LATE PAYMENTS: Equal treatment between public authorities and undertakings is inacceptable!

European Parliament IMCO rapporteur Barbara WEILER has recently introduces a report on the Commission´s proposal to revise the Late Payment Directive. Voting in the IMCO Committee will take place on 8th April 2010 and during the May plenary. CEBRE has examined thoroughly WEILER´s report and welcomes the inclusion of positive incentives to combat late payments, such as the use of professional publications, promotional campaigns as well as the establishment of prompt payment codes and the 60-days maximum cap for public authorities.

However, the report includes some elements we cannot fully support. Czech businesses do not accept the equal treatment of undertakings and public authorities. Public authorities do not have the same financial constraints as private undertakings, normally enjoying more stable cash-flow conditions and easier access to finance. Therefore, stricter sanctions, as proposed by the Commission, should only apply to public authorities and not to undertakings in the framework of business-to-business transactions. Ineffective management of public finance, burdensome administration and incorrect public accounting cannot be reasons for rejecting stricter conditions for public sector. On the contrary, it is an opportunity to improve all these.

We do not accept that the same conditions should be imposed on companies (namely, SMEs). It would not be responsible and would harm the European economy. Regarding late payments public authorities should give moral and ethical example. Incremental sanctions (2%, 4%, 5%) replacing 5% lump sum of Commission´s proposal can be accepted by Czech entrepreneurs. Nevertheless, it can be only acceptable if these sanctions apply for public authorities LATE PAYMENTS (continued from page 1) (continued from page 1) (continued from page 1) and not for businesses. Rapporteur makes also difference between public authorities themselves when she stresses the need for public authorities operating in health sector to derogate to the 30-days limit. This is not only potentially unfair vis-á-vis other authorities providing services of general interest, such as schools for example, but the justification given – to take into account the specific organization of health care systems and the different arrangements in the Member States.