Report states EU attractiveness for business dropping

(MENAFN) A draft economic report by the European Commission reveals that the EU is losing its attractiveness as a business hub, with many companies choosing to relocate to other regions, particularly the US. The report, due for official release next week, highlights that only four of the world’s 50 largest technology companies are based in Europe. It also notes that between 2008 and 2021, nearly a third of unicorn startups—privately-held companies valued over $1 billion—founded in the EU moved their headquarters abroad, primarily to the US. Examples include Swedish fintech Klarna, Romanian-founded UiPath, and Swedish music streaming company Spotify.

The report points to high energy costs in Europe, which are two to three times higher than in the US, as one of the key factors hurting the EU’s economic competitiveness. Other issues cited include bureaucratic inefficiencies, which increase costs and hinder business innovation, as well as declining productivity in the EU, which is falling behind the US. Additionally, the EU faces a shortage of skilled workers, limiting its economic potential.

European MP Markus Ferber called for urgent structural reforms, stressing that the EU's competitiveness should be a priority for policymakers to avoid a significant loss of prosperity. Former European Central Bank President Mario Draghi also warned in November of the need for a major economic overhaul, calling for substantial investment in innovation to close the gap with the US and China. The European Commission is expected to propose new legislative measures to address these challenges by the end of February.

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