Insolvency and the internal market

Companies and individuals in the EU are increasingly extending their business activities to new EU countries. If they become insolvent, this can directly affect the proper functioning of the internal market.

The Council set up the first common framework for insolvency proceedings in Europe, a regulation on insolvency proceedings.

These rules on cross-border insolvency have been updated and modernised in 2015. The new rules shift focus away from liquidation, helping businesses overcome financial difficulties, all the while protecting creditors' right to get their money back.

The new regulation http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32015R0848 entered into application on 26 June 2017.

Insolvency initiative

As a next step, the EU is leading an insolvency initiative that would allow viable businesses in distress to be rescued and honest but bankrupt individuals to be given a second chance.

Proposal for a Directive of the European Parliament and of the Council on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures

Research and key documents

This comparative study on substantive insolvency law throughout the EU also includes an analysis of the 2014 recommendation on a new approach to business failure and insolvency.

Key policy documents

Capital markets union action plan:

Action plan on building a capital markets union, COM(2015) 468 final, 30.9.2015 (Insolvency on pp. 24-25)

Economic analysis accompanying the action plan on building a capital markets union - SWD(2015) 183 final, 30.9.2015 (insolvency on pp. 73-78)

Feedback on the green paper "Building a capital markets union" SWD(2015) 184 final, 30.9.2015 (Insolvency on pp. 59-60)

Communication - Upgrading the single market: more opportunities for people and business, COM(2015) 550 final, 28.10.2015 (Insolvency on p. 6)

Communication – Towards the completion of the banking union  COM(2015) 587 final, 24.11.2015 (Insolvency on p. 10)

Green paper on retail financial services – better products, more choice, and greater opportunities for consumers and businesses, COM(2015) 630 final, 10.12.2015 (Insolvency on p. 25)

'Five Presidents' Report': completing Europe's economic and monetary union, 22.6.2015