European Union
The European Union regulates payment timing through the EU Late Payment Directive (2011/7/EU), which caps public-authority payment at 30 days and B2B payment at 60 days, with automatic interest at the ECB rate plus 8 percentage points. Unlike Australia or the UK, this is a general commercial-payment law, not a construction-specific security-of-payment regime — there is no EU-wide statutory Construction Adjudication. Construction payment protection therefore varies sharply between the 27 member states, depending on national implementation and whether a member state has its own construction-payment law.
European Union [relates] EU Late Payment Directive EU Late Payment Directive [opposes] Global Subcontractor Payment Delays
The evidence shows the Directive has not solved the problem. The EU Payment Observatory’s 2025 Annual Report found that more than half of EU companies suffered late-payment difficulties in 2024 — up 5% on 2023 and 10% on 2021 — and that average payment periods exceed 60 days in both B2B and government-to-business transactions, with public authorities averaging close to 70 days in every member state despite a 30-day legal limit. Larger companies are significantly less likely to pay on time, reinforcing the power imbalance that bears down on construction subcontractors.
EU Payment Observatory [provides_evidence_for] European Union European Union [supports] Construction Payment Problem
The EU’s recent reform history is itself a key finding. In September 2023 the European Commission proposed replacing the Directive with a directly-applicable Regulation capping all commercial payment terms at 30 days. The European Parliament backed it; the Council did not. National parliaments raised subsidiarity objections and industry associations — explicitly including construction — argued a rigid 30-day cap ignored legitimate sector payment cycles. Compromise attempts failed and in 2025 the Danish Council Presidency confirmed no further action: the reform is dead. The contrast with the UK (which in 2026 chose to tighten its regime) and Australia (continual reform) is instructive — the EU tried to strengthen subcontractor protection and could not reach agreement.
EU Late Payment Directive [contradicts] UK Late Payment Reform 2026
Connections
- EU Late Payment Directive — governs payment terms across member states, source: 2026
- EU Payment Observatory — provides the comparative evidence base, source: 2026
- Global Subcontractor Payment Delays — problem persists despite the Directive, source: 2026
- Prompt Payment Legislation — EU lacks a construction-specific adjudication regime, source: 2026