According to the most recent survey compiled by Euler Hermes, Romania is among the first ten countries in Europe in respect of the companies which entered into insolvency proceedings in 2015. The first positions are occupied by France with over 63.000 registered insolvency cases, Hungary with over 35.000, Germany with around 23.000, Great Britain, Italy, Turkey and Russia. Of all the 23 countries under scrutiny, Greece is on the last place with only 362 insolvency cases declared in 2015.
The survey also brought up a projection of this phenomenon in 2017 and there has been a decrease of 5% in the insolvency cases in our country while the prognosis in respect of the other countries shows either a flat or decreasing trend – for example, in Hungary, a decrease of no less than 25% has been forecast.
Radu Lotrean, the first Romanian President of Insol Europe and co-founder of CITR presented in detail the dynamics of insolvency cases in Europe at the national Conference “Reforms of the New European Regulations in respect of Insolvency Proceedings”, which was attended by university professors, magistrates, lawyers, insolvency practitioners, representatives of the Ministry of Justice and of the Romanian Trade Registrar.
“It is not a novelty that the number of insolvency cases in Romania is decreasing year by year. In 2014, 20.696 proceedings commenced, in 2015 their number reduced to half while at the end of last year only 8371 cases were filed, which represents a subsequent decrease of 20%. Such decrease in the number of insolvency cases stems from an economic growth at the national level; nevertheless, the highest decrease has been registered in companies without financial statements or without operations, which represent more than half of the total insolvent companies. Nonetheless, our country is part of the trends regarding the insolvency phenomenon at a European level”, assets Radu Lotrean.
For example, in Germany, following the record decrease in the insolvency cases – 22.750, it is forecast that the figure would remain steady at around 23.000 cases after seven years of continuous decrease. In spite of a slow economy, Italian companies are also recovering. In this respect, analysts forecast a decrease of 5% in 2017 which is conditioned by the methodic settlement of bank vulnerabilities. Nevertheless, Italian companies remain vulnerable due to a trust crisis which is connected to a prolonged period of political instability: the number of bankruptcy cases remains with 40% higher than the pre-crisis average, shows Euler Hermes. In 2016 France falls back on 60.000 insolvency cases for the first time after 2011 thus registering a significant decrease which is more prevalent in the area of construction due to the fiscal benefits granted to companies and to more advantageous loan conditions. However, the number of companies who filed for insolvency is still 25% higher than it was in the period before the crisis. In Spain the number of insolvency cases is 3.5% higher than before the crisis but specialists expect it to slowly decrease by 5% this year. The survey brings to light a statistic jag – here insolvency cases increased by 60% in 2016 due to the fact that the new organization of the society triggered numerous insolvencies and also because of administrative reasons: the IT system from the tax administration artificially preserved at an inferior level the figures in respect of insolvency cases. Therefore, in 2017 the number of bankruptcy cases will be reduced to 19%, mainly due to a statistic adjustment.
“Specialists expect that Great Britain shall be the only European country with a noticeable increase in the number of insolvency cases. In 2016 there was a decrease of 3% for the fifth consecutive year and the British economy seems resilient following Brexit. This year, however, this trend will be reverted due to a slowdown of economic grow and the depreciation of the pound”, Radu Lotrean also specifies.
Radu Lotrean is a co-founder of CITR and the first vice president of INSOL Europe. Starting with this autumn he is to become the first Romanian President of this prestigious organization.
INSOL Europe is an European organization of insolvency practitioners that was founded in 1981 with a view to facilitating the exchange of information, ideas and good practices among its members and to strengthening collaborations with other European institutions with the same profile and with other relevant international institutions.