European governments can provide EUR 65bn stimulus to economies

14 May 2009
by intrumjustitia -- last modified 14 May 2009

Research released in Brussels by leading credit management services company Intrum Justitia shows that European governments could provide a EUR 65bn stimulus to their home economies by simply paying invoices owed to suppliers in full and on time.

European survey reveals harmful effect of late payments on businesses

Key European statistics

• If all European businesses and consumers paid their bills and invoices on time, the money saved from written off bad debt would equate to a €270bn cash injection for businesses throughout the European Union
• If government bodies alone across Europe paid their bills on time, it would be the equivalent of a €65billion boost to the European business economy
• European businesses spend a minimum of €25billion chasing late payments from consumers and businesses each year
• Just 50pc of all invoices across Europe are paid within 30 days (down from 53pc in 2008)
• Over 70pc of the respondents across Europe feel that payment risks will further increase the coming 12 months, compared to just 30pc of those who took part in the 2008 survey

Research released in Brussels by leading credit management services company Intrum Justitia shows that European governments could provide a €65bn stimulus to their home economies by simply paying invoices owed to suppliers in full and on time.

The European Payment Index survey of over 5000 European businesses has shown that governments across Europe are more unreliable than private businesses or consumers when it comes to paying suppliers monies owed, taking an average of an additional 37 days to pay an invoice on a 30 day average contract term.

Across European government, businesses and consumer groups, 2.4pc of all invoices have to be written off as bad debt, an increase of 0.4pc or €20bn compared to the same period last year. If all invoices across these groups were paid on time and in full, the money saved would equate to a liquidity injection of €270bn into the European economy.

"On the one hand we have governments across Europe pumping huge sums of money into their economies to increase cashflow, yet on the other hand, these same entities are not paying invoices on time," commented Lars Wollung, CEO, Intrum Justitia. "It is for this reason that we are calling on governments across Europe to pay up on time.  European businesses and in particular SMEs are fighting for survival and an injection of at least €65billion into the economy could prove a real lifeline."

About the European Payment Index
The survey was conducted simultaneously in 25 countries between January and March 2009. The survey was conducted in written form and 5000 companies responded. This is the fifth year that Intrum Justitia has run the survey.

The questionnaire was translated into the respective national languages. Dispatch and return of the questionnaires was carried out on a decentralised basis by the countries concerned, whereas the analysis was carried out centrally in accordance with pre-determined guidelines. All information has been verified and uncertainties were not included in the evaluation. Furthermore, all anonymously sent questionnaires were not taken into account for the evaluation. Companies in England, Wales, Scotland and Ireland were questioned by telephone by a specialised company (B2B International).

For further information, please contact:
Pia Skaerbak and Leif Hallberg
p.skaerbak@intrum.com and l.hallberg@intrum.com
Ph: +32 2 234 5860/61

Intrum Justitia is Europe's leading Credit Management Services (CMS) group and offers services designed to measurably improve clients' cash flows and long-term profitability. Intrum Justitia was founded in 1923, has 3,400 employees in 24 markets and revenues of approximately SEK 3.7 billion. Intrum Justitia AB is listed on Nasdaq OMX Stockholm since 2002.

Intrum Justitia