Small Firms, Big Gap: Rethinking MSME Rescue in EU Insolvency Law

This paper argues that despite two decades of reform, the European Union’s (EU) insolvency framework remains structurally and behaviourally inaccessible to micro-, small-, and medium-sized enterprises (MSMEs). While policy rhetoric has embraced the idea of a “rescue culture,” practical implementation has prioritised larger, well-resourced firms. Drawing on international guidance and case studies from Ireland, France, and the United States (US), the paper shows that legal reform alone is insufficient. Structural complexity, cultural stigma, and weak institutional outreach continue to block MSMEs’ access to rescue. The paper proposes a forward-looking agenda for EU reform centred on three pillars: legal simplification tailored to MSMEs, institutional scaffolding to enhance visibility and support, and cultural reframing to normalise restructuring as a second chance. It concludes that a functioning rescue culture must treat MSMEs not as scaled-down versions of large firms but as distinct users with unique constraints and capacities.