Foreign investors rate Germany Europe’s best

Germany is behind only China and the USA as a destination for foreign investment, a study has shown.

Foreign investors rate Germany Europe's best
A worker assembling motors at a Magdeburg factory. Photo: DPA

Financial services company Ernst and Young polled 808 “decision-makers” about the attractiveness of different countries worldwide.

They found that 21 percent of managers named Germany among their top three countries to invest in – an increase of three percentage points over 2014.

While Germany is still well behind China and the US, who scored 38 and 35 respectively, it leads competitors including India (18 points), Brazil (14 points) and Russia (11 points).

In all, 65 percent of investors said that they were “happy” with German government policy.

“Years-long economic and social reforms have made Germany as a business location more resilient and flexible and increased its competitiveness,” the authors write.

“Workers are among the best-trained in the world and the quality of products made or designed in Germany traditionally has a fantastic reputation.”

Investors rated Germany highly for its transport infrastructure, workers' skill levels, the social climate, and transparency and stability in the political and justice systems.

But the investors are keen to add that the country can't rest on its laurels.

“Labour is too expensive, business taxes are too high, and labour law is too inflexible,” the authors sum up.

Beating out Britain

On a comparison between different western European countries 42 percent of the survey respondents named Germany the “most attractive” country for foreign investment.

That score puts the UK, at 18 points, and France, at 12 points, thoroughly in the shade.

Britain lost four points on the western Europe ranking compared with 2014.

And when investors were asked to name the most important competitor country for Germany, just 11 percent named the UK – a fall of seven points compared with last year.

Despite all its image problems, the UK racked up more total foreign investment projects in 2014, at 887 compared with Germany's 763, but Germany and France were hot on its heels.

That's likely because of US firms' preference for investing in a country with the same language and cultural background.

Around 30 percent of US investments in Europe came into the UK, compared with just 14 percent for Germany.

“If you leave out US investors, the total number of investment projects in Great Britain was 565 in 2014,” the authors found.

“Germany's second place this year is mostly due to the huge weight of the US as an investor in Europe and the above-average engagement of American investors in the UK.”

Optimism for coming years

Asked about the near future, 54 percent of the investors polled said that Germany's attractiveness would improve – although just 6 percent said it would be “significantly” improved.

Only nine percent thought that the country would become less attractive.

“A year ago, not even half of respondents were this optimistic,” the authors write.

“The environment is totally positive: many German companies are reporting record profits, tax income is rising, unemployment is the lowest it's been since reunification – many companies even have problems filling their open positions.”

The sunnier outlook for Germany is linked to expectations of more improvement in the European economy.

Almost 60 percent of investors thought the continent would become more attractive in the coming years, a boost of five points compared with 2014.

“Investors think the trough of the Euro crisis is behind us,” the authors write. “They believe there's fresh wind in the 'old' continent's sails – trust in Europe is growing.”

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Germany to tighten Covid controls at French border

Germany on Sunday, February 28th, classed France's Covid-battered Moselle region as a high risk area for virus variants, triggering tougher entry requirements at the border between the two neighbours.

Germany to tighten Covid controls at French border
Image: Peter H/ Pixabay

France’s eastern Moselle region is now listed as an area “at particularly high risk of infection due to widespread occurrence of SARS-CoV-2 virus variants”, Germany’s Robert Koch Institute for disease control announced.

From Tuesday, March 2nd, cross-border travellers from Moselle will need to be able to show a recent negative coronavirus test.

Germany has already introduced tough checks at its borders with the Czech Republic and Austria’s Tyrol region, ignoring calls from Brussels to keep borders within the bloc open.

At those crossings, only Germans and non-German residents are allowed to enter, as well as cross-border commuters working in certain categories of jobs.

Every vehicle is stopped and occupants must produce a negative test that is less than 48 hours old.

The checks on the German side of the Moselle crossing are expected to be less strict, a German interior ministry spokesman told AFP.

Instead of systematic checks, police would randomly stop vehicles on the German side and ask drivers to show “a negative test and their online entry registration”, he said.

Germany has grown increasingly concerned in recent weeks about the rapid spread of new, more contagious strains of the coronavirus, especially those first detected in Britain and South Africa.

The coronavirus, including the more dangerous South African variant, is spreading faster in Moselle than elsewhere in France but French officials have pleaded with Berlin to avoid a full closure of the border.

The German classification “normally implies the extremely strict measure of a quasi-closure of borders”, France’s European Affairs minister Clement Beaune said Sunday.

“We don’t want that,” he said, adding that talks were ongoing with Berlin to find solutions for the roughly 16,000 commuters who cross from Moselle into Germany’s Saarland and Rhineland-Palatine states every day.

The German interior ministry spokesman said the two countries would discuss details of the border implications on Monday.

Asked why the French checks would not be as stringent as those along the Czech and Austrian frontiers, the spokesman said Saarland and Rhineland-Palatine had not requested border closures.

“And there is a good cooperation between the affected German and French regions,” he added.