From the Slovak point of view the European Union (EU) is the main source of foreign direct investment (FDI). The article analyses the position of the EU as a global investor, its position in candidate countries and Slovakia and describes possible consequences of EU investment flows on Slovak economy with regards future Slovak membership in the EU. The Slovak accession to the EU should lead to substantial increase of FDI. Main countries that now play and will continue to play crucial role as investors are geographically proximate countries, namely Austria, and Germany. The position of Slovakia as host country lags behind other candidates. Main differencies in. attracting FDI reflect their market size, the quality of business environment, labour costs, natural resources endowment, different privatisation methods and market access. From the long-term perspective the Triad (USA, EU and Japan) is biggest provider as well. as recipient of FDI. During 1998 - 2000 it accounted for three-quarters of global FDI inflows and 85 per cent of outflows, and for 59 per cent of inward and 78 per cent of outward FDI stocks. The share of the EU within the Triad has been increasing. The position of the USA as largest outward investor has been taken over by the United Kingdom since 1999 and France in 2000. The EU remains dominant as both investor and recipient of FDI. During last years the EU is accounting for 70 per cent of world FDI outflow out of which 68.7 per cent is invested in the EU itself In 2000 intra-EU FDI flows accounted for 48 per cent of global FDI outflows. Biggest investors are France, the Netherlands, Germany and Austria. Three EU member countries, namely Germany, the Netherlands and France - provided candidate countries two thirds of FDI in 2000. France invested mainly in Poland, the Netherlands as well as Germany in Poland, Hungary and the Czech republic. Slovakia as host nation participates on the global FDI inflows only by 0.003 per cent. Slovakia lags behind neighbouring countries. Three countries of the Central and,Eastern Europe - Poland, the Czech republic and Russian federation attracted two thirds of the FDI flowing to the CEE region. The situation has changed in recent years due to privatisation that is short-term phenomena. The FDI stock in Slovakia reached record level however this amount is lower than annual FDI inflow reached by the Czech republic in last four years. Biggest investors in Slovakia include Germany and Austria. The position of Slovakia as host nation according to inward FDI index calculated by UNCTAD is satisfactory and reached the: level of 1, i. e. Slovakia was able to attract FDI with regard its economic strength in the world economy. However it lags behind the Czech republic, Poland, Baltic states and Bulgaria. Central and Eastern European countries attracted in 2000 only 2 per cent of world FDI inflows. The EU serves as a main source for FDI in candidate countries accounting for 80 per cent. The positive effects resulting from future EU membership in the area of foreign direct investment. include strengthening of political and economic stability that will contribute to future FDI inflows, attracting FDI from non-member countries, strengthening financial stability and country's credibility, stronger anti-corruption pressure and positive influence on environment. Negative effects include abolition of tax incentives offered to foreign investors (that will require finding new ways how to attract FDI). Other negative effects include FDI concentration into few industries that might lead to stronger sensitivity of economy on external environment changes, using cheap labour, which is not long-term strategic advantage of Slovakia as host nation, increased balance of trade deficit, the creation of dual-economy, deepening regional differencies.
