"We have already sorted out quite a lot of problems and not many are left on the table," the European Parliament's rapporteur on late payments, Barbara Weiler (S&D, Germany), told EurActiv at the end of the first trialogue meeting between the EU institutions aimed at finding a final compromise on a delicate legislative text for the entire EU economy.
The main achievement of the meeting, which took place on 31 August, was widening the scope of the revised rules. According to the draft deal, business-to-business payments will fall under the new directive, while the original proposal from the European Commission was limited to payments made by public bodies.
This increases the certainty of payments and is expected to have a highly positive impact on the entire EU economy. Indeed, many sound companies are often financially strangled by delayed payments from their debtors, which in some countries take years to pay for services received.
According to the initial but not definitive agreement, both EU member states and the Parliament agreed to set a 60-day cap on business-to-business payments. In case of delays, an interest rate should be charged to the offender.
In the trialogue, which in EU jargon means legislative negotiations between the Parliament, the Commission and the Council, the parties also agreed to scrap an initial proposal to impose sanctions other than interest rates on the sums to be paid.
They instead agreed to impose a minimum of €40 compensation in addition to the interest rates in case of delays.
Controversial exemptions
The entire effort of making the rules more stringent to prevent late payments could, however, be seriously hindered by a number of exemptions which member states insisted on adding to the revised legislative text.
The most controversial exemption concerns the application of the 60-day deadline for business-to-business payments.
These payments shall not exceed 60 days "unless otherwise expressly agreed between the debtor and the creditor, and provided it is not grossly unfair to the creditor," reads the text proposed by the Council and agreed to in substance by the Parliament.
With this exemption in place, small companies run the risk of being forced by big contractors to accept the non-application of the deadline, with a manifest circumvention of the logic behind the new rules.
Another exemption, which appears less controversial, concerns the application of extended deadlines to specific sectors, notably the healthcare industry, which has more significant debt loads and payment delays than other sectors.
Pending issues
Some issues must still be resolved by the negotiating parties. The Parliament is pushing to maintain unchanged the original deadline for payments of public bodies proposed by the Commission. It should be set at 30 days, with a possible extension to 60 days for specific sectors, such as the healthcare (EurActiv 30/04/2010).
"The Council finds difficult to accept" the 60-day deadline for public bodies, reported a Commission source participating in the trilogue.
The legal setting of public undertakings is also subject to debate. It remains unclear if they will be subjected to rules for public bodies or to those for private business.
Moreover, the parties are still debating the interest rates to be paid should the deadline be breached. The Commission and the Council have agreed on 7%, while the Parliament is pushing for 9%. However, "everything is negotiable," conceded Weiler, the Parliament's rapporteur.
A second round of negotiations will take place on 6 September to discuss parts of the proposal that have not been debated yet, but which are deemed less controversial. A third possible meeting could be held later on to sort out potential pending issues.
The deadline for the final vote in the European Parliament plenary remains the second half of October.
