Eucomed press release 05/09 – Revised Directive on Late payments: 23.6 billion Euros of unpaid invoices threaten small companies’ survival and jeopardize public health
April 10, 2009
Brussels, 8 April 2009 – Eucomed welcomes revision of directive 2000/35/EC on Late Payments adopted by the European Commission today strengthening current payment obligations. Association disappointed to see final text considerably watered down compared to initial clear targets.
As the voice of the medical technology industry in Europe, Eucomed is extremely pleased to see late payments finally high on the European agenda, especially in times of economic crisis. Late payment is one of the main causes of bankruptcy amongst SMEs in Europe.
However, the association is very disappointed that the final proposal still leaves many loopholes for public authorities concerning the terms of payment. “We call for clear obligations for public entities to pay their bills within 30 days. Currently, there is still plenty of room for them to extent the terms of payment significantly”, says John Wilkinson, Eucomed’s Chief Executive. “This proposal will not help in overcoming the problem of late payment and therefore our sector.”
“We call for clear obligations for public entities to pay their bills within 30 days. Currently, there is still plenty of room for them to extent the terms of payment significantly. This proposal will not help in overcoming the problem of late payment and therefore our sector.”
Public authorities constitute the majority of clients for the medical technology industry in Europe. Moreover, the sector comprises 80% small to medium-sized enterprises which are extremely dependent on continuous and timely cash flow, not only to remain economically viable, but also to be able to reinvest part of their sales into R&D. As public health and patient safety are at stake, the sector furthermore has a strong ethical obligation to continue supply whether bills are paid or not. “We are not calling for an emergency package, we are merely demanding that invoices be paid,” ends Wilkinson.
“We are not calling for an emergency package, we are merely demanding that invoices be paid.”
Eucomed calls on the European Parliament to strengthen the Commission’s proposal in order to protect SMEs as drivers of innovation and economic growth.
One out of four insolvencies is due to late payment. This leads to the loss of 450,000 jobs each year, adding to the high unemployment level in Europe. In addition, outstanding debts worth 23.6 billion euro are lost every year through insolvencies caused by late payment. In 2000, the EU adopted Directive 2000/35/EC to protect companies from being paid after an agreed deadline for payment has expired. The Directive entered into force on 8 August 2002 for the then 15 Member States (and the three States of the European Economic Area); on 1 May 2004 for another 10 European countries and in 1 January 2007 for Bulgaria and Romania.
Director Communications and External Affairs
+32 (0)2.775.92.24Author : MedTech Europe