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CONTENTS

ALEKSANDAR GROS & INTERVIEW: ZSUZSANNA HARGITAI 2 FRITZ KALTENEGGER 46 We Plan to Invest EUR 21 bln. In EBRD Introduction Countries

4 INTERVIEW: IVAN GROS 48 WALTER DÖRING It is time for new visions After the Crisis is Before the Crisis: But Now It’s About Economy MARGARETE SCHRAMBÖCK 8 The Key is That Austria and the EU 51 MILA CAROVSKA Overcome the Crisis Together Measures will „Cure“ the Economy

DAVOR MAJETIC 12 MICHAEL HÖLLERER 53 We are Liable Partner in CESEE Preserving Jobs Will Be the Biggest Challenge 17 MARIYA GABRIEL The power of digitalisation MARJOKE BREUNING 55 Business Recovery From “Corona Shock” ALEKSANDAR VLAHOVIC 20 For Economic recovery – EUR 5 billion INTERVIEW: HRVOJE KOLARIC 57 We Need to Change Our Business Models Fast INTERVIEW: JOHANNES HAHN 22 Recovery Plan Using the Full Potential of EU Budget CHRISTINE ANTLANGER-WINTER 59 Technology Must Be Available For All ELISABETH STADLER 25 VIG – A Reliable and Stable Partner JANOS ZEMBERI 61 Strategic Work on Modernisation is the Only Way INTERVIEW: BLAZ BRODNJAK 26 Banks in Slovenia are Now Better Prepared for any Crisis ROMAN GLASER 62 The “Land of Cooperatives“ Jointly Fights Covid-19 MARTHA SCHULTZ SUCCESSSTORY 32 Rebooting Austrian and European Tourism 64 FRANZ SCHAUSBERGER Protecting what matters. Europe, Corona and Western Balkans ZDRAVKO POCIVALSEK 35 Our Group is celebrating 30 years in CEE. In 1990, Digitalisation is a Big Opportunity 66 BERAT RUKIQI we began expanding into Eastern Europe and this frst- We Need to Adapt and React Quickly INTERVIEW: SAMIR MANE mover advantage laid the foundations for our market 38 leadership. This has enabled us to become the number We All Need to Readjust INTERVIEW: GERLINDE GAHLEITNER one in CEE, a region which now accounts for more 68 Austria – Country of Possibilities than half of our proft and premium income. To fnd out 42 INTERVIEW: DRAGICA SEKULIC what also matters to us, visit www.vig.com We are Preparing the Third Set of Measures 70 KEVIN KRETZ Advantages and Possibilities of Aluminum 44 MARTIN ENGELBERG The Day After Covid-19

PUBLISHER: SEEBDN, A- 1190 WIEN, Krottenbachstr 151/3, Coordinator to the Publisher: Mag. Aleksandar Gros, General Secretary SEEBDN • EDITORIAL STAFF • Editor: MARIJANA SIMIC | Design & Technical Editor: ANA DJORDJEVIC Translation & Proofreading: BILJANA MAJSTOROVIC | Print: DMD Beograd

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,,SEE Business Circle-focus on North Macedonia”in Vienna , in cooperation with the Vienna Insurance Group (VIG) with our special guest Prime Minister The SEEBDN continues to expand its for 2020 and 2021 in a timely manner of North Macedonia, Mr.Zoran activities and programs and we are and we are looking forward to sup- happy to announce that the SEEBDN porting future partnerships and pro- Zaev has a large number of new members jects between the German-speaking and partners and that interest in our area and the countries of Southeast premium business network consist- Europe through our work. ing of high-ranking political and busi- In the next few years, our association ness figures is very high. would also like to actively promote Due to the positive developments in investments in Europe, especially in Central and Southeast Europe with the countries where SEEBDN is ac- ,,SEE Business Conference” respect to the COVID-19 crisis, we tive, i.e. in Germany, Austria and SEE in Zagreb in cooperation with are working intensively on our event countries. ALEKSANDAR GROS formats, which is an important tool In order to implement this profes- Euroherc Insurance with high General Secretary of the for our organization. We are happy sionally, the SEEBDN board has de- ranked guests from SEE, Austria SEEBDN to announce that on September 29, cided to found two new bodies: the Executive Director at Grimex 2020, with the support of Ms. Martha Investment Council for Austria and and Germany Consult Schultz (Vice President of the Austri- the Investment Council for SEE. Both an Chamber of Commerce), we will councils will have high-ranking man- hold the event titled "Women's Ex- agers, entrepreneurs and experts as cellence Circle - Austria Connects members, who will be supporting the with SEE" in Vienna. High-profile fig- SEEBDN network. ures from business, politics and soci- When we look at the results, listen to ety will be participating as panelists reactions of our member companies, and guests. we plan continuous improvement of We would also like to announce that the Councils. We also plan to form a on October 20, 2020, with the sup- new Council with two important Ger- port and in the premises of Raiffeisen man provinces - Baden-Württem- Bank International in Vienna, we will berg and Bavaria. Germany is a ma- ,,SEE Business Circle” in Vienna hold the event titled “BUSINESS CIR- jor investor in Southeast Europe and with high ranked personalities CLE: Boosting Investments and Part- certainly one of the priorities in terms nerships between Austria and SEE” of SEEBDN countries and the goal of from economy and politics. to promote partnerships and trade our members is to better network FRITZ KALTENEGGER between Austria and the countries of with partners from Germany. Having Chairman of the Board of the Southeast Europe even more inten- in mind our results so far, we have no SEEBDN sively and to network high-ranking doubt that we will be successful in CEO at café+co International figures in the sphere of business. the realization of these new plans as Holding GmbH We will announce our further events well.

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Regional integration BL: Isn't the first step for countries to a positive investment environment. IT IS TIME FOR NEW VISIONS AND NEW try to overcome the decline in reve- From the point of view of the devel- has reached a certain nues due to the pandemic? oped ones, the strategy, following the STRATEGY FOR GROWTH AND DEVELOPMENT level and now it is same logic, should be based on more necessary to shift the IG: Of course. All countries, includ- active promotion of one's own coun- ing those where the SEEBDN oper- try as an investment destination. I am INTERVIEW: focus to developed ates, have set aside billions from their convinced that the EU will strive to IVAN GROS, Member of the SEEBDN Board, Managing Director of Grimex Consult markets. This would budgets to support the economy, pri- concentrate most of its new invest- BY: Marijana Simić marily in three key groups of meas- ment on its markets, and that it will bring stability and long- ures - to delay and reduce taxes, to especially make sure not to move stra- term conditions for preserve the number of employees, tegic production outside the conti- and for guarantees and other levers nent. This will be one of the important “In recent years, very high-quality companies have ap- development to these for ensuring liquidity. But that is, as strategic changes, which opens space peared in Southeast Europe that want to further develop you said, only the first step. We have for companies from SEE and WB to in the EU markets. On the other hand, in the new situ- companies, and thus to to think ahead. As economist Milton enter these markets. ation imposed by the coronavirus pandemic, countries the overall economy. Friedman said, only a crisis produc- are massively reviewing and changing their economic es change. When a crisis occurs, the BL: What is the precondition for that? strategy, so EU members will now, mainly of looking for steps taken depend on the ideas. Well, investment destinations outside their borders, try to at- now we have come to the point where IG: In order to achieve this strategic tract serious investors to their markets”, said for the Busi- we need a fresh idea, and we should orientation, it is necessary for eco- ness Link Magazine Ivan Gros, a member of the Board of use this chance to create a new visions nomic decision makers in SEE and the South East Europe Business Development Network and ideas. Because, the measures will WB countries to target their actions (SEEBDN) and Managing director of the Grimex Consult. fix the problem, but what we really and prepare companies for such an

