Cyprus recorded the EU’s second-steepest fall in business bankruptcy declarations in the second quarter of 2026, although Eurostat warned that the percentage was amplified by the island’s small number of cases.

Filings fell by 41.7 per cent from the first quarter, behind only Malta, where they dropped by 50 per cent, according to Eurostat figures released on Monday. Slovakia recorded the third-largest decline at 33.5 per cent.

The fall reversed a 9.1 per cent increase in Cyprus during the first three months of the year compared with the final quarter of 2025.

However, Eurostat said the absolute number of bankruptcy declarations in smaller countries such as Cyprus and Malta is low, meaning that a relatively small change in cases can produce a sharp quarterly swing.

The picture across Europe was markedly different. Bankruptcy declarations rose by 5.7 per cent in the EU and by 6.9 per cent in the euro area, reaching their highest EU level since the first quarter of 2019.

That followed declines of 2.4 per cent in the EU and 2.3 per cent in the euro area during the opening quarter of the year.

Estonia recorded the largest increase between April and June, at 31.8 per cent, narrowly ahead of Greece at 31.6 per cent. Croatia followed with a rise of 20.5 per cent.

Among the bloc’s larger economies, bankruptcy filings increased by 3.2 per cent in France and 2 per cent in Spain, while Italy recorded a marginal decline of 0.5 per cent.

At the same time, Cyprus continued to record growth in new business registrations, although the pace slowed. Registrations increased by 1.4 per cent from the previous quarter, compared with growth of 4.1 per cent during the first three months of the year.

The island again moved against the wider European trend, as registrations fell by 0.5 per cent across the EU and by 0.1 per cent in the euro area.

Ireland recorded the strongest increase, at 20.4 per cent, followed by Belgium at 8.2 per cent and Sweden at 7.6 per cent.

By contrast, registrations fell by 24.2 per cent in Luxembourg, 12.4 per cent in Lithuania and 8.2 per cent in Denmark.

The detailed breakdown also showed a sharp difference between sectors. Registrations declined in five of the eight areas covered, led by industry with a 3.6 per cent fall. Accommodation and food services followed with a drop of 3.4 per cent, while registrations in education and social services decreased by 3.2 per cent.

Information and communication stood out with an 8.8 per cent increase, while construction recorded growth of 1 per cent. Financial services were unchanged.

Bankruptcies also increased in five of the eight sectors. Education and social activities recorded the largest rise, at 21.1 per cent, followed by transport at 11.4 per cent and financial services at 6.8 per cent.

Nevertheless, filings fell by 2.6 per cent in accommodation and food services, 1.7 per cent in construction and 1.2 per cent in trade.