The European Union finds itself at a turning point where economic policy and industrial resilience must be more closely aligned. After years of pandemic-driven disruptions, geopolitical uncertainty still persists, and rapid technological shifts, the EU’s industrial policy is under pressure to do more than stimulate growth.
Further, it must also build lasting stability. Yet despite all the focus on green transition, digitalisation, and global competitiveness, one essential element remains overlooked: the role of corporate restructuring as a pillar of crisis resilience.
Traditionally, restructuring has been viewed as a reactive measure — a last resort to salvage failing enterprises.
This outdated approach no longer fits the pace and complexity of today’s economic shocks.
Restructuring must be seen as a strategic, forward-looking tool that is integrated into industrial policy, not separated from it.
Without this shift, the EU risks losing vital parts of its industrial base, particularly among small and medium-sized enterprises, which are most vulnerable in times of crisis yet remain essential to Europe's economic structure.
The pandemic laid bare how fragile European industry can be.
Supply chain breakdowns, business closures, and insolvencies exposed weaknesses in the system.
Recovery funds and government aid helped temporarily, but many businesses needed more than short-term support. They needed tools to adapt structurally — redefining operations, refocusing investments, and reshaping their business models.
The lack of a coherent EU-level restructuring strategy meant that many of these firms were left to navigate that alone.
At the same time, the twin transitions — the green and the digital — require companies to undergo significant transformation. Transforming companies that produce goods or deliver services such as retraining employees, upgrading infrastructure or meeting environmental regulations, requires significant financial and organisational investment.
Many companies, especially those with limited margins or high debt levels, struggle to make these transitions without external support. If these businesses are not supported and begin to fail, the EU risks creating policies that promote innovation and sustainability in theory while in reality facing a decline its industrial base.
To prevent this, restructuring must be elevated to a policy priority. The 2019 EU Restructuring Directive introduced early intervention mechanisms and aimed to harmonise legal frameworks.
However, implementation has been uneven, and the directive is still treated primarily as a legal measure rather than a tool of industrial governance. For restructuring to support resilience, it must be embedded into economic policy at both the national and European levels.
A crisis-proof restructuring strategy should begin with early diagnostics. Member states and EU institutions need systems that can identify firms under stress before insolvency becomes inevitable.
Using data analytics and digital tools, these early warning systems can monitor performance and trigger timely intervention. Advisory services should accompany them to help companies evaluate their options and access suitable restructuring frameworks.
A second step is creating cross-border support mechanisms.
Many companies operate in more than one EU country, but jurisdictional differences often slow down or complicate restructuring efforts.
An EU coordination hub could work alongside national actors to streamline procedures and resolve cross-border issues. EU funding instruments, including recovery and industrial funds, should be linked to structured transformation plans that include clear restructuring strategies.
Public investment must be tied to long-term business viability, not just temporary solvency.
Restructuring is often associated with job losses, but it also presents opportunities to reskill workers, redeploy talent, and build more agile labour structures.
By linking restructuring programs to employment initiatives, training schemes, and regional development, we can ensure these changes strengthen rather than weaken the EU’s human capital.
Improving transparency and governance is equally important, as restructuring decisions made behind closed doors often lead to mistrust and resistance. A participatory approach that includes social partners, civil society, and local stakeholders can enhance legitimacy, ease implementation, and promote public understanding of the broader economic benefits of restructuring.
Future crises — economic, environmental, or political — are inevitable, and the EU’s industrial strategy must be built to adapt and respond proactively. Crisis-proof restructuring is about enabling companies to evolve, safeguard workers, and remain competitive in an unpredictable world.
Integrating restructuring into EU industrial policy does not mean centralising all decisions or replacing national frameworks, whereas it means creating a shared understanding that restructuring is part of resilience, and that proactive transformation is more effective and less painful than emergency response.
If the EU wants to build an economy that is sustainable, inclusive, and adaptable, it must treat restructuring as an essential policy tool — not a stigma, and not an afterthought.
Europe’s economy is built on diversity, innovation, and adaptability. These qualities must be preserved and reinforced through a coherent strategy that supports firms not only when they are thriving but also when they face difficult transitions.
A truly resilient industrial policy is one that helps companies change before they collapse. The time to embed that thinking into EU strategy is now.
Dr Binu Daniel is professor of finance at CBS University of Applied Sciences in Berlin.
Dr Binu Daniel is professor of finance at CBS University of Applied Sciences in Berlin.