Róża THUN UND HOHENSTEIN (Renew, PL) holds a press conference on Parliament's vote on the Late Payments regulation

statement

Strasbourg

plenary session

press conference

THUN UND HOHENSTEIN, Róża (Renew, PL)

Press Conference by Róża THUN UND HOHENSTEIN (Renew, PL) on Parliament's vote on the Late Payments regulation

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, Thank you very much. Good afternoon. It's a very important day, because, as you know, on our European Common Market, we have over 24 million small and medium enterprises. And they have been urging us for a long time to do something about those late payments. If you ask them about their main problems, they say the first one is a bureaucracy and the second one are the late payments. And we want our market through the small and medium enterprises to become stronger, to become more innovative, to develop well. So we had to do something about the late payments. And I am really very happy that the Parliament accepted this proposal prepared by the Commission, amended by us, and was voted through today.

<p>R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, So if I go roughly and quickly through the main points, then I would enumerate the following. We introduced, as we say G2B. That means payment terms for public authorities to the to business. We introduced a strict 30 day cap for payment, of the invoices by public authorities. And this must ensure swift payment to business and it should enhance the cash flow, stability. This is, to put it roughly, I am not going into the details.</p>

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, Now as far as private sector is concerned here we introduced a maximum payment period of 60 days. That means standard is 30. But if both parties agree, 30 additional days can be added. And this is the standard payment, the standard payment practice to prevent undue delays that can weaken, smaller businesses. Please remember that this is their second complaint. First is bureaucracy. Second hurdle is for them to surmount is the fact that their invoices are paid so late.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, We introduced special provisions for seasonal and slow moving goods. This is a delegation that was asked from us to introduce. So we did it. And it's a derogation to allow a payment period up 120 days for seasonal and slow moving goods and services. And now this flexibility we introduced in order to support sectors where longer cycles are typical. The European Commission will introduce guidelines. Which goods belong to those, slow moving and seasonal goods.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, There is a point that protects subcontractors in public procurement, which we introduced new provisions to secure payments to subcontractors involved in public procurement. We want to ensure that even the smallest contributors in the supply chain receive timely payments. And that means that the next installment to the contractor is paid. After this contractor can prove that the subcontractor has been paid.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, We introduced limitations on waiving rights to interest. There is an interest rate and we don't want the smaller or the weaker party which signs the contract to be forced, obliged, for example, to waive those rights. This provision is to limit the ability to waive rights to interest on late payments, with the aim to prevent powerful entities from exploiting their market position. We found the solution which proposes that when a public authority and the large company is debtor the creditor cannot waive their rights to interest and compensation, that makes the situation fair, clear and easier for the weaker partner on the market.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, What was important to us was contractual fairness. And here we introduced clear provisions that prohibit contract terms and practices that pressured smaller companies into accepting unreasonably long payments terms. It means that it will not be possible to prohibit factoring or other third party services in the contract. Which was unfortunately a very common practice.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, And the last point is who will watch over all this? There is a proposal, that we voted today, a proposal for enforcement authorities that should be created or been named (often they exist already in member states), that must be completely independent in all member states, and they must ensure that payment deadlines are strictly adhered to. This is a robust mechanism to enforce compliance, and it addresses violations of these laws.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, I don't remember the exact numbers, with what majority this proposal was voted. It was in fact supported, the version that came out from the committee. And I wanted to remind, and I did it in the plenary session, to remind again that why it is so important, this is also my urge to the Council to accept this proposal, as we voted it. Over 98% of the companies on our common European Common Market are small and medium companies. And as I told you, they urge us they have been waiting for this, solution for a long time. 80% of them say that they need, a time limit for the payment of the invoices.

R&oacute;ża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, So here we at last propose the solution. And this solution seems to be reasonably good and good, not only for small and medium, but for the functioning of our common market. Maybe the last remark I can make is that in the council, I expect problems. Because it also obliges the governments to pay timely. Which not for all governments, or not in all situations. It doesn't always make them very happy. So I expect some opposition.

Róża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, I can assure you that the Polish government, which takes over the presidency after Hungary is very favorable to this proposal, knows very well the situation on the market, is very favorable to the proposal, and I hope very much that under the presidency of the mayor of Poland, the Polish government, the council will accept this regulation as it was voted today by the European Parliament. Thank you very much.

Q&A, Question on the amendment that was adopted on the exemption for the book sector.

Q&amp;A, Question regarding the benefits of this policy in terms of reassurance and prosperity for small businesses and cosumers.

Róża THUN UND HOHENSTEIN (Renew, PL), Rapporteur, I received a quote from from a colleague. Do you understand French? There is a quote of Henri Lacordaire, especially to those who think that total freedom of contract in this sense, because we don't have the freedom of contract, because that is from 0 to 120 days. So there is plenty other aspects. But nothing should be regulated, companies should just manage it in the situation which we have. And I have a quote from Henri Lacordaire in french which says 'entre le fort et le faible, entre le riche et le pauvre, entre maître et le serviteur, c'est la liberté qui opprime et la loi qui affranchit'. Having this in mind, I hope that the that the Council will adopt this regulation. Thank you very much.