Italian public sector payments: "The cheque is in the post"

If a European Government were to miss a payment on its debt we would have outcry from all corners of financial markets and very possibly a rapid return to the chaos of the early months of 2012. Luckily that risk has passed (for now) so spare a thought for those businesses that provide services to Eurozone public sector bodies.

It's a sad fact that European governments have a growing habit of dragging their heels when it comes to paying their invoices. Last week the Italian state provided over 30 billion euros to pay overdue bills owed by its public sector bodies. In some cases these delays have gone on for months, resulting in job losses and bankruptcies. Even with this cash now available, the process for making payments is so cumbersome that creditors could still face further months before receiving their overdue payments.