencies annually. Also bankruptcies by self-employed people are not registered as corporate insolvencies. So-called GIIPS states (Greece, Ireland, Italy, Portugal and Spain) seemed to have doubled the number of insolvencies during the crisis compared with 2008, although these countries show signs of improvement and recovery in the last few years.

On the contrary, countries such as the UK and Germany have less corporate insolvencies compared with 2008, Scandinavian states report a decline in recent years, although at higher levels compared with 2008, and France is stable at 2012 levels.

In Greece, corporate insolvencies totaled 189 in 2015, from 330 in 2014, a decline of 42.7 pct, recording the higher percentage decline in European south. Greece, however, is one of the countries where only a small fraction of corporate insolvencies were made through official bankruptcy procedures.

Collection period for arrears was larger in GIIPS states, an average of 81.3 days in 2014, from 56.2 days in Western Europe on average, but slightly up from 2013.