First I would like to congratulate the rapporteur and my colleagues who participated in the conciliation meetings and had to battle hard with a Council of Ministers more than a little reluctant to progress legislation on late payment, which is an absolute scandal considering the economic problems oppressing SMEs. It has to be recognised that late payment is the chief cause of the cases of insolvency threatening the survival of many firms, making them bankrupt, which translates into job losses. The national regulations aimed at managing this problem differ considerably from one Member State to another. Hence the interest in adopting legislation aimed at harmonising the provisions relating to late payment, due dates and the legal rate of interest at European level as soon as possible. A legal framework needs to be established to discourage late payment and give creditors the right to fair compensation in case of late payment. That is the purpose of the directive we are debating today. The negotiations on this text were difficult. A common position was finally adopted on 29 May last. The European Parliament emerged from those long negotiations victorious on several crucial points. The differences of opinion between Parliament and Council focussed around the difference in treatment between the public and private sectors, which have finally been placed on an equal footing. As regards retention of title, Parliament fought to have this provision included in the text of the directive. Thus, the Member States must ensure that the seller retains title in the goods until full settlement, while complying with the applicable national provisions. As regards the anti-abuse clause, the European Parliament refused to give precedence to freedom of contract to the detriment of the creditor. The directive therefore provides that, when an agreement mainly serves the purpose of procuring the debtor additional liquidity at the expense of the creditor or where the main contractor imposes on his suppliers and sub-contractors terms of payment which are not justified on the grounds of the terms granted to himself, such provisions may be considered to be factors constituting abuse. As to compensation, apart from the cases where the debtor is not responsible for the delay, the creditor is entitled as a result of this agreement to claim reasonable compensation from the debtor for all recovery costs incurred. This compensation may include the creditor’s borrowing costs or bank overdraft, administrative recovery costs paid for by the creditor company, recovery costs of debt recovery organisations and recovery costs arising from legal action. On interest, Parliament and the Council reached agreement on a rate of 7% above Central European Bank rate, making a total of 10.5% at the present time. The European Parliament wanted to reduce the period after which interest is due for late payment to 21 days from the date of receipt of the invoice rather than 30 days as envisaged by the Council. In the end the period of 30 days was maintained, but with the proviso that it may give rise to action for compensation if it constitutes a manifest abuse against the creditor. To conclude, the result of the conciliation was satisfying as a number of the European Parliament’s wishes are incorporated. I have therefore voted in favour of this text.

Political group: PSE