ERNST & YOUNG SRL

  |  05.06.2013

Bridging continents, connecting markets

2012 was a very difficult year for Europe. Business leaders struggled to protect their bottom line, which was sapped by government austerity measures, chronic global uncertainty and weak consumer confidence. The challenges to growth in Europe persist and will hold back the pace of the recovery that we anticipate.

To create long-term confidence, European governments need to reconcile fiscal balance with steps to boost potential growth, as well as implementing necessary structural reforms to enhance productivity.

 

 

Ernst & Young’s European attractiveness survey measures the reality of foreigndirect investment (FDI), in terms of projects initiated and jobs created, and reveals the perceptions of more than 800 decision-makers.

 

 

Perhaps counter to expectations, this year’s study shows that tough times have not destroyed investors’ faith in the continent. It seems that they have become accustomed to the economic situation in Europe, learned to live with it, and do not want to miss out on the scarce, but rich, opportunities there.

 

The 3,797 FDI projects started in 2012 represent a slight (-2.8%) reduction on 2011 figures, while the number of jobs created increased by 8%. Though understandably concerned about Europe’s economic prospects, foreign investors seem optimistic that the continent will weather these hard times and emerge stronger.

 

Business investment will play a central role in determining whether this is the case. Meanwhile, European governments recognize the vital role of FDI in creating jobs and stimulating economies Geographical differences within Europe were more pronounced in this year’s report. Investors see two distinct Europes: Western Europe drew three-quarters of all FDI projects, yet more than half of the FDI jobs were created in Central and Eastern Europe (CEE). The UK narrowly escaped losing its first place to Germany. Further east, Poland overtook Russia to become the leading destination for FDI projects in CEE.

 

Against this backdrop, respondents to our survey stressed the urgent need to improve Europe’s competitiveness and attractiveness. They emphasize the importance of economic stability, a real focus on entrepreneurship and innovation, and a better alignment of Europe’s industrial sectors with future consumer demands. Respondents added that further economic integration, fewer regulation and a renewed focus on education would also go a long way to improving Europe’s attractiveness.

 

This is Ernst & Young’s 11th European Attractiveness Survey. We would like to thank the hundreds of decision-makers and Ernst & Young professionals who have taken the time to share their thoughts with us fo more than a decade.

 

COMMENT ON THIS ARTICLE:




Load new captcha.