Late Payment: EBC regrets the postponement of the vote in IMCO committee

Following the legislative proposal of the European Commission for a Late Payment Regulation last year, the European Parliament’s IMCO Committee was expected to vote on the draft Report and Compromise Amendments proposed by the Rapporteur MEP Thun und Hohenstein (Renew, Poland) yesterday 22 February. However, although many political groups were in favour of proceeding as planned, the vote has now been postponed to a later date in March because of pressure of some right-wing political groups.  

The postponement is due to important disagreements on the content of the compromise amendments, including with the circulation of an alternative list of amendments to that of the Rapporteur. This is taking place in a context where heavy lobbying by large companies and their representatives is exerting significant pressure on European lawmakers.  

In this tense political climate, EBC has not ceased to point out the reality of the situation in the construction sector, where small companies are suffering from a lack of liquidity and cash flow due to late payments, an uneven balance of power in their commercial transactions with public authorities and big business, and a need for investment capacity to complete the long-awaited and necessary digital and environmental transition of the sector. 

For these reasons, EBC sees overall favourably the compromises reached by the Rapporteur. The proposed compromises take into account important requests of construction SMEs and crafts, notably clearer rules with enforcement power, specific conditions for micro companies, clarification on abusive contractual freedom, or direct payment to subcontractors. On the flip side, a notable element of improvement should be the inclusion of the grouping of invoices as an SME-friendly option, a measure that has proved useful for construction SMEs. 

EBC thus regrets the lack of accord among MEPs to agree on the need to move forward on combating late payment and considers this postponement as a negative signal. This delay will likely mean that an adoption of a first reading in the European Parliament before the European elections is becoming improbable.  

EBC will continue to actively advocate for hands-on solutions to combat late payment, a long-lasting phenomenon that suffocates micro and small companies in construction, severely distorts competition and undermines the European economy and single market. 

To consult the EBC position paper on the Revision of Late payment directive, click here

To consult EBC’s feedback on the proposal for a Late Payment Regulation, click here