Economic Resilience in Europe Amid Investment Risks

Amid global economic volatility and growing geopolitical uncertainty, understanding how investment risks and economic resilience differ across regions of Europe has become increasingly important for shaping effective investment and regional development policy. This study assesses differences in investment risks and economic resilience between the regions of Europe and determines their relationship with actual volumes of foreign direct investment (FDI). Using the Global Investment Risk and Resilience Index (GIRRI) and United Nations FDI statistics for 38 European countries grouped into four regions (Western, Northern, Southern, and Eastern Europe), the study uses comparative, statistical, and graphical analysis to assess the homogeneity and regional distribution of risk and resilience indicators. The results show that Western and Northern Europe have the lowest investment risk and the highest resilience, while Southern and Eastern Europe display greater risk, particularly in inflation, political stability, legal-regulatory, and physical climate dimensions, as well as lower resilience in external accounts, innovation, and quality of governance. The analysis indicates that the relationship between investment resilience and actual FDI inflows is not linear. Western and Northern Europe are characterized by a high level of investment resilience and low risks for investors; at the same time, the total FDI inflows in the research period to these regions were lower than to Southern Europe. This confirms that the GIRRI characterizes the quality of the investment environment and the long-term resilience of the economy, while the actual volumes of foreign direct investment largely depend on conjunctural factors and large-scale corporate financial transactions. The distinguishing novelty of the methodology is in combining GIRRI-based risk-resilience assessment with actual FDI flow analysis to reveal differences between potential and realized investments across European regions. The practical significance is in enabling regional authorities to differentiate investment policy according to region-specific risks and resilience rates. The findings will be useful for policymakers, economists, and investors.