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The latest European Payment Index based on research carried out among 6,000 companies in 25 European countries to be released tomorrow by credit management services group Intrum Justitia of Sweden reveals that European written off debt, i.e. monies owed to a business in the region but never paid, has reached the record level of 300 billion Euro, a figure equal to Greece's national debt. This is a +8% rise on the levels recorded in 2009.
The report shows that European SMEs, responsible for contributing 56% of the EU's GDP, are the hardest hit by the rise in non-payment, with 3% of all transactions across public authorities, businesses and consumers having to be written off as bad debt.
Now in its sixth year, the survey also reveals that despite much talk of the 'green shoots' of recovery, European business confidence is low with just 10% of businesses forecasting an improvement in trading conditions over the coming 12 months and 52% of organisations feeling less confident that they will get the support they need from their banks.
Lars Wollung, CEO of Intrum Justitia, said "with many European governments continuing to prop up their economies with cash injections, this 300 billion Euro wastage figure is truly worrying. In particular it is extremely troubling to see how hard hit the SME market has been by non-payment and the lack of confidence that conditions will improve over the coming months. With banks continuing to lend cautiously, good cash-flow management, which includes taking decisive action when faced with late or non-payment, is vital to help ensure the very survival of many European small and medium-sized businesses."
The European Payment Index also revealed that more than half of all businesses (60%) would have liked to see the recently revised European Late Payment Directive extended to cover consumer payments with 58% saying that such an extension would significantly improve their business conditions.
To read more about the EU Late Payment Directive, please visit