BUSINESS INSOLVENCY : COMMISSION WANTS TO GIVE SECOND CHANCE TO ENTREPRENEURS.

The European Commission is revising the regulation on cross-border business insolvency, helping to give otherwise viable businesses a second chance'. Current rules (2000) define the competent authorities, the applicable law and plan for decisions to be recognised. The rules also outline coordination procedures when proceedings are open in several member states.

But the regulation covers liquidation rather than the "rescue and recovery" of struggling businesses. The aim of the revision is precisely to shift the emphasis of the rule by facilitating restructuring and giving a second chance to honest-failed entrepreneurs.

Around 200,000 firms go bankrupt in the EU each year. A quarter of these bankruptcies have a cross-border element. But the Commission highlights evidence suggesting that businesses created after a first bankruptcy are generally more successful than the initial venture, and last longer than the...