There has been no improvement in the declining attractiveness of the EU as a business location, says a new report.
It adds that the majority of business federations believe that the EU’s attractiveness as investment destination for global firms stagnated or declined over the past year.
The EU is a less attractive investment location in comparison to our international competitors than 3 years ago, says BusinessEurope, the umbrella body for businesses across Europe.
Its grim message comes on the eve of a crunch EU summit in Brussels on 21 March.
EU leaders meet in the city this week to discuss the EU’s flagging economy as well as other issues, notably the war in Ukraine and Middle East crisis.
The report says, “In 2023, European entrepreneurs continued to seek to drive the EU’s green and digital transitions and their task was made more difficult by high energy costs, an increasing regulatory burden and continuing geo-political uncertainty.”
It goes on, “Furthermore, they have felt the effects of both reduced consumer demand and increased financing costs linked to higher interest rates that are necessary to tackle inflation.”
The gap in productive investment between the EU and the US continues to widen.
Productive investment in 2022 amounted to 15% of GDP in the US versus 11% in the EU and is part of a worrying longer-term trend.
For the past 10 years, Europe has shown a gap in productive investment of 1.5 to 2 percentage points of GDP relative to the US.
