LONDON – The world’s markets may think the worst of the financial crisis in Europe is over after three turbulent years, but the people who control the purse strings of the world’s businesses are not breathing any easier.
An annual survey of finance directors from global business consultancy BDO finds that the crisis over government debt in Europe remains a key concern – so much so that Greece is considered a riskier place to invest and set up business than war-torn Syria.
Only Iran and Iraq are considered riskier than Greece, which also struggles to convince its international creditors that it deserves bailout loans to avoid bankruptcy and a possible euro exit.
Greece isn’t the only country in the 17-country eurozone to make the survey’s top 10 list of riskiest countries to invest in. Spain, with the eurozone’s No. 4 economy and a long-standing relationship with Latin America, stands at No. 7.
This reluctance by finance directors, particularly from fast-growing economies such as Brazil and China, to invest in Europe’s indebted countries goes to the heart of the financial crisis. These countries’ recovery is largely dependent on the private sector stepping in to fill the investment gap left by cuts in government spending.
While countries like Greece and Spain are struggling to convince international business that they are good places to invest, others are prospering on global investment.
Despite recent signs of slowing down, China is considered the most attractive country for expansion, closely followed by the U.S.
Brazil, India, Germany and the U.K. also figure in the top 10.
Overall, the survey from BDO found that CFOs around the world are finding it more difficult to conduct business abroad. As well as an uncertain global economic situation, they cite increased regulation and greater competition.