Commission proposes new approach to business insolvency in Europe

© Fotolia - Leszek Maziarz
The European Commission is for the first time presenting a set of European rules on business insolvency today. Well-functioning insolvency and restructuring systems are key to supporting economic growth. This initiative aims to enhance the "rescue culture" in the EU. It will allow companies in financial difficulties to restructure early on so as to prevent bankruptcy and avoid laying off staff. At the same time it provides rules on giving honest entrepreneurs a second chance of doing business after a bankruptcy.

This initiative is part of the Capital Markets Union Action Plan and the Single Market Strategy. It will contribute to removing key barriers to the development of capital markets in the EU by providing legal certainty to cross-border investors and companies operating across the EU. The new rules will help attract investors, create and preserve jobs, as well as help economies absorb economic shocks. Currently, too many viable companies in financial difficulties are steered towards liquidation rather than early restructuring and very few honest entrepreneurs get a second chance.

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