EU bureaucracy unfavourable to new businesses, claims report

Date: 03/04/03

By Peter Chapman

THE EU's hotchpotch of red tape and taxation rules is threatening efforts to finance new businesses, according to a study unveiled this week.

The European Private Equity and Venture Capital Association - which represents financiers investing in firms at the earliest stage of development or in unlisted companies - said the gloomy scenario 'needs urgent attention'.

Javier Echarri, secretary-general of the Brussels-based group, said despite the proven track record of the sector in helping to boost business and jobs, 'it is striking to ascertain the limited efforts devoted by many member states to providing an entrepreneurship-conducive tax and legal environment'.

The study judged member states on factors such as company tax rates for small firms, capital gains tax, taxation of stock options and overall 'entrepreneurial environment'.

The report said only the UK and Ireland are close to a 'favourable environment' for investors, closely followed by Luxembourg, the Netherlands, Italy and Greece.

Worst ranked were Germany, Denmark and Austria.

France and Sweden were just below the average, the report added.

The EU's hotchpotch of red tape and taxation rules is threatening efforts to finance new businesses, according to a new study by the European Private Equity and Venture Capital Association.