WRITTEN QUESTION E-0131/01 by Christopher Huhne (ELDR) to the Commission. Flow of foreign direct investment.
Date: 2001-01-31
Institutions: European Parliament, Provisional data
Subjects: capital movement, direct investment, foreign investment, third country

C 40 E/8

Official Journal of the European Communities

EN

14.2.2002

(2002/C 40 E/007)

WRITTEN QUESTION E-0131/01

by Christopher Huhne (ELDR) to the Commission

(31 January 2001)

Subject: Flow of foreign direct investment

Will the Commission indicate the flow of foreign direct investment into and out of each Member State in
each of the last ten years in total and also break down each total figure into the amount coming from and
going to EU partner countries, non-EU countries, Japan and the United States?

Joint answer
to Written Questions E-0130/01 and E-0131/01
given by Mr Solbes Mira on behalf of the Commission

(18 April 2001)

Foreign direct investment (FDI) is a category of international investment that indicates an intention to
acquire a lasting interest in an enterprise operating in another economy. It covers all financial transactions
between the investing enterprise and its subsidiaries abroad. It differs from portfolio investments, because
the investor seeks to obtain an effective voice in the management of the foreign enterprise. Formally
defined, a direct investment enterprise is an unincorporated or incorporated enterprise in which a direct
investor owns 10 % or more of the ordinary shares or voting power (for an incorporated enterprise) or the
equivalent (for an unincorporated enterprise).

Through direct investment flows, an investor builds up a foreign direct investment position that features
on his balance sheet. This FDI position (sometimes called FDI stock) differs from the accumulated flows
because of revaluation (changes in prices or exchange rates, and other adjustments like rescheduling or
cancellation of loans, debt forgiveness or debt-equity swaps).

The Commission maintains an FDI database which contains harmonised and thus comparable data on
inward and outward FDI positions, flows and income for the Community, its Member States and major FDI
partners. FDI data are contained in Eurostat(cid:146)s database NewCronos (under theme2/bop/fdi). The main
annual publication is the FDI Yearbook, which also contains descriptive analysis of FDI evolution and
detailed explanation on definitions used and methodology applied in data collection.

The tables sent direct to the Honourable Member and to Parliament(cid:146)s Secretariat contain data on FDI flows
for 1992-1999 and for stocks at the end of 1998.

Data are broken down according to four dimensions:

(cid:129) Reporter: This refers to the Member States reporting FDI data to Eurostat. The 15 Member States
(EU 15) total data are calculated by Eurostat aggregating Member States data and estimating missing
values.

(cid:129) Abroad in the reporting economy: FDI abroad is investment made by EU15 Member States in other
Member States or in extra-EU countries. The minus sign indicates investment for FDI abroad, and the
plus sign disinvestment.

FDI in the reporting economy is investment made in the EU15 by other Member States or by extra-EU
countries. The plus sign indicates investment for FDI in the reporting economy and the minus sign
disinvestment.

(cid:129) Partner: This refers to the country in which FDI is made (for FDI abroad) or the country making the

investment in the Community (for FDI in the reporting economy).

The selected partners included in the tables are the United States, Japan, and the candidate countries.
Totals are calculated for both extra-EU, and intra-EU.

(cid:129) Including/excluding reinvested earnings: Reinvested earnings are profits made by direct investment
enterprises that are not distributed and are therefore deemed to be reinvested in the enterprise. Total
FDI flows should include reinvested earnings, but these data are available only as from 1995 for the
Community aggregate and for different periods for individual Member States. Therefore a more
complete series of data excluding reinvested earnings have been included in the table.