EU proposal to tackle late payments

The EU Commission today published details of a new proposal to help combat the practice of late payments and improve cashflow for businesses.

The proposal will enforce a maximum payment period of 30 days from public bodies, private companies and the European Commission.

It forms a key part of the 2008 Small Business Act, which aims to create a better working environment for Small and Medium Sized Enterprises (SMEs). If adopted, this will lead to a change in the late payments directive of 2000.

"Late payment by public administrations should be no longer tolerated," said EU Commission Vice-President Günter Verheugen, responsible for Enterprise and Industry.

"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.”