Financial Restructuring in Turkey: Drawing Lessons from the EU

Abstract The European Union has formulated a comprehensive legal framework addressing corporate restructuring, insolvency, and bankruptcy matters among its Member States. Notably, Preventive Restructuring Directive (EU) 2019/1023 was adopted by the European Council on 20 June 2019, setting minimum standards for restructuring and specific insolvency issues. As Turkey, a candidate country aspiring for EU membership, aligns its legal framework with EU law, it has made strides in restructuring, insolvency, and bankruptcy strategies. For example, in 2018, the provisions of the Enforcement and Bankruptcy Law regarding the concordat were extensively amended, and simultaneously, the Banking Regulation and Supervision Agency published the Regulation Amending the Regulation on Restructuring of Debts Owed to the Financial Sector. However, full harmonization, especially in financial restructuring, is yet to be achieved. In the face of ongoing economic and political challenges, there is a growing recognition of the necessity for a robust legal framework in Turkey that facilitates efficient restructuring processes. This article aims to assess the key components of the EU’s legal restructuring framework, drawing lessons for Turkey. In light of this evaluation, it seeks to propose a new legal framework for financial restructuring in Turkey.