Potential competitors:

With low interest rates, funds will flow towards stock market. Companies without any unimmitable differentiated characteristic will be prone towards new entrants as chance of availability of funds to new entrants will be stronger.

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No tax rate harmonisation :

Tax harmonisation is only inevitable if companies are movable ad there are no other differentiating factors between European Union Countries, But actually this is not true. Moreover, tax is paid to the national government & not to the EU, as is the case in U.S. where taxes are paid to federal government. If we consider the total corporate tax base then Italy has the highest corporate tax burden. So harmonisation of tax rate won’t be a solution but efforts have to be done for the harmonisation of corporate tax burdens which is unlikely in near future. Also, largest divergence between tax burdens relate to social security contribution, which vary from 4.5% of GDP in Ireland to nearly 20% in France.

Overall Corporate Tax Burdens

Country	% of GDP
Italy	4
UK	3.8
Ireland	3.4
Spain	2
France	1.7
Germany	1.3

Quoted from European Insight Group Web Site

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Costs & Efforts

	Cost	Effort
Back office accounting & administration	36%	50%
Sales channel and customers	15%	20%
Training and culture change	4%	5%
Information technology	45%	25%

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