Renew Europe addresses historic demand from SMEs with a balanced regulation to combat late payments across the EU

Author: Alberto Cuena Vilches



Late payments regulation v2 landscape

More than 80% of businesses, especially SMEs, are hit by payment delays, which hinder their growth, innovation and employment capabilities. That is why, after numerous discussions spearheaded by our political group, we embrace today´s plenary backing of the Late Payments Regulation, which aims to tackle the shortcomings of the 2011 directive, bringing a unique opportunity to enhance the payment culture and to build a better framework for a functional and transparent business environment. Renew Europe played a pivotal role to shape a balanced and adaptable regulation ensuring that payments for commercial transactions are made promptly, while providing some flexibility for specific products categories. We have defended SMEs throughout the whole mandate and we do not leave them in the lurch now either.

Renew Europe MEP Róża THUN (Polska 2050, Poland), European Parliament’s rapporteur on the Late Payments Regulation, stated:

"Late payments are, together with the administrative burden and access to finance, the main concerns for SMEs and micro-enterprises, which account for 98% of businesses across the EU. Unreliable cash flows can render SMEs financially vulnerable and restrict their ability to grow, affecting their resilience and innovation capacities and thereby undermining the competitiveness of the Union.

This regulation is for the benefit of all, as it addresses the historic demand from business to combat late payments, both business-to-business and between the business and public sector, while freedom of contract is respected by providing for the adaptability and flexibility needed in specific sectors. This regulation offers our smaller companies a shield against the practices of larger corporations that delay payments, jeopardizing the very survival of our SMEs. It therefore provides so much needed predictability to millions of small European companies and is a major push towards a better payment culture in order to close a vicious circle that is very damaging to the European economy as a whole".

In depth

The endorsed legislation establishes clear rules for the public sector, leaving no room for interpretation concerning the 30-day payment periods for the public authorities, which are one of the worst payers. It also urges Member States to ensure greater transparency and independence of the enforcement authorities to enhance public bodies’ payment practices towards undertakings.

Between companies, payment of invoices must be made as well within a maximum of 30 days from the receipt of the invoice. However, some flexibility (up to 60 calendar days) is foreseen, if the parties wish to do so, thus benefiting from their contractual freedom.

Moreover, the adopted text includes a payment period of up to 120 days for specific products categories that, due to the nature of the sector, require somewhat longer payment and invoicing periods (namely “seasonal” and “slow-moving goods”). As we need to protect the most vulnerable players on the market, the agreement also introduces more flexibility for micro-companies, by allowing them an additional year to adjust to the new payment period framework following the entry into force of the legislation.

Press conference

The rapporteur Róża Thun Und Hohenstein will brief media at 15h today.

  • Where: European Parliament in Strasbourg, Daphne Caruana Galizia press conference room (WEISS N -1/201)
  • How: Accredited media representatives can attend the press conference physically. Journalists wishing to ask questions remotely can connect via Interactio.


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