The Impact of Economic Crisis on the International Investment Position and Foreign Direct Investments of European Union

Khakkul Khumoyun, Wei Wang, Ravshan Islomov

Abstract: In 2007/2008 world economy faced the deepest economic crisis since WorldWar 2. Economic crisis originated from US but soon adopted a global shape and effect many developed and developing countries.2007/2008 economic crisis significantly increases public debt of many developing and developed countries. The crisis turned into serious debt problem particularly in Europe. Financial crises of 2007/2008 seriously influence the investment opportunities in European Union region. The crisis hit hard both inward FDI and outward FDI on a higher level. Crisis in EU restrict inward FDI coming in European Union, while high debt limit the outward FDI. Restriction of both inward and outward FDI severely hit the job sector and foreign companies in EU. NIIP of overall Europe Union fall significantly during the crisis. In 2008 EU faced current account deficit and net financial transaction created a negative impact on NIIP.

Keywords: European Union, Foreign Direct Investments, International Investment Position