“Withdrawing a proposal that would have given SMEs the ability to invest, hire, and own their cash flow goes against any commitments this Commission had toward SMEs”, deplored SMEunited President Davide Galli, reacting to the withdrawal of the proposal for a Regulation to combat Late Payment from the Commission work programme.
The proposal for a Regulation to combat unfair payment terms and late payments has been a key priority for European SMEs. The Payment Observatory yesterday presented preliminary findings of its 2026 report at the SME and Cluster Assembly. The report shows that late payments increasingly impact firms’ investment, recruitment, and day-to-day operations.
52% of companies reported problems due to late payments in 2025 and 71% of surveyed companies, including large companies, consider a 30-day cap on payments would be fair.
“It is hard to understand how in 17 Member States, more than half of all companies report payment issues, and still the co-legislators refuse to bring a tangible answer to this issue”, stated President Galli.
58% of suppliers report having accepted longer payment terms than they were comfortable with – indicating payment conditions increasingly reflect imbalances in bargaining power. “Freedom of contract does not exist for SMEs. This proposal was a way to bring back fairness into contractual relations. Policymakers have a responsibility toward SMEs”, Mr Galli insisted.
Finally, Mr Galli referred to the United Kingdom, where the Commercial Payments Bill will introduce clear provisions on payment terms and grant the Small Business Commissioner powers to adjudicate payment disputes, investigate poor payment practices, and take enforcement action. “It is a shame that the EU still lags behind when it comes to putting the ‘Think Small First’ principle into action”, Mr Galli concluded.
