EU Commission: EU sees Europe’s attractiveness for business dwindling

A current draft report from the EU Commission sees significant weaknesses in economic competitiveness. “The attractiveness of Europe as a business location is decreasing,” says the document, which is available to the German Press Agency in Brussels. According to current planning, the report is scheduled to be officially presented in the middle of next week.

Between 2008 and 2021, almost a third of the so-called unicorn start-ups founded in Europe – i.e. start-ups that are later worth more than a billion US dollars – moved their headquarters abroad, the vast majority of them to the USA. Only 4 of the world’s 50 largest technology companies are European.

The European Commission is expected to present a major legislative proposal at the end of February to address the current economic challenges.

High energy prices and bureaucracy as a problem

In addition, according to the report, productivity in Europe – that is, in simple terms, how much value is created through an hour of work – continues to lag behind productivity in the USA. The commission warns that there is great potential to catch up. On the positive side, however, Europe’s efficiency is better than in the United Kingdom and Japan.

The competitiveness of the EU economy is suffering from the structurally high energy and electricity prices. The latter are two to three times higher than in the USA. In addition, there is a shortage of qualified workers and high levels of bureaucracy are preventing the European internal market from exploiting its full potential.

CSU economic politician Markus Ferber sees the draft report as a wake-up call to action. “The report shows that the topic of competitiveness must run like a common thread through the Commission’s work in the future.” There is a risk of a significant loss of prosperity.