The number of insolvencies among German personal and corporate entities surged in July, reaching levels unseen in a decade, according to the Leibniz Institute for Economic Research (IWH). This spike, particularly pronounced in the manufacturing sector, saw 1,406 insolvencies—a figure surpassing even the peak in April 2024.

The 20% month-over-month increase represents a 37% rise compared to July 2023 and a striking 46% above the pre-pandemic July average from 2016 to 2019. The July uptick exceeded IWH's earlier forecasts, partially due to the high number of working days.

All sectors experienced a rise in bankruptcies, with manufacturing hit hardest. From 100 insolvencies in June, the number climbed to 145 in July, marking a new record since the IWH began sector-specific tracking in January 2020.

In the end, the bubble economy, which was built on the illusion of eternally negative real interest rates, cannot shoulder even the smallest increases in interest rates. The dream of the green transformation agenda has been shattered! The reality for Germany and the eurozone is only just beginning.