Europe is 'heading for third world status'

The Telegraph has this report on the future of Europe:

Europe risks becoming a "second- or third-world region" within a generation because strict labour laws are preventing companies from restructuring properly, according to the author of a Government-sponsored report out today.

The study "i2010 - Responding to the Challenge" criticises large European countries, particularly France, Germany, Spain and Italy, for not having the courage to reform archaic labour laws.

Who'd want to invest in a place like that?