Improving the EU’s investment environment

In recent years, the investment gap between the EU and the U.S. has widened, with the U.S. remaining a top global destination and the EU experiencing significant declines in foreign direct investments (FDI). Meanwhile, China’s FDI flows have been relatively stable, though recent trends show some decline.

Given that investments are essential for long-term competitiveness, the EU must intensify efforts to attract and retain capital. Creating an investment-friendly environment requires reducing barriers to cross-border capital flows, effectively implementing the long-promised Capital Markets Union (CMU), and strengthening national capital markets within Member States.

Source: UNCTAD FdiFlowsStock

Our latest Reform Barometer reveals serious concerns among the European business community about the EU’s investment climate. A striking 82% of respondents believe that the EU’s attractiveness for investment has either deteriorated or remained unchanged over the past 12 months. The biggest challenge that they identify is overregulation, followed by high energy prices and labour shortages.

How do you think the EU investment environment is seen by global firms compared to 12 months ago?

Source: BusinessEurope Reform Barometer 2025, members’ survey.