Companies go bankrupt waiting to be paid. Jobs are lost. Dreams die. Across the European Union, paying suppliers late is common. It costs little and is considered acceptable. But it does great harm. Every year, hundreds of thousands of European businesses have closed waiting for late payments. Small and medium-sized enterprises are particularly exposed to late payment, and business selling across borders are especially vulnerable. The late payment culture has to change, and the European Union is equipping business with the tools to make this change happen.
Late payments constitute a major
obstacle to the free movement of goods and services in the single market
and could substantially distort competition. The resulting
administrative and financial burdens impede cross-border trade. Small
and medium-sized enterprises (SMEs) and the craft sector are most
vulnerable. Despite the adoption and application of Directive 2000/35/EC
on combating late payment in commercial transactions, late payment is still a common practice across the European Union.The reality for European enterprises, and especially for SMEs, is that late payment for goods delivered and services provided leads them into bankruptcy, with the direct effect of increasing unemployment. As a result the entire European economy is negatively affected by this phenomenon.
In order to protect European businesses, in particular SMEs, against late payment and to improve their competitiveness, a new Directive 2011/7/EU on combating late payment in commercial transactions was adopted on 16 February 2011 and must be integrated into national law by Member States by 16 March 2013 at the latest.
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