Tag: foreign investment

The inflow of foreign direct investment (FDI) in the EU halved in 2009 and particularly declined in the new member states – where the foreign sector is economically vital, writes the Vienna Institute for International Economic Studies in an analysis of FDI in 20 Central, East and South-East European countries based on the latest update of its database.

Corruption and an unreliable legal framework are hindering the economic development of the Western Balkans, notes a report by the European Association of Chambers of Commerce and Industry, published on 13 November.

Statistics show that corporate investment in research and development (R&D) has grown in the EU for the third year running, surpassing the growth rate for private sector funding in the United States. 

The law, aimed at protecting strategic domestic industries from unwanted foreign takeovers, was approved by the cabinet yesterday (20 August), despite insistence by German business associations that the move goes against EU rules on the free movement of capital.

The use of national security issues as a pretext for protecting companies and markets from EU competition is a source of "increasing concern" in the EU, the Commission declared in an annual report on US trade barriers. In a visit to Tokyo, the EU's trade chief also raised the issue of steep barriers to trade and investment as a key concern in EU-Japan relations.

Each EU country should, "if necessary", be able to block foreign investments carried out via state-owned vehicles, state the conclusions of the European Council, which also confirmed member states' support for an internationally-agreed code of conduct for sovereign wealth funds.

The Commission is expected to approve, on 27 February, guidelines governing these special state-owned foreign investment funds amid concerns that countries such as China, Russia or Saudi Arabia are using them for political rather than economic motives.

The Commission will look into introducing checks on takeovers of EU companies by state-controlled foreign investment funds, saying that it is concerned that funds run by countries such as China may be acting on politico-strategic considerations rather than economic motives.

Internationalisation of research and development drives cross-border flows of research funds. Europe wants more of those funds, but is currently losing investment to US, China and India.   

Cross-border investment flows involving the EU have fallen sharply in 2004, according to figures published by Eurostat.