Every year 200,000 enterprises in the EU go bankrupt which results in the loss of 1.7 million jobs. In many cases this can be avoided, announced the European Commission.

The EC has proposed unified standards in the restructuring of enterprises in the 28 member-states. During the reform procedures for a given firm with financial problems, its employees will be given additional guarantees that they will keep their jobs.

Brussels wants more efficient procedures with respect to insolvency and debt cancellation which will reduce red-tape and protracted legal suits.

The heads of small and medium-size ventures will be given a second chance to revive them and keep their staff. The draft directive stipulates that entrepreneurs will be able to start their businesses again via unconditional cancellation of their debts for a maximum period of three years.

“At the moment, every second European says that they do not want to start a business because of fear of failure,” explained European Commissioner for Justice Věra Jourová.

The proposal is also aimed at greater financial stability – thanks to the new procedures for restructuring, the number of firms which cannot service their credits to banks will be reduced.

The directive will be reviewed by the governments of the member-states and the European Parliament.