The Minister for SMEs, Trade and Crafts Olivia Grégoire estimated that the European text on late payments from business suppliers should “be reworked”, Monday to the daily Les Echos after a revolt from trade associations .
The regulation on late payments incorporates into Article 3 a provision which harmonizes and shortens payment deadlines without any sectoral exemption. It needs to be reworked. We are asking the European Commission for an impact study to support future decisions, said Olivia Grégoire.
In absolute terms, Brussels’ desire to fight against payment delays and deadlines at the European level is going in the right direction, she said again. But the proposed system on deadlines risks causing significant disruption for businesses in commerce and industry, she said, calling for time to be allowed for consultation.
The European Commission proposed on September 12 a new regulation on payment deadlines which is to replace a 2011 directive. The proposal introduces a stricter maximum payment deadline of 30 days, eliminates ambiguities and addresses legal shortcomings in the current directive , said the authority in a press release.
The proposed text also guarantees the automatic payment of interest due and compensation costs, and also introduces new enforcement and recourse measures to protect businesses against bad payers. This, with the aim of meeting the needs of European small and medium-sized businesses.
But several professional associations of traders, both French and European, have criticized this project.
Reducing the maximum deadline from 60 to 30 days will automatically increase payment delays by putting pressure on merchants’ cash flow and threatening the survival of the most fragile companies which will face very significant liquidity problems, for example stated in October. French Commerce Council (CDCF), which brings together around thirty trading federations.
He states that the cash drain carried out to the detriment of French traders would be of the order of 25 to 30 billion euros if the European Commission’s proposal were to be approved as is. However, the text is at the very beginning of its legislative process.