Brussels: Europe and the Arabs
  The European Commission in Brussels said in a statement that late payments have negative impacts on companies, by reducing liquidity, preventing growth, hindering resilience and potentially hindering efforts to transition to a greener and more digital environment. In the current economic context, businesses, especially SMEs, depend on regular payments for work and investment. The Late Payment Directive obliges public authorities to pay their bills within 30 days (or 60 days for public health authorities). By adhering to these payment deadlines, public authorities are setting a good example in combating poor payment culture.
The Commission refers Greece to the Court of Justice over payment practices followed by Greek public hospitals towards their suppliers that violate the Late Payments Directive. These hospitals do not respect the obligation to promptly repay their debts when suppliers agree to waive their rights to interest, which is contrary to applicable case law. The Commission had already referred Greece to the Court of Justice in November 2023 in another late payment case, targeting excessive delays in payment by public hospitals in Greece (INFR(2019)2298). Delayed payments by public hospitals hamper the competitiveness and flexibility of companies operating in the health sector, especially SMEs. During the COVID-19 pandemic, these companies have played a critical role in quickly supplying hospitals, helping them stay operational.
background
Late payment causes administrative and financial burdens, which are particularly acute when companies and customers are in different countries of the European Union. Cross-border trade is inevitably affected. To address this problem, Directive 2011/7/EU on combating late payment in commercial transactions established stringent measures that, when properly implemented by EU countries, contribute significantly to employment, growth and improved liquidity of companies.
Member States have a special responsibility to ensure that public authorities pay for the goods and services they purchase on time. The Commission supports Member States in applying the provisions of the Directive more effectively, including by making stronger monitoring and enforcement tools available. The Commission is currently establishing a European Observatory for Payments in Commercial Transactions as announced in the Industrial Strategy Update adopted in May 2021. In addition, in September 2023 the Commission also presented a review of the Late Payment Directive, with a proposal on a system for combating late payments in commercial transactions. This review is part of a series of initiatives to meet the needs of SMEs, as announced by the Commission President at the State of the Union 2022. The review aims to address regulatory shortcomings and gaps, promote timely payments and achieve a better balance between large and small operators.