Click:Custom Georgia Jerseys

MEPs set to change late payment plans

Commission’s intention to impose a flat-rate penalty on authorities that pay late is deemed ‘excessive’.

The European Parliament is expected to make major changes to  European Commission plans for  penalising public authorities that pay their contractors late.

German socialist MEP Barbara Weiler, who is leading the Parliament’s work on the dossier, said MEPs regarded as excessive the Commission’s intention to impose a 5% flat-rate penalty on authorities that pay late. The Parliament was considering what she described as a more effective scheme, with a graduated fee starting perhaps as low as 1%, and increasing in line with the length of the delay.

“I’m sure we will decide together on a lower percentage or a step-by-step approach,” Weiler said.

Impetus

Günter Verheugen, the European commissioner for enterprise and industry, has described his proposal, under which the 5% fee would apply once a 30-day deadline for payments had passed, as “an important impetus to overcoming the economic crisis”.

Weiler also warned that public services such as hospitals could be put at a disadvantage to rivals in the private sector. While the Parliament’s political groups had “not yet decided” how to resolve this, MEPs did not want to give private companies an advantage or to discriminate, she said.

The Parliament’s internal market committee will discuss the proposal in a public hearing with local authorities on 26 January. Weiler plans to deliver her draft report on 4 February, allowing it to be debated in the committee on 23 February.

Erik Sonntag of BusinessEurope said he saw “a great deal of pragmatism” in Weiler’s approach. “We have always questioned the Commission proposal’s realism,” he said. “We hope that the Council [of Ministers] will now show a similarly constructive approach.”