| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2012) 742 final (12.12.12) |
| Publication Date | 12/12/2012 |
| Content Type | Policy-making |
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As Europe is facing a severe economic and social crisis, the European Union is taking action to promote economic recovery, boost investment and safeguard employment. It is a high political priority to take measures to create sustainable growth and prosperity. The debt crisis has a direct effect on people, jobs and businesses. The economic crisis has led to an increase in the number of failing businesses. From 2009-2011, an average of 200,000 firms went bankrupt per year in the EU. About one-quarter of these bankruptcies have a crossborder element. About 50% of all new businesses do not survive the first five years of their life. 1.7 million jobs are estimated to be lost due to insolvencies every year. The EU Regulation on insolvency proceedings was adopted to deal with issues of crossborder insolvency through the proper recognition and coordination of national insolvency proceedings and in order to avoid incentives for the parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position (forum shopping). As its scope is cross-border, the Regulation however did not harmonise insolvency laws used for national insolvency cases. Thus, differences in national laws remain, and as a consequence, economic activities may be lost, creditors recover less than they otherwise would, and creditors from different Member States are not treated equally. The Commission is currently proposing the modernisation of the EU Regulation on insolvency proceedings but the changes proposed concern only cross-border cases. This Communication highlights those areas where differences between domestic insolvency laws have the greatest potential to hamper the establishment of an efficient insolvency legal framework in the internal market. It seeks to identify the issues on which the new European approach to business failure and insolvency should focus so as to develop the rescue and recovery culture across the Member States. |
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| Source Link | http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0742:FIN:EN:PDF |
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| Subject Categories | Law |
| Countries / Regions | Europe |
