EU States (Except UK)

Country Group Profiles

Baltic states (Estonia, Latvia and Lithuania): These former Soviet States are located in northern Europe and owe their nationhood to their modern foundation in 1918. They share a number of institutions like the Baltic Council of Ministers and they have special political links with Nordic countries. Each has a significant Slavic minority and there are geographical concentrations of different Christian communities. Their combined population is 6 million and land area 175,228 sq kms. The most densely populated state is Estonia – which also has the highest per capita GDP. Estonia has a Russian majority population to the east and this has caused some social instability over claims that resources are being directed towards ethnic Estonians.

Benelux (Belgium, Luxembourg and Netherlands): This entity originates from a customs convention signed in 1944 by exiled governments operating in London. The Benelux parliament was established in 1955 and Benelux court of Justice in 1974. The combined population is 28m and land area 74,657 sq kms. The most densely populated state is the Netherlands and the highest per capita GDP income is enjoyed in Luxembourg.

Czech Republic: This country once formed part of the Austro-Hungarian empire and latterly was united with the Slovak Republic. Prior to the WW2 this industrialised country ranked tenth in the global league for industrial production. 3 million German’s living in the country prior to the war were expelled to Germany after the war ended in 1945. The Soviet era was highly repressive and over a quarter of a million people were imprisoned or executed for their beliefs. It became an independent state in 1989 and split from Slovakia in 1993. The legal system is Germanic in nature and there is a separate Constitutional and Supreme Court. It is the most prosperous of the ex-Soviet states and it is not part of the Eurozone. The population is now 10.6m and land area 78,866 sq km.

Danube, Adriatic and Slavic states (Austria, Bulgaria, Croatia, Hungary, Romania, Slovakia and Slovenia): These countries do not form a distinct political entity within the EU, but they do have strong historical links. 81 million people live in the Danube basin as a whole – which links some 19 countries through the heart of Europe to the Black sea. The Danube is connected to the river Rhine by a canal which means that river goods traffic can pass directly from the Black Sea in the east to the North Sea in the West. This is such an important subregion that the EU has formed a Danube strategy and funds a number of important infrastructure projects. These 7 countries have a combined population of 57m and land area of around 651,000 sq kms. They are all constitutional democracies, but both Austria’s and Hungary’s governments have both swung heavily to the political right in recent years. Historically both Romania and Bulgaria suffered from widespread corruption, particularly amongst officials. However, this is now less evident than in the past.

Nordics (Denmark, Finland and Sweden): These affluent countries share a broadly common culture, high English language capability and a fairly narrow wealth gap. Norway is not an EU member, but adopts EU Directives on a voluntary basis. These are high tax/high welfare provision economies that tend to be politically neutral/stable and highly participative democracies.

Trade unions play a central role in the economy and there is little ideology or militancy in their approach. In Denmark many EU laws are implemented via collective agreements and the Swedish model of labour relations dates back to the 1938 Basic Agreement between SAF and LO. Many collective disputes are resolved through mediation and the Swedish Labour Court only acts as an institution of last resort. An important piece of Labour legislation is the Swedish Co-determination Act which gives employees and their unions a strong voice in the formation and application of workplace rules.

All Nordic countries give employees a high level of protection against dismissal and generally applicable collective agreements apply across sectors – even for companies not party to an agreement. Finland, in particular, provides strict privacy rights for workers – to the point of even preventing employers from opening emails addressed to employees that are on company systems.

Outlying states: (Greece, Irish Republic, Malta, Portugal): These highly individual states all lie at the outer margins of the EU. They include one of the EU’s most vibrant economies (Ireland) and two of its weakest (Portugal and Greece). However, both Greece and Ireland suffer from the highest concentrations in the EU of people under 60 years of age living in households with very low work intensity. Portugal has a number of important outlying islands in its territory – Madeira and the Azores and because of its former empire (and common language) retains close links with Brazil. Malta once formed part of the British Empire and retains a distinct identity from neighbouring Italy. Unlike Cyprus it decided, on independence, not to become part of the British Commonwealth.

The big five (France, Germany, Italy, Poland and Spain): A federal state, Germany has one of the world’s most complex legal systems. Collective bargaining takes place at a regional and sectoral basis and individual states operate their own Labour Courts. Companies in Germany function with two-tier boards and work councils enjoy a high level of codetermination rights.

France is one of the lowest unionised countries in the world, but also suffers greatly from the intense militancy within the union movement – to the point of holding manager’s hostage without police intervention. France also operates a system of state cartels whereby sectoral collective agreements are applied by law to all companies operating in the sector. All employment-related documents must be written in French and Labour Courts are highly biased against employers.

Italy has a complex system of collective bargaining and agreements often go right up to top executives (Dirigenti). Trade unions have a fixation on the issue of reinstatement after an employer has been found guilty of unfair dismissal and attempts to modify this right even cost two past labour ministers their lives.

Spain suffers from an excessive level of statutory compensation for unfair dismissal (which applies to most dismissals) based on years of service. This has had a big impact on inward investment and as a consequence most new jobs are fixed-term and unemployment (particularly youth unemployment) remains very substantial. Unemployment could be reduced by seeking work elsewhere in the EU but the general lack of language skills and weakness of the work ethic leaves this as a limited option.

Poland exports much of its unemployment via a large dispora of often highly skilled workers prepared to work in other EU countries for low wage rates.

Greatest advantages: Consistency in basic framework of employment laws, access to a large labour market and highly qualified personnel attracted to work in the region, generally good labour relations and declining unionisation, freedom of movement between countries, good communications.

Greatest disadvantages: Having to deal with codetermination in many countries, compliance with sectoral collective agreements that you as a company are not party to, high labour and social security costs, intense competition for the most talented staff and little corporate loyalty, wide variety of linguistic groups, considerable state bureaucracy in some countries, employee expectations concerning benefits in kind. Easy access to courts in order to pursue litigation.

Proportion of global land area: 2.9%
Proportion of global population: 5.9%
Annual rate of population increase: 0.25%
Life expectancy: Men 75years Women 81years
Working population in the informal economy: 8-32%
GSI Modern slavery (Forced Labour) 0.018% (France) to 0.47% (Poland)
Unemployment rate: 8.8%
GDP/capita PPP (current) $36,198
Female labour participation rate: 39%
Male labour participation rate:44 %

World Bank rating (doing business): 3/190 (Denmark)
FedEE overall employment potential rating: 6/10
FedEE regulatory rating: 8/10

Minimum wage rates (selected states)
– See here.