The escalating number of insolvencies in the German economy underscores the detrimental effects of overreliance on a zero-interest-rate environment in Europe, rendering it non-competitive as capital markets inch towards positive interest rates. Without the European Central Bank propping up interest rates with its monetary policies, the zombie economy would crumble like a yeast dumpling. The latest data from the Leibniz Institute for Economic Research (IWH) reveals a staggering surge in insolvencies among individuals and corporations in April.

Surpassing the previous record set in March by an additional five percent, April's figures represent a 47 percent increase compared to April 2023 and a 40 percent surge over the April averages from 2016 to 2019, pre-dating the COVID-19 pandemic. Various sectors, including construction, retail, services, as well as smaller industries like information and communication, have witnessed record-high insolvency rates.

Analysis by the IWH indicates that the top decile of companies reporting insolvency in April accounted for approximately 34,000 lost jobs. This figure marks a threefold increase compared to the previous month, doubling the numbers from the same period last year, and representing 360 percent of the average April figures pre-pandemic. Not since July 2020 has the IWH recorded a higher number of job losses since the institute began its survey in 2016.