Paris Beat London As Top European City For Foreign Investments
According to the latest Ernst & Young (E&Y) report on foreign investment in Europe, France is almost on par with economic powerhouses like the UK and Germany. Analysts note that about 50 percent of foreign projects in Europe take place in one of these three nations.
Perhaps the most shocking finding in E&Y's new study was that Paris took the top prize for the most foreign investments in 2017. This is the first time the "City of Lights" took over the top spot from the British capital.
In 2014 and 2015, London averaged over 50 percent in foreign investments. Ever since Brexit, however, London can't seem to get out of the 30 percent range. The UK's capital posted a score of 34 percent in 2018, which is a meager gain from 32 percent in 2017.
France, on the other hand, rose from 27 percent in 2017 to 37 percent in 2018. The German cities of Berlin, Frankfurt, and Munich came in third, fourth, and fifth place, respectively.
The main reason foreign investors are turning away from London has to do with the uncertainty surrounding Brexit. E&Y analysts believe investors feel safer putting their money to work in Paris, especially after the election of French President Emmanuel Macron.
While London dropped from its top spot to second place, the UK was still the best performing country in E&Y's analysis. In total, the UK attracted 1,205 foreign investments in 2017, which represents 18 percent of the total share in Europe.
Although the UK had the most foreign investments, France had the most dramatic percentage change of any nation on E&Y's study. From 2016 to 2017, foreign investments grew by 31 percent. By contrast, both the UK and second-place Germany's investments grew by 6 percent.
President Macron's latest round of corporate tax cuts was cited as a major reason for France's strong performance in this year's E&Y report. French leaders point out that foreign investors would rather pay a premium in labor costs than invest in more unstable nations like the UK or Italy.
Obviously, the headlines from E&Y's new survey were positives for France, but analysts caution that the growth in European foreign investment wasn't phenomenal. Between 2016-2017, investments into Europe only increased by 10 percent, which is the lowest growth rate since 2013.
Headquartered in London, E&Y is a major multinational accounting firm. Along with Klynveld Peat Marwick Goerdeler, PricewaterhouseCoopers, and Deloitte, E&Y is one of the largest accounting firms in the world.
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