The Economy of the European Union European Economic and Trade Office 歐 洲 經 貿 辦 事 處

Scope 27 Member States27 Member States 487 Million people487 Million people 25% of the world’s economy25% of the world’s economy 25% of the world’s external trade25% of the world’s external trade 23 official languages

Economic activity

Expenditure on social protection

External Trade

EU – Taiwan Trade

The Euro

The European Union and Foreign Direct Investment

Taiwan’s FDI in the EU

Taiwan’s FDI in the EU  16 th investor in the EU  2.2 billion Euros in FDI stocks  Less than Hong Kong, Singapore (both 15 billion Euros), Korea (2.8 billion Euros)  Taiwanese investors are far from having fully exploited the opportunities offered by the EU

Why invest in the EU?

EU advantages offered to foreign investors  Access to a single market of 487 million customers, with no borders for goods, services or people  A common regulatory framework, setting standards for the world (e.g. WEEE, RoHS…)  A strong scientific research base  Highly skilled labour force

 Europe has a slight trade surplus  The EU has a stable macroeconomic environment due to the Euro which maintains low inflation, low deficits, and which keeps a ceiling on national debt  This single currency is freely floating on the foreign exchange markets  The ‘Lisbon Agenda’ is designed to create a restructuring of the economy to adapt it to current needs Foreign investors operate in a stable economic environment

The EU is not expensive  The pattern of taxation and welfare systems throughout the EU is very diverse and varied.  The amount of GDP taken in taxes varies between 35% and 55% depending on the country, with most of the large Member States situated between 40% and 50%.

The EU is not expensive  However, the burden of taxes, welfare and regulation is more than offset by:  Higher productivity of labour and capital  Strong public services (transportation, utilities, general business environment)  Incentives and subsidies often available for new investments  Competitiveness is not measured by taxes and welfare, but by the overall factor costs and productivity

Opportunities for all investors  Direct investment in industrial manufacturing or services  Equities  Funds and portfolio investment  Venture capital

Eastern Europe special!

5 th and 6 th EU enlargement

Relatively less well-off…

…but growing much faster!

Declining unemployment

EU membership brings convergence and economic stability

An EU policy to foster development and growth

Labour costs

Corporate tax rates

Attractive FDI destination

Openness to foreign investment: illustration in the banking sector

Sustainability

Links  The European Economic and Trade Office  (English and Chinese language website)

Acronyms  CZ: Czech Republic  EE: Estonia  CY: Cyprus  LV: Latvia  LT: Lithuania  HU: Hungary  MT: Malta  PL: Poland  SI: Slovenia  SK: Slokakia