EU Investment Climate Challenges and FDI Risks in 2022
The EU faces investment challenges with restrictions on foreign investors, political violence, and asset confiscations. The theft of major assets in 2022 may deter global investors, prompting calls for FDI insurance and legal protections against confiscations.
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Sanctions forever? Foreign trade and investment protectionism in the EU Alexey V. Kuznetsov corresponding member of the Russian Academy of Sciences, director of the Institute of Scientific Information for Social Sciences
In 2022 we can see the radical change in the EU s investment climate Some typical problems which are typical nowadays in the EU: Restrictions on entry by foreign direct investors Systems for controlling inflows of FDI Limits on foreign exchange transfers The role of the State in the economy (e.g. price controls) Political violence (incl. confiscations) The EU used thieving practices before 2022 (e.g. against Libya) because neo-colonialism is the essence of the European economic model, but only in 2022 the EU decided to steal assets from companies of one of the leading powers in the world
The whole scale of negative results will be seen only after several years Main FDI assets stolen in the EU in 2022: Gazprom assets (companies with pipelines and gas storage facilities) Rosneft oil refineries in Germany It is a sign for all investors in the world that the EU is an unreliable partner like unstable dictatorial regimes of the Global South Divestments of Arab, Chinese and other investors are possible It is very important to launch FDI insurance system in the world which is free of Western influence, because the level of risks for FDI in the EU is closer to the most unstable regimes Russia should introduce the federal law in 2023 against all cases of criminal confiscations of Russian assets abroad which should lead to the inevitability of punishment and the inevitability of compensation (like French portfolio investors struggle against Soviet confiscations for almost a century) The restoration of justice is more important than the misunderstood ideas of economic liberalism even if the struggle against criminal economic actions of the EU can damage EU-Russian foreign trade
Country Outward FDI stock, end of year 1991 $ billion % 2 528 100.0 859 34.0 120 4.7 352 13.9 140 5.5 15 0.6 FDI outflows in 2021 $ billion 1 708 398 29 152 -3 62 25 46 -2 12 20 -3 871 403 90 108 147 -19 9 61 64 438 145 87 47 10 21 23 23 2021 $ billion 41 798 13 264 3 357 2 141 1 545 1 274 1 273 % 100.0 31.7 8.0 5.1 3.7 3.0 3.0 1.7 1.4 1.3 1.1 1.0 47.2 23.5 5.5 5.2 4.7 3.8 1.5 1.3 1.0 21.0 6.2 5.0 3.2 1.0 0.8 0.7 0.5 % 100.0 23.3 The world total EU-27 (including mutual FDI) Netherlands Germany France Ireland Luxembourg Belgium Spain Italy Sweden Cyprus Other developed countries United States Canada United Kingdom Japan Switzerland Australia Republic of Korea Russia Developing countries China Hong Kong Singapore Taiwan Cayman islands Brazil United Arab Emirates 1.7 8.9 Negative 3.6 1.5 2.7 48 1.9 691 601 553 448 413 20 70 55 0.8 2.8 2.2 0.0 60.2 32.8 3.7 9.2 9.2 3.0 1.4 0.1 0.0 5.9 0.2 0.6 0.4 1.3 0.0 1.7 0.0 Negative 0.7 1.2 0 Negative 1 521 828 19 744 9 814 2 285 2 166 1 984 1 579 619 552 399 8 790 2 582 2 082 1 346 411 344 296 215 51.0 23.6 5.3 6.3 8.6 94 232 232 76 36 Negative 0.5 3.6 3.7 25.6 8.5 5.1 2.8 0.6 1.2 1.3 1.3 3 0 148 5 14 9 32 1 42 0
