Foreign investment in Germany has plunged to its lowest level since 2009, reflecting deep concerns about the country’s competitiveness. High taxes, costly energy, and bureaucratic hurdles are among the factors steering global investors and corporations toward more business-friendly European destinations.

Germany’s economy contracted more than expected last quarter, according to official data released on Friday. With US tariffs battering exports, Chancellor Friedrich Merz faces mounting pressure to steer Europe’s top economy back to growth.