Sluggish growth in Europe's largest economy caused a sharp rise in the number of companies going bust last year, mainly due to a change in the country's laws on insolvency, data showed today.
The wave of companies going to the wall affected the jobs of at least 274,000 people, the Federal Statistics Office said.
"But the number of workers affected could be even higher, because in around one fifth of the cases which come to court, no employee figures are given," the office said.
A total of 84,428 public and private companies were declared insolvent in 2002, compared with 49,849 in 2001, but the office said the large rise was due to changes in the law which allowed individuals to declare themselves insolvent.
"For that reason, comparison with the previous year makes no sense," the office said. It said bankruptcies of traditional small and limited liability companies rose 13 percent to 24,025.
The German economy grew at its slowest rate in nine years in 2002, forcing banks to make huge provisions for bad loans.