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The EU is a hugely beneficial marketplace for companies that trade with customers in other member states – but when things go wrong, that can leave corporate insolvencies straddling EU borders too.

Cross-border corporate insolvencies can become complex, with creditors in multiple different EU member states all keen to get what they are owed out of a company before it ceases trading completely.

Now the European Council has published plans to simplify cross-border insolvency proceedings, while making it more likely that troubled companies will be recovered to a good trading position.

Council president Minister Rasnacs said: “The regulation creates an improved EU insolvency regime which aims not only to better protect the interests of creditors, but also provides for a regulatory framework.

“I believe this new regulation is definitely a step in the right direction as it lays down more effective rules on cross-border insolvency proceedings.”

According to the European Council’s figures, there are 200,000 corporate insolvencies in the EU each year, affecting around 1.7 million jobs.

One in four of these have some kind of cross-border element to them, which should be simplified under the proposed regulations.