The global recession has cost Europe 11 percent of foreign direct investment (FDI) projects in 2009, according to Ernst&Young's annual report presented Thursday in La Baule of northwest France. 

"Central and Eastern Europe generally, and many of the smaller countries in Western Europe, have seen dramatic drops in project numbers as investors have flown to the safety of bigger, safer economies like the UK, France and Germany," said one of the report's author Marc Lhermitte, who is attending the Eighth World Investment Conference.

The conference, a European forum focusing on technology, business, investment and policies to stimulate global economic growth, has gathered investors and financial leaders from Europe and Asian countries in La Baule.

Central and Western European countries recorded a collective fall of 40 percent in terms of project numbers. In contrast, big economies held up relatively well to attract inward investment last year.

The report showed project numbers in Britain were down only 1 percent, while those in France, Italy and Germany were up 1 percent, 4 percent and 7 percent respectively.

Additionally, Russia, Ukraine and Turkey all posted increases in the numbers of investment projects in 2009.

The United States, the biggest investor in Europe, as well as Japan registered a decline in 2009, whereas China posted an increase in investment numbers by near 30 percent during the same period.

The sectors of automotive, mining and transport bore the brunt of the impact with significant drops, while business services and software projects also took a hit, the professional service company said.

Although most investors gave negative answers on further input to Europe, Lhermitte said the investment environment has been showing signs of improvement from 12 months ago.

"The current problems around the euro not withstanding, we expect that 2010 overall will show a modest pickup in project numbers, and at least a flat lining in job creation numbers," said Lhermitte.

At a regional level, China is considered the most attractive FDI destination with an attractiveness rate of 39 percent, a point ahead of Western Europe, which ranks the second.

Eastern Europe took the third place with a declined attractiveness rate of 24 percent, followed by India, the United States and Canada -- all scoring 22 percent.

For the long run, the advisory group held on Western Europe as an important destination for investment. "The region is perceived as the third most attractive location over the next three years by 59 percent of investors, just behind China (66 percent) and India (61 percent)," the report predicted.