Belgium must guarantee political stability and investor-friendly economic climate - Western Europe still vulnerable - According to the most recent attractiveness survey in Belgium, published by Ernst & Young, investors would like better fiscal conditions and a more stable political climate in the country. The interviews in the survey were carried out with a panel of 814 Company Executive Officers, some of whom are the most demanding in the world. At a European level (the study includes a significant chapter on foreign direct investment -FDI - in Europe), Ernst & Young emphasises that this continent remains vulnerable in the East (which must rebuild its financial and social systems) and in the West (which is witnessing falls in price competitiveness and is not seen as a top performer in the knowledge arena). In 2009, investors focused on more modest, targeted and regional projects but are now looking for improvements in the ecological and sustainability areas with regard to demand for technologies, services, consumer goods and infrastructure. The survey highlights: 1) the general situation: FDI fell by 36% due to economic uncertainties that provoked a certain hesitancy amongst investors. In Europe there was a total of 3,303 projects in 2009, 11% fewer than in 2008, whilst job creation through FDI fell for the third consecutive year (16%) to 124,923; 2) Western Europe: FDI created 18% fewer jobs in Western Europe. Almost half of this loss affected the services sector but industry also suffered serious losses. Chinese and Indian companies are, for the time being, the main new foreign investors in Europe, especially in the west; 3) Eastern Europe: the substantial fall in job creation in central and eastern Europe slowed down in 2009 because manufacturers of vehicles, electronic systems and computers announced their intention to set up new factories in the area. Overall, the number of FDI projects fell by 23% but 76 629 jobs were also created by FDI. This is only equal to a 14% fall compared to figures for 2008 - a result that is significantly higher than the job creation result in Western Europe; 4) Attractiveness: up until now, Europe was considered as the second most popular destination for FDI but in 2010, investors again made China the most attractive country for FDI in the world. Despite an expected 4% increase in world trade, European growth is only expected to be 1% and investors are focusing on high-growth markets; 5) China: political stability, developing infrastructure and an enormous domestic market all combine to create rapid growth. This country is still demonstrating a 39% attractiveness score, one point more than Western Europe. With a score of 22%, India is also considered as attractive as the US and Canada, although both of the latter are two points behind Eastern Europe. Belgium: the number of new projects has fallen considerably, recently. In 2009, the recovery was more marked, with 100 new investments out of a total of 146 FDI projects. Of these 64 were registered in Flanders, 57 in Wallonia and 25 in Brussels. Ernst & Young points out that FDI in Flanders is continuing to decline. The Brabant Wallon region benefited from a fall in FDI in Brussels. Wallonia reached a record level in FDI. The US remains the biggest investor in Belgium, with 33 projects out of 146, despite a downward trend observed since 2005. The other main investors are the United Kingdom (16 projects), France (14 projects), Germany (13 projects) and the Netherlands (9 projects). The BRIC countries (Brazil-Russia- India-China) also experienced a fall in its share of FDI, although their share in FDI projects in Europe continued to increase, overall. Japan continues to be a good customer and its share of FDI is larger than all the BRIC countries combined. According to foreign investors, attractiveness advantages in Belgium mainly include the quality of life, followed by telecommunications infrastructure. Ernst & Young formulate eight recommendations to maintain and increase foreign investment in Belgium: 1) Stability will play a crucial role; 2) Urgent measures must be taken to tackle taxes and labour costs that are too high; 3) Notional interest rates must continue to be cut; 4) Corporate taxes must be reduced; 5) The Commission de Ruling, which provides legal security in tax affairs, must further demonstrate its usefulness; 6) There must be further fiscal stimulus for innovation; 7) More emphasis should be put on obtaining investment; 8) Ecological entrepreneurship, innovation and R&D are the challenges of the future. (I.L./transl.fl)