Brussels, 8 April 2009
Based on a commitment in the Small Business Act, the Commission today suggests a new policy approach to tackle the situation on late payments and proposes substantial changes to the late payment directive of 2000. The Commission suggests that public authorities should lead by example and should – as a rule – pay their bills within 30 days. In parallel, the Commission commits itself to speed up payment of goods and services so to fully respect the targets for paying bills and, in a number of cases, even shortening payment times to under the current legal period.
European Commission Vice-President Günter Verheugen, responsible for Enterprise and Industry, stated: “Late payment by public administrations should be no longer tolerated. Today’s proposal provides an important impetus to overcome the economic crisis by helping to avoid further bankruptcies and promoting businesses’ cash flow in order to reinforce the competitiveness of European enterprises in the long term.”
The proposed changes reflect the importance of timely payments to businesses, and especially to SME's:
This proposal aims at improving the cash flow of European business which is particularly important in times of economic downturn. It also aims at facilitating the smooth functioning of the internal market via the elimination of related barriers to cross-border commercial transactions.
It will achieve this by providing creditors with instruments that enable them to fully and effectively exercise their rights when paid late and by confronting public administrations with measures that effectively discourage them from paying late.