Britain retains top slot in foreign investment ranking, France lags: Study

A general view of the London city skyline. -- PHOTO: AFP
A general view of the London city skyline. -- PHOTO: AFP

PARIS (REUTERS) - Britain and Germany topped an annual ranking of foreign investment projects in Europe while France lagged behind though its numbers were on rise, a study showed on Tuesday.

Retaining its top position, Britain saw the number of foreign investment projects in the country rise by 15 per cent last year to 799, according to Ernst and Young.

Meanwhile, Germany, Europe's biggest economy and industrial powerhouse, saw an increase of 12 per cent to 701 foreign investments.

France appeared to have halted some of its decline in recent years although the number of foreign investments grew more slowly than in Britain or Germany.

With a nine per cent increase last year in investments to 514 projects, Economy Minister Arnaud Montebourg seized on the study as a sign of the government's success in reviving French firms'competitiveness and improving the country's attractiveness.

In a move to improve competitiveness further, President Francois Hollande aims to phase out 30 billion euros (S$51 billion) in payroll tax companies pay over the next three years in exchange for commitments to create jobs.

Ernst and Young said that the total number of foreign investments in Europe rose five per cent to a record 3,955 projects, creating 166,300 jobs which was down from pre-crisis levels of close to 200,000.

While intra-European investment accounted for 54 per cent of foreign investment, the United States was the single biggest foreign investor followed by Germany and Britain.

In one of the latest examples of US investment in Europe, US conglomerate General Electric is seeking to buy the energy assets of French group Alstom, once an icon of French industry.

However, it faces resistance from the French government, which prefers a European tie-up between Alstom and German rival Siemens and which has widened its control of foreign takeovers with a decree giving it powers to veto deals.