Funny enough, the zombie apocalypse is a possible threat not only to humanity but to the economy as well. Reportedly, Germany is struggling now with the growing number of zombie companies that pose a risk to the financial stability of the country's economy.
Against the background of the coronavirus, a great number of such zombie companies is steadily soaring up, sapping the economy. Zombie companies are firms that are unable to cover debt-servicing costs from current profits over an extended period. They expanded in Germany, Europe's largest economy, after the government introduced a new law in March. According to that law, many enterprises adversely hit by the pandemic did not have to file for insolvency. Taking into account the fact that the law is planned to be extended until March next year, these companies are sure to multiply. Of course, the only right solution for companies that cannot keep afloat is to file for bankruptcy. The government’s financial support is unlikely to help them in the long term. Experts say that if the pandemic continues, 550,000 German companies may turn into zombie ones. The economy will not withhold such an invasion.
Nevertheless, the government is now spending billions to support companies facing insolvency. Experts warn that the government will only delay the inevitable. No matter how hard it is trying to postpone the wave of bankruptcies but the country will face it eventually.