need - is to think about the new strat- approach. It is important to realize Considering this fact, the goal which SEEBDN strives egy of economic development. that in this way, they will meet the for is to "two-way" network potential investors from the conditions for much faster develop- SEEBDN member countries: from Austria and Germany BL: What should this strategy be ing of a domestic private sector. The to the Western Balkans, Croatia and Slovenia, but also in based upon? development of the domestic econo- the opposite direction. Austria alone, for example, has my should be in focus, and priority invested in the countries covered by the SEEBDN, close IG: From the angle of the less devel- should be given to small and medium to EUR 43.7 billion, most of it in Germany. Gros explained oped, the basis should be the cooper- enterprises. This can be achieved by that it is now important for Austria, but also Germany, ation of related companies from the countries which promote their econo- as two important European economies, to continue in- region and, above all, joint trade or mies in developed foreign markets, by vestment and business activities in the SEE countries. He investment presentation on the Eu- presenting their investment projects, also pointed out that today, more than ever, lies an op- ropean market. Regional integration and have direct talks with potential portunity for companies, especially from SEE and WB, to has reached a certain level and now investors to interest them in the im- be actively involved in economic projects in EU countries it is necessary to shift the focus to de- plementation of offered projects. and to initiate the establishment of joint companies in veloped markets. This would bring When a crisis occurs, the steps taken their markets. He is convinced that this would lead to an stability and long-term conditions for BL: And the sectors you see as prom- depend on the ideas. increase in business arrangements, to the mutual benefit. development to these companies, and ising ones? thus to the overall economy. But some countries, especially the WB coun- IG: Those are certainly agriculture tries, are too slanted to their partial and the food industry, then energetic, and short-term interests. It produces digitalization and communications, constant tensions and confrontations, and of course transport and logistics. and that is not good for investors. In such conditions, it is difficult to count on increased economic growth and

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The SEEBDN has designed and successfully implemented one such platform for the promotion The SEEBDN’s plans for the next year or two: of resources and investment projects of certain countries in the region, all in cooperation and with “We want to gather even more the support of their governments. business people and experts from the SEEBDN countries and create a comprehensive strategy and pro- grams for practical action. We be- lieve that these efforts will be well implemented by the two newly BL: And what would a reverse invest- country's economy. They are stable, planned Councils. We are current- ment look like? For example, if a com- offer financial support, equal business ly forming the "Investment Council pany from the Western Balkans wants conditions, regardless of the origin of for Austria" and the "Investment to enter the EU market? capital, subsidies, insurance against Council for the SEE" within our IG: For example, a good and respect- risks for investments and exports, association, where we will bring able company from the SEE Region etc. Take the example of Austria. Its together prominent business people and Western Balkans wants to expand total foreign trade with the SEEBDN and CEOs of companies from Aus- and invest in production, for exam- countries has exceeded EUR 110 bil- tria, the SEE and the Western Bal- ple, in Austria, where it establishes lion, of which most of it is traded with kans, who have a similar concept of its ‘daughter’ company. In that way, Germany, then, it has more than EUR development in their programs. Of they can use the great exchange that 5 billion trade with Slovenia, around course, we will continue to support Austria has with the rest of the world EUR 3 billion with the WB countries Austria’s investment activities that (around EUR 320 billion), and export (more than 50 percent with Serbia), BL: What does the SEEBDN offer to vestments are being main model to in- BL: What would be the main instru- are oriented towards Slovenian, their products from this EU member and around EUR 2 billion with Cro- companies in order for them to get in- vest in the WB countries, which some ment to encourage the creation of that Croatian and WB markets, but we State. After some time, when the pro- atia. volved in these flows? want, but experience shows that there business connection? will be particularly active in terms duction company is more developed, are also those foreign investors who of a stronger and more meaningful the transfer of new technology can This is a huge potential for devel- IG: During the pandemic, our associa- are more interested to establish a joint IG: Governments and chambers of presence of companies from the strengthen the parent company, which opment and export to the EU and tion was in contact with our members, company with a domestic partner. commerce should play a positive role SEE and the WB on the EU market. but also with other companies, so we in this matter and, in consultation could modernize its basic production. beyond. It is especially important Or, the daughter company may invest having in mind that Austria in 2019 could listen to their current needs in A foreign investor believes that this with the business representatives, We also plan to form a Council in the parent company. This will be had foreign trade with the world of order to prepare adequate programs is the most efficient way, because do- jointly select several interested com- with Germany, i.e. with two very registered as a direct foreign invest- around EUR 320 billion. This gives a for their further activities. Based on mestic partner has knowledge of the panies with a good and quality pro- important German provinces, ment in the parent company, i.e. the chance to companies from the region that, our concept of strategic partner- market, knows the economic condi- duction line as well as a quality devel- Baden-Würtemberg and Bavaria. country, and it can eaven expect sub- that by joining such a market, they ship was strengthened, with strong ac- tions, and it is export-oriented one. opment program. It is best to back up Germany is a large country and it sidies. can use the position for further export cent on various types of joint business The foreign investor is ready to bring family businesses that have matured would be difficult to cover activities activities in the international market. projects, and especially the formation capital, knowledge and technolo- enough, but they need this injection. on the entire territory. But I have BL: Why Austria or Germany? Austria and Germany have a large for- of joint venture companies from the gy into the joint company, which is If they do well in the EU market, oth- no doubt that this endeavor will eign trade turnover with SEE and WB region and from EU countries. a benefit for the local company, but ers would follow. It is necessary for all be successful, as well. The growing IG: On the one hand, these are countries, where they are among the also for the economy of a country as participants to build a strategy, so that number of our members unequivo- countries with significant econom- largest investors. It is also a chance for BL: Why are joint venture models im- a whole, because the level of devel- each side would play its role. cally proves our commitment and ic strength, they are implementing ambitious companies from the region portant? opment is constantly improving. Of The SEEBDN has conceived and suc- perseverance. That is why I believe significant international investment to get involved in technological flows course, there are also investors who cessfully implemented one such plat- that we will succeed also in these projects, and at the same time they and thus ensure stable development. IG: This is very important for the are more willing to develop their busi- form for the promotion of resources new circumstances and that we will are traditional partners to many That is why we within the SEEBDN economy, especially for medium-sized ness independently. Which model will and investment projects of certain help our members find business SEE countries and Western Balkans. have set ourselves an extensive pro- enterprises. It is noticeable, for exam- be applied depends on the assessment countries in the region, all in coop- niches for action, as we have done On the other hand, they bring new gram of activities in order to use these ple, that greenfield and brownfield in- of the future investor. eration and with the support of their so far”, Gros says. government. technologies into companies and the observations and to lead to concrete actions.

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THE KEY IS THAT AUSTRIA AND THE EU OVERCOME THE CRISIS TOGETHER

INTERVIEW: MARGARETE SCHRAMBÖCK Austrian Federal Minister for Digital and Economic Afairs

For the full recovery of Austria seems to be one of the countries which was the best in dealing with Economic forecasts our economy, we focus the crisis caused by the coronavirus. A national measures have been adopt- ed (9% of GDP), but what is needed for full recovery? An answer to that and are especially first on fiscal relief for other questions of the Business Link Magazine were given by Margarete challenging during employees, second on Schramböck, the Austrian Federal Minister for Digital and Economic Affairs. this coronavirus relief for businesses “A comprehensive package of measures to further strengthen Austria´s at- crisis, since a lot will in order to enable job tractiveness as a business location and to ensure the competitiveness of Aus- depend on an effective trian companies in the post-crisis world is already in implementation. The retention and creation successful application of health policy measures and the containment of the national as well as and third, investments spread of the virus indeed put Austria early in a favourable position in com- international health in climate protection, parison to other EU member-states. For the full recovery of our economy, we focus first on fiscal relief for employees, second on relief for businesses in management. digitization and order to enable job retention and creation and third, investments in climate regionalization. protection, digitization and regionalization”, she said.

