Modernising insolvency rules: Viable companies should be given a second chance
MEPs adopted today modernised insolvency rules, which aim at minimising bankruptcies and job losses and address the cross-border aspects of insolvency in the EU, which can directly affect the proper functioning of the single market. The text foresees preventive restructuring procedures available for debtors in financial difficulty, procedures leading to a discharge of debts if creditors agree, and measures to increase the efficiency of restructuring and insolvency. Liberals and Democrats stressed today the importance of giving a second chance to viable companies and the overall need to encourage entrepreneurial activities, especially with a view to small start-ups.
Antonio Marinho e Pinto, Shadow rapporteur on this file, said today:
“We want to encourage entrepreneurship and allow for better-safe-than-sorry measures without stigmatising failed honest business endeavours. With this proposal, viable companies are given a second chance, which otherwise would have been threatened by bankruptcy. Through this, the legitimate interests of honest entrepreneurs, creditors, workers and economy in general, will be protected.”
Enrique Calvet Chambon, Rapporteur of the opinion of the Committee on economic and monetary affairs, added:
"Today, some 200,000 companies in the EU (600 a day) go bankrupt and 1.7 million jobs are lost every year. With this directive, a second chance should be given to companies if the debtor acted in good faith. This directive is essential to create a lifesaving culture in the EU, encourage business activities, allow better measures to be established without stigmatising business failure, so that an appropriate balance has been struck between the interests of debtors and creditors. A significant percentage of lost jobs related to the bankruptcy of companies could be saved with this minimum level of harmonization in all the Member States."