Tuesday

18th May 2021

Financial crisis saw massive drop in EU investment

  • The Grand Duke's palace in Luxembourg, the biggest EU destination for outside money (Photo: Cesar Poyatos)

The worldwide financial crisis, which erupted in late 2008, saw foreign investors massively cut their flow of money to the EU.

The European Commission put out the figures, covering 2010, on Monday (27 June), on the eve of a vote by Greek MPs on further austerity cuts designed to win credibility among institutional lenders like the International Monetary Fund, and the private sector.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The numbers show that foreign direct investment (FDI) to the EU, which includes investment in foreign businesses but not purchases of sovereign debt, fell from €216 billion in 2009 to €54 billion in 2010.

The steepest fall came from offshore financial centres, which injected €46 billion into the EU economy in 2009 and just €4 billion the year after. The biggest overall drop came from the US, from €97 billion to €28 billion. Investment from Switzerland and Russia also plunged. But inflows from Canada (up €16 billion) and China (up €12 billion) went up.

Luxembourg - a financial services centre - took a big hit as the EU's largest normal recipient of outside money.

The commission report said the overall drop "continues the trend of recent years" and noted that FDI into the EU was eight times higher in 2007, before the crisis struck, than in 2010.

EU investors also tightened their purse strings.

EU investment around the world in 2010 fell from €281 billion to €107 billion. EU companies held back money primarily from offshore investment centres and the US. But investment also plummeted in Switzerland, going from €44 billion in 2009 to a net extraction of €7 billion.

EU outward investment was five times lower than in 2007.

Commission fast-tracks EU 'project bonds' to spur growth

The EU commission on Wednesday proposed that "project bonds" worth €230 million be kicked off next year instead of 2014, so as to help investments in transport, energy and broadband connections as national budgets are drained of cash.

News in Brief

  1. Pandemic conspiracies pose security threat in France
  2. EU laws on vans and CO2 too weak, NGO says
  3. Unicef urges rich countries to donate vaccines
  4. Belgium voices Chinese spy fears over airport hub
  5. EU: Over 5 million people risk 'starvation' in Ethiopia
  6. EU 'deplores' Russian ban on Czech diplomats
  7. UK to stop locking up EU travellers without visas
  8. Karadžić being moved from Hague to UK jail

Opinion

Why Russia politics threaten European security

Russia could expand hostile operations, such as poisonings, including beyond its borders, if it feels an "existential" threat and there is no European pushback.

Analysis

Ten years on from Tahrir: EU's massive missed opportunity

Investing in the Arab world, in a smart way, is also investing in the European Union's future itself. Let's hope that the disasters of the last decade help to shape the neighbourhood policy of the next 10 years.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  2. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  3. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  4. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  5. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  6. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance

Latest News

  1. EU impunity for Israel creating 'horror' in Gaza
  2. Internal paper lays out EU splits on 'returning' migrants
  3. Israel-Palestine and travel certificates in focus This WEEK
  4. MEPs rethink EU Parliament future after Covid-19 pandemic
  5. The activists calling out racism In Italy's media
  6. Online privacy for adults means more internet child abuse
  7. EU aims at 'zero pollution' in air, water and soil by 2050
  8. French police arrest Luxembourg former top spy

Join EUobserver

Support quality EU news

Join us