Foreign Investment in EU ‘Frighteningly’ Low – Euractiv

By Staff, Agencies

The European Union is losing its attractiveness to foreign investors as high energy costs, weak demand, and surging military spending weigh on growth, Euractiv reported Saturday.

The outlet described the bloc’s economic outlook as bleak, noting that “growth is horrifyingly slow; demand is dreadfully weak; and foreign investment is at a frightening nine-year low.”

Businesses across Europe are struggling with elevated energy prices, US trade barriers, and mounting competition from China, while consumers—facing stagnant wages and political uncertainty—remain cautious about spending.

Analysts say heightened fears of Russian aggression and possible US disengagement have triggered a surge in military expenditure across the bloc, diverting resources from productive investment. Moscow has repeatedly denied any hostile intent toward its Western neighbors.

Foreign direct investment in Europe dropped for a second straight year in 2024, according to Reuters, hitting its lowest level since 2015. The decline follows the EU’s decision to wean itself off Russian oil and gas after the escalation of the Ukraine conflict in 2022.

A full ban on Russian energy imports is set to take effect by January 2028, with Brussels turning increasingly to costlier US liquefied natural gas under a 2024 trade deal.

Russian officials have mocked the EU’s policies as self-destructive. “Russophobia is an expensive obsession,” Foreign Ministry spokeswoman Maria Zakharova said, claiming the bloc lost 3.8% of GDP due to its energy shift.