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In brief
Restructuring activity is climbing steadily across Europe, and Irish businesses will not be immune. The pressures driving this trend, from stubborn inflation to higher financing costs, supply chain friction, and geopolitical uncertainty are not short-term shocks. They are slow-burn forces that will shape the next 12–18 months across Irish and EU businesses.
For some companies, this period will be about protecting stability. For others, it could be an opportunity to restructure on favourable terms and emerge stronger. For those with the resources, it may present unexpected acquisition opportunities. Either way, preparation is key.
The latest EY-Parthenon Restructuring Pulse Survey, drawing insights from 200 workout banking professionals in 25 countries, paints a clear picture:
This is not the kind of spike we saw in previous crises, particularly, the Global Financial Crisis in Ireland. Instead, the build-up is gradual, driven by persistent headwinds. Industrial sectors in Western and Central Europe face energy and tariff pressures, while tourism-heavy economies are still feeling the effects of changing travel patterns and higher costs.
The same forces are at play here in Ireland. Challenging interest rates and input costs are squeezing margins. Global supply chain blockages are still working their way through manufacturing and distribution. Consumer sentiment, while more resilient than feared, remains cautious too.
There is also the question of cross-border exposure. Many Irish companies operate within US and European supply chains or serve export markets where customers are under stress. If a key customer restructures or a partner reduces orders, the effects can ripple quickly.
At the same time, Ireland has legal and structural advantages that can help businesses manage restructuring proactively:
Ireland is a common law jurisdiction that can avail of recognition of its restructuring and insolvency processes in the EU and UK with a strong track record of recognition by courts in the US. Ireland’s restructuring and insolvency processes have a thirty year plus history of providing options to enable companies to restructure.
Luke Charleton
EY Ireland Turnaround, Restructuring and Insolvency Partner and Private Equity Sector Leader
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Read moreThese tools mean Irish companies do not have to wait until crisis point. They can restructure earlier, protect value, and preserve jobs, which is exactly where the European trend is heading.
While every business should be scanning for early warning signs, some sectors may feel the pressure sooner:
In a market where restructuring activity is rising but not yet peaking, timing matters. Moving early gives companies more options, from consensual “amend-and-extend” agreements with lenders to operational improvements that avoid formal insolvency.
The survey also found that 37% of European business leaders are already delaying or reducing investment because of economic uncertainty. That creates risks, but also opportunities, for example, well-positioned companies may find acquisition targets at attractive valuations as others restructure.
With the European peak expected in late 2025 or even 2026, Irish businesses have a window to prepare. Those who act early can shape the terms of their restructuring, rather than have them dictated by market forces.
Summary
The European restructuring wave is building, not crashing. Irish businesses face the same economic undercurrents but have the advantage of a strong legal toolkit and an experienced advisory ecosystem. The coming 12–18 months will reward early action, informed planning, and the willingness to adapt.
