A recent report from the European Court of Auditors has rebuked twelve EU member states for their failure to report or conduct screening on the influx of foreign direct investments (FDI) between 2020 and 2022.
The twelve countries that neglected reporting, listed in order of inward FDI, are Luxembourg, Ireland, Belgium, Cyprus, Sweden, Portugal, Slovakia, Bulgaria, Greece, Estonia, Croatia, and Slovenia. These countries collectively constitute half of the EU’s total inward FDI, with Luxembourg alone contributing 21.9% during the specified period.
According to the report released on 6 December, EU member states reported 886 screened cases to the EU Commission. The majority of cases (92%) were submitted by six countries, with the remaining 8% coming from nine others.
Between 2020 and 2022, France led in the number of screening notifications, submitting 193, followed by Italy, Spain, and Austria. Notably, the Netherlands and Luxembourg, which together account for half of all inward FDI in the EU, reported only seven and zero screening cases, respectively.
In terms of FDI projects, Germany took the lead in 2021, with a total of 1,535 projects recorded by GlobalData’s FDI Projects Database. France secured the second position with 768 projects, followed by Spain (639), Poland (424), and Ireland (312).
FDI contributes over €100 billion ($108 billion) annually to the EU. According to the EU Commission, in 2021, the Cayman Islands and Canada were the primary sources of EU investment inflows.
The report highlights the increasing significance of reporting FDI projects for the bloc’s economy, as both state and European officials seek improved methods to protect against emerging security and public order threats.
Mihails Kozlovs, the ECA Member overseeing the audit, commented, “Screening of foreign investment in the EU is a work in progress. As the EU’s safety net, it has some large holes in it. If the EU wishes to mitigate the risks better, both the Commission and all member states must repair the net.”