Report Indicates Decline in EU's Business Attractiveness
A draft report from the European Commission indicates that the EU's appeal to businesses is diminishing. Read Full Article at RT.com.
TroibNews 
High energy prices and bureaucratic hurdles are pushing companies to relocate, according to a draft assessment from the European Commission.
The attractiveness of the EU for businesses is diminishing, with numerous companies opting to move their operations elsewhere, reported German news agency dpa on Saturday. The draft economic paper notes that currently, only four of the world's 50 largest technology companies are based in Europe.
“Europe’s attractiveness as a business location is declining,” the report states, which is scheduled for official release next week. It highlights that between 2008 and 2021, nearly a third of unicorn start-ups established in the EU chose to move their headquarters overseas, primarily to the US. Unicorns, which are privately-owned companies valued at over $1 billion, typically focus on technology, exhibit rapid growth, and attract significant investment. Their contributions through technological innovations are believed to bolster economies on a larger scale.
Prominent examples of unicorns that originated in Europe but later shifted their headquarters to the US include Swedish fintech firm Klarna, Romanian-founded UiPath specializing in robotic processes, and Swedish music streaming service Spotify.
The draft document identifies persistently high energy prices in Europe, which are two to three times greater than in the US, as a critical challenge to the bloc’s economic competitiveness. Bureaucratic obstacles also exacerbate the situation by inflating costs and complicating the establishment and management of businesses, thereby stifling innovation and growth. Additionally, the report notes that productivity levels in the EU, defined as the added value produced per hour of labor, have been declining and remain significantly lower than those in the US.
The assessment further points to a lack of qualified workers in the bloc, which is hindering the full potential of the European internal market.
European MP Markus Ferber commented on the report, stating it should serve as a catalyst for EU policymakers to implement necessary structural reforms. “The report shows that the issue of competitiveness must be a central theme in the Commission’s work in the future. There is a risk of a significant loss of prosperity,” he remarked.
In November, former European Central Bank President Mario Draghi similarly cautioned that the EU needs an urgent and comprehensive economic overhaul to regain its competitiveness and avert further setbacks. He stressed the importance of substantial investments in innovation to bridge the gap with the US and China, estimating that annual funding of up to €800 billion—around 5% of EU GDP—may be necessary.
dpa reports that the European Commission is anticipated to unveil a significant legislative proposal by the end of February to tackle the current economic challenges facing the bloc.
Frederick R Cook for TROIB News
The attractiveness of the EU for businesses is diminishing, with numerous companies opting to move their operations elsewhere, reported German news agency dpa on Saturday. The draft economic paper notes that currently, only four of the world's 50 largest technology companies are based in Europe.
“Europe’s attractiveness as a business location is declining,” the report states, which is scheduled for official release next week. It highlights that between 2008 and 2021, nearly a third of unicorn start-ups established in the EU chose to move their headquarters overseas, primarily to the US. Unicorns, which are privately-owned companies valued at over $1 billion, typically focus on technology, exhibit rapid growth, and attract significant investment. Their contributions through technological innovations are believed to bolster economies on a larger scale.
Prominent examples of unicorns that originated in Europe but later shifted their headquarters to the US include Swedish fintech firm Klarna, Romanian-founded UiPath specializing in robotic processes, and Swedish music streaming service Spotify.
The draft document identifies persistently high energy prices in Europe, which are two to three times greater than in the US, as a critical challenge to the bloc’s economic competitiveness. Bureaucratic obstacles also exacerbate the situation by inflating costs and complicating the establishment and management of businesses, thereby stifling innovation and growth. Additionally, the report notes that productivity levels in the EU, defined as the added value produced per hour of labor, have been declining and remain significantly lower than those in the US.
The assessment further points to a lack of qualified workers in the bloc, which is hindering the full potential of the European internal market.
European MP Markus Ferber commented on the report, stating it should serve as a catalyst for EU policymakers to implement necessary structural reforms. “The report shows that the issue of competitiveness must be a central theme in the Commission’s work in the future. There is a risk of a significant loss of prosperity,” he remarked.
In November, former European Central Bank President Mario Draghi similarly cautioned that the EU needs an urgent and comprehensive economic overhaul to regain its competitiveness and avert further setbacks. He stressed the importance of substantial investments in innovation to bridge the gap with the US and China, estimating that annual funding of up to €800 billion—around 5% of EU GDP—may be necessary.
dpa reports that the European Commission is anticipated to unveil a significant legislative proposal by the end of February to tackle the current economic challenges facing the bloc.
Frederick R Cook for TROIB News
