The German industry is resisting the European Commission’s proposal for a significantly shorter payment term in the EU, forecasting an increased need for financing and higher costs.
– “Financing costs could rise significantly, especially for small and medium-sized merchants,” said Achim Dercks, Deputy Director General of the German Chamber of Commerce and Industry (DIHK).
Due to shorter payment terms, companies will in many cases be forced to resort to temporary financing to complete transactions.
– “Liquidity shortages often have to be covered by loans,” explained Dercks.
According to the current directive, the standard payment term for business transactions is 60 days, and partners can adjust it as needed.
In September, the European Commission proposed amendments aimed at curbing payment delays and protecting small and medium-sized enterprises from financial difficulties.
– “The proposal will make small businesses more resilient and help them navigate challenging times,” said European Commissioner for the Internal Market Thierry Breton at the time.
The European Commission is still negotiating the proposals with EU member states and the European Parliament.
German Justice Minister Marco Buschmann sharply criticized the proposed changes.
– “Strict deadlines do not take into account different circumstances and do not leave the economy enough room to independently determine contractual terms,” said Buschmann.
