Investors flock to Europe due to the stability of the bloc, compared with US concerns
Peter Roessner feels both sides of Donald Trump’s trade war.
Investor interest in European projects has increased despite the fact that tariff risks have forced H2Apex, a Luxembourg-based firm specializing in hydrogen, to stop relying on U.S. manufacturers for a project worth more than 200 millions euros ($235 million).
He said that investors in the hydrogen industry are now more focused on the European market because of the uncertainty and insecurity surrounding the planning process in the USA. This included both U.S. and local players.
"The framework conditions are not perfect, but they are stable." Roessner’s comments reflect a trend in recent months. Investors and businesses are increasingly looking to Europe for stability, attracted by a push to spend on infrastructure and defence. This is because of Trump's unpredictable tariff policies, which have made the U.S. a less secure market. This shift is also fueled by Trump's tendency for making sweeping announcements and threats about tariffs, which are often changed or delayed. He has also issued executive orders that test the limits of his president power.
"The U.S. comes from a very stable and capital market friendly environment. "There is now political interference and an attempt to increase power," said Christoph Witzke who heads Deka's CIO office, one of Germany’s largest investment funds.
He said that this uncertainty created the possibility that an intervention could occur at any moment. Europe was the focus of the attention of the recent investor conferences. Investors have begun to shift their money in anticipation of the July 9 deadline, and Trump's threat to impose tariffs of 50% on EU goods if a deal is not reached.
LSEG Lipper Funds data shows that over $100 billion in European equity funds has been invested so far this season - a threefold increase from the same time last year – while the outflows of money from the U.S. have more than doubled, reaching nearly $87 billion.
Christine Lagarde, ECB president, said this month that "all that is an indicator that at least the market forces, investors and those who actually move money around see value in Europe" The shift in focus is also shown by the poor market debut of Holcim’s North American spinoff Amrize, announced in 2024 with much fanfare.
The share price of Holcim, which is now firmly focused on Europe and Latin America, as well as North Africa, has risen by 15%.
A SENTIMENT IS QUICKLY TRANSFORMED
Maria Ferraro, the finance chief at Siemens Energy, said that the company's sales in the U.S. have increased by 84% in the past year. This is due to a roadshow in the U.S. and a recent increase in its share price.
In addition to a better market view, it is important that more investment be made in order to revitalize the EU economy and close the competitiveness gap with other regions.
According to the latest data from the Bundesbank (the largest economy in the EU), closely watched foreign direct investments into Germany have more than doubled, reaching 46 billion euros, during the first four month of 2025. This is the highest level recorded since 2022.
The data also shows that German firms even pulled money from the United States during three of the four first months of this year. Their balance of direct foreign investments was negative in April, at 2.38 billion euro.
Negative balances are created when companies decide to either invest less in a foreign nation than they divest or refuse to extend credit lines locally.
Investors have pointed out that the situation is not as rosy. They say Europe is under pressure now to act quicker, to create better regulations and to keep its spending promises.
This sentiment can change quickly. "This should serve as a warning, but also an incentive, to take advantage of the momentum and implement the agenda consistently," said Stefan Wintels.
Hajo Kroesche is a partner at Altor Private Equity and said that "the window of opportunities will not remain open forever" to attract capital into Europe.
Christian Sewing, CEO of Deutsche Bank, said last week that investor interest in Europe, Germany, and the Middle East was high. However, he cautioned that long-term conditions must remain stable.
These aren't people who make investments in two days. "But they are aware of what's happening in the world today."
(source: Reuters)
