EY announces publication of bold 12-Point plan to help reignite foreign investment in Europe 

• New 12-step plan reflecting views of business leaders across Europe published as the continent faces a decrease in foreign investment
• Potential actions include reducing energy prices, simplifying regulation, boosting investment in innovation and AI
• Recommends ‘Choose Europe’ campaign to help promote key strengths, including skilled workforce and commitment to sustainability

In a new report, the EY organization is calling on European business and government leaders to consider 12 collective steps to help enhance the continent’s attractiveness after foreign direct investment (FDI) into Europe hit a nine-year low in 2024.

The plan follows the publication of the latest EY Europe Attractiveness Survey, which found that European FDI fell by 5% in 2024, with double-digit declines in France, the UK and Germany ‒ the top three destinations for FDI in Europe.

The survey also found that 37% of surveyed businesses have either postponed, cancelled, or scaled back their investment plans in Europe, citing high energy prices, regulatory complexity, as well as trade and geopolitical tensions as key deterrents.

Julie Linn Teigland, EY EMEIA Area Managing Partner and EY Global Vice Chair – Alliances & Ecosystems, says:

"Europe is facing a critical moment and decisive action taken now can help transform adversity into opportunity. By focusing on these essential measures and taking action, Europe could enhance its global competitiveness by attracting the foreign investment that will help drive sustainable growth for years to come."

To address key challenges and restore investor confidence, today’s publication outlines 12 actions Europe could take, focused on helping boost competitiveness, reinforcing resilience and firing up growth. The key potential actions are:

1. Reduce the energy gap: Businesses rank reducing energy prices and increasing energy independence as a top priority. Electricity prices in Europe remain significantly higher than in the US, and immediate action should be considered to help create a more competitive energy landscape.
   
   
2. Lead on sustainability: Europe’s commitment to sustainability is considered a competitive advantage – with two-thirds of business leaders saying that Europe’s sustainability efforts have boosted investment appeal. However, to maintain a leading position, policymakers must accelerate the low-carbon energy transition and simplify access to decarbonization programs.
   
   
3. Supercharge innovation: Europe lags other advanced economies in R&D investment. Europe should consider improving access to funding for early-stage businesses and enhancing collaboration to help drive innovation and attractiveness to leaders across a range of areas including AI and clean energy.
   
   
4. Simplify the rules: The complexity of operating in Europe frustrates businesses – 45% of businesses surveyed say that Europe’s approach to tax has decreased its attractiveness as an investment destination. Streamlining regulations and harmonizing approaches across Member States may be essential for boosting Europe’s investment appeal.
   
   
5. Make tax lower and predictable: Concerns over rising public sector debt and tax unpredictability are deterring investment and surveyed businesses say a more predictable tax environment is crucial, in addition to a reduction in corporate tax rates.
   
   
6. Shape a new trade strategy: Businesses cite tariffs and trade barriers as significant obstacles. Europe should work to further reduce internal trade barriers and build new trade relationships to enhance market access.
   
   
7. Champion strategic sectors: Protecting critical industries and promoting innovative sectors like clean energy and AI is considered to be vital for securing future growth and investment.
   
   
8. Support SMEs: Small and medium-sized enterprises (SMEs) are essential to the investment ecosystem and targeted support and simplification of SME-related regulations is considered critical to help them thrive.
   
   
9. Invest in defense: Geopolitical tensions require increased defense spending, and a coordinated approach would be needed to increase confidence in European security.
   
   
10. Unlock access to finance: The availability and cost of capital are crucial for investment. Europe should therefore consider enhancing its capital markets and creating a more favorable environment for venture capital to thrive.
    
    
11. Foster and attract top talent: A skills deficit poses a significant challenge for Europe, which should consider investing in the right education to foster and attract top talent, especially in data and technology.
    
    
12. Choose Europe: A unified investment promotion push could help project Europe’s strengths and attract global investors, showcasing its skilled workforce, commitment to sustainability and the measures already taken to address longstanding barriers to investment.

For a comprehensive view of the findings and recommendations, please visit here, in addition to further detail on investment attractiveness of a range of other countries.

-ends-

Notes to Editors

About EY

EY is building a better working world by creating new value for clients, people, society and the planet, while building trust in capital markets.

Enabled by data, AI and advanced technology, EY teams help clients shape the future with confidence and develop answers for the most pressing issues of today and tomorrow.

EY teams work across a full spectrum of services in assurance, consulting, tax, strategy and transactions. Fueled by sector insights, a globally connected, multi-disciplinary network and diverse ecosystem partners, EY teams can provide services in more than 150 countries and territories.

All in to shape the future with confidence.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.