The aim of this paper is to study and analyse the situation of the textile and clothing industry in Europe and Croatia. A hypothesis that the current problems and possible long-term sustainable growth and development solutions for the textile and clothing industry in Europe and Croatia should be seen as an essential prerequisite for the development of new policies that will enable restructuring of textile and clothing industry in Croatia has been confirmed. This paper draws on secondary (desk research) and primary (interviews with managers of companies, textile and clothing industry experts and local administration staff in charge of the industrial sector) sources of information, with scientific methods applied, such as methods of analysis and synthesis, inductive and deductive methods, proof and denial methods, method of description and method of compilation. PUBLICATION ABSTRACT