European countries still deal with insolvent firms far more harshly than America does, and most such firms end up in liquidation, a recent Economist analysis found. They often treat creditors badly too, meaning that neither side ends up satisfied. Observers worry that Europe will cope with the coming flood of defaults far less effectively than America, meaning a slower recovery. In recent years several European countries have tried to change their systems so that companies have a better chance of survival.
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