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EuCham - European Chamber - 2015-06 Business and Labor Freedom

     


     
     
     



2015-06 Business and Labor Freedom

EuCham lists the European countries according to their Business and Labor Freedom, in order to identify the countries with the least restrictive environments to conduct a business.

Denmark tops the general ranking, achieving a score of 94.8 out of 100, and remains one of the European most efficient and transparent regulatory environments. Georgia (2nd) catches up the United Kingdom (3rd) and they are now rubbing shoulders. Flexible and modern employment regulations sustain their labor markets, as their competitive and efficient regulatory framework definitely facilitates entrepreneurial activities.

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EuCham Charts

June 2015

Business and Labor Freedom Index

1

Denmark

94.8

2

Georgia

84.3

3

United Kingdom

83.4

4

Ireland

79.2

5

Austria

77.4

...

   

47

Croatia

49.3

 

EuCham data based on "2015 Index of Economic Freedom"
47 European countries were considered

 

EuCham_Charts_Logo.jpg

  • Denmark offers the least binding business environment, performing an overall score of 94.8 (out of 100).

  • Georgia has experienced a decade of economic and social changes. Its economy has been boosted by policies, especially labor market reforms, which enable the employment system to be much more flexible.

  • Despite improvements thanks to recent policies, Croatian labor market remains rigid.

 

Source: eucham.eu/charts

 

Detailed Information

European governments have set many business regulations in place to protect employees’ rights and supervise the business environment. Administrative burden can yet be a drag on growth and a barrier to market entry. The efficiency of the regulatory framework is thus crucial in business development.

EuCham lists the European countries according to their business and labor freedom, in order to identify the countries with the least restrictive environments to conduct a business. Denmark tops the general ranking, achieving a score of 94.8, and remains one of the most efficient and transparent regulatory environments. Georgia (2nd) catches up the United Kingdom (3rd) and they are now rubbing shoulders. Flexible and modern employment regulations sustain their labor markets. Their competitive and efficient regulatory framework definitely facilitates entrepreneurial activities.

Ukraine, Moldova and Croatia are the three last ranking countries. Despite a business start-up process which has been streamlined and reform measures on the labor market, the overall regulatory environment remains burdensome and inefficient. Eastern Europe countries have undergone a fast-change in their regulatory frameworks and embrace now a larger business and labor freedom. Individual’s rights to establish and run an enterprise, as well as companies’ rights to contract freely and dismiss workers without undue intervention of the state, have been significantly enhanced.
However, the ranking reveals performing results as 34 European countries out of 47 considered are ranked above the world average (62.7).

 

Methodology

All the data are derived from the Index of Economic Freedom of the Heritage Foundation and The Wall Street Journal. The index was measured according to 10 quantitative and qualitative factors. Factors are divided into four main categories: rule of law, limited government, regulatory efficiency, open markets.
Among these 10 factors, EuCham Research Department considered:

(1/10) Business Freedom: starting a business - opening a license and closing of business, each in  (time, cost, % of income per capita).

(1/10) Labor Freedom: ratio of minimum wage to the average value added per worker, hindrance to hiring additional workers, rigidity of hours, difficulty of firing redundant employees, legally mandated notice period, and mandatory severance pay.
All the data is extracted from the Index of Economic Freedom 2015.

 

Figure 1: Business and Labor Freedom Map

Chart Business and Labor Freedom ok.jpg

 

 Figure 2: Business and Labor Freedom Index

Graph LABOR BUSI.jpg

 

Table 1: Business and Labor Freedom Index

Rank

Country

Business Freedom

Labor Freedom

Business & Labor Freedom Index

1

Denmark

97,4

92,1

94,8

2

Georgia

88,6

79,9

84,3

3

United Kingdom

91,1

75,6

83,4

4

Ireland

82,1

76,2

79,2

5

Austria

78,0

76,7

77,4

6

Montenegro

77,1

77,5

77,3

7

Belgium

90,7

63,7

77,2

8

Switzerland

78,1

75,3

76,7

9

Iceland

90,5

62,2

76,4

10

Belarus

72,0

80,1

76,1

11

Czech Republic

68,2

82,9

75,6

12

Netherlands

84,3

66,3

75,3

13

Macedonia

79,2

70,7

75,0

14

Finland

92,6

54,8

73,7

15

Armenia

82,7

64,3

73,5

16

Lithuania

84,9

62,0

73,5

17

Bulgaria

68,5

76,6

72,6

18

Latvia

82,1

61,5

71,8

19

Hungary

74,5

67,7

71,1

20

Sweden

87,9

54,0

71,0

21

Norway

92,1

48,2

70,2

22

Estonia

81,5

58,7

70,1

23

Germany

88,2

51,2

69,7

24

Cyprus

79,5

59,6

69,6

25

Kosovo

66,8

72,1

69,5

26

Romania

69,8

68,6

69,2

27

Slovenia

81,2

57,1

69,2

28

Russia

76,3

58,9

67,6

29

Portugal

87,5

42,9

65,2

30

Spain

77,5

52,6

65,1

31

Serbia

57,8

70,4

64,1

32

Poland

67,3

60,4

63,9

33

Italy

71,9

55,4

63,7

34

Slovakia

69,6

56,5

63,1

World average

62,7

35

Greece

73,3

51,6

62,5

36

France

80,2

43,5

61,9

37

Albania

70,6

52,9

61,8

39

Bosnia and Herzegovina

53,5

63,4

58,5

41

Malta

61,0

55,6

58,3

42

Luxembourg

71,3

42,1

56,7

43

Turkey

61,0

50,2

55,6

45

Ukraine

59,3

48,2

53,8

46

Moldova

66,8

40,6

53,7

47

Croatia

55,8

42,8

49,3

No data: Andorra, Azerbaijan, Kazakhstan, Liechtenstein, Monaco, San Marino

Source: The Index of Economic Freedom (2015)
EuCham Research Department - Compiled by Soazik Lijour 2015-05-26

 

 

 

 

 

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