Late Payments Directive - another blow for the public finance

Brussels, 12th November 2009

The Commission insists that all public institutions such as the ministries, regions, municipalities and even regional hospitals, schools or theatres should pay a penalty in the amount of 5% for each invoice paid later than within the 30-day maturity, even if the delay was a single day.

Edvard Kožušník MEP (CZ) said: “It is definitely necessary that the authorities make payments to the suppliers in time, but it is not possible to set forth a flat five-percent penalty by law, on top of the contractual penalty and delay interest; and, furher more, for the public sponsors only. This proposal is particularly dismal due to the fact that numerous public institutions get into insolvency right upon implementation of projects co-financed by the European Union. European projects implemented by the Union’s self-administration normally make payments within a 90-day maturity, but self-government is required to pay their suppliers within a thirty-day maturity.” According to Kožušník, the Union thereby applies double standard instead of leading by example and refraining from getting the public sponsors in member states into solvency problems.

Therefore, in Kožušník’s opinion, the Commission’s proposal will, in the final analysis, result in even higher budgetary shortfalls and, paradoxically, it will finally end up with even worse payment system. Public investments will decrease and, last but not least, the proposal provides space for corruption to flourish as well.

Contact:

Edvard Kožušník (MEP) on +32 228 45711
ECR Press Office - James Holtum on +32 473 861762
ECR Czech delegation press officer: Jan Krelina on +32 493 214346