December 22, 2010
This story about starting a business in the EU was originally published on 22nd December 2010 by EurActiv.
The European Union adopted the Small Business Act in 2008, with the intention of making it easier to start and run a business. Two years on, the EurActiv network takes a look at the achievements and challenges ahead.
Starting her own online art gallery in London this year took Gina Cross about a week and cost £70 (€82), about the average for entrepreneurs in the United Kingdom.
Likewise, in Bulgaria, France and Ireland, registering a new business costs less than €100 and takes less than a week.
“It’s quite easy,” said Cross, founder of A Little Bit of Art, a small company which sells printed artworks.
But in Poland and Spain, entrepreneurs still wait about a month for their initial paperwork to be approved. In Italy, Luxembourg, Greece and the Netherlands, the process is faster but expensive – more than €1,000.
That discrepancy highlights the challenges facing efforts in the European Union to jumpstart the economy. When it comes to economic initiatives the EU has no powers to enact rules with teeth. They host meetings, promote programmes and share best practices, but at the end of the day their recommendations are only as strong as the political will to enact changes at the national and regional level.
“Certain member states moved on certain elements, but not all […] There’s definitely space to push further. We’re very much aware of that,” said Marko Curavi?, head of unit for entrepreneurship in the European Commission.
Four years ago, leaders from all 27 member states set a 2007 deadline for their own countries to create one-stop-shops for setting up a company quickly – ideally within a week. Start up fees, the European Council concluded, should be as low as possible, and hiring the first employee shouldn’t involve more than one public administration point.
Clearly many countries are years behind schedule.
But why does that matter?
Small and medium-size businesses create 80% of new jobs in Europe. That means entrepreneurs and small and medium businesses will play a critical role as Europe recovers from the economic and financial crisis. So anything that hinders new businesses hinders growth.
This is especially important now because while the unemployment rate in the EU averages around 10%, and it’s double that for job seekers under the age of 25, according to research published last week by the Organisation for Economic Coordination and Development. The highest youth unemployment rate was in Spain, followed by Ireland, Slovakia and Greece. Only Germany posted a slight decrease.
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