European firms face insolvency wave as courts order COVID aid repayments

The Austrian Supreme Court ruled that COVID‑19 state aid must be repaid on a group‑wide basis, overturning previous calculations that applied limits per subsidiary. The decision obliges companies that received excess funds—such as a major rest‑stop chain that was overpaid by €1.42 million—to return the money, raising fears of a wave of corporate bankruptcies.

In Germany, insolvency specialists observe a similar surge in filings. They attribute the trend to the withdrawal of pandemic support and the retroactive enforcement of repayment obligations, which push financially fragile firms—both long‑standing midsize enterprises and newer start‑ups—into liquidation. The combined legal developments threaten thousands of jobs and could strain courts and restructuring professionals across the two economies.