Europe faces an important turning point: The region has witnessed three consecutive years of decline, which is the key to stimulating business and creating jobs.
In 2024, the number of foreign direct investment projects (FDI) has slid 16 % on an annual basis to 270,000-the lowest level in the past nine years, with the exception of 2020 when the epidemic dominated the world.
Within Europe, France, the United Kingdom and Germany were among the best countries receiving foreign direct investment, according to the annual European gravity surveyed on Friday.
But any waiting celebration will have to have: Although they have most foreign projects, each of the three countries has recorded a decrease in two number in the number of projects, as Germany faces more severe.
American investment in Europe is in its lowest level in the past decade, as the two global powers are trying to move in a commercial minefield.
EY survey depends on tracking data for tracing foreign investment projects in 45 countries and a perception survey covering the C-SUITE executives. The announcement of President Donald Trump’s official tariff was preceded last month, but he is still riding the work morale in winning.
While Europe lacked investments, North America witnessed a 20 % jump in foreign direct investment, as more companies tried to compensate for the effects of potential tariffs by increasing production in the United States
Many factors contributed to the decrease in investment. The usual suspects, including slow economic growth in the eurozone, geopolitical tensions, and the competitiveness of weaker manufacturing compared to the United States and China, have attracted the entire region’s attractiveness.
The country’s elements, such as uncertainty related to elections in France and Germany, as well as low productivity in the United Kingdom, did not bode well with investors.
Some of these opposite winds were weighted on foreign direct investment in Europe even in 2023. Julie Telend, an EY management partner who co -authored the report, said, At a time when it should be seen as a “call for waking up”, and these regulations in the region should not come at the expense of business growth and innovation.
Anna Putin, CEO of Spanish Bank Santander and a prominent business leader in the region, He said luck previously This year, this productivity in Europe began to recognize the urgent need for change.
She said: “To do this, there are some quick victories, such as focusing on reducing the organizational and supervisory complexity. But in the long run, we must do a lot to embrace innovation and institutions, and create a business environment and culture equivalent to smart risks.”
The annoying reality of investors is that 2025 can unleash a full new set of challenges.
The EY report pointed out that “the influence of the fear of the new Trump administration policies on the horizons of Europe cannot exaggerate.”
About 42 % of 500 business leaders surveyed between January 31 and March 3, 2025 believe that American policies make Europe less attractive. Also, more than half of the former CEOs surveyed have postponed their investment plans due to the uncertain climate.
However, as with more trends in Europe, even if the general narration is concerned, there are pockets of enormous opportunities.
Take Denmark, for example. The country witnessed an 86 % increase in foreign investment, and it is decisive The private sector employment. Greenfield investment – that is, when a foreign company prepares new operations from A to Z – it was also Historically Strong in the northern country.
Spain is another example of the prosperous economy. GDP grew 3.2 % in 2024, or five times the pace of the euro area, and a country noted by EY is a “prominent performance” with a 15 % jump in investment.
Low supplies of land, energy and low -cost employment have proven relatively magnetic investment, as well as a batch of 163 billion euros from the European Union through a plan to build more flexible economies. Astrazeneca has announced that it will expand its presence in the country, which increases employment.
“This indicates that investors still consider Europe an attractive location for advanced research in all sectors in the areas where it has a competitive advantage,” the EY report pointed out.
European companies invest more in other regional countries, such as the new German Defense Company Rheinmetall Manufacturing factory In Lithuania, which can also help local economies.
Although next year it appears mired in complexity and the inability to predict, experts believe that Europe’s attractiveness as an investment destination will recover during the next three years.
This story was originally shown on Fortune.com
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