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Spanish bankruptcies hit the roof in 2013

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Spanish bankruptcies hit the roof in 2013
A building partly constructed in Valdemoro, near Madrid. Photo: Philippe Desmazes/AFP
12:14 CET+01:00
Bankruptcy filings soared to a record high in Spain in 2013, official data showed on Thursday, with the construction industry in particular still reeling five years after a property market crash.

The number of household and business bankruptcy filings leapt by 6.5 percent to 9,660, the National Statistics Institute said, as the economy emerged from a long recession.

Spain's economy grew slowly in the second half of 2013, shaking off a double-dip recession but still weighed down by a 26-percent unemployment rate.

The eurozone's fourth-largest economy is still overshadowed by the aftermath of a decade-long property bubble, which collapsed in 2008 destroying millions of jobs and flooding the nation in debt.

In a sign that the business sector's decline may be steadying, however, bankruptcy filings rose at a slower pace last year when compared to a 15.1 percent increase in 2011 and a 32.2 percent surge in 2012.

But the number of bankruptcy filings remains at historically high levels. 

In 2007, for example, there were only 1,147 bankruptcy filings overall.

In 2013, businesses suffered more than individuals, the data showed, with bankruptcy filings by companies surging 10.4 percent to 8,934 while those by households dropped by 25.6 percent to 726.

The building industry suffered most, representing 26.6 percent of all corporate bankruptcy filings.

Among the big names to file for bankruptcy last year were frozen fish giant Pescanova with 10,000 staff and the household product manufacturer Fagor, which employs 2,000 people in Spain.

Though bankruptcy proceedings aim to enable debt-laden businesses to restructure and emerge as viable enterprises, in Spain 94 percent of filings end in liquidation, according to brokerage Axesor.

The Spanish small business federation ATA estimates that nearly half a million small businesses have gone under since the start of the financial crisis.

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