Fall in business registrations and bankruptcies in the EU in Q2 2020

In the second quarter of 2020, the quarter when COVID-19 containment measures were already in place in all Member States, the number of registrations of new businesses saw a significant drop (Eurostat).

Generally, the number of registrations of new businesses has increased in the EU since 2015 until the end of 2019, and the trend was broken only in the first and second quarter of 2020.

During the same second quarter of 2020, an even sharper fall* in the number of declarations of bankruptcies was noted.

Since 2015, there has been a clear downward trend with a sharp decrease in the first and second quarter of 2020.

According to Eurostat, the decrease of registrations and bankruptcies may be largely explained by the fact that the respective administrations responsible for the recording of registrations and bankruptcies were temporarily not accessible or closed and therefore these events could not be reported immediately, but with a delay.

Governments may also have allowed additional time for completing the administrative procedures.

Finally, for bankruptcies, government measures supporting businesses during the crisis may have allowed businesses that would otherwise have filed for bankruptcy to continue their activities.