Principal Non-EU Countries
Albania: Formerly a deeply oppressive communist country that, in 1967, declared itself the world’s first atheist state. Many post WW2 attempts were made to overthrow the government – which moved progressively towards the Soviet regime after Yugoslavia broke its ties with Russia. Between 1960 and 1970 Albania switched its focus to relations with Communist China. From 1970 it opened up slightly to the world, whilst maintaining a highly repressive hold on its people.
The country today has large potential mineral assets and has the second largest oil and gas reserves on the European continent. This mountainous country on the edge of the Adriatic still remains poor and detached from the rest of Europe. Its bureaucratic state apparatus and elements of political corruption prevents its full economic development.
Belarus: This heavily forested country retains many of the trappings of the former Soviet Union. After the breakdown of the USSR it maintained close ties with Russia and one of its two official languages is Russian.
The government has not made any attempt to join the European Union. However, there have been some indications since the Russian invasion of Crimea that the government is steering a more independent line, free from much Russian influence. Integrity is often low in political spheres and officials will sometimes seek bribes during a tendering process. The countries human rights record is poor and in 2014 a group of workers representing 9% of the national workforce was legally prevented from leaving their jobs.
Bosnia-Herzegovina: This ex-Yugoslav state is, in effect, a federal state embracing two national entities and a third small entity governed by its local government. The country suffered much ethnic violence during the Baltic wars and carries many of its past scars today. It has a bicameral parliament and a three-person President – one for each ethnic group. High unemployment and the continued loss of jobs sparked many violent protests in 2014 across the Federation of Bosnia-Herzegovina (one element of the state). The whole country is still a candidate for EU membership, but unrest and investment from islamic fundamental interests will have set that prospect back many years.
Iceland: This northern country has a small population, but enjoys a high standard of living. It is a member of the EEA and therefore adopts EU Directives and Regulations without being a formal member of the European Union. Although oral contracts of employment are valid, by far the majority are provided in writing. Collective agreements are widespread and automatically incorporated into individual contracts. Fixed-term contracts are limited to two years and no renewal after that period is allowed. Managerial contracts over 4 years can, however, be renewed for the same fixed period. Unlike other Nordic countries, termination can be undertaken without any stated reason and on serving due notice. However, an employee has the right to a meeting with their employer to challenge the decision.
Macedonia (FRYOM): The name and very existence of this state has bred much hatred in adjacent Greece, where a province also bears the same name. Curiously, this concern does not exist for Thrace – a name shared for separate areas by Greece, Turkey and Bulgaria.
The Republic of Macedonia has, in fact, very ancient roots stretching back before the Roman Kingdom of Macedonia. Today it has a significant minority population of Albanians, mainly living in the south of the country. Unemployment remains high and three out of four people report that they can manage only with “great difficulty” on the incomes they receive. However, the country has been able to attract a significant level of inward investment from multinational manufacturing companies and achieved a low, but consistent, level of economic growth.
Moldova: A former Soviet Republic that achieved its own national independence in 1990. The native population is culturally closely linked to Romania and the fear of absorption into one state led to formation of a breakaway republic of Transnistria in the north of the country – probably also prompted by the stationing of the 14th Russian Guards Army there.
Moldova continues to be haunted by a level of corruption that has been termed a “political disease”. This was illustrated in 2014 by the uncovering of massive fraud achieved by fictitious loans from a leading bank. There is now little confidence in the country by foreign investors and many of those who can trace their ancestry back to Romanian families are seeking to move into Romania (an EU state).
Norway: This oil rich state has a low population compared to its physical size. It is one of the best governed countries in the world and has clearly drafted labour laws. Norway is a member of the EEA and therefore adopts EU Directives and Regulations without being a formal member of the European Union.
The Working Environment Act sets out basic employment rights. All employment contracts must be a writing and concluded within one month of an employee staring work. Managerial employees may be exempt from working time and overtime payment requirements and a CEO can be subject to the terms of a written contract outside the terms of employment protection legislation. Termination must be for “cause”, although there is no need to issue a formal warning before termination takes place. The statutory notice periods are between two weeks and 6 months, depending on the period of service with the employer.
Russian Federation (West of Urals): The country as a whole is physically the world’s largest nation. However, the vast majority of the population (77%) live in the European part of the country.
Following the collapse of the Soviet Union in 1989/90 the new Russian Federation remained a world power and relations with other advanced economies improved. However, the collapse of any true democracy in the new millennium and Russian ambitions to regain territory lost primarily to Ukraine has made the USA and western allies cool their favourable attitudes and a new “cold war” has developed. There have also been deep, partly substantiated, concerns that Russia has sought to interfere with election results around the world, has used nerve gas to attack former agents in the UK and endorses the use of chemical weapons in Syria. It has also developed advanced techniques in cyber warfare and begun to secretly rearm.
Russia is the twelfth largest economy in the world, but nevertheless some 20 million inhabitants live below the poverty line and the proportion is increasing. For those in work, the income tax system consists of an attractive flat 13% rate. Different estimates exist concerning corruption and tax evasion. However, the informal economy probably accounts for at least 25% of GDP. Since the end of 2016 a significant shift has taken place in orientation as US-led sanctions have begun to impact on the economy. Now much of the orientation is towards China and this includes a huge growth in Chinese tourism.
Serbia: This is a democratic nation with an independent judiciary and a modern constitution. It has established diplomatic relations with almost all countries in the world and is probably the leading candidate for future EU membership.
The Baltic conflict hit the economy hard and gave rise to a poor reputation abroad, which only now is recovering back to the level it once enjoyed. It has also suffered from a severe refugee problem for many years. Today its demographic crisis is due to a death rate that exceeds the birth rate – giving rise to an ageing population. 60% of the working population are in the services sector and this has helped compound its negative trade balance.
Switzerland: Most people will know Switzerland because of its mountains, cheeses, financial sector and excellent railway network. But today the economy relies heavily on manufacturing – with a strong presence in the form of pharmaceuticals, chemicals and precision engineering. It is politically a federal state consisting of 26 cantons and the city of Berne. Its form of government is highly democratic with a facility for citizens to raise petitions for referenda to be held – with results binding on the national parliament.
Over 20% of the population are foreign nationals and many people commute each day across the borders from neighbouring countries to work there. Living standards are high, although only 37% of families are home owners. It has a highly flexible labour market, relaxed labour laws compared to other continental countries and a low tax regime.
Ukraine: This former soviet state has a large population and yet a very weak economy. Its borders are constantly under threat from Russian-backed rebels and the loss of Crimea to Russia has created a huge political controversy with the west. The civil war in the Donetsk Oblast and neighbouring areas has placed a great political and military strain on a country that has still not fully recovered from the 1986 Chernobyl Disaster and the laying to waste of a huge chunk of forest and farmland.
Greatest advantages: Access to capital markets, minimal labour laws in some countries, stability and central European location (Switzerland), inexpensive labour (eastern Europe). Clear and reasonable labour regulation (Iceland and Norway).
Greatest disadvantages: US-led embargo on Russia, cyber security problems, state bureaucracy, poor consumer markets, high social security costs, political instability and tight labour regulation (eastern Europe).
Proportion of global land area: 3.6%
Proportion of global population: 2.4%
Annual rate of population increase: -0.5% (Bosnia-H) +1.1% (Switzerland)
Life expectancy: Men 65.5 years (Russia) Women years: 85.4 (Switzerland)
Working population in the informal economy: 20-30% (not Switzerland)
GSI Modern slavery (Forced Labour) 0.404% Serbia, 0.732% Russia
Unemployment rate: 4.2% (Moldova), 25.1% (Bosnia-H)
GDP/capita PPP (current) $9125 (Ukraine) to $61360 (Switzerland)
Female labour participation rate: 16.1% (Bosnia-H), 69% (Switzerland)
Male labour participation rate:21.3% (Moldova) 67.9% (Switzerland)
World Bank rating (doing business): 136/ 190 (Moldova) 76/190 Ukraine
FedEE overall employment potential rating: 6/10
FedEE regulatory rating: 4/10 (Switzerland) 7/10 elsewhere.
Minimum wage rates (selected states)
– Albania: 24,000 leke a month (1.5.2017)
– Iceland: 300,000 a month (1.5.2018)
– Russian Federation: 9,489 roubles (1.1.2018)
– Serbia: 24,787 new dinars a month (1.1.2018)
– Ukraine: 3,723.00 hryvnias a month (1.1.2018)