New rules on cross-border insolvency proceedings
Struggling firms that do business across borders should get some breathing space to restructure their operations and finances so as to avoid going bust, under revised EU rules on cross-border insolvency proceedings to be debated on Tuesday and voted on Wednesday. At the same time, the new rules will clarify which member state has jurisdiction to open the proceedings, so as to prevent insolvency “forum shopping” .
A vote in favour would confirm an informal deal struck in November 2014 with the Council of Ministers, which formally approved it on 12 March.
The idea of including individuals and households in the scope of the new approach to business failure and insolvency, which aims to give potentially viable firms a second chance, will also be debated with the Commission on Tuesday.
According to the European Commission, 50,000 firms face cross-border insolvency proceedings every year, and about 400,000 people lose their jobs each year due to cross-border insolvencies.
Procedure: co-decision (ordinary legislative procedure), second reading agreement
Debate: Tuesday, 19 May
Vote: Wednesday, 20 May