Dutch legislation on competition has in the past been relatively lax. Some time ago the Dutch government passed a new law on competition which sets stricter rules. The Netherlands will have to enforce those rules vigorously. The second barrier is formed by labour-market rules, including those on working hours and on hiring and firing, and by stringent collective bargaining agreements. The third barrier has to do with the unattractive climate for setting up new companies in what are or should be fast-growing sectors.
Strict regulation drives up labour costs.
This is particularly true for small businesses. The fourth barrier consists in the lack of incentives for the low skilled to find jobs. Social security benefits in the Netherlands are still among the most generous in the world. Many of the unemployed are therefore stuck in a poverty trap. Wider margins between benefits and wages should lead to jobs becoming available for those who can work but now depend on social security.