EU accessian process has raised expectations of increased growth rates in employment and ineames caused, among other contributory jactors, by increases in direct foreign investment flows (DFI). However whether growth stimulated thus may be sustainable or not, depends on certain conditions such as the achievement of domestic and external balances as well as increases in R&D expenditures and the successful building of an industrial infrastructure based on quality human-capital. The first section of the paper elaborates on the concept of sustainable development. Economic policies and policy instruments that should be used in order to close the domestic and external savings gaps are discussed in the second seetion and an analysis of the effects of increases in DFI on sustainable growth are presented in the third section.
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