26.07.2024
A recent study conducted as part of the European OITBC project has shed light on the concerning reality facing many small and medium-sized enterprises in Europe, which are not yet adequately prepared to face and manage business crisis situations that could lead to insolvency.
The study, which analyzes the implementation of EU Directive 2019/1023 on preventive restructuring frameworks, has highlighted significant discrepancies among Member States in adopting early warning tools and restructuring procedures. Despite the European Union’s efforts to harmonize regulations, many SMEs still lack the necessary tools to promptly identify crisis signals and intervene effectively.
The research examined regulations and practices adopted in various European countries, including Italy, Spain, Portugal, and Bulgaria, extending also to Balkan countries that are candidates for EU membership such as Albania, Serbia, Bosnia and Herzegovina, and North Macedonia. The results show a heterogeneous landscape: while some nations have developed advanced early warning systems, others are still in the implementation phase.
A crucial aspect that emerged from the study is the importance of timely intervention. Companies capable of recognizing early signs of difficulty are more likely to restructure successfully, avoiding insolvency. This underscores the urgency for all countries to equip themselves with effective early warning indicator systems.
The OITBC project, funded by the European Union’s Erasmus+ program, aims to bridge the identified gaps by developing tools and skills to help SMEs prevent insolvency and ensure business continuity. The research highlights the need to create a widespread culture of business crisis prevention in Europe, especially among SMEs.
Among the best practices that emerged, Italy stands out for introducing automatic indicator systems to assess crisis risk, while Spain has focused on training and preventive consulting. In the Balkan countries that are EU candidates, the situation is more diverse, with regulations in the process of adapting to European standards.
The importance of this harmonization becomes even more evident considering the crucial role of SMEs in the European economy. With over 23 million small and medium-sized enterprises representing 99% of all companies in the EU and employing about 100 million people [Source: European Commission, 2022; Euro Central Bank, 2023], SMEs constitute the true economic engine of the continent. Their protection is not just an economic issue, but also a social and sustainable development one.
In this context, EU Directive 2019/1023 and its uniform application in all Member States prove to be fundamental tools to protect and enhance this invaluable entrepreneurial heritage. By offering effective and harmonized preventive restructuring frameworks, the directive provides European SMEs with the necessary tools to face economic challenges, preserve employment, and continue to be drivers of innovation and growth.
Only through a coordinated and forward-looking approach will it be possible to guarantee the continuity and prosperity of the European economic fabric, protecting millions of businesses, workers, and their families.
The complete research results and additional training materials developed within the OITBC project are freely available on the website www.oitbc.eu. In the coming months, the project plans a series of informative and training events in various European countries to present the results and train entrepreneurs and professionals on business crisis prevention tools.
The research also offers valuable insights for policymakers, entrepreneurs, and industry professionals, emphasizing the importance of concerted action at the European level to strengthen the resilience of SMEs in the face of future economic challenges.
