The Portuguese economy is generally supposed to be extremely rigid. Red tape and lack of flexibility in the labour market, would hinder the adjustment of the economic structure to new situations, namely to the challenges created by the recent EEC membership and the future completion of the Internal Market. Bureaucracy, imposing costs and increasing the lags between detection of profit opportunities and entry into the market to exploit them, and labour law, constraining the quick response to market requirements would be, according to this dominant view the main obstacles to new firm formation, to the growth of existing firm growth and to productive investment in general.