Increase in Bankruptcy Rates Among Businesses Remains Steady
Frank Talk on French Business Failures
Still climbing, business collapses in France ain't showing any signs of slowing down just yet. In the initial quarter of 2025, a staggering 17,897 companies dashed into legal wranglings, including safeguard proceedings (391), judicial reorganization (5,240), or direct liquidation (12,266). This bump up, courtesy of stats given on April 28 by the National Center for Judicial Administrators and Judicial Mandatories (CNAJMJ), indicated a 2.3% increase compared to the first three months of 2024[1][2].
The upward trend only accelerated after 2022, with the demise of the "whatever it takes" policy, energy crisis, and inflation pushing bankruptcies sky-high. With a total of nearly 66,000 companies tumbling in 2024, compared to just over 51,000 in 2019, before the COVID-19 pandemic and the Russian invasion of Ukraine[3].
François Desprat, CNAJMJ's president, reckons we can't deny a relative "stabilization" happening now[4]. "We wound up 2024 with a 17% surge in bankruptcies compared to 2023," Desprat recalls.
The Economic Burden of Business Failures
What lies behind these collapsing businesses? To grasp the bigger picture, you gotta dig deep into the economic context and business landscape [5].
Economic Uncertainties
The economic downturn, relentless inflation, and surging bankruptcies reveal the immense obstacles faced by businesses in France. The situation demands the Unemployment Insurance step in to help those hit by job losses [1].
Economic Conditions Before 2023
Prior to 2023, the economic climate was more mellow, with space for businesses to thrive. However, even before the COVID-19 pandemic and Russian invasion of Ukraine, uncertainty loomed large [6].
Current Trends
Inflation Woes
Rising inflation and price increases have become significant pain points for businesses in France, paralleling international trends. These factors escalate the risk of bankruptcies [1][2].
Wave of Bankruptcies
A noticeable surge in bankruptcies swept across recent years, driven by economic uncertainty, inflation, and supply chain issues [4].
Comparison to Previous Years
Before the Pandemic (2019)
Prior to the pandemic, global health crises didn't weigh heavily on businesses in France as much as economic factors like market competition and innovation dynamics [7].
Pandemic Period (2020-2022)
During the COVID-19 pandemic, businesses had to tackle exceptional challenges like lockdowns, reduced consumer spending, and supply chain disruptions, which supercharged the risk of bankruptcies [8].
Post-Pandemic (2023-2025)
Presently, the economic slowdown and inflation are major players in the bankruptcy arena, mirroring challenges faced during the pandemic, but with different underlying causes [8].
Overall, businesses in France have been swimming against the tide since the pandemic, their struggle worsened by recent economic challenges like inflation and economic slowdowns. In this tough environment, businesses must adapt and innovate to stay afloat.
- The surge in business failures in France, as highlighted in 2025, indicated a worrying increase in liquidation, safeguard proceedings, and judicial reorganization, with inflation being one of the significant pain points.
- Despite the staggering 17,897 businesses that collapsed in the initial quarter of 2025, François Desprat, CNAJMJ's president, suggested a relative "stabilization" happening now compared to the previous year.
- As the economic downturn, inflation, and surging bankruptcies pose immense obstacles for businesses in France, France's finance sector must safeguard these businesses and support them in adapting and innovating to stay afloat.
- With the continued economic slowdown and inflation, businesses in France in 2025 are faced with challenges similar to those during the pandemic, albeit with different underlying causes, making the need for financial safeguards and support even more crucial.
