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Economics question, europe and investment

How does being in Europe increase investment?
Reply 1
Avatar for Jessie
Jessie
9
Being in Europe should increase Foreign Direct Investment for a couple of reasons.

Firstly, there are no trade barriers between european countries and firms have a bigger market to sell to. This should encourage them to invest more and re-invest any profits.

Also, because we are in the EU, lots of firms from elsewhere in the world, particularly SE Asia and Japan, will want to invest anywhere in the EU because it allows them to overcome the trade barriers.

The EU is also important for UK exports (57.3% goes to EU) so being a member of the EU should also encourage investment.

Cant think of anything else at the moment...
Reply 2
Avatar for Bhaal85
Bhaal85
9
Don't forget the introduction of the single currency, those that have accepted the changeover will perhaps have more investmenet, due to the fact that currency exchange rates and the fees they paid on commissions become non-existant.
Reply 3
Avatar for emma_
emma_
2
There is investment from the EU in all member countries, however, the UK in total gives out more money to the EU than it gets back, unlike some of the poorer EU countries. That make any sense?

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