Equity prices in European Union member countries have risen 118 per cent in the last five years, a new report has shown.

Data from Halifax Financial Services shows EU stocks have outperformed both US and UK share prices – which rose 51 per cent and 55 per cent respectively since 2003.

The EU also outperformed the Australian All Ordinaries Index (90 per cent) and the Japanese Nikkei 225 index (77 per cent), but was pipped by Hong Kong’s Hang Seng share index, which recorded 195 per cent.

The strongest performer was Bulgaria with growth of 352 per cent, or 35 per cent a year – the equivalent of six times the growth of the UK – while of the top ten growth nations, eight were in Eastern Europe.

The worst performers were Italy (42 per cent), UK (55 per cent), and France (69 per cent).

However, the EU’s medium growth is in contrast with widespread falls over the last year – with only Slovakia and Luxembourg reporting rises in stock prices.

While the UK has seen stocks fall six per cent, the rest of Europe has seen declines ranging from three per cent in Slovenia to 34 per cent in Estonia.

The full force of the credit crunch and subprime crisis in the US has also been felt in the EU this year.

Across the EU equity prices have fallen 14 per cent since the start of the year – with only Luxembourg recording growth – at two per cent.

Martin Ellis, Halifax Financial Services chief economist, said: “Despite the recent financial market difficulties, the long term performance of stock markets across the EU has been strong. Over the past five years shares prices have risen by an average of 17 per cent per annum.

“The top performing stock markets over the past five years are primarily the newest members to the European Union. These countries have clearly benefited from greater capital flows, especially foreign direct investment and the further integration of their financial markets within the EU. This has boosted share prices substantially.”