BL: How big burden is the national BL: In which timeframe do you think measures in the budget and how do is possible to expect partial recovery you plan to maintain the public fi- and which timeframe is needed for full nance at an acceptable level, in the recovery? situation when the private sector is unable to operate at a full capacity? MS: Economic forecasts are especially challenging during this coronavirus MS: Due to continuous efforts on re- crisis, since a lot will depend on an ef- ducing government deficit, Austria’s fective national as well as internation- public finances are in good shape to al health management. We therefore manage this unprecedented crisis, al- monitor the number of coronavirus lowing us enough fiscal space for the cases very closely and take decisions economic stimulus package. However, dependent on that permanent analy- medium to long term it is of course sis. However, most of the current fore- our goal to consolidate our budget casts are confident that Austria will again, economic growth and positive be back on a growth path in 2021. As contributions via all growth compo- export-oriented economy, Austria is nents is the best contribution.

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The current situation made the benefits of digitization even more apparent. We have to use the momentum.

BL: Austrian economic growth will Within weeks we were ‘beamed’ into drop more than 3% this year in a a digital future. The current situation moderate scenario of the coronavirus made the benefits of digitization even pandemic response, the central bank more apparent. We have to use the said. Some other estimation goes momentum. However, there are also down to the GDP decline to 7% in deficits that require to be eliminated. worst scenario. What is your strategy As one consequence, Austrian SMEs for recession and what kind of help need further support on their way do you expect or you will ask from to e-commerce. For this purpose, an the EU? online marketplace was launched in cooperation with a range of existing MS: Austria was one of the first coun- platforms on “oesterreich.gv.at”. It is tries in Europe to initiate a gradual also necessary to enable more people transformation to normality while to use digitization, including the older paying attention to the control of the generation particularly affected by the of course very dependent on develop- therefore play an active role in the Solidarity and well- spread of the virus. Solidarity and a current isolation measures. ments in our export markets. There- efforts to further strengthen the in- well-coordinated approach between fore, it is key that Austria and the EU ternal market, e.g. through the mod- coordinated approach the EU and its Member States should BL: What is your strategy for digitali- overcome the crisis together. ernisation of European competition between the EU and its be the key to success. Therefore, the zation in the future? Commission presented in coopera- law. Furthermore, a functioning rules- Member States should BL: Austria is a large exporter. How based international trading system tion with other EU institutions vari- MS: Looking ahead, further prior- much does the recovery of the Austri- will become even more important and be the key to success. ous guidelines in order to support jobs ities need to be set within the next an economy depend on the recovery weaknesses linked to securing neces- and businesses or to ensure the flow one to two years in order to support of the EU? What should happen in the sary supplies in times of crisis have to of goods across the EU via “Green the crisis management and to ensure neighbouring countries to improve the be addressed. Thus, besides looking Lines”. Furthermore, a Joint Europe- achieving Austria’s long-term goal of economic situation in the Austria? into ways to shorten, diversify and an Roadmap towards lifting Covid-19 establishing a “digitally responsible secure the supply chains of especial- containment measures and a Roadm- society”. For this purpose, the Feder- MS: For Austria, as a small and open ly strategically important goods, we ap for Recovery were presented as the al Ministry for Digital and Economic economy, exports play an essential support EU efforts to improve inter- first step ahead. Affairs started the development of the role: Around 60% of our GDP de- national cooperation in this area, e.g. “Digital Action Plan Austria” already pends on them. With roughly two- regarding pharmaceuticals and medi- BL: Will the crisis trigger the rapid prior to the crisis based on a concert- thirds of Austrian exports going into cal products. Austrian exports within development of digitalization, as the ed program of measures across all other EU countries, a strong pan-Eu- value chains account for around 33% new situation motivated people to fields of action currently developed as ropean recovery and a functioning in- of total economic output. transfer activities to the online world? part of the Digital Action Plan which ternal EU-market is key. Austria will will also emphasize the necessity of MS: The corona crisis hit Austria as bundling the various digitization pro- an external shock, also having conse- cesses that were being initiated in the quences on the digital transformation. course of the crisis.

10 BUSINESS LINK BUSINESS LINK 11 BUSINESS LINK BUSINESS LINK WE ARE LIABLE PARTNER IN CESEE Over night we found ourselves accelerating digital tools to comply with social and physical distancing rules. MICHAEL HÖLLERER CFO Raifeisen Bank International

ver since 2008, banks, regu- ly found ourselves engaging with our lators and governments have neighbours. Only a couple of weeks Etaken extensive measures to earlier, leaving a note with your tele- mitigate the effects of a possible next phone number on your neighbour’s Special focus will crisis. I intentionally use the word door would have been considered be put in future “mitigate” as opposed to “prevent“ strange behaviour, whereas now it is on small and for the simple reason that - while we an example of solidarity in difficult hardly will know when a next crisis times. medium sized will hit and what might trigger it - one companies as they certainty remains: The cyclical nature So yes, we all have proven ourselves to of our economies will inevitably bring be flexible and adaptable in response are the backbone about the next crisis whatever we try to an entirely new situation. However, of the economic to do about it. And while most of us in their response to the COVID-crisis, may have expected a number of possi- governments have taken rigid meas- development ble causes to trigger the next econom- ures that have taken their toll on busi- and significant ic crisis, only a few of us would have nesses and the economy. The question employers in our anticipated a global pandemic to be remains: Were we sufficiently pre- the culprit. pared for this their impact and the regions. ensuing crisis? A highly contagious COVID-19 has had a significant impact on the way From my perspective at Raiffeisen we interact and do business: Over Bank International with a certain de- night we were forced to accept that gree of pride I can state that we are many things we had taken for granted much better prepared for this situa- just a week earlier, were suddenly ei- tion than in the past. Truth be told, we ther not available, not accessible or in were not always entirely convinced of the extreme - not legal anymore. Over our approach and asked ourselves not night we found ourselves accelerating only once whether our models, limits digital tools to comply with social and and our conservative risk appetite physical distancing rules. And over could really compete with the mar- night in our private lives, we sudden- ket´s behavior. Today, we can clearly

