Structural reforms and economic governance
The EU has to rapidly bring the European economy back on track for growth with an ambitious and effective long-term competitiveness strategy. Our global competitiveness is under massive threat. Investment is increasingly pushed away from Europe. Foreign direct investment inflows to the EU fell by 68 percent in 2021 compared to 2019, contrasting with a 63 percent increase in the USA during the same period according to BusinessEurope’s 2023 Reform Barometer.
Our survey shows that European companies are facing the prospect of long-term energy price rises well above major competitors, as well as a more rapid increase of regulatory burden compared to them. Generous support for industry seen in other major regions, such as the U.S. Inflation Reduction Act, is acting as a significant pull factor to invest outside the EU.
Around 90% of our member federations consider that compared to our global competitors, the EU investment environment is less attractive than 3 years ago. Foreign direct investment inflows to the EU fell by 66 percent in 2021 compared to 2019, contrasting with a 63 percent increase in the USA during the same period. The number of greenfield investment projects in the EU fell by 15 percent between 2021 and 2022, compared to an 18 percent increase in the USA during the same period.
