After court ruling on late payments, Italy may face EU fines
January 28 2020 02:26 PM
The European Court of Justice (ECJ)
The European Court of Justice (ECJ)


Italy could face the prospect of EU fines for failing to settle public service invoices on time, after the bloc's top court ruled against Rome on Tuesday in a long-running dispute.

The case dates back to 2014, when the European Commission warned Italy about complaints it had received from private contractors who were not being paid on time by public authorities.

The average length of time for invoices to be settled was 170 days for services or goods provided, and 210 days for public works, the commission said at the time - compared to an EU-mandated deadline of 30 or 60 days.

Italy has since made progress on the issue, but is still not fully compliant with EU rules.

Following several years of back-and-forth with Rome, the commission escalated the case to the European Court of Justice (ECJ) in 2018.

Among other things, Italy argued that it was only bound by an EU obligation to pay late payment interest and compensation for recovery costs - an argument the court rejected, pointing towards ‘increased obligations’ in relation to private companies, according to a statement.

Italy had therefore failed to comply with the European Union's payment periods, laid down in a 2011 law, the Luxembourg-based judges concluded.

Rome must immediately comply with the ruling, or else the commission could bring a separate case calling on the ECJ to impose potentially hefty fines.

By 2014, Italian authorities had built up debt arrears worth 60-100 billion euros (66-110 billion dollars in today's prices), according to different estimates.

It has since whittled that down to 26.9 billion euros by the end of 2018, according to an Italian Economy Ministry statement from May last year.

Over the course of 2018, the average time to settle invoices was 46 days, the ministry said.

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