I have many times in the past pointed out the importance of the rule of law in attracting investments to a particular country. As a matter of fact, I believe that it is more important than future economic prospects (which in their own turn, are also affected by the rule of law.)
The #EC published today a research on the change in investment (both public and private) as a percentage of #GDP in each #EU country over the past decade. Overall, total investment was equivalent to 20.1% of GDP in 2017, compared with 22.4% ten years ago, just before the economic and financial crisis. This represents a decrease of 2.3 percentage points (pp). The fall in investment is even more pronounced in the euro area: from 23.2% in 2007 to 20.5% in 2017 (-2.7 pp).
The position of each country on the chart, is more or less related to its ranking in the global annual corruption indices (#DK and #IE being the only notable exceptions to this “rule.”)
The discrepancy in the investment ratios between north and south also means that the long sought-after cohesion is not anywhere near to be achieved, as the gap is widening instead of closing.
Regarding the qualitative characteristics of the investments, about half amounted for construction, which generally has little impact on improving the EU’s competitiveness against other countries. Finally, in FY17 the #UK had the third lowest Investment/GDP ratio, clearly affected by the uncertainty around #BrExit developments.
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