Entrepreneurs: A major challenge for Europe

Written by Helena de Felipe Lethonen on 31 October 2017 in Opinion
Opinion

The disparities between EU member states are such that there is no one-size-fits-all solution, writes Helena de Felipe Lethonen.

The disparities between EU member states are such that there is no one-size-fits-all solution | Photo credit: Adobe Stock


There are currently wide gaps between EU member states’ national regulations concerning entrepreneurs. Each country has its own legislation, and despite the free movement of people, the rules have not been harmonised, making it difficult to talk about entrepreneurship of a global and European nature. 

For example, in Spain, it takes 14 days to effectively create a company, whereas at the other extreme, in Lithuania, it takes 72 hours. In global terms, the EU isn’t entrepreneur-friendly.

In New Zealand, a newly created company is operational in just half a day. The differences are not just about timings, but also the company capital and other requirements necessary for creating a company.


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In the same vein, the conditions of young people and women in a territory as extensive as the EU are also very unequal, starting with Spain where the percentage of unemployed young people exceeds 40 per cent, while the European average is below 20 per cent. 

Germany is the example to follow, with less than seven per cent youth unemployment. Germany has also been looking to hire many young people from other EU countries, relieving the pressure on other countries’ labour markets, such as Spain or Greece, the latter of which has 48 per cent youth unemployment.

The same occurs with women in the labour market. Countries such as Sweden, Finland and Germany are much better at getting women into the labour market and into top management positions, compared to countries in southern Europe, where both the employment rate and wage comparison between men and women continues to be a challenge which must be tackled. 

In Spain, women earn 35 per cent less than men, according to Eurostat 2017 data. Currently men in the European Union earn 16.3 per cent more than women for each hour worked.

Clearly there is no one-size-fits-all solution. Although the EU has set out guidelines for boosting entrepreneurship - three days maximum to set up a company, at a cost of no more than €100, that everything should be able to be processed at a single portal or in different countries at the same time - the reality is that any pressure - if any - applied on EU member states to implement these requirements does not obtain the desired result.

National disparities in terms of youth unemployment, employment equality and facilities for starting up, are such that harmonised rules are pointless. 

This is why the EU should carry out policies in those countries with the biggest problems regarding youth unemployment or women on the labour market, to allow them to be a bit more like the leading countries.

European associations like the Federation of Organisations of Mediterranean Business Women do important work, looking to reinforce gender equality, promote women’s entrepreneurial spirit and improve their professional development, by creating equal opportunities between member states and with neighbouring third countries.

Another challenge is trying to ensure that all countries have similar legislation. This will allow entrepreneurs travelling through Europe, with customers in Italy or Germany, to avoid an administrative maze which might convince them that extending their customer portfolio to a European level isn’t profitable, because of dual taxation or impossible regulations.

Around 84 per cent of male executives believe there are di¬fficulties for women in being able to start up. The reasons are many, but the EU and European professional and business organisations must contribute to the promotion of a cultural framework which will open up the market and opportunities to women.

Legislative changes and regulatory standardisation will be unsuccessful without prior political commitments both from the EU and from the member states so that those changes will be real priorities and global policies in the European Union.

 

About the author

Helena de Felipe Lethonen is a member of the European Economic and Social Committee’s employers’ group

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