MEPs want to speed up work on late payments
Member states given deadline for deal as business groups say delays are proving costly.
The European Parliament has lost patience with the slow pace at which national governments are working on EU legislation about late payment of invoices.
Now the MEPs have set a deadline for the member states to finalise their work on the proposed law, whose provisions include setting a deadline for payment of bills by governments.
European business groups have been lobbying for the legislation to be finalised. They complain that the delays that businesses experience when dealing with public authorities are a threat to their viability. Small and medium-sized firms claim, in addition, that they need protection from the abusive payment practices of larger companies.
The European Commission’s proposal, published in April 2009, includes an EU-wide maximum deadline of 30 days for governments to pay companies, backed up by fines. No uniform deadline is envisaged for business-to-business transactions, because payment time would be agreed by the parties involved. But the proposal does include provisions on possible sanctions if the agreed deadline is not observed. Businesses would have a right to charge recovery costs to companies that are late making payments.
The Commission said its proposal was an essential measure to protect businesses during the financial crisis.
The Parliament’s internal market committee voted its opinion on the proposed legislation in April. But the draft has yet to be put to a vote of the entire Parliament, which has been postponed three times, most recently last week.
The Parliament has been holding off on its vote, in the hope of reaching an agreement on the draft text with the Council of Ministers, so that the legislation can be passed with only one reading.
However, Barbara Weiler, a German centre-left MEP who is leading the Parliament’s work on the dossier, is not prepared to hold off indefinitely. She told European Voice that she was setting a strict deadline of October for the Parliament to vote its first reading, whether or not there is an agreement with the Council.
“I think we have to push them [the Council] to an agreement,” she said. “We do not want to postpone it again and again.”
“The Council has now to say what it wants,” she said.
Belgium, which took over the rotating presidency of the Council of Ministers on 1 July, has declared its intention to advance work on the dossier, saying that it hopes to secure a deal with the Parliament by the end of the year.
Member state representatives yesterday (14 June) agreed a version of the draft legislation that Belgium can use in negotiations with the Parliament. It is the first time that the Council has had an agreed position on the draft law.
Paying suppliers
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The Parliament and the Council disagree over important aspects of the legislation, including whether a strict deadline should be placed on member states to pay their suppliers. The Parliament is also keener than the Council on imposing a maximum payment deadline on business-to-business transactions (an idea not included in the Commission’s original proposal).
Ben Butters, European affairs director at the Association of European Chambers of Commerce and Industry, said that the proposal was recognised by policymakers as “crucial to improving cash-flow during the crisis, yet it remains stuck in inter-institutional dialogue.”
“Time is of the essence,” he said.
“It is important to have a good solution as soon as possible,” Luc Hendrickx, director for enterprise policy at the European Association of Craft, Small and Medium-Sized Enterprises, said.
He said, however, that the Council and the Parliament should prioritise reaching an ambitious deal over reaching a quick one.
According to a report prepared by Intrum Justitia, a credit management company, the average payment time for a business-to-business transaction in Europe varies from 105 days in Greece to 27 days in Finland.
For transactions involving public authorities, the worst performer is Italy with an average of 186 days, while the best are Estonia and Finland, both with an average of 24 days.