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Germany investments drop, France peaks

Germany investments drop, France peaks

Germany is less attractive to foreign investors. In 2021, there were significantly less investments in the country. Other European countries saw an increase, however, with France at the top. Overall, investor confidence in Europe declined.

These are the results of a study by consulting firm EY. The researchers interviewed 501 international investors and mapped foreign direct investments from 44 European countries.

Projects in Germany fell 10%

France, Great Britain and Germany are the top 3 European countries for foreign investments. Though, remarkably, foreign investments in Germany fell as much as 10 percent in 2021. Investors announced a total of 841 projects in the country.

Germany has a lenghty administration process and high energy costs.

According to the study, Germany has a lengthy administrative process and high energy costs by comparison. Investors also mention a shortage of skilled workers. On the upside, Germany did attract two flagship investments last year with a new Tesla plant and Intel chip factory.

France and United Kingdom at the top

France is at the top with 1.222 projects last year. That is a 24 percent increase compared to the year before. This is partly due to economic reforms, making it a more attractive investment location.

UK investments increased slightly with 2%.

That leaves the United Kingdom (UK), although no longer part of the European Union, in second place. UK investments remained steady, with a slight increase of 2 percent to 933 projects. Thus, Brexit does not seem to have reduced the appeal for foreign investments.

Investor confidence in Europe declined

For Europe overall, investments increased slightly with 5 percent in 2021. However, confidence of investors decreased in 2022. In the beginning of March, nearly 80 percent of investors planned to expand in Europe. But at the end of the month, only 25 percent said this.

64% of investors think Europe’s appeal will improve.

This is mainly because of the ongoing war in Ukraine, inflation and supply chain disruption. Nonetheless, investors remain optimistic: 64 percent of investors believe the attractiveness of Europe will improve in the next three years.

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