Foreword: opportunities in adversity

Patrick Gounelle Global Managing Partner EMEIA Integration

Marc Lhermitte Partner Ernst & Young Advisory

The G20 spring meeting closed with promises of a more regulated global economy. We now have a much better picture of the factors impacting businesses around the world: difficulty in accessing finance - despite an unprecedented fall in indicative interest rates, slumping demand, slowing economic growth or contraction, rising unemployment, weak consumer confidence and falling profits.

As a consequence, we are seeing a rise in the number of stressed companies around the world: a record number of companies are expected to go bankrupt in 2009. In Europe and in the US, 260,000 business insolvencies are expected. More companies are likely to breach their loan covenants in 2009 as the slowdown intensifies, leading to a surge in company restructurings or failures.

Country focus

       France Attractiveness survey
               - Réinventer la croissance
        Germany Attractiveness survey
               - Deutschland und Europa im Urteil internationaler Manager
       Belgian Attractiveness survey - No we can't
               - La Belgique ne satisfait pas aux demandes des investisseurs
               - België geeft niet wat investeerders vragen
       Attractiveness of Central and Eastern Europe - Hungary
               - La Hongrie fait le pari de la qualité
               - Hungary sells itself on quality

Foreign investors - companies acquiring assets and/or expanding operations in international markets - are waiting for the dust to settle after the demolition of financial services on which they used to rely. They are driving blind with no visibility on the road they used to follow. Yet 74% of international business leaders have put their immediate confidence in Western Europe's ability to address the economic crisis. They'd sooner stay at home than venture abroad. Emerging regions are not providing the absolutely safe ground international investors are looking for. Yet, the engine of growth in the global economy is moving east, propelled by a combination of commodity production and the advent of a new Asian middle class. Emerging market multinationals are becoming global champions in many industries. In this world in transformation, new power brokers (sovereign wealth funds, private equity, hedge funds) have taken off, but the financial crisis is altering their trajectories.

In this troubled and fascinating year, Ernst & Young's 2009 European attractiveness survey reports on the 3,718 mobile capital investments made in 42 European countries by multinationals, both large and small, which have created more than 148,000 jobs. These foreign investors have pursued locations with supply chain potential, competitive costs and advantageous resources, attractive national and local tax structures, business incentives and technology clusters.

How were European countries affected by the crisis and in which sectors ? How are business leaders looking at Europe and other global regions to tackle the crisis? What are their longer-term prospects - if any? What is expected from governments, national and local, to help businesses get through the current situation and beyond?

These issues form the core of Ernst & Young's 2009 European attractiveness survey, based on a two-fold, original methodology that reflects, first, Europe's real attractiveness for foreign direct investors, based on Ernst & Young's European Investment Monitor (EIM), and second the ‘perceived’ attractiveness of Europe and its competitors by a representative panel of 809 international decision-makers.

In 2008, Ernst & Young took a vital step by bringing together 60,000 people in 87 national practices across Europe, the Middle East and India. As we present our seventh European attractiveness survey, we would like to extend our gratitude to the thousands of decision-makers and Ernst & Young professionals who have taken the time to share their thoughts with us.

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