Status update March 3, 2025 on EU Harmonisation Efforts
The Insolvency law Harmonisation Efforts of the EU are gathering momentum. The original proposal is still out there and discussed in Brussels. Even the Dutch Financial Timed (FD) reported on this topic which is normally far away from the headlines in the Dutch press.
In December 2024, Council reached a compromise on certain aspects of the original proposal. Again the FD reports and even the Secretary of the State of the Ministry of Justice and Safety Struycken takes the time talk to the FD reporter after the compromise is made public. The Dutch government seems to be pretty active, see page 9 and 10 of this report to the Dutch Parliament.
EPRS, the European Parliamentary Research Service issued in January 2025 a report on the economic perspectives of harmonisation of insolvency law. I quote from that report: “The Commission has set the general objectives to (i) maximising the share of debt recovered (recovery rate), (ii) at the highest speed and lowest cost possible, and (iii) with a
predictable and fair distribution of recovered value among creditors.” It would indeed be great if the EU Harmonisation efforts will lead to that. With 27 Member States discussing their internal insolvency law, it is a challenge. From the Council compromise of December 2024, it is already clear that the original proposal is going to be watered down and that much of the implementation will remain in the hands of the member states thus no full harmonisation.
Meanwhile the rapporteurs ad shadow rapporteurs are meeting the stakeholders. For those who are interested, those activities are fairly transparent and are available on the Legislative Observatory website of the proposal.
More progress on EU Harmonisation is to be expected in 2025. On March 6 or 7, new discussions will be held in Council, so it appears from this publication of the Dutch government. Chapters of the proposal which will be discussed are most likely the creditors’ committee, the pre-pack and the microenterprises. The Dutch government is pro pre-pack (be it that the current proposal to detailed is). Less positive is the Dutch government on the chapter on microenterprises, which might lead to lack of supervision and abuse of liquidation proceedings.
Interesting note in this publication: the Dutch government suggest also harmonisation of the law of secured credit. Will we be getting another proposal soon?