The stock of current account trade payables of our Public Administration (PA) continues to grow continuously: in 2021, the latest survey presented in recent days (Eurostat, “Note on stock of liabilities of trade credits and advances”, - 23 April 2022), reached a record of 55,6 billion euros.
A figure that compared to our national GDP is equal to 3,1 per cent: no other EU-27 country records such a negative score. Of our main commercial competitors, for example, Spain's current account debt to GDP is 0,8 per cent, 1,2 per cent in the Netherlands, 1,4 per cent in France and in Germany. at 1,6 per cent. Even Greece, which last year had a public debt / GDP ratio of nearly 203 percent, has an incidence of trade debt on GDP that is almost half of ours: 1,7 percent.
There are those who have gone bankrupt: paradoxically not for debts, but for uncollected credits
It should also be noted that the calculation of trade payables presented in recent days does not include capital account ones (i.e. those referring to delays or missed payments for investments), which, according to an estimate by the CGIA Research Office, could be around 10 billion euros. Adding them to the 55,6 of the current account would push the total amount of the commercial debts of our PA to over 65 billion euros. Furthermore, there are not a few companies that have failed even in the last 2 years; not for debts, but for credits with the state that they have not been able to collect.
An unfortunate situation, according to the CGIA Studies Office, which demonstrates once again how the public car struggles to respect the payment times for goods and services provided by its suppliers, as required by law (usually 30 days from issue of the invoice or 60 days for some types of supplies, in particular healthcare ones).
They pay important bills, but not those of smaller amounts
It is correct to point out that in recent years the payment delays, measured with the Payment Timeliness Index (ITP) (In summary, the Payment Timeliness Indicator is defined in terms of average payment delay weighted on the basis of the amount of invoices and, for its calculation, the Ministry of Economy and Finance has provided detailed operating instructions with circulars no. . 3/2015 and n. 22/2015) are on average decreasing, although according to the Court of Auditors (Report on the General State Accounts 2019, Volume I, Volume I, p. 285) a trend is consolidating in which public administrations favor the quick payment of larger invoices and intentionally delay the settlement of lower ones. An operating method that obviously penalizes small businesses that generally work in contracts or supplies for amounts significantly lower than those "reserved" for larger production activities.
Most ministries are also a bad example
Paying late or not even paying are an all-Italian malpractice that does not spare even the ministries. In 2021, for example, among those with portfolios, only 2 out of 14 met the payment deadlines set by the law (Ecological Transition and Education / University / Research). All the others, on the other hand, paid late. The most "critical" situations were registered with the Ministry of the Interior (+67 days with respect to the deadline set by law), Agricultural Policies (+ 42 days), Defense (+33 days) and Cultural Heritage (+21 days ). The situation is even getting worse; in the first 3 months of this year, in fact, of the nine ministries that updated the ITP, only that of agricultural policies paid in advance (-37,07 days). All the others, on the other hand, have an average delay in payments: the slowest in paying the invoices received were the Ministry of Defense (+18 days), that of Infrastructure (+27 days), that of Labor (+29 days) and that of the Interior (+47 days).
In the South, the Municipalities are struggling to pay
Among the public administrative realities most in difficulty in paying suppliers we see the Municipalities of the South. In 2021, in fact, from the analysis of the ITP we see that the municipal administration of Lecce paid the invoices received 50 days late (data reported to the 3rd quarter of 2021), in Salerno after 61 days, in Avellino after 72 days, in Reggio Calabria after 154 days and in Naples with 228 days of delay. In the Campania regional capital, if we exclude public holidays, suppliers are paid one year after the deadline set by national legislation.
By paying off half of the debts, we could have 250 new employees
If, hypothetically, at least half of the 55,6 billion euros of trade debts were paid today, thus aligning us with a level of non-payments on GDP in line with the European average, how many new jobs could be created? Obviously, giving a precise answer to this question is extremely difficult. However, with almost 28 billion euros more in cash, it cannot be ruled out that companies could use at least ten billion to boost their workforce. Hypothetically, according to the CGIA Studies Office, this large injection of liquidity could help create at least 250 new jobs (This hypothetical result was reached by dividing the 10 billion euros of new liquidity with 40 thousand euros. This latter amount is the average annual cost of a new employee).
Already convicted by the EU Court of Justice
With the sentence published on January 28, 2020, the European Court of Justice affirmed that Italy has violated art. 4 of the EU directive 2011/7 on payment times in commercial transactions between public administrations and private companies (since 2013, following the transposition into our legal system of the European legislation against late payment - EU Directive / 2011 / 7-, payment times in commercial transactions between Italian public bodies and private companies cannot normally exceed 30 days - 60 for some types of supplies, in particular healthcare ones). Although in recent years the average delays with which invoices are paid in Italy have decreased slightly, in 2021 the European Commission sent a letter of formal notice to the Draghi government on non-compliance with the provisions of the European directive approved 10 years ago. . Finally, another procedure still open against our country concerns the code of public contracts which provides for a payment term of 45 days, when at the EU level the deadline is 30 days.
Suppliers must offset tax liabilities with trade receivables
To solve this age-old question that is putting a lot of pressure on many SMEs, for the CGIA there is only one thing to do: by law, provide for the dry, direct and universal compensation between certain liquid and collectable credits accrued by a company against the PA and the tax and social security debts that it must pay to the Treasury. Thanks to this automatism we would solve a problem that we have been carrying on for decades. Without liquidity available, in fact, many artisans and as many small entrepreneurs find themselves in serious difficulty and in such a delicate moment for the country's economy it is unacceptable that the debts of the PA towards entrepreneurs have been constantly growing since 2017.
Because the PA struggles to pay
The main causes that have given rise to this bad habit that we have been carrying on for at least 15 years are the following:
- the lack of liquidity by the public client;
- intentional delays;
- the inefficiency of many administrations to issue payment certificates in a reasonably short time;
- disputes that lengthen the settlement of invoices.
To these cases must be added at least two others which, among other things, led the European Court of Justice to condemn us in January 2020. They are:
- the request, often made by the PA towards the executors of the works, to delay the issue of the progress of the works or the sending of invoices;
- the request made by the Public Administration to the supplier to accept, during the signing of the contract, payment times exceeding the limits established by law without the application of default interest in case of delay.