Business executive Alice Weidel argues that the coalition of black and red parties is leading companies toward bankruptcy, citing insolvency as the ultimate outcome.
In the heart of Europe, Germany is grappling with a surge in insolvencies, a trend that has been on the rise since the beginning of 2025. The increase in regular insolvencies, particularly noticeable in July 2025, has reached levels not seen since October 2024.
The economic landscape is burdened with high energy prices, a crushing tax burden, and paralyzing bureaucracy, according to a statement made by the Alternative for Germany (AfD) on August 12, 2025. The AfD, under the leadership of Dr. Alice Weidel, Federal Spokeswoman of the Alternative for Germany, is advocating for a real economic turnaround.
The AfD's proposed economic turnaround includes lower taxes, radical bureaucracy reduction, and cheap energy. However, the party's economic plan does not mention any specific industries or sectors. The AfD is positioning itself as the strongest force to lead Germany back to success.
Industries such as transport and logistics, construction, and catering are experiencing a rapid increase in insolvency numbers. For many energy-intensive companies, the expensive conversions mandated by the enshrinement of 'climate neutrality' in the Basic Law mean the final end.
The transformation agenda of the black-red coalition led by Friedrich Merz is exacerbating the burdens on the German economy. The increase in insolvencies in 2025 is primarily driven by structural economic challenges such as declining sales, rising operating costs, energy and tariff pressures, and weakening consumer spending.
While Chancellor Friedrich Merz's transformation agenda and the economic proposals of the AfD might influence the broader economic policy environment, the current insolvency surge is more strongly linked to sector-specific downturns and macroeconomic headwinds rather than any immediate, direct policy effects from these political players.
Insolvencies rose notably in the hospitality and catering sector, with a 67% surge in insolvencies for caterers and meal service providers as of mid-2025. Corporate insolvencies overall increased by 5.3% year-on-year as of May 2025, with 2,036 insolvency applications and creditor claims around €3.2 billion. Energy costs and tariffs are cited as major contributing factors causing an economic slowdown and increased insolvencies, especially among small and medium enterprises (Mittelstand).
In summary, the insolvency rise in Germany during 2025 mainly results from structural economic issues such as inflation-driven cost increases, tariff and energy price shocks, and sectoral downturns impacting payment behavior and business viability. While Chancellor Merz’s and AfD’s policies form part of the wider political-economic context, the current surge in insolvencies appears to be primarily driven by ongoing macroeconomic and sectoral challenges rather than immediate effects of their transformation agendas or proposals.
[1] Source: Bundesanzeiger für Insolvenzen [2] Source: Deutsche Bundesbank [3] Source: Ifo Institute [4] Source: Destatis [5] Source: Insolvenz-Register des Amtsgerichts Frankfurt am Main
- The rising insolvencies in sectors, such as transport, construction, and catering, are a consequence of structural economic issues and sectoral downturns, as well as escalating energy costs and tariffs, creating an economic slowdown particularly detrimental for small and medium enterprises (Mittelstand).
- Despite political parties like the AfD advocating for an economic transformation through lower taxes, radical bureaucracy reduction, and cheap energy, the current surge in insolvencies in Germany is more significantly linked to ongoing macroeconomic headwinds and sectoral challenges rather than direct policy effects from these political actors.
