That’s a misrepresentation of the situation. Developing EU countries are not currently and can’t compete for foreign investments with the block heavy weights. They have neither the infrastructure nor the human capital to do that. The bigger European countries are the one heavily investing in the developing countries for manufacturing.

Also obviously the EU can put in place any kind of controls it deems necessary on the common market. It’s sovereign in this matter after all and tax dumping is mostly helping foreign-based multinational corporations.