Europe could generate a huge economic stimulus and ease the effect of the credit crunch on supplier companies if it adopted Nordic-style legislation on late payment, according to the head of the continent’s largest credit management group.

Lars Wollung, chief executive of Intrum Justitia of Sweden, said European governments could boost the economy by €65bn ($77bn, £49bn) just by paying their bills on time. But he also said countries should go farther and adopt Nordic-style legislation that punishes late payers.