Foreign investments in Germany are falling by twelve percent

Foreign investments in Germany are falling by twelve percent

According to a current EY study, there is a negative trend in foreign investments in Germany. Last year, the country recorded a twelve percent decline in announced investment projects from abroad. This corresponds to the lowest value since 2013 and marks the sixth consecutive decline. In a European comparison, Germany remains in third place, but the gap to leader France has increased again. Despite a decline of five percent, France still recorded more investment projects than Germany.

Henrik Ahlers, CEO of EY, expressed concern about this development and described the decline as alarming. He emphasized that Germany is becoming significantly less attractive compared to other European locations such as France. He cited, among other things, the high tax burden, labor costs, expensive energy and the bureaucratic hurdles in the country as reasons for Germany's weak performance.

Overall, there was also a downward trend in foreign investment in Europe, with Germany being particularly hard hit. The study made it clear that Europe relies on foreign investment to stimulate the economy, create jobs and drive innovation. It was emphasized that urgent measures must be taken to ensure that Europe remains competitive in global competition with the USA and China.

It also found that US companies also experienced declines despite their role as key investors in Europe and Germany. In Germany in particular, investment projects by US companies fell by 22 percent. This trend has been attributed to billion-dollar subsidy programs such as the Inflation Reduction Act, which encouraged US companies to invest more domestically. Henrik Ahlers emphasized the need to regain the trust of US investors by improving the investment environment. Despite these challenges, he was skeptical about a quick turnaround and emphasized the structural problems and the need for real tax reform and regulatory relief in Germany.