New research published on Tuesday claims that European governments could provide a €65bn stimulus to their home economies by paying invoices vowed to suppliers in full and on time.
The European payment index survey of over 5,000 European businesses argues that governments across Europe are more "unreliable" than private businesses or consumers when it comes to paying suppliers monies owed, taking an average of an additional 37 days to pay an invoice.
Across European government, businesses and consumer groups, 2.4 per cent of all invoices have to be written off as bad debt, an increase of 0.4 per cent - or €20bn - compared to the same period last year.
If all invoices across these groups were paid on time and in full, the money saved would equate to a liquidity injection of €270bn into the European economy, it is claimed.
The study says that European businesses spend at least €25bn chasing late payments from consumers and businesses each year while 70 per cent of respondents feel that payment risks will further increase in the coming year.
"On the one hand we have governments across Europe pumping huge sums of money into their economies to increase cashflow, yet on the other hand, these same entities are not paying invoices on time," said Lars Wollung, chief executive of Intrum Justitia, the credit management services company that conducted the study.
He added, "It is for this reason that we are calling on governments across Europe to pay up on time.
European businesses and in particular SMEs are fighting for survival and an injection of at least €65bn into the economy could prove a real lifeline."
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