Why tackling late government payments to businesses should be a key priority

Every year, many businesses across Europe go bankrupt as a result of payment delays. For this reason, the EU established a Late Payment Directive in 2011. Maurizio Conti, Leandro Elia, Antonella Ferrara and Massimiliano Ferraresi assess the impact of the directive, finding it has had some notable positive effects for the financial position of firms. Given the strain many businesses are under as a result of the Covid-19 outbreak, it is now more vital than ever for policymakers to address the problem.