EBC welcomes the decision of the European Commission to take further steps against Italy, Spain, Greece and Slovakia on late payments by public authorities to companies. Late payments have a dramatic impact on businesses by reducing their liquidity and cash flow, complicating their financial management and in some cases even causing their default.
The Late Payments Directive gives companies strengthened rights by putting in place time limits for payments by other businesses and public authorities when procuring goods or services. When payment deadlines are not met, it entitles businesses to fair compensation. However, in the countries mentioned above this directive is not properly applied.
The Commission is requesting an action from Member States due to the following reasons:
- Italy: excessively late payment by public authorities (a reasoned opinion);
- Spain: legislation systematically extending the statutory payment term by 30 days (a letter of formal notice);
- Greece: new legislation removing creditors’ rights to interest and compensation (a complementary letter of formal notice);
- Slovakia: excessively delayed payments in the public health sector (a letter of formal notice).
These 4 Member States now have two months to notify the Commission of measures taken to remedy the situation. Alternatively, the European Commission may decide to refer Italy, which receives a reasoned opinion, to the Court of Justice of the EU.
Have a look at EBC’s webpage on late payments
Read the full press release of the European Commission about late payments