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state that this very responsible behav- active in emerging Europe. Raiffeisen A meaningful ior has substantially helped us to face Bank International was one of the intervention of an current challenges with an excellent initiators during the global financial liquidity situation and sound capital crisis in 2009 and remains one of the estimated six to ten per ratios in the group. The brand “Raif- most active participants in the Ini- cent of the region’s GDP feisen” proves to be strong, stable and tiative. In the past 10 years we have reliable. Our clients did not only keep, seen that this initiative operating as will be required to get but also increased their deposits with an agreement between policy makers recovery on track in the us. and the banking industry successfully ensured that foreign banks were able region. Such an amount Throughout this crisis and beyond to maintain exposure and fund their can only be delivered Raiffeisen Bank International will re- subsidiaries in Central Eastern and by all stakeholders in a main a reliable partner for corporates, South Eastern Europe (CESEE), help- financial institutions as well as retail ing avert banking crisis as economies coordinated approach. customers. In addition, special focus experienced a sharp downturn. And will be put in future on small and me- actually, evidence from CESEE shows dium sized companies as they are the that cross-border banking benefits backbone of the economic develop- economic growth. The direct posi- ment and significant employers in our tive effect of financial integration on regions. Their specific requirements growth outweighs the indirect nega- are to be reflected in our services and tive effect of higher risk of contagion. products more and more. With its broad and in-depth expe- Based on our close partnership with rience in managing financial crisis clients and given our advisory role we in CESEE, it appears obvious to all speedily are able to translate current stakeholders of the Initiative that it COVID-19 measures and regulations could and it should play a vital role into practical guidelines for ourselves in addressing the economic and finan- as well as our customers. We have cial repercussions of the current COV- thus managed to reschedule the re- ID-19 crisis. As a well-established payments of about 25% on average of mechanism the Vienna Initiative our SME loan portfolio in our core re- could in fact substantially contribute gion within less than a month. In this to promoting a coordinated approach The EU candidate status the region. Such an amount can only are being left behind. However, giv- be delivered by all stakeholders in a en the ECB´s unifying and already spirit of partnership we continue to of national authorities in the region of some SEE countries, support our clients to plough through thereby ensuring efficient cooperation coordinated approach. proven strengths, it would be widely the current crisis: “What one cannot with IFIs providing effective adminis- which most probably welcomed if ECB would prove itself do alone, many can achieve together” trative funding as well as risk sharing will join the Union in Most economies of CESEE are not a more active member of the “Vienna is the guiding motto at Raiffeisen – to banks and local economies. part of the Eurozone and in parts Initiative”. The ECB plays a crucial not only on paper, but also in practice. the long run, also needs still considered as emerging markets. role in preserving a supervisory level Purely national government initiatives to be reflected in terms Whereas financial conditions in Eu- playing field in Europe and in unify- rope have tightened overall, CEE ing supervisory expectations due to This cooperative approach also de- as well as stand-alone programs set up of providing financial fines our commitment to the “Vien- by IFIs – while certainly well intend- bond spreads have widened signifi- its view on a consolidated level of a na Initiative”, as it brings together ed – have in practice more often than support. cantly, and CEE currencies have de- cross-border banking group. It could leading International Financial Insti- not failed to deliver optimal results. preciated. Outflows from emerging therefore help avoiding regulatory tutions (IFIs), European Institutions, We need to be aware: A meaningful bond and equity markets are at very arbitrage by the Single Supervisory home and host country central banks, intervention of an estimated six to ten high levels. While the ECB is provid- Mechanism (SSM) versus Non-Eu- regulatory and fiscal authorities as per cent of the regions GDP will be ing massive support programs to the ro countries and stabilizing Europe´s well as the largest EU banking groups required to get recovery on track in Eurozone, Non-Eurozone countries currencies and financial sectors.

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THE POWER OF DIGITALISATION IN COVID AND POST-COVID TIMES

The crisis is showing how digitalisation has the digital system within the EU, while safeguarding sovereignty, privacy and power to keep the education of children going, individual freedoms in the use of data. businesses and public services running, and trade At European level, we see a growing flowing. consensus that the post-crisis period should be used to build a smarter and more sustainable economy, for which he coronavirus crisis exposed digital technologies are indispensable. pre-existing vulnerabilities in The development of digital capacities European societies, ranging T and infrastructures, the upskilling of from unsustainable supply chains to the labour force and modernising the the inability of some industries in Eu- interaction between governments and rope and beyond to apply digital solu- citizens will be crucial to building a tions quickly. Further digitalisation of smarter and more resilient economic industries could help to render them recovery. more resilient in times of crisis. Yet, The coronavirus pandemic has creat- whatever digital solutions we apply ed the momentum for a long-overdue The EU candidate status of some SEE tors for businesses. We provide work- ile and innovative environment we need to be human-centred, respect technological upgrade in Europe. To countries, which most probably will ing capital loans supported by the should be able to learn from each our common values and fundamental come out of this crisis faster, the Euro- join the Union in the long run, also different programs announced by the other, which is more needed than ever rights. pean Union needs to maintain a strong needs to be reflected in terms of pro- European Commission and are play- in the context of nationalistic devel- Networks and connectivity, data, industrial and technological presence viding financial support. Such contri- ing an active role not only in the uti- opments towards the unifying idea of artificial intelligence and supercom- MARIYA GABRIEL in key parts of the digital supply chain butions for the region are the basis for lization of such funds but in structur- a harmonized Europe. The stronger puting, as well as basic and advanced EU Commissioner for to be able to compete worldwide, pro- a long-term stabilizing factor based ing products offered by the European the cross-border banking business is digital skills, are essential to sustain- Innovation, Research, tect its citizens and deliver to them the on tailor-made solutions for each institutions. We offer the know-how developed in CEESE, the more suc- ing our economies and societies, al- Culture, Education and Youth best services and products while pre- country. and take into account the needs of our cessful the fundamental rights of the lowing work to continue, tracking the serving its values. clients. At this point, support of all European Union - especially the free- spread of the virus, and accelerating We need therefore to ensure that digi- The current crisis will probably lead stakeholders in the regulatory process dom of movement of capital - can be the search for medicines and vaccines. talisation will be a priority for the EU to a consolidation of the market in its is needed to ensure unified rules and defended as a prominent pillar of the In particular, the crisis is showing how recovery plan. This requires scaled attempt for stabilization – by compa- measures across all countries, legal European internal market which sup- digitalisation has the power to keep up, coordinated and targeted invest- nies but also by banks. We are care- stability and to avoid “gold plating”. ports financial stability. the education of children going, busi- ments to build up an EU-wide dynam- fully monitoring this situation and Joint forces, sharing experiences and nesses and public services running, ic and excellence-based ecosystem. In evaluating opportunities to support The “Vienna Initiative” forum is a ideas from East to West and West to and trade flowing. In a nutshell, dig- the field of Artificial Intelligence (AI), our clients in specific situations. unique and successful platform to fa- East is the key to a common European italisation brings us closer to leaving Europe has all it needs to become a cilitate the resolution of all the diverse future. no one and no place behind. world leader with excellent research Given the economic downturn, com- issues at stake. The main ingredient Of course, increased digitalisation centres, secure digital systems and panies as well as banks are bound to for success is the concept of partner- *Special contribution in preparing needs to go hand in hand with ade- a robust position in robotics as well hurt. Yet, make no mistake: Banks ship between supervised and supervis- this article is given by Christine Wür- quate skills and digital literacy, cyber- as competitive manufacturing and have already positioned themselves as ing entity. fel and Daniela Tsoneva security solutions and investments in services sectors, spanning from auto- a driving force on the road out of this This platform has proven that di- overall strategic digital capacities. A motive to energy, from healthcare to crisis. As banks, we are major facilita- alogue is the key. In times of an ag- joint effort will be needed to ensure agriculture. a comprehensive and inter-operable

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The Commission will propose a renewed Digital Education Action Plan to support people from all ages and backgrounds in enhancing their digital literacy and skills. The Action Plan will run until 2027.

