Attractiveness of investing in Europe
Report on the attractiveness of investing in Europe
This non-legislative report by Rodi KRATSA-TSAGAROPOULOU (EPP, EL) was written for and adopted by the Committee on Economic and Monetary Affairs.
The EU is the first port of call for foreign direct investment (FDI). As such, it is recommended that the EU learns to balance the expectations of investor and beneficiary states while complying with the EU’s broader economic, social and environmental policy objectives. Therefore investment is suggested as a primary point for all flagship initiatives within the Europe 2012 Strategy, especially as a way of tackling the current financial crisis.
The Commission is called upon to improve the EU’s policies on tax and the economy while considering the economic and social divergences between euro-area members and between EU Member States. The ultimate aim of this is to encourage third-county investment.
The main recommendations in the report are as follows:
Exploiting the EU’s position
The EU should exploit the fact that it is the world’s largest single common market, foreign investor and trader in tackling the fiscal crisis. However, it needs more efficient funding tools and investment schemes in order to exploit its competitive advantages.
Maximising cohesion policy
The report recommends that the EU enhances its use of the Structural Funds and the Cohesion Fund as a catalyst for attracting additional funding from the EIB (European Investment Bank), EBRD (European Bank for Reconstruction and Development), and other international financial institutions, as well as the private sector.
Guaranteeing stability and improving access to financing
Deepening European capital markets will help to ensure access to financing from sources other than banks. Institutional investors should be encouraged to participate in European venture capital funds and European social entrepreneurship funds. Furthermore it is advised to eliminate restrictions on the supply of venture capital funding in small and medium-sized enterprises.
Increase public investments
The promotion of education, research and development and job creation in the sector of renewable energy and the reduction of emissions are suggested as a way of encouraging foreign investment.
Completing the internal market
Trans-European Networks and student, researcher and worker mobility should be encouraged in order to reinforce cooperation and complementarities between EU economies.
Addressing human capital needs
Youth unemployment needs to be tackled in order that employment objectives for EU 2020 Strategy are realised. Reduced taxes on labour may help attract more investment in the labour-intensive sectors of the economy.
Fighting tax evasion is crucial – especially during this time of economic problems as it represents a major loss to national budgets. Smooth cooperation and coordination between the Commission and the Member States to fight against double taxation, double non-taxation, tax fraud, tax evasion and dumping, and the use of tax havens for illicit purposes is needed.
Ensuring fair competition
The EU is called upon to negotiate at international level a common set of rules that allows fair competition relating to financial regulation and taxation. This will protect the EU’s competitiveness and ensure respect of the social and environmental objectives of the Union.
As a result of this report the Commission is asked to draw up a communication on the attractiveness of investing in Europe as compared to its main partners and competitors. Furthermore it is asked to produce an integrated strategy which includes specific policies and recommendations, as well as legislative proposals if appropriate, to help improve the EU’s investment environment.
The creation of an ad hoc European Observatory for foreign direct investments could contribute to reinforcing the coordination of Member States’ policies in this field, and promote Europe as an investment destination.
The European Parliament voted to approve the report on the 3rd July 2012 with 546 for, 58 against and 48 abstentions.
To read the report click here
Alternatively visit the website at www.europal.europa.eu
Last Updated (Thursday, 20 September 2012 14:20)