On Thursday 7 March, European ministers responsible for the internal market debated the European Commission’s proposal for a regulation on late payments (see EUROPE 13248/21). While they all said they wanted to tackle late payments, which are particularly harmful to SMEs, they were very reluctant to change the current rules. The debate on the Commission’s proposal had a “critical tone”, in the words of the Belgian Minister for SMEs, David Clarinval, who chaired the meeting.
Some 15 Member States believe that it would be better to revise the current directive rather than adopt a regulation that does not take into account the specific characteristics of the Member States and their laws in this area.
“All the friends of the internal market say that we absolutely need single rules, but when it comes to applying them, it’s more complicated”, said the European Commissioner for Internal Market, Thierry Breton, who said he understood these difficulties. However, he believes it is crucial to have harmonised rules for companies operating in the single market.
Beyond the legal instrument, the content of the text also poses problems for the EU27. Most of them are not in favour of a 30-day payment period applicable to all businesses. Many of them defended companies’ freedom of contract, which allows them to set longer payment terms in their contracts.
The idea of granting flexibilities for certain sectors such as slow-moving or seasonal products was also raised by several delegations. In the European Parliament, there is also talk of granting flexibility to these sectors in the compromise amendments that were reached by the political groups (see EUROPE 13352/8, 13356/2). The European Commission is ready to discuss flexibilities, assured Thierry Breton.
Another problematic aspect of the regulation is the Commission’s proposal to set up implementing authorities in the Member States. All countries except Greece and France were opposed to the idea, believing that a system parallel to the courts would add confusion and bureaucratic burden.
These implementing authorities responsible for ensuring compliance with the regulation can be existing entities, said Mr Breton. Konstantínos Skrékas, the Greek Minister of Development, believes that the current legal system is not suitable for meeting the needs of SMEs which are adversely affected by late payments: “Imagine how difficult it is for an SME to take a large company to court! Do you think their relationship will continue? On the contrary. That’s why we need these supervisory authorities”.
Flemish Minister of Economy, Jo Brouns, believes that it is crucial not to impose any additional administrative burden with this text. “This is an important starting point if we are to reach a common position”, he told Agence Europe. (Original version in French by Léa Marchal)