Late payment: Commission urges 4 Member States to comply with the Late Payment Directive to protect SMEs in their commercial relations

On 15 February 2017 the European Commission released a Press Release which stated the EC had taken steps against Greece, Italy, Slovakia and Spain to ensure the correct application of the Late Payment Directive (Directive 2011/7/EU) and prevent losses to businesses – particularly, small and medium-sized enterprises (SMEs) - in these countries.

Late payments have a negative impact on businesses by affecting their liquidity and cash flow, complicating their financial management and preventing them from growing. The Late Payments Directive equips creditors with strengthened rights by putting in place time limits for payments by businesses and public authorities when procuring goods or services. When payment deadlines are not met, it entitles businesses to fair compensation. To discourage a culture of late payments, public administrations play a particularly important role in setting an example in promptly and transparently paying their suppliers.

• Primary Source