Late payment plan faces delay

Date: 01/10/1998

By Myles Neligan

EUROPE's small businesses are up in arms over signs that ministerial discussions on a long-awaited plan to crack down on the late payment of bills may themselves be delayed.

EU industry ministers are due to discuss the European Commission's proposal at their next meeting on 16 November, but there are signs that other pressing business may force the issue off the agenda.

If that happens, ministers will not get another chance to debate the plan until next May, by which time the European Parliament will have suspended normal business as MEPs prepare for the June Euro-elections.

As the proposal, drawn up by the European Commissioner for Small and Medium-Sized Enterprises Christos Papoutsis, must be approved jointly by national governments and the Parliament, this would delay agreement for up to a year. This has prompted an outcry from UEAPME, the lobby group which represents Europe's small businesses, which says its members would be left once more without legal support in their efforts to collect the estimated 29 billion ecu they are owed in outstanding bills.

"This directive is long overdue. Further delays would be disastrous for small and medium-sized enterprises in the EU. The lack of uniform rules on the payment of bills is hindering cross-border trade and inhibiting the single market," said UEAPME spokesman Gary Parker.

"Our members will be incensed if this proposal is not pushed through as soon as possible. Small businesses are the most important economic agents in Europe, and it is high time that the uncertainties they face in cross-border trade were eliminated."

Supporters of the measure point out that there is little disagreement over the substance of the proposal, with all EU governments except France broadly in favour of it and MEPs firmly supporting the move.

"We feel the Parliament's position would be broadly acceptable to national ministers. I am not at all pessimistic about this particular proposal," said one Commission official who has followed the debate closely.

The proposal would set a maximum period of 60 days for the payment of bills, irrespective of whether a deadline was written into the contractual agreement between businesses or not. If the 60-day deadline was exceeded, the debtor would be obliged to compensate the creditor for interest payments lost as a result of the delay.

The same rules would apply to public authorities, which are accused by many suppliers of excessive foot-dragging in settling accounts.

The proposal also aims to regulate the debt-collection industry, stipulating that only "reputable" organisations may collect debts. Officials say that this has won particularly enthusiastic support from EU governments, although the legal profession, which enjoys a near-monopoly on debt collecting in some countries,is lobbying against it.