This chart, from the IMF’s latest update to its World Economic Outlook, piqued our interest: That’s right, bankruptcies have fallen through the floor, despite all of the world’s major economies (bar China) shrinking in 2020. It’s mainly thanks to the government support which has propped up firms during the pandemic. Here in Germany, for instance, the normal rules of insolvency have not applied, enabling over-indebted companies to remain in business. These companies can, in much of Europe, also ask governments to cover a big chunk of the wages of their furloughed workers. There are good reasons for this protection. Most of the firms that have been hard hit by the pandemic are smaller ones, especially those operating in the services sector. While larger companies can
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This chart, from the IMF’s latest update to its