and all citizens will need to have the ing business. In particular, the EIT digital competences and confidence Digital Knowledge and Innovation to succeed in a rapidly changing en- Community is supporting innovative vironment and to adapt to new and digital solutions not only in the area emerging technologies. of health, but also helping in other I am happy to share that in 2020, areas to improve overall remote col- the Commission will propose a re- laboration, working or learning for newed Digital Education Action Plan the benefits of students, businesses or to support people from all ages and citizens. The Grape, a communication backgrounds in enhancing their dig- platform supported by the EIT Digital ital literacy and skills. It will build Accelerator, ensures companies or ed- on its predecessor from 2018, while ucational establishments remain pro- also taking into consideration the im- ductive and efficient while working mediate lessons from the COVID-19 remotely through secure video, voice To create an ecosystem To create an ecosystem of AI excel- We often say that using digital tech- crisis and pursuing Commission’s or text conversations integrated in the lence, the Commission has proposed nologies is as important as the abili- long-term vision for high-quality and client’s favourite business tools. They of Artificial Intelligence to use its Horizon Europe and Digital ty to read and write. The COVID-19 inclusive education in the digital age. are now offering their services free to excellence, the Europe Programmes to make the nec- disruption showed us this more prom- The Action Plan will run until 2027 small businesses, healthcare profes- Commission has essary investments. This will support inently than ever. Overnight, tens of and cover informal and non-formal sionals or schools in need of commu- a new public-private partnership in millions of people around Europe had education, youth and lifelong learn- nication infrastructure. proposed to use its AI, data and robotics, the strength- to switch to digital ways of working ing. Through the actions, we will pro- Looking forward, digitalisation, re- Horizon Europe ening and networking of AI research and communicating. Such unprec- mote digital literacy for all citizens, mote learning and teleworking could excellence centres as well as setting edented use of digital technologies while supporting the development of become a ‘new normal’, creating a and Digital Europe up AI testing and experimentation fa- heightened the necessity for all citizens basic and advanced digital skills. The number of challenges but also many Programmes to cilities. AI-focused digital innovation to have at least a basic level of digital Action Plan will also support online opportunities for people and business- hubs could facilitate the uptake of AI skills, allowing them to continue their learning at all education levels and es to capitalise on these new trends in make the necessary by SMEs and public administrations daily tasks at work or at school. in particular as a vehicle to promote terms of entrepreneurship and inno- investments. while networks of leading universities Digital skills will be also vital for the upskilling and reskilling, which will vation. This effort can valuably draw could strengthen AI skills. In addition, economic recovery after the COV- become even more important in the on the “Made in EU” Smart Speciali- increased equity financing for innova- ID-19 crisis. As the digital economy recovery period. sation approach promoting more tar- tive developments and deployment in will be a leading driver of our recov- I would also like to underline the geted and efficient innovation invest- AI is planned under the InvestEU in- ery over the coming years, demand for contribution of the European Insti- ments towards the modernisation and itiative. The Commission’s AI Watch digital skills will grow – from basic to tute of Innovation and Technology diversification of the economy in every Observatory applies front-end meth- advanced, including artificial intel- Community to the transition towards region and country in the EU. odologies to analyse the AI ecosystem ligence, data literacy and cybersecu- better and more digital ways of work- and track its evolution. rity. Students, job seekers, workers ing, learning, communicating or do-

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Serbia's Package for Economic Recovery WORTH 5 BILLION EUROS

ALEKSANDAR VLAHOVIC President of the Serbian Association of Economists

The collection of income tax and contributions in Serbia has been delayed for three months for all private enterprises.

The implemented package of econom- EUR a month per employee to entre- ic measures in Serbia strikes an opti- preneurs ans SME’s for the same pe- mum balance between the measures riod. In cooperation with commercial of monetary and fiscal policy. In order banks, a loan guarantee scheme was to preserve liquidity in the real sec- defined for loans intended for private tor, back in mid-March the National enterprises in the amount of 2.2 bn Bank of Serbia adopted a decision EUR. Finally, in order to stimulate ary this year will not be attained be- essary to improve the quality of cor- on the moratorium on repayment of the consumption, disbursement of fore January 2022. I expect to see ac- porate governance in the public sector, loans and other financial obligations assistance in the amount of 100 EUR celerated economic recovery already finish the restructuring of large state- in the period of three months. Also, to all adult Serbian citizens started in in the last quarter of this year, provid- owned enterprises and begin partial the key policy rate was reduced to mid-May. On the whole, the package ed we don’t face the second wave of privatization thereof. Also, further 1.5%, while, at the same time, the re- of measures amounts to around 10% COVID-19. economic development requires the duction of monetary rigidity led to an of the annual GDP, i.e. around 5 bn The recovery of the economy of Ser- improvement of the judicial system, In cooperation with increase in dinar liquidity in the bank- EUR. bia directly depends on the state of the elimination of corruption and en- ing sector. The level of unity in formulating the economy of the EU, especially of the hancement of the efficiency of public commercial banks, a In late March, the Government of response to the crisis within the EU Eurozone, because Serbia conducts institutions. Drawing on experience loan guarantee scheme the Republic of Serbia presented the will also be an important factor. It is nearly two-thirds of its foreign trade gained in the current crisis, it can be package of fiscal measures which obvious that the world will not be the with the EU countries, as well as with expected that many global and, espe- was defined for loans were essentially aimed at preserving same as before the crisis. I’m afraid its neighbors in the Western Balkans. cially, European multinational com- intended for private the liquidity in the real sector in the that the world trade will continue That is why rapid recovery of the EU panies will move part of their capital short term, as well as at encouraging to decline, which is not good for the is essential. The 1% decline in the EU from Asia, i.e. China, in order to pre- enterprises in the banks to direct the dinar liquidity to- long-term growth projections. leads to a drop of 0.7% in the eco- vent the breaking of the supply chain amount of 2.2 bn EUR. wards small, medium-sized and large The forecasts of international finan- nomic activity in Serbia. The econom- in the future. Whether the Western enterprises after the state of emergen- cial institutions show that this year ic growth is affected similarly. Balkan countries will impose them- cy ends. The collection of income tax the economic activity in Serbia will All Western Balkan countries, includ- selves as a convenient destination for and contributions has been delayed suffer a decline of 2.5% to 4%, and ing Serbia, must continue implement- big, trademark investors will depend for three months for all private en- that next year the growth could reach ing the structural reform program. on the extent to which these countries terprises. The Government shall pay 6% of GDP. All things considered, the COVID-19 must not be an excuse for implement the cited reforms. financial assistance of around 250 level of economic activity from Janu- postponing the cited reforms. It is nec-

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BL: What are the recommendations funds from other projects to help the INTERVIEW: JOHANNES HAHN, EU Commissioner for Budget and Administration of the Commission for EU Members? economy? When and how could these How binding are you in finding the funds be recovered? best "cure" for economies and what are your expectations on the matter? JH: The heads of state have asked the Commission to shape our collective JH: The Commission took immediate response to the crisis – and the key is measures following the outbreak of the multiannual financial framework, the pandemic to support the EU mem- which we are currently negotiating. ber states and our partners around This long-term European budget for The Commission’s Europe. In the EU, this has meant 2021-2027 is at the heart of our recov- immediate liquidity plus exception- ery strategy. It is being complemented spring 2020 al flexibility for Member States to by a recovery instrument allowing us economic forecast use cohesion policy funds; flexibility to borrow on the capital markets with of the state aid and of the EU fiscal the guarantee of the Member States. projects that the rules; a short-term unemployment The budget is time-tested, trusted by EU economy will scheme to help preserve jobs and sup- all Member States and per se designed port families as well as companies. We for investment, cohesion and conver- contract by 7.5% have also directed money to research gence. in 2020 and grow and purchase of protective gears and by around 6% in medical equipment to offer immediate BL: In what time do you expect the support to the healthcare sector. EU's economic recovery in the best 2021. possible scenario and what will be the Beyond the acute crises, we proposed passing time in a worst-case scenario? a recovery strategy, which builds resil- ience to future crises. Our long-term JH: The coronavirus pandemic rep- budget is the answer to that. It will resents a major shock for the global support Member States, kick-start the and EU. Despite the swift and com- “Given the magnitude of the challenge we are facing, no EU country can The new instrument EU economy and address the lessons prehensive policy response at both EU cope on its own, we need a comprehensive answer. Therefore, the European “Next Generation of the crises. We will strengthen our and national level, the EU economy Commission is taking unprecedented policy measures, offering the Member single market and improve Europe’s will experience a recession of historic States support not only for the health sector but also for businesses, em- EU” of 750 billion € competitiveness and resilience – not proportions this year. The Commis- ployees and regions. Thanks to our common European action, more than 3.4 embedded within a only by fostering the Green deal and sion’s spring 2020 economic forecast trillion euro are flowing to those most affected”, this is how EU Commissioner powerful revamped digitalisation but also by enhancing projects that the EU economy will for Budget and Administration, Johannes Hahn, answered question about our strategic autonomy, including in contract by 7.5% in 2020 and grow supporting EU members due to the coronavirus crisis. long-term EU budget strategic value chains and reinforced by around 6% in 2021. Given the in- “In addition, the European Commission proposed a major recovery plan us- for 2021-2027 will screening of foreign direct investment. terdependence of EU economies, we can only outfight impact of the virus ing the full potential of our EU budget: the new instrument “Next Generation bring the total financial EU” of €750 billion embedded within a powerful revamped long-term EU BL: To what extent will the fight with our combined and coordinated budget for 2021-2027 will bring the total financial firepower of the EU budget firepower of the EU against the coronavirus affect the EU European strength. budget? Will you need to relocate to €1.85 trillion. This will not only enable us to recover but also to invest in the budget to €1.85 trillion. future”, Han said.

