Things are still quiet in the bankruptcy offices

The bankruptcy statistics show no abnormalities so far. But that could soon change. Experts expect the number of corporate bankruptcies to rise massively in the coming months.

Step by step, the government has erected a protective wall in recent months. The goal: to delay the consequences of the Corona crisis for the economy, at least for some time. A statutory standstill in the debt sector, interest-free loans guaranteed by the federal government, a freeze on payment reminders for social security contributions and the tried and tested short-time working scheme: a number of measures have been taken to ensure that companies survive the worst phase of the crisis. In the hope that as many of them as possible can stay afloat.

A glance at the statistics of company bankruptcies shows that the measures are working - at least for the moment. In the first five months of this year, the number of company bankruptcies across Switzerland actually decreased by 23% compared to the same period last year, according to the latest figures from the economic information service Bisnode D&B. For the month of May, the decline was as high as 32%. Urban Hodel, spokesman for the Swiss Trade Union Confederation, is not surprised: "The economy is still being strongly supported, and wages are being covered by the state. This will allow many jobs to be saved. Otherwise, we would have had significantly more redundancies or bankruptcies," he says.

Central Switzerland Chamber of Commerce and Industry confident
The figures are stable In Central Switzerland. A survey by our newspaper among experts in the collection and bankruptcy offices of Central Switzerland confirms this picture: there has not been an increase in corona-related bankruptcy proceedings anywhere.

Conditions in the region's commercial register and bankruptcy offices are largely normal.

But the state's protective wall may be breached in the coming months. Bisnode speaks menacingly of a "bankruptcy tsunami that will break through all over Switzerland". The question is not whether, but when, this will happen. Bisnode expects a massive increase in corporate bankruptcies in the coming months.

Adrian Derungs is fundamentally optimistic, however. The Director of the Chamber of Commerce and Industry of Central Switzerland (Industrie- und Handelskammer Zentralschweiz IHZ) points to the traditionally heterogeneous structure of the Central Swiss economy: "Depending on the canton and region, there is a different mix of industries. Looking back to the recent past before Corona, the Swiss industry in Switzerland has proved to be rather resilient to crises in Switzerland."

Past crises have shown that the most bankruptcies in the Central Switzerland region took place in construction, wholesale, retail and catering. "This picture is likely to change, to the detriment of companies from industries that have been especially affected, such as the tourism and gastro industry," says Derungs. He is under no illusions: "We will not come through this crisis without any damage; and, unfortunately, not without any painful bankruptcies." On the positive side, many entrepreneurs and their employees are adapting to the circumstances, looking for innovative solutions and proactively managing the crisis. This type of confident entrepreneurship is essential at this difficult time, he adds.

Trade union federation calling for longer period of short-time working
Urban Hodel of the Trade Union Confederation(Gewerkschaftsbund), meanwhile, points out the demands that were recently handed over to the Federal Council. One of them is to extend the short-time working period from the current 12 to 18 months as soon as possible. In addition, the unemployment insurance(Arbeitslosenversicherungen ALV), as well as well-funded companies, should pay 100% percent of the wages for short-time working.

The burden of health insurance premiums could also be reduced – for example, by higher premium refunds and a reduction in the reserves held by the health insurance companies (Krankenkassen).