European countries are creating laws to make it more favorable to do business between the existing countries of the European Union to increase investment opportunities. Firms need to be confident that they can compete on a level playing field and that legal structures exist to allow all businesses to move across borders.
Due to the recent financial crisis being experienced around the world, many companies are closing down. Some electronics retailers are in receivership (bankruptcy) in the United Kingdom.¹ Credit is tight and businesses are finding it hard to finance purchases. Additionally, the value of the euro has been very unstable recently, fluctuating each and every month depending on what countries may require economic bailouts and the unemployment rates of European countries. There is also an issue with exchange between the UK and the rest of Europe. The UK uses the British pound for currency while the EU uses the euro. Taxes are also increasing in order to pay off huge national debts, making it more expensive for businesses to expand. Unemployment in Europe is huge, making a pool of talented labour available for less money than would be required in North America.
Reference:
1. Sabbah, P. (November 25, 2011). Manage Risks When Doing business in Europe. Retrieved from http://www.washingtonpost.com/business/on-small-business/manage-risks-when-doing-business-in-europe/2011/11/23/gIQART0BwN_story.html