The Economy of the European Union

1. The Economyof the European Union European Economic and Trade Office 歐 洲 經 貿 辦 事 處

2. 27 Member States • 487 Million people • 25% of the world’s economy • 25% of the world’s external trade • 23 official languages Scope

3. Economic activity

9. Expenditure on social protection

10. External Trade

16. EU – Taiwan Trade

17. The Euro

23. The European Union and Foreign Direct Investment

29. Taiwan’s FDI in the EU

30. Taiwan’s FDI in the EU • 16th 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

33. Why invest in the EU?

34. 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

35. Foreign investors operate in a stable economic environment • 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

36. 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%.

37. 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

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

39. Eastern Europe special!

40. 5th and 6th EU enlargement 2004 +10 2007 + 2

41. Relatively less well-off…

42. …but growing much faster!

43. Declining unemployment

44. EU membership brings convergence and economic stability

45. An EU policy to foster development and growth

46. Labour costs

47. Corporate tax rates

50. Attractive FDI destination