Foreign Direct Investment:The eurozone's transistor

In 2012 inflows of foreign direct investment (FDI) to the euro zone slumped -41% (after increasing +20% in 2011) but held above their 2008 low. This fall was caused by across-the-board investor wariness, in particular on the part of Europeans: FDI from eurozone countries fell -77%.

Medium-term prospects are expected to improve on the back of renewed confidence following the easing of financial tensions, an alleviation of risks overhanging the sustainability of public debts and an improvement in current account balances. The financial and industrial sectors will remain at the forefront among the major beneficiaries of FDI. Reciprocally, renewed FDI flows can be expected to aid the return to growth in some eurozone countries.