A simple solution to help EU citizens and businesses get their money back
Up to €600 million a year in cross-border debts could be more easily recovered through a new proposal launched today. The European Commission is recommending a Europe-wide preservation order to ease the recovery of cross-border debts, a problem which affects both citizens and businesses.
How can a company recover a debt from a supplier in another EU country who falls behind on its payments? How can an individual follow up when goods bought online are never delivered or an absent parent fails to pay maintenance from abroad? There are currently no easy solutions, and any pursuit of such debts can be expensive and time consuming.
The proposed Regulation would establish a new European Account Preservation Order that would allow creditors to preserve the amount owed in a debtor's bank account, thus preventing the debtor from removing his assets before any decision is made by a court. Such a change would increase both the prospects of successfully recovering cross-border debt and people's confidence in trading within the EU’s single market. It would not change the national systems for preserving funds, but rather add a European procedure that creditors could chose to use to recover claims.
"Companies lose around 2.6% of their turnover a year to bad debts," said EU Justice Commissioner Viviane Reding. "In these difficult economic times, companies need quick answers." Today's proposal is part of the Commission's “justice for growth” agenda, which seeks to harness the potential of the EU's common area of justice for trade and growth.