Situation of non-payment in Vigo’s naval sector

Subject: Situation of non-payment in Vigo’s naval sector

Shipbuilding in Spain, a sector in which the workforce is in constant decline, is structured around a small group of large industries, which subcontract a large part of their work to auxiliary companies. The typology of these auxiliary companies is very diverse and ranges from micro-enterprises to SMEs, whose workloads stem from several shipyards. Many of these companies were set up by former workers of large shipyards, i.e. outsourcing. The shipbuilding industry in Vigo (Galicia) is an example of where this has happened.

A common practice of large companies is to order urgent work from their suppliers with little financial control, which leads to repeated non-payment. An example of this is the company Barreras (in which the Ritz-Carlton hotel chain has a stake holding).

A platform of 19 auxiliary companies of the naval sector are affected by such non-payment. Collectively, these companies are owed EUR 7 million in unpaid invoices for works carried out. Meanwhile, this platform of companies denounces that the same debtor companies are applying for European subsidies.

1. Does the Commission consider it appropriate to grant aid and subsidies to companies which are structurally in arrears with their workers or auxiliary workers?

2. What specific measures and conditions does the Commission envisage to combat the problem of non-payment of the sort to which Vigo’s shipbuilding ancillary companies have fallen victim?

Answer given by Mr Breton on behalf of the European Commission

(21 September 2021)

Late payments are endemic to commercial transactions between businesses (B2B). In the EU, 60% of B2B transactions are paid late (1). Small and medium-sized enterprises are more exposed to this risk, with disastrous consequences for their survival and supply chains resilience.

The 2019 European Parliament Resolution (2) highlighted that tackling late payment requires a set of different measures targeting processes, people, practices, and provisions at both national and EU level.

As noted in its reply to Written Question E-002150/2021, the Commission will support the Member States in enforcing the Late Payment Directive (3) more effectively. The EU Observatory on late payments will expand its current work on the construction ecosystem to others (4).

On 16 June 2021, the Commission gave a positive assessment to Spain’s recovery and resilience plan, which included dedicated measures to combat late payments in B2B transactions (5).

State aid rules do not prevent Member States from supporting companies in case of late payment to suppliers, as long as the company fulfils all conditions required by state aid rules (6).

As regards EU funds, the Commission does not directly grant aid and subsidies to companies for the implementation of the EU policies.

The Cohesion Policy’s funds are implemented and managed according to a shared framework between Member States and the Commission.

⋅1∙ https://op.europa.eu/en/publication-detail/-/publication/c8b7391b-9b80-11e8-a408-01aa75ed71a1/language-en

⋅2∙ European Parliament Resolution of 17 January 2019 on the implementation of Directive 2011/7/EU on combating late payment in commercial transactions:

https://www.europarl.europa.eu/doceo/document/TA-8-2019-0042_EN.html ⋅3∙ Directive 2011/7/EU on combating late payments in commercial transactions: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32011L0007 ⋅4∙ Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery, COM(2021)350. ⋅5∙ https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2987

⋅6∙ For example, if the company is an undertaking in difficulties, and cannot pay its bills, then it can still benefit from state aid under Rescue and Restructuring guidelines

(Communication from the Commission — Guidelines on state aid for rescuing and restructuring non-financial undertakings in difficulty (OJ C 249, 31.7.2014, p. 1). A company (that was not already in financial difficulty on 31 December 2019 in case of large undertakings) may also benefit from aid granted under the Temporary Framework for state aid measures to support the economy in the current COVID-19 outbreak (Communication from the Commission — Temporary framework for state aid measures to support the economy in the current COVID-19 outbreak (OJ C 91I, 20.3.2020, p. 1), as amended by Commission Communications C(2020) 2215 (OJ C 112I, 4.4.2020, p. 1), C(2020) 3156 (OJ C 164, 13.5.2020, p. 3), C(2020) 4509 (OJ C 218, 2.7.2020, p. 3), C(2020) 7127 (OJ C 340I, 13.10.2020, p. 1) and C(2021) 564 (OJ C 34, 1.2.2021, p. 6).












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