The total flow of foreign direct investment (FDI) both out of and into the European Union (EU) increased by 38 percent in 2006, the EU statistics bureau Eurostat said on Thursday.

Last year, EU member states' direct investment to third countries amounted to 183 billion euros (1 euro equals 1.34 U.S. dollars), an increase of 35 percent compared to 136 billion euros in 2005.

Meanwhile, EU countries attracted 135 billion euros from the rest of the world, representing a 42 percent increase in the inflow of FDI from 95 billion euros in 2005.

Thus, the 27-nation bloc was a net investor last year, with outflows higher than inflows by 48 billion euros. In 2005, outflows were 40 billion euros higher than inflows.

The increase in bi-directional investments with the rest of the world was strongly supported by the growth in EU's FDI flows with North America, the Eurostat said.

In 2006, the EU invested 71 billion euros in the United States and 22 billion euros in Canada, compared to the 37 billion and 13 billion euros respectively in 2005.

The U.S. invested 48 billion euros, and Canada five billion, in the EU in 2006, compared to the 19 billion and seven billion euros respectively in 2005.

Among EU member states, France was the biggest investor to the outside world. With an outflow of 39 billion euros, France accounted for 21 percent of the EU's total outflow of FDI, followed by Germany, which invested 31 billion euros to non-EU countries last year.

On the inflow side, Britain was the main recipient of foreign direct investment. 56 billion euros went to Britain, a 42 percent share of the EU total. Luxembourg ranked the second highest, with an inflow of 20 billion euros from non-EU countries.

Luxembourg was also the third largest investor to non-EU countries, tailing after France and Germany, two of the biggest economies within the bloc.

The small western European country's outstanding position in EU foreign direct investment is mainly explained by the importance of its financial intermediation activity, the Eurostat said.

In 2006, FDI between EU member states fell by eight percent compared to 2005.

Source: Xinhua