Foreign investment continues to be a major force behind economic expansion, innovation, and job creation, yet Europe is finding it increasingly difficult to maintain its appeal in a rapidly shifting global economy. As governments worldwide compete for multinational projects through incentives, tax advantages, and investment summits, recent data suggests that Europe’s position is weakening even as individual countries continue to attract substantial capital.
France has maintained its role as Europe’s leading destination for foreign investment projects, supported by its long-running “Choose France” initiative. At this year’s investment summit, President Emmanuel Macron announced that foreign companies had pledged €93 billion in new investments, a figure described by the Élysée Palace as a record. Despite this, the broader trend across Europe shows a slowdown in activity.
According to the EY Europe Attractiveness Survey, 5,026 new investment projects were recorded across the continent in 2025, marking a 7% decline from the previous year and the lowest level in 11 years. France remained in first place with 852 projects, although this represented a 17% drop. The United Kingdom followed with 730 projects, down 14%, while Germany ranked third with 548 projects, reflecting a 10% decline and its weakest performance since 2009.
The long-term picture is even more pronounced. Compared with 2019 levels, Germany has seen a 44% fall in investment projects, significantly sharper than declines recorded in France or the United Kingdom. In contrast, some southern and eastern European economies have gained momentum. Spain recorded a 20% rise to 383 projects, moving into fourth place, while Turkey followed closely with 376 projects. Poland also continued its upward trajectory, reaching 285 projects.
Investor origins have also shifted slightly. The United States remained the largest source of investment into Europe with 943 projects, followed by German firms, which despite a 24% drop still led intra-European investment activity. France remained the top destination for German capital, while Turkey overtook the United Kingdom for second place.
On a global scale, Europe’s challenges are more evident. United Nations Conference on Trade and Development data shows global foreign direct investment fell to $1.49 trillion in 2024, with Europe experiencing a particularly steep 58% drop to $182 billion. By comparison, North America attracted $343 billion, while Asia remained the largest recipient with $605 billion.
Analysts point to several reasons for Europe’s weakening performance. Slower economic growth, high energy costs, geopolitical uncertainty, and concerns over regulatory complexity have all contributed to investor caution. Trade tensions and fears of new tariffs have added further pressure, prompting companies to reassess long-term commitments.
Despite the slowdown, Europe continues to attract significant global capital, but the competition for investment is clearly intensifying as other regions gain ground.