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VIG - A RELIABLE AND STABLE PARTNER BEFORE AND AFTER CORONA CRISIS

FROM FIRST MOVER TO MARKET LEADER ELISABETH STADLER CEO Vienna Insurance Group Vienna Insurance Group celebrates now 30 years of suc- cessful development in the CEE/SEE region. VIG-Group was a first mover, expanding in 1990 as a Western Euro- pean insurance company to Eastern Europe after the fall of the iron curtain. Today VIG-Group is represented in 30 countries with around 50 Group companies and is a mar- ket leader in Austria and CEE.

TO STAY FOR THE LONG HAUL

VIG-Group follows a sustainable, long-term strategy in its BL: The EU has started out as an eco- JH: The EU is mobilising – together The EU is mobilising markets in line with the commitment to stay for the long nomic union. Do you have a strategy with the European Investment Bank haul, and the intention to stick to it. Based on insuranc- – together with the for rebuilding the economy after the – more than 3.3 billion of financial € es, we think that the insurance industry is by definition pandemic is over? support to the benefit of the Western European Investment sustainable. We provide protection today against risks of Balkans' citizens. The package aims Bank – more than 3.3 tomorrow. It is only because of insurance companies that € JH: We are already thinking beyond to address the immediate health and financial risks can be managed at all, that plans can be pur- the acute crisis to make sure Europe resulting humanitarian needs of the billion of financial sued and implemented with security. It is therefore the ba- will not only recover but come out of COVID-19 pandemic as well as help support to the benefit sis of our business model to plan and calculate long-term this crisis even stronger. The recovery with the social and economic recov- oriented and economically sustainable in order to fulfill of the Western Balkans' plan will use the whole firepower of ery. The Western Balkans is a key our promises in the future. citizens. the EU budget and the recovery in- partner of the EU. They already par- strument to strengthen not only the ticipate in many initiatives and instru- single market but also the solidarity ments aimed to tackle the coronavirus WELL POSITIONED FOR CHALLENGES between nations and generations. pandemic. This includes, for instance, This means we will use the recovery joint procurement of medical equip- The corona crisis has triggered an economic crisis practi- to invest in the future: in the transition ment and the fast flow of essential cally all over the world. This does not leave us unaffected. to a climate-neutral, digitalised and goods across land borders through But VIG-Group has been strengthened and very well posi- more resilient Europe. At the same “green lanes”. They will also receive tioned due to the result of successful years. This makes us time, we will strengthen the support support under the strengthened long- Photo credit: Philipp Lipiarski very confident that we can cope well with this exception- to our neighbourhood. term budget. al situation. VIG-Group will follow the way to provide The European Commission will lat- high-quality products in order to fulfill the ambition to BL: What the candidate countries can er in the year come forward with an It is only because of insurance protect what matters for their clients. To continue this way expect from the European Union? Economic and Investment Plan for the of successful protection also in a world of constant change, How much money did you set aside region, to spur the long-term recovery, companies that financial risks can in which we are also confronted with new challenges, such for these countries and what are the boost economic growth and support be managed at all, that plans can as combating the current corona pandemic, is our most conditions for withdrawing that mon- reforms required to move forward on be pursued and implemented with important target. We learn to deal with this challenge and ey? the EU path. security. continue our approach to be a reliable partner for our stakeholders.

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BANKS IN SLOVENIA ARE NOW BETTER PREPARED FOR ANY CRISIS

INTERVIEW: BLAZ BRODNJAK, CEO of the NLB Bank

“Banks in Slovenia today are much better prepared for Economies of all the countries any crisis, also the Covid-19 one, since our loan books of our presence are relatively have been diversified, capital structure has been very sol- id and further strengthening, while we commend a swift smaller in size and dependent and tangible support, provided to the households and on international trade and companies by the government. I believe that NLB and en- cooperation, especially with EU tire Slovenian society have tackled the challenges of the Photo credit: Iztok Lazar new coronavirus pandemic very well. We provided stable countries. So, their recovery will, services, undisturbed cash supply and smooth-running to the important extent, depend payments systems. With all this taken care of, we now on the pace of recovery in EU. BL: The world's leading financial in- to recover, as well as confidence levels BB: Economies of all the countries of entered a second stage – understanding and tackling fi- stitutions are predicting an economic investments/consumption of corpo- our presence are relatively smaller in nancial impact of this situation on our clients”, said Blaž decline by a few percentage, they pre- rates and households. It is too early size and dependent on internation- Brodnjak, the CEO of Slovenian NLB Bank, in an interview dict a recession. The economy lacks to determine the expected duration al trade and cooperation, especially with the Business Link Magazine. money and banks are more cautious of the crisis and when a consumption with EU countries. So, their recovery in lending. How can we get out of this and production will recover. More will, to the important extent, depend circle? clarity will be reached in a couple of on the pace of recovery in the EU. In “Although our starting point has improved, we cannot months, what is already clear howev- Slovenia, for instance, we expect more deny the impact the coronavirus has had and is going BB: Projections from the economists er, is that the impact on the banking significant hit in tourism and poten- to have on our economy. Banking is an industry that is can be divided into three groups – ex- sector will be significant. We will be tially in automotive industry. Howev- fuelled by confidence, both from consumers and busi- pecting V, U or L-shaped recovery. As facing challenges on the revenue and er we need to take into account that nesses. They have recently been confronted with a high always, expectations depend on the as- cost side, with cyclically elevated cost Slovenian economy is also fairly di- uncertainty and our future is to an important extent sumptions applied, the most relevant of risk. versified. Hence, we can expect that dependent on how soon their confidence will return to ones being: duration of eventual lock- more resilient industries will mitigate pre-crisis levels. We on the other hand clearly have to downs in relevant countries, measures BL: Are the measures of the countries some negative consequences in the give credit to the entire nation for highly effective man- taken on fiscal and/or monetary level, of the region where NLB operates most affected parts of the economy. agement of the health crisis, leading to very favourable structure of the economy by industries well targeted to help banks continue On the other hand, Serbian economy, evolution of the epidemic, enabling Slovenia to declare and assessment of severity of impact to lend to already vulnerable compa- in our view, is well positioned to over- the end of it as the first country in Europe”, he said. on specific ones, time needed for them nies during and after the pandemic? come impacts of this crisis effectively,

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We have been overcome an extremely severe crisis, unchanged, yet the crisis will most which lasted from 2008 and ended likely impact our ability to achieve closely monitoring only in mid-2016, at least in Slovenia. them. However, at the same time it the developments We have indeed overcome it with the has accelerated the Group’s digitisa- help of the state aid. However, our tion initiatives, which over time will throughout the region, role today is entirely different. Not reduce the physical footprint, im- noting that most only have we successfully restructured prove efficiency and above all enhance countries have been and transformed our business model, experience and consequently satisfac- completed all the commitments to the tion, as well as loyalty of our clients. adopting more or less European Commission and returned Achieving untapped revenue oppor- comparable measures the abovementioned aid almost entire- tunities is clearly much more difficult ly, we and the whole economy have in the new circumstances. Hence, cost with Slovenia and learned our lesson. This time NLB will efficiency based on client centricity Serbia standing out in be the pillar of economic recovery. We and relevance has become the name will help alleviate the effects of eco- of the game. We might even say that scope and volume of nomic hibernation. the coronavirus crisis could be consid- the respective systemic ered an opportunity for major play- support of governments BL: That means that you are well pre- ers like NLB Group. On one hand, pared? us being the largest banking and fi- and other institutions, nancial group with headquarters in including some central BB: We are really well prepared for this region – we call this region our the challenge. Our liquidity position home – means that people see us as a banks. rests on extremely solid own retail local domestic name and listen to our and corporate deposits base, which is, messages, while on the other hand, it due to high contribution of food in- of the crisis to the economic activity ment of liabilities to the newly expect- besides high capitalisation and recent might just give us an additional push dustry, relatively lower dependency and containment of unemployment, ed levels of cash flows to weather this priceless experience in crisis handling, to exploit our true potential. on EU and tourism industry, as well while to some extent they have also situation effectively. We will clearly of key importance to not only fight as established relations with Russia, addressed a stability of financial sys- also productively apply all available through the turmoil, but exit from it BL: Do you think about more inten- Turkey and China. It is consequent- tems. We can see extensive stimulus public support schemes to inject all even stronger. We will apply a high sive cooperation with developed EU ly reasonable to expect for Serbia to packages, temporarily covering la- available energy into the businesses level of responsibility at preserving countries and what are your plans in come out of this crisis earlier than bour costs at reduced operations and for their swift recovery. healthy cores of the regional econ- this regard? other regional players, with solid GDP to some extent private consumption, omy and we will further deepen our and re-established fast growth track. combined with guarantee schemes, relationships with regional retail and BB: NLB has had broad correspond- tackling the fresh liquidity needs of BL: Unlike the Great Recession of corporate clients. ent network with financial institu- We have been closely monitoring the the most affected businesses. 2008 when the banks were the bear- tions globally. As such it serves as the developments throughout the region, ers of the crisis, they are now, in some hub of local businesses to the world noting that most countries have been Banks and financial sectors in gener- ways, the mainstay of the economy. BL: You stated before the crisis that and global investors’ interest in the re- adopting more or less comparable al have entered into this corona cri- How do you see your role in the com- your strategic goal was to strengthen gion. It is however essential to finally measures with Slovenia and Serbia sis in much better shape, compared ing years? your influence as a regional player. initiate and accelerate the accession standing out in scope and volume to the 2008+ crisis. Banks have been Did the coronavirus slow down the process of Western Balkans states to of the respective systemic support of self-funded, highly liquid and very sol- BB: Indeed, I agree very strongly realization of this goal? What is your the European Union. There has been governments and other institutions, idly capitalised. This time around we with this conclusion. Unlike in the strategy for next year? absolutely no good reason for keep- including some central banks. have immediately reacted by intensi- previous crisis, the role of the banks ing these countries outside of the EU, fied contacts with clients and provided can this time around be entirely dif- BB: These new circumstances have while being surrounded by it. Inde- BL: And? immediate liquidity support in com- ferent – NLB Group will most defi- not affected our aim to leverage the pendently of this process, the region bination with releasing the burden nitely be part of the solution, not the role of a regional specialist. Despite needs to establish a free economic BB: As we see them, the measures through moratoria on existing finan- problem. Keep in mind that we are changed market conditions, key medi- zone, ensuring a free flow of talents, taken are predominantly focusing cial liabilities. In the second stage we well-experienced in mastering enor- um-term goals of NLB Group remain goods and capital following the Scan- on minimising the potential damage will now focus on the mid-term align- mous challenges. We have namely just

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dinavian model as soon as possible. plus one share However, NLB d.d. is This would namely diminish con- publicly listed company with an in- straints of complex political bound- ternational ownership structure, con- aries, while at the same time create sisting of the highly reputable base of conditions to increase the importance financial investors. NLB’s shares have of the larger ‘domestic’ market in been traded on the Ljubljana and Lon- which local brands are recognizable don stock exchanges. and respected. And not only that – with such setup it would be consid- We believe that NLB and Komercijal- erably easier to overcome the periods na Banka are very compatible, with of slow economic activity in other key significant potential for meaningful export markets and large-scale crises, synergies. For example, Komercijalna which is crucial for small open econ- Banka is currently the second strong- omies such as ours. Last but not least, est banking brand on the Serbian this would also ensure a considerably market, with a priceless retail deposit higher interest of investors, job crea- base, a vast pool of clients and many tion and most of all, perspective and The completing of acquisition of Komercijalna Banka is very valuable devoted employees with opportunities for young people and expected by the end of 2020 experience and deep understanding of intellectuals to stay here. In my firm customers, banking in general, trends view Slovenia and Croatia should be- etc. On the other hand, by gaining a come members of this zone as well. new strategic partner in NLB Group, BL: In Serbia, the acquisition of one of the greatest potential, even without Komercijalna Banka will further en- the largest domestic banks has already eventual acquisition of Komercijalna hance its digital platforms for mobile been completed, where you will soon banka. After all, it is the largest in our and internet banking, and gain access become one of the strongest players, core region, whilst our market share Despite the to innovative solutions (Omnichan- with a 11% market share. When will is currently (that is until the eventual nel, CRM platforms, etc.). It will consequences of the the acquisition process of Komercijal- closing) the lowest, even though NLB above all get a partner with profound na Banka be completed and what is Banka Beograd has grown signifi- coronavirus pandemic understanding of local specifics, such your strategy for Serbia? cantly thus far organically. With the as culture, mentality, value system, and changed market completion of the acquisition process with whom interaction in the local BB: As you know, the completion of however, NLB Group would become conditions, the closing language will be possible. We will the procedure for the acquisition of a systemic top 3 player in all markets of the transaction jointly reposition the bank as a price- Komercijalna Banka depends on ob- of our presence, ensuring a position less member of a dynamic regional (acquisition of taining consents of multiple regula- of the leading international bank fo- banking platform for supporting trade tors, including the European Central cused solely on our region. Komercijalna Banka) is flows among our markets and again as Bank, the Bank of Slovenia, the Na- a banking powerhouse in Serbia. We expected by the end of tional Bank of Serbia and others from BL: Slovenia has been an EU member believe that by joining our strengths relevant markets in the region. De- for years. Can the largest Slovenian the year, therefore all the at developing and delivering high spite the consequences of the corona- state owned bank, the NLB, transfer quality and relevant services for our necessary procedures are virus pandemic and changed market new knowledge, technologies or dif- clients, as well as by demonstrating conditions, the closing of the transac- ferent principles to the largest state- continuing according to true and authentic care for our society tion is expected by the end of the year, owned bank in Serbia, Komercijalna the plan. through comprehensive corporate so- therefore all the necessary procedures Banka? Which ones? What will both cial responsibility programme, we will are continuing according to the plan. sides get from this merging? positively impact the quality of life in Serbia and other regional markets. I would like to emphasize once again BB: First, we should clarify that NLB We plan to build a joint master brand, that the Serbian market is of great in- is not a state-owned bank. The Re- close to the hearts of Serbian people. terest for our Group and represents public of Slovenia indeed holds a 25%

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REBOOTING AUSTRIAN AND EUROPEAN TOURISM

MARTHA SCHULTZ, Vice President of the Austrian Federal Economic Chamber Member of the Presidency of EUROCHAMBRES

The strategy must ourism including hotels, lei- The reopening of the approximate- Restaurants and cafes sure industries, travel agencies ly 30,000 restaurants and cafes in be twofold: on the are an important source Tand restaurants are leading in- Austria with their more than 100,000 one hand, to increase dustries for Austria and a part of our employees is also relevant for the gen- of impetus for the entire domestic consumption identity. At European level, too, tour- eral feeling throughout the country. economic cycle - from ism is the economic driving force of Restaurants and cafes are an import- and, on the other, to many EU Member States. This success ant source of impetus for the entire trade and commerce to rely on the safe and story has been abruptly interrupted by economic cycle - from trade and com- agriculture and forestry. the current pandemic. Tourism busi- merce to agriculture and forestry. sustainable opening of nesses have been particularly hard hit borders. by the corona crisis. The turnover of Now it is important to get everything many companies has fallen to almost going again. Whoever goes out again, zero overnight, even though rents and buys and consumes, helps the country, salaries still have to be paid. his family and himself. The calcula- In Austria, politics decided on a tion is simple: buying and consuming restaurant package that gives restau- secures jobs. rants an economic perspective for a successful comeback. I fought for this But the strategy must be twofold: on package, because we all know that the one hand, to increase domestic the hospitality industry had to over- consumption and, on the other, to rely come many challenges in recent years. on the safe and sustainable opening of Smoking bans, allergen regulations, borders. In contrast to other EU Mem- cash register requirements. In this sit- ber States, almost 70% of overnight uation, we need rapid relief. stays in Austria come from abroad.

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And there we are at the European EUROCHAMBRES level. Imagine tourism without open borders, it’s not possible. For it is not as the Association of European DIGITALISATION only Austrian tourism that is severely Chambers of Commerce and affected, but also other countries that have been hit harder by the coronavi- IS A BIG OPPORTUNITY Industry represents over 20 rus are heavily dependent on tourism. million enterprises in Europe ZDRAVKO POCIVALSEK Minister of Economic Development To underline what is at stake: 10% demic. The Commission is thus taking – 98% of which are SMEs – and Technology of Slovenia of European businesses belong to the up a proposal that the Austrian Feder- through 45 members and a tourism industry. These 2.4 million al Economic Chamber has also advo- European network of 1,700 companies employ an estimated 13.6 cated through its European umbrella million people in Europe. organisation EUROCHAMBRES. regional and local Chambers. EUROCHAMBRES called to tempo- Fortunately on 13th May, the Euro- rarily allow vouchers instead of cash pean Commission presented a whole refunds for cancellations. That would EU countries remain by package of initiatives to help the in- be the right solution to defer payment dustry make a fresh start. Free move- obligations and prevent insolven- far the biggest investors ment and cross-border travels are of cies. Customers should exceptionally in Slovenia in 2018, central importance for tourism in Eu- and temporarily be obliged to accept rope: general travel restrictions are to vouchers to deal with the economic accounting for 85% of be gradually replaced by more target- impact of the coronavirus pandemic, total investments. ed measures. which would not constitute a perma- nent change to consumer rights. How- • The Commission proposes common ever, there is room for improvement. I EU criteria for the safe and gradual would still like to see an adjustment re-opening of tourist activities. Health to the Package Travel Directive, which protocols for hotels and other forms would allow the tour operator to issue of accommodation should enable vouchers to the customers which are guests to have a safe stay and employ- obligatory for acceptance instead of ees to work safely. Coronavirus apps reimbursement of the travel price. on a voluntary basis are intended to help lift border controls and revitalise A further communication of the Euro- here are three packages of measures to mitigate the negative effects the tourism and travel industry. pean Commission proposes a gradual of the Covid-19 pandemic in companies in Slovenia. The first two are and coordinated approach to the lift- Tdirected towards ensuring liquidity and enabling employees to work • Europe-wide communication cam- ing of internal border controls and the from their home. The third package will include support for the sectors of the paigns are to present Europe as the restoration of freedom of movement. economy which are harmed the most. It is important to ensure governmental number one travel destination. A Eu- Targeted measures against the spread support enabling companies to exit the crisis and to continue developing. 10% of European ropean Tourism convention should of the coronavirus pandemic are to re- Speaking of GDP growth, approximately 8% decline in GDP is expected in businesses belong to the discuss the future of sustainable, inno- place closed internal borders. 2020, taking into account economic policy measures for alleviating the con- tourism industry. These vative and resilient European tourism sequences of the epidemic and assuming a gradual recovery of the economy, through the "European Agenda for Be it national or European, what we which should start in June in 2020 (source; UMAR). We should also keep in 2.4 million companies Tourism 2050". need now is a major relief and invest- mind that Slovenian economy is export oriented. Therefore, we support bor- employ an estimated ment offensive, maximum possible ders to be opened for the transit, because limitations to foreign trade harmfully • The Commission also recommends tax reduction as well as a maximum influence our open economy. 13.6 million people in the increased use of travel vouchers as possible elimination of bureaucracy, Europe. an alternative to the reimbursement at national as well as at European lev- of travel costs in the coronavirus pan- el.

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IPA FUNDS Slovenia strives to The EU will also redirect funds from the become a successful Instrument for Pre-Accession Assistance (IPA) to and competitive help the recovery of the Western Balkan partners international economy, in the short and medium term. it focuses on R&D, investment in high-tech and smart technologies, as well as green EU support for candidate countries economy. Attracting foreign investments

According to the OECD’s FDI Regu- ments, and competences). Slovenia If we talk about EU support for SEE funds from the Instrument for Pre-Ac- latory Restrictiveness Index, Slovenia is also known as a strong innovator countries due to the coronavirus pan- cession Assistance (IPA) to help the re- is one of the most open economies in country. The key strength of the Slo- demic, especially for EU candidate covery of the Western Balkan partners the whole OECD. EU countries re- venian innovation systems are human countries such as Serbia, Montene- in the short and medium term. This main by far the biggest investors in resources and international coopera- gro, North Macedonia, Albania, the will include support to the private sec- Slovenia in 2018, accounting for 85% tion of researchers and innovators. EU has already responded to their tor, increasing social protection, with of total investments. Digitalization is definitely the key immediate needs by supporting the a specific attention to the vulnerable I believe that our vision of Green.Cre- competitive advantage for today and supply of medical devices and person- groups, and strengthening resilience ative.Smart. Slovenia is the right way tomorrow’s business and everyday al equipment to the Western Balkans. in the public health sector. Moreover, for attracting investments also in the life. Therefore, we will even more Also, EU is including the Western the Commission is also working close- future since it encompasses the key fu- encourage the adoption of digital Balkans in EU initiatives to tackle the ly with International Financial Insti- ture trends that every investor would features to conduct business together coronavirus crisis, like the joint pro- tutions (IFIs) and relevant financing benefit from. As Slovenia strives to with new business models, promote curement schemes of protective per- institutions from EU Member States. become a successful and competitive digital economy and create a digi- sonal equipment, and has accelerated In my opinion, this is the right way as international economy, it focuses on tal-