The benchmark for this section had to be constructed differently. No numerical measurements - or, as far as we know, comprehensive comparison - exists for all EU countries. Therefore, we had to build from scratch and concentrate only on the seven country comparative group. The index, therefore, averages only these seven, and not all of Europe.
The Czech Republic receives high marks for the quality of its legislation. In bankruptcy and commercial registration - both recently reformed with intensive involvement of private sector experts - the country has a distinct competitive advantage. In seven chapters of legal reform, the country performs at the comparative group average. Only labor law is a competitive disadvantage.
The Czech bankruptcy law is considered to be a fully modern approach to bankruptcy. Over the next few months, the newly formed re-organization provisions will likely be tested thoroughly, as well the judiciary’s knowledge of those provisions.
The commercial registration process, once a black mark in the World Bank ratings, now ranks highly. If the demanding basic capital requirement were lowered, the country could receive an even higher score.
Most of the seven legal categories that ranked as average could be easily improved with amendments. Some amendments are already in the process: including those introducing rules for e-delivery of documents issued by state authorities; protecting a person who purchased property in good faith from an owner registered in the cadaster but whose ownership is subsequently invalidated; archiving an e-electronic document; introducing the personal liability for cartel arrangements; and creating a new Tax Procedural Code.
As for the labor code, the inflexibility of working arrangements - particularly conditions for ending a working relationship - make the law a significant problem for the economy. The law does not distinguish between large and small firms, or between manufacturing or professional service workers, or between staff and management. The lack of subtlety and flexibility will hurt more in hard times than in good.