Why CEOs are losing appetite for investing in Europe
Unattractive
As EU industry ministers head to Brussels, a new survey shows that European CEOs are increasingly considering shifting investment from Europe to other countries, writes Barbara Moens.
Context: Boosting competitiveness is a key priority for European Commission president Ursula von der Leyen, who is pushing to implement Mario Draghi’s recommendations to prevent the bloc from falling further behind its global rivals. But the EU has struggled to put them into action.
EU industry ministers are meeting today in Brussels to discuss progress made on simplifying EU legislation, one of von der Leyen’s key strategies to boost economic growth, in addition to tearing down barriers inside the single market.
Ahead of that discussion, the European Round Table for Industry (ERT) has released a new report warning that Europe is “wasting a good crisis” as the bloc has so far not been able to reform.
The ERT’s survey of the chairs and chief executives of around 60 major multinational European companies shows that over a third of CEOs will invest less than planned in Europe or have put their investment decisions on hold. Only eight per cent of CEOs in the survey said they would invest more in Europe than planned.
Meanwhile, 45 per cent said they would invest more in the US than planned.
That outlook is in stark contrast with the optimism of chief executives after the recommendations of both Draghi and Enrico Letta, who in a separate report made recommendations on how to fully integrate the single market.
The ERT survey shows that CEOs are alarmed at the lack of urgency in delivering on Draghi and Letta’s reforms, with 76 per cent saying they have so far seen “little or no positive impact” from EU initiatives.
“Current geopolitics and geoeconomics mean Europe has no time to waste to restore its competitiveness and prosperity. The stakes are too high now to hide behind the cliché of ‘blaming Brussels’,” said Anthony Gooch Gálvez of ERT.