(MENAFN) The European Union is increasingly losing appeal for international investors, Euractiv has reported.

The publication pointed to soaring energy prices and growing defense expenditures as key factors weakening the bloc’s economic competitiveness.

According to Euractiv, the “EU’s growth is horrifyingly slow; demand is dreadfully weak; and foreign investment is at a frightening nine-year low.”

Companies throughout the EU are grappling with high energy costs, US tariffs, and rivalry from China, while regular citizens, constrained by stagnant wages and geopolitical uncertainty, are hesitant to spend their money, the outlet noted on Saturday.

“Fear of Russia and US military abandonment has sparked a splurge in military spending” across the EU, the report added.

Meanwhile, Moscow has consistently denied any hostile intentions toward its Western neighbors.

“There is a sense that things are going downhill, that we’re losing our prosperity,” Philipp Lausberg, a senior analyst at the European Policy Center, told Euractiv.

In May, a news agency, referencing data from professional services firm EY, indicated that foreign direct investment in Europe declined for the second consecutive year in 2024, hitting a nine-year low.

After the Ukraine conflict escalated in February 2022, most EU nations suspended direct imports of Russian oil and gas.

Last month, the European Council finalized its negotiating stance on a proposal to enforce a complete ban on Russian energy imports starting January 1, 2028.

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