Why is it hitting the middle class particularly hard?
Micro-enterprises with up to ten employees account for the largest share of insolvencies. In this segment, around 19,500 companies filed for insolvency, representing 81.6 percent of all cases. Small and medium-sized enterprises (SMEs) have fewer financial reserves to weather prolonged periods of hardship. The combination of increased energy costs, higher interest rates for refinancing, rising personnel costs, and growing bureaucracy is disproportionately affecting smaller businesses. Unlike large corporations, many cannot negotiate more favorable terms on the capital markets and are more dependent on bank loans, the conditions of which have deteriorated significantly since the…