Foreign investment in EU ‘frighteningly’ low – Euractiv
High energy prices, military buildups, and US tariffs have weighed on the bloc’s economic outlook, the outlet reports
The EU is becoming progressively less attractive to foreign investors, Euractiv has reported. The outlet cited high energy prices and rising military spending among the factors undermining the bloc’s economic competitiveness.
According to Euractiv, the “EU’s growth is horrifyingly slow; demand is dreadfully weak; and foreign investment is at a frightening nine-year low.” Businesses across the bloc are struggling with high energy prices, US tariffs, and competition from China, while ordinary citizens, burdened by stagnant wages and geopolitical uncertainty, are reluctant to spend their savings, Euractiv wrote on Saturday.
“Fear of Russia and US military abandonment has sparked a splurge in military spending” in the EU, it added. Moscow, meanwhile, has repeatedly denied harboring any aggressive plans toward its Western neighbors.
“There is a sense that things are going downhill, that we’re losing our prosperity,” Philipp Lausberg, a senior analyst at the European Policy Center, told Euractiv.
In May, Reuters, citing data by professional services group EY, reported that foreign direct investment in Europe fell for the second consecutive year in 2024, reaching a nine-year low.
Following the escalation of the Ukraine conflict in February 2022, most EU countries halted direct imports of Russian oil and gas. Last month, the European Council agreed on its negotiating position regarding a proposal that would impose a full ban on Russian energy imports starting on January 1, 2028.
In July, Brussels and Washington struck a trade deal that included a pledge that the EU would replace Russian oil and gas with US energy imports.
Commenting on the situation last month, Russian State Duma Speaker Vyacheslav Volodin said the EU was buying US liquefied natural gas at such high prices as if it were Chanel perfume. The bloc is “destroying [its own] economy” with this choice of energy sources, he added.
Russian Foreign Ministry spokeswoman Maria Zakharova said earlier that “Russophobia is an expensive obsession.” She added that the EU had lost around 3.8% of its combined GDP by 2024 due to its shift from Russian energy to more costly alternatives.
