The number of corporate insolvencies increase

Corporate insolvencies, the situation when a business cannot afford to pay back its loans or its other bills and goes bankrupt, are expected to rise this year. In many European countries, they are returning to the pre-pandemic level, but for example for the UK and Spain much higher levels were forecast. According to the latest information, the UK has currently as many insolvency cases as in 2009, during the latest major crash of economy. In 2019, the numbers in Western Europe were lower than in ten years, and in 2020, the insolvencies were massively postponed by states pumping money to businesses to keep them going. During the pandemic, many companies also took loans to keep their business afloat, but the situation has not got any better for them, so now they are unable to pay back. In the case of UK, analysts suggest that the reasons for high numbers of insolvencies lie in the high costs of borrowing money set by the Bank of England and the simultaneous high inflation, as well as the ending of government support – proving that the economical crisis did not start or end with the pandemic, and these measures were to artificially prevent a sudden crash and to prepare the economy for a repartition. Similar phenomenon is observed world wide.

It was not only smaller businesses who received pandemic support money, but also many monopolies did. But now, especially the small or medium companies are struggling to afford the rising costs and some of them are going bankrupt or are bought by larger companies. In the US it is seen that the number of bankruptcies are on the highest level since 2010. Many workers are being laid off. At the same time, many monopolies have been reporting record high profits, for example in the US the profits of some companies are the highest in 70 years, even though the general trend is that profit growth is slow. Interestingly, also in the case of UK the insolvencies are affecting the smaller businesses, as in the case of the larger companies the levels of insolvencies remain the same as in 2019. Therefore, what can be seen is intensifying monopolization. This is one example of that it is not true that the current economical crisis is caused by the pandemic or by the war of aggression against Ukraine, but it refers to the general crisis of imperialism, and shows its increasing rottenness.