- Funding Programme
- Structural Reform Support Programme (SRSP)
Supporting Slovakia on implementing preventive restructuring frameworks
The Commission provided technical support to the Slovak Republic to improve the framework governing insolvency. The support measures include a mapping of the Slovak legislation, benchmarking it with EU best practice and providing specific recommendations in the form of legislative amendments. The technical support is expected to reduce the costs and length of insolvency proceedings, while enabling viable debtors to continue operating.
The Slovak Republic had to transpose the Directive (EU) 2019/1023, so-called Restructuring Directive, on preventive restructuring frameworks before 17 July 2022. The need to transpose the Directive represented an excellent opportunity to conduct additional reforms to the framework governing insolvency and debt restructuring, in order to improve its efficiency and effectiveness.
The Commission and its partners supported the Slovak Republic in drafting the legislative amendments to transpose the Restructuring Directive into Slovak law. The scope of the technical support covered five main areas:
- design and set-up of early warning tools;
- improve the framework governing debt restructuring;
- professionalise insolvency practitioners;
- improve the efficiency of corporate insolvency;
- revamp the courts handling insolvency and debt restructuring cases.
The Slovak Republic and the Commission agreed on these areas because of their relevance to increase the overall efficiency of the legislative framework, but also because some of them had been long-standing issues in Slovakia.
At the end of the technical support, a draft bill to amend the framework governing insolvency and debt restructuring reflecting the Directive’s transposition was submitted to the Parliament. Setting up a nation-wide system of early warning tools in Slovakia allows for an earlier detection of financial distress. That, combined with the improvements to the framework governing restructuring, enables viable debtors to address and solve financial distress at an earlier stage, avoiding insolvency. For those debtors who may file for insolvency, the reduced costs and length of proceedings increases recovery rates and foster investment. The professionalisation of insolvency practitioners and set specialised courts handling insolvency and restructuring enhances the skills and reduce the uncertainty about insolvency rules, thus transforming Slovakia into a jurisdiction more attractive to investors and international companies.