# Corporate financial distress in Europe and Middle East > Live situation record from CLSTR: https://clstr.news/situations/corporate-financial-distress-in-europe-and-middle-east > Updated: 2026-09-03T02:06:54.000Z. Sources: 3. Developments: 2. Corporate financial instability is increasing across Europe and the Middle East. An Alvarez & Marsal report indicates that the proportion of financially distressed companies has risen to 9.2%, an 18.4% increase over three years and the highest level in four years. Falling profits, driven by geopolitical instability in the Middle East and rising energy and supply chain costs, are identified as primary drivers of this trend. This trend is reflected in growing pessimism among European chief financial officers. A Deloitte survey shows that 48% of CFOs are less optimistic about their companies’ financial prospects than they were three months prior. Geopolitical risks, including potential energy shocks and Middle East conflicts, have surpassed general economic uncertainty as the primary concern. While many companies anticipate revenue growth, approximately 36% expect profit margins to decrease, leading to more cautious investment strategies. ## Timeline ### 2026-09-03: European CFO pessimism reaches four-year high amid geopolitical risks A Deloitte study reveals European CFOs are at their highest level of pessimism in four years, driven by geopolitical risks, energy costs, and Middle East tensions affecting profit margins. 3 sources. https://clstr.news/cluster/european-cfo-pessimism-reaches-four-year-high-amid-geopolitical-risks ### 2026-08-10: Alvarez & Marsal report shows rising corporate distress in Europe and Middle East Alvarez & Marsal reports that corporate distress in Europe and the Middle East has reached a four-year high of 9.2%, driven by falling profits and geopolitical tensions. 3 sources. https://clstr.news/cluster/alvarez-marsal-report-shows-rising-corporate-distress-in-europe-and-middle-east --- Cite as: Corporate financial distress in Europe and Middle East. CLSTR, https://clstr.news/situations/corporate-financial-distress-in-europe-and-middle-east