SMEs and self-employed people welcomed the counter-regulation with visible relief. The European Commission announced measures to curb late payments, a move confirmed by the EU leadership in a recent State of the Union message. The Multi-Sectoral Platform Against Late Payments (PMcM), which connects more than a million small businesses and freelancers across Spain, praised the plan to sanction companies and public administrations that fail to settle debts, while also setting a maximum payment term of 30 days.
“This marks an unprecedented milestone in European market practice, and it reflects the tireless work of many stakeholders. The contributions and demands from workers and businesses—especially those most affected by late payments—are now reflected at the highest level,” stated the PMcM president, Antoni Cañete, in a public statement.
The proposal requires each Member State to appoint authorities responsible for enforcing the regulation and guaranteeing timely payments. Among the tools available are fines and other sanctions, injunctions against non-compliant entities, on-site inspections without prior notice, and formal requests for debtors to address breaches in payment deadlines.
Cañete emphasized that penalties for late payments and unregulated terms in Spain, even after extended parliamentary consideration, are essential to shorten payment cycles. PMcM has maintained that a system of sanctions is the only viable way to end late payments once and for all.
Applicable regime
The regulation specifies that Member States will determine the sanctions framework for infringements and implement all necessary measures to ensure compliance. In this context, PMcM’s leadership hopes the regime will align with the EU directive seeking sanctions that are effective, proportionate and deterrent, as outlined in the regulation.
A notable focus is compensation for salvage costs. When late payments accrue interest, PMcM notes that debtors must automatically cover the creditor’s collection costs, including a fixed fee of 50 euros for each business transaction. This provision aims to correct a long-standing imbalance where creditors bear the burden of late payment interest.
“This framework brings much-needed justice to the situation where the creditor shoulders the financial impact caused by the debtor’s delays,” Cañete commented. In response, he urged regional authorities to lead on this issue, particularly regarding direct payments to subcontractors in public contracts. The broader effect is tangible: these changes are expected to impact billions of euros in invoices from major suppliers, often with delays cascading down to subcontractors after payments are collected.
At a regional level, lawmakers and industry groups are watching closely as the new rules take shape, with attention to how enforcement will be carried out in practice and how small firms can leverage the new penalties and protections to secure quicker settlements. Observers emphasize that real-world implementation will require robust administrative capacity and clear reporting mechanisms to prevent evasion and to ensure consistent application across member states.
In the broader European context, the initiative is part of a wider push to modernize payment practices, reduce the administrative drag on businesses, and strengthen trust in public procurement processes. Stakeholders stress that faster payment cycles contribute directly to the health of small enterprises and the vitality of local economies, ultimately supporting employment and innovation across the continent. [Citation: PMcM leadership and EU regulatory developments]