Hundreds of bankruptcies expected over the coming months

Businesses closed in Palma, Mallorca during the pandemic.

The moratorium was established because of the pandemic. | Efe

Andrew EdePalma01/07/2022 08:11

The Spanish government's moratorium on insolvency proceedings has come to an end. As a consequence, it is expected that hundreds of small businesses in the Balearics will file for bankruptcy over the coming months.

Jordi Mora, president of the Pimem federation of small to medium-sized business associations, doesn't anticipate an "avalanche", but rather "a constant trickle" starting in September.

Some economists have been critical of the moratorium. In the long run it has meant the postponement of a problem that could only worsen over time. Pau Montserrat, a partner at Futur Legal, a company which specialises in bankruptcy administration, believes that there will be "a record need for insolvency proceedings" in the Balearics.

In his view, the moratorium was "questionable as a solution". It made sense for businesses with prospects for improvement after the pandemic, but this is not the case for many companies which have filed for bankruptcy much earlier.