LUXEMBOURG / RankWire.AI / – European Union business formation declined during the second quarter of 2026, even as the number of bankruptcy filings surged sharply. On a seasonally adjusted basis, new business registrations dropped by 0.5% compared to the first quarter. Meanwhile, bankruptcy declarations grew by 5.7% in the same period, according to data released by Eurostat on Monday. This increase pushed EU bankruptcy figures to their highest point since the first quarter of 2019. The latest data encompasses both registration and bankruptcy figures across the entire business sector within the bloc.
The euro area exhibited a similar trend during the same period. Business registrations decreased by 0.1% from the previous quarter, while bankruptcy declarations rose by 6.9%. These figures follow declines in both metrics during the first quarter of 2026, when EU business registrations had fallen 0.9% from late 2025, and bankruptcy declarations had decreased 2.4%. The second quarter thus saw a further reduction in new registrations combined with an uptick in bankruptcy filings, reflecting a challenging environment for businesses.
Five out of the eight economic sectors analyzed experienced a drop in registrations during the second quarter. Industry experienced the steepest decline, with registrations falling 3.6% from the previous quarter. The accommodation and food services sector decreased by 3.4%, and education and social services saw a 3.2% decline. Conversely, information and communication registered an 8.8% increase. Construction rose by 1.0%, while financial services remained stable with no quarterly change. In nearly all sectors, registration levels continued to stay above late 2019 figures.
Bankruptcy filings climb across five key sectors
During the second quarter, five of the eight sectors experienced an increase in bankruptcy declarations. The education and social activities sector saw the most significant rise, with a 21.1% increase. Transport reported an 11.4% growth, and financial services saw a 6.8% uptick. Conversely, three sectors reported decreases: accommodation and food services fell 2.6%, construction declined 1.7%, and trade decreased 1.2%. Overall, in the business economy, bankruptcy levels recorded in the second quarter remained higher than those observed in the fourth quarter of 2019.
Country-specific data revealed significant disparities across the EU. Luxembourg experienced the largest quarterly drop in new business registrations at 24.2%. Lithuania followed with a 12.4% decrease, and Denmark reported an 8.2% decline. Ireland, however, registered the strongest growth, with a 20.4% increase. Belgium’s registrations grew by 8.2%, and Sweden saw a 7.6% rise. Eurostat calculates national registration indices from administrative records, adjusting quarterly figures to facilitate better comparisons among countries with different registration systems.
Country-specific data highlight notable variations in bankruptcy filings
Estonia experienced the largest quarterly increase in bankruptcy declarations at 31.8%, followed closely by Greece with a 31.6% rise. Croatia also saw a 20.5% increase. Malta recorded the most substantial decrease, dropping 50.0%, with Cyprus declining 41.7%, and Slovakia decreasing 33.5%. Smaller economies tend to show larger percentage changes due to their lower absolute bankruptcy numbers. Consequently, these quarterly figures primarily reflect shifts in declarations rather than the total count of business closures.
The data track legal registrations and the initiation of formal bankruptcy procedures rather than completed business closures or new startups. A registration indicates a legal entity entering the relevant administrative system during the quarter, while a bankruptcy declaration signifies a legal process commencing for a company. However, this process does not always mean a business ceases operations permanently. Since 2021, EU countries have been providing quarterly data on registrations and bankruptcies as part of their European business statistics obligations.