(Reuters) -The reform has streamlined and speeded up the process to restructure debt. That's a big deal in Spain, where Eurostat figures show business bankruptcy declarations jumped 66% in the third quarter of 2022 from the previous one, versus an average rise of 16% for the European Union.
Now, a restructuring plan for Celsa, Spain's largest private industrial group with debt worth roughly 2.8 billion euros ($3.04 billion), is going through the courts. It's also a trial of the new law, considered by legal experts as the jewel in the crown of a reform package that took effect in September.
Signs that reforms are working could lift investment in the fourth-biggest euro area economy and help buffer against a downturn. Spain's central bank has cut its 2024 growth forecasts.
"The problem in Spain with restructuring a company is that it takes a long time to be implemented as the courts are overwhelmed, [but] you can't leave a company with financial problems for two years without taking decisions," said Jose Carlos Diez, professor of economics at the University of Alcalá de Henares.
"What this law is trying to do is avoid full bankruptcy proceedings," added Diez, a former member of the European Central Bank's panel of experts on Europe's economy.
