Europe is losing investor confidence. Around EUR 300 billion comes out of the European Union all year, both from individual and organization investors. Reason? advanced energy prices and excessive bureaucracy. This was the diagnosis made by the president of the European Council, Antonio CostaAfter the last gathering in Brussels.
According to Costa, European savings no longer support the EU economy.
"This is EUR 300 billion that do not fund businesses in the EU," he said.
Instead, capital runs to non-European markets where investors see greater profit possible and smaller barriers.
This worrying trend coincides with the expanding Union spending on Ukraine's assistance. Brussels is now considering doubling financial support for Kiev to EUR 40 billion per year. Meanwhile, critics specified as Hungarian Prime Minister Viktor Orbán say that the EU is on the verge of financial exhaustion.
"We don't have a cent anymore," he said.
Costa acknowledged that the EU's current model of action was exhausted. To counter the outflow of capital, he announced cuts in bureaucracy: 25% for all companies and 35% for tiny and medium-sized enterprises. This is simply a consequence to increasingly loud calls to reduce regulatory burdens that discourage investors and undermine Europe's competitiveness.
There are besides concerns about the future of US support for Ukraine. A possible return of Donald Trump to the White home could mean a halt to US arms supply. For Brussels, it is another impetus to increase its own spending on this intent – despite interior disputes and a tense economical situation.
Increasing energy prices, investment outflows and controversy around Ukraine's backing are present major challenges for the European Union. If Brussels fails to find effective solutions, capital leakage may only be the beginning of major economical problems.
