Because of bureacratic overhead. We did employee people from other EU countries in the past because I personally honestly don't care where someone is from or where someone lives. But you need to learn the rules of every country. And they are often subtly different. We even struggle with UK & Germany already. It's annoying. And we have like 0,1 FTE to take care of HR stuff and anything "out of the ordinary" eats into that time and money budget.

The rules need to change. The rules will not change. So we're stuck.