Ministers to stall proposals on prompt payments

Date: 12/11/1998

By Myles Neligan

OPPOSITION from EU governments to key aspects of planned new rules to combat the late payment of bills is almost certain seriously to delay their entry into force.

Union diplomats are ruling out any chance of agreement on the proposals when industry ministers meet in Brussels next Monday (16 November). Since the proposal requires the joint approval of governments and MEPs, who plan to suspend normal business from next May in order to concentrate on the June 1999 Euro-elections, supporters of the initiative fear that the proposed rules will not become law for at least another year.

Under the proposal drawn up by the European Commission, public institutions would be obliged to pay up within 60 days, while private companies would have to settle their accounts within 75 days. The debtor would be obliged to compensate the creditor for interest payments lost as a result of the delay in settling the account and new rapid procedures would be introduced for settling payment disputes and collecting debts.

EU officials say that while all the member states agree on the need for payment rules, they unanimously oppose the stricter payment deadline for public authorities, rejecting the argument that government institutions' superior bargaining power justifies a tougher regime. “There is a feeling that since public authorities' credit will always be good, there is no justification for imposing a tighter deadline on them,” said a Council of Ministers official. Many member states also oppose the proposed new debt collection procedures, arguing that they would needlessly cut across established national mechanisms.

Given these objections, no decision is likely until industry ministers meet again next May. The prospect of further delays has disappointed EU small business association UEAPME.

“If this proposal is not approved by next May, it will send out a signal that it is acceptable to pay late,” said a spokesman.