checkSURE - Global Bankruptcies

checkSURE WORD WATCH - Global "Bankruptcies"

"Bankruptcies" is a dreadful word - difficult to spell for anyone who does not have English as a first language and enough to put the fear of God into most owner managers in any language. The last six months has seen a string of announcements on bankruptcies world-wide.

Today, the London Evening Standard reports that Germany suffered record bankruptcies in the first quarter with 24,500 firms and individuals going bust, up 27 percent on the year. It went on "Banks are squeezing small firms, overseas investment is shrinking and the global downturn is hurting. Corporate failures accounted for 9750 of the casualties. More than 40,000 failures are likely this year, up from 37,500 in 2002, Germany's statistical office said. The total cost to the economy last year is estimated at around £17 billion."

Across the English Channel things are little better bankruptcies wise. In early February, according to a recent report by Sfac-Euler, 42,897 French businesses went bankrupt in 2002, up 2.1 per cent on 2001. Business services companies were hit particularly hard, with bankruptcies increasing by 12 per cent. This is the first such increase after five consecutive years of bankruptcy decline in France.

Both these lessons are being reprinted and sent to all supporters of the euro for the UK that are known to the checkSURE team (admittedly they are few and diminishing in number!).

Three days ago in the east, bankruptcies were also a topic of conversation. The Baltic news agency announced that "Contrary to Europe (sic) where the number of bankruptcies shot up 22 percent in 2002, the corresponding indicator in Estonia is declining year by year Krediidiinfo (Credit Information) reports. Whereas in 2001 courts in Estonia declared 257 firms bankrupt, last year 242 companies had to shut down because of insolvency, it appears from a survey completed by Krediidiinfo." Given that Estonia is one of the most wired countries on the face of the earth this encouraging news on bankruptcies is of little surprise to us.

Even further east and more recently, 16 May 2003, the Financial Times reports that “The reduction of surplus capacity in Japan's economy slowed in April as corporate bankruptcies fell for the fourth consecutive month. Bankruptcies were down 7.7 per cent from the same period last year, and 3.4 per cent lower than in March, Teikoku Databank said yesterday.”

Whilst on 19 May the Korea Times said that: “Corporate bankruptcies rose to their highest level in 27 months last month due to the continuing economic slowdown, the Bank of Korea reported yesterday. The central bank said there were 507 corporate bankruptcies in April, up 56 from March, with bankruptcies reaching 202 and 305 in Seoul and provincial areas, respectively. The figure was the highest level since hitting 512 in January 2001.” However, more encouragingly, the number of new start-ups in the South Korea’s eight metropolitan cities totalled 3,030, up from 3,007 the previous month. In the meantime, the nationwide dishonored bill ratio slid 0.06 percentage points to 0.08 percent in April from March.

Clearly its time for checkSURE to make its way over to the Korean peninsula – check this space for further news on checkSURE word watch “bankruptcies”.

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