Directe investeringen in Oost-Europa gedaald in 2004, maar economische vooruitzichten zijn positief (en)

EUOBSERVER / BRUSSELS - Contrary to the fears of some in the "old" EU, investment and jobs do not appear to be flowing to the new member states, according to a new UN report published yesterday.

The report - from the UN investment body UNCTAD - showed an "unexpected plunge" in flows of foreign direct investment (FDI) into Eastern Europe last year to 21 billion dollars, down from record highs in 2002.

Slovakia and the Czech Republic were the worst affected.

"The region's modest performance last year suggests that no large-scale diversion of FDI from the older European Union (EU) members to CEE countries has occurred", says the report.

However, the Director of UNCTAD's Investment Division, added, "Not surprisingly, prospects for foreign direct investment in Central and Eastern Europe are promising".

Prospects for the Eastern Europe region - which also includes countries not currently in the EU - are thought to be bright due to a high rate of economic growth and low corporate tax regimes.

<strong>L'exceptional France</strong>

The debate on tax and inward investment in the EU has been stirred recently by comments from French Finance Minister Nicolas Sarkozy, who has proposed halting EU handouts to new member states that keep corporate tax rates low in order to attract investment.

Many Eastern European countries offer firms a low rate of tax to attract investment, prompting fears that investment and jobs will flow from the more heavily-taxed West.

But France has little to worry about, according to the report. Almost 47 billion dollars of foreign investment flowed into France last year, more than Canada and the US combined, reported the IHT.

And although FDI flows into Western Europe also declined, it still topped the global list for investment inflows.