New law to ease EU debt collection

BRUSSELS – The European Commission proposed new rules yesterday to make it easier to recover debts from bank accounts anywhere in the 27-country bloc.

EU companies lose about 2,6 per cent of turnover every year to unrecovered debts – a total of 600 million euros, according to the Commission, the EU’s executive. About 60 per cent of cross-border debt remains unrecovered every year, it added.The new rules, that still need to be approved by EU governments and the European Parliament, would help creditors to recover money lost in cross-border deals, said officials.Under the proposal, a creditor in one EU state would be able to use a single procedure to ask authorities in another country to block the funds in the debtor’s bank account.’I want to make recovering cross-border debts as easy as recovering debts domestically,’ European Justice Commissioner Viviane Reding said in a statement.At the moment, a creditor owed money by a person in another country has to pursue the money through that country’s legal system – often a complicated and time-consuming task.Under the Commission’s proposal, national systems for blocking funds will remain in force in parallel with the proposed EU system. The proposed legislation will now pass to the 27 EU member states and the European Parliament for a vote in September. – Nampa-Reuters