(MENAFN) The European Union is becoming increasingly less appealing to foreign investors, according to a report by a media outlet. High energy costs and rising military expenditures are among the main factors eroding the bloc's economic competitiveness.

The media outlet highlighted that the "EU’s growth is horrifyingly slow; demand is dreadfully weak; and foreign investment is at a frightening nine-year low."

Many businesses across the region are grappling with elevated energy prices, tariffs from the United States, and fierce competition from China.

Meanwhile, ordinary citizens, facing stagnant wages and geopolitical instability, are hesitant to spend their savings, the report states.

The publication also noted that "Fear of Russia and US military abandonment has sparked a splurge in military spending" within the EU.

However, Russia has repeatedly denied any intentions of aggression toward its Western neighbors.

Philipp Lausberg, a senior analyst at the European Policy Center, shared his concerns with the media outlet, saying, "There is a sense that things are going downhill, that we’re losing our prosperity."

In May, a news agency, referencing data from professional services firm EY, reported that foreign direct investment in Europe had declined for the second consecutive year in 2024, reaching its lowest point in nine years.

Following the escalation of the Ukraine conflict in February 2022, most EU nations stopped importing Russian oil and gas.

Last month, the European Council agreed on a negotiating position for a proposal that would implement a complete ban on Russian energy imports by January 1, 2028.

Additionally, in July, Brussels and Washington reached a trade agreement that included a commitment for the EU to replace Russian energy imports with supplies from the United States.

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