Europe's FDI Landscape Shifts: Spain, Poland Gain as France Stumbles
Europe's economic landscape is shifting, with varying fortunes in foreign direct investment (FDI) and growth. While the Eurozone's GDP growth has slowed due to structural issues, certain countries like Spain and Poland are poised to benefit from specific projects. Meanwhile, political instability in France may hinder its FDI intake, but it remains one of Europe's top destinations.
In 2024, Eurozone GDP growth stagnated at 0.9% due to persistent challenges such as low productivity, rising bond yields, and energy costs. Despite this, the UK retained its position as the top FDI destination, with London serving as a crucial gateway between European and global markets. In 2025, the most important European countries for FDI included France, Germany, the UK, Spain, Poland, Italy, Belgium, Portugal, and Sweden. Spain and Poland demonstrated rapid growth in FDI projects, while France, Germany, and the UK maintained their status despite facing challenges. Portugal saw a slight decline but remained among the top 10, and Sweden maintained a strong position. Belgium also showed active FDI approvals concentrated in specific sectors and regions.
FDI projects in Europe peaked at 5,663 in 2022 but have since declined. Germany's industrial strategy and fiscal stimulus have bolstered investor confidence despite mixed FDI trajectories in recent years. However, FDI levels in Europe between Q1 2024 and Q1 2025 have mostly decreased from source countries, mirroring a global downward trend. A report by GlobalData attributes this decline to 'war and weak macro conditions'. The number of opened FDI projects in Europe plummeted by an estimated 40% in the first half of 2025 compared to the same period in 2024. Counterintuitively, capital expenditure (capex) increased in Europe during this period.
Despite the overall decline in FDI projects, Europe's economic prospects remain diverse. While some countries like Spain and Poland are poised to benefit from specific projects, others face challenges. The UK maintains its status as the top FDI destination, and Germany's industrial strategy continues to bolster investor confidence. As Europe navigates these shifts, it is crucial to monitor the evolving landscape of foreign direct investment.
