SME Assembly 2023: Construction SMEs show support to Regulation proposal to tackle late payment

In the context of the 2023 edition of the SME Assembly, held in Bilbao on 13-15 November, EBC was invited not only to attend and discuss small businesses’ matters with fellow SME representatives from across Europe, but also to contribute directly to the session dedicated to late payment.

In a session with the equivoque name of “30 days or pay”, the European Commission wanted to discuss further the proposal for a Regulation that, once approved by the European Parliament and the Council, will replace the current “Late Payment Directive” (LPD). The session focused on three key issues for the successful implementation of the new rules and, ultimately, for a progressive shift towards a culture of prompt payment:

  • how data can support effective monitoring and enforcement,
  • the role of business organisations, and
  • the challenges and needs for specific sectors as wholesale & retail and construction.

After taking the audience through the background of the LPD revision in the introductory remarks, DG GROW explained that the proposal indicates the EU’s willingness to step up its fight against late payments in commercial transactions, for the benefit of SMEs and the overall economy. Late payments affect every sector and every EU Member State, disproportionately impacting SMEs’ cashflow. According to the Commission, each year across Europe, thousands of SMEs go bankrupt waiting to be paid, with jobs being lost, putting the whole EU competitiveness at stake.

MEP Róża Thun (Renew, Poland), the European Parliament’s Rapporteur for the file in the IMCO Committee, explained her will to build upon the Commission’s proposal and work for a consensus as there is a need for prompt action to tackle late payment across the EU.

The first Annual Report of the EU Payment Observatory was also presented with highlights of the EU level results, together with information on the functioning and ongoing work of the Observatory, notably the database of sources of information on payment from the European, national, and local level.

In the panel discussion that followed, debating how to foster a prompt payment culture in the business environment, EBC shared the stage with representatives from the Banque of France and the French Business Observatory, the retail and wholesale organisation Eurocommerce, and the Spanish SME organisation CEPYME, under moderation of Antonella Correra, from DG Grow.

EBC Secretary General explained why construction SMEs and crafts are supportive of the Commission’s proposal, as the current framework is too easily circumvented or misused, the long-subcontracting chains in the sector are too prone to payment abuses, and small and micro companies lack bargaining power both in business-to-business and government-to-business commercial transactions.

Mr. Sigchos Jiménez added that a zero-tolerance against late payment is needed, with a 30-day cap for all commercial transactions to establish a clear regulatory framework supported by strong enforcement bodies at the European and national levels. In that sense, he added that reinforcing the current EU Payment Observatory represents an opportunity to collect factual data to alert on payment trends and help the supervisory authorities to steer action.

EBC looks forward to the next edition of the SME Assembly to continue to reinforce the bonds with the SME network in Europe. In the meanwhile, EBC will support the inter-institutional works to deliver a well-needed SME Relief package with fighting late payment as one of its cornerstones, including with concrete proposals to fine-tune the original Commission’s proposal for a Late Payment Regulation.

To read the full EBC position paper on the revision of the Late Payment Directive, click here
To learn more about the EU Payments Observatory, click here
To learn more about the SME Assembly 2023 in Bilbao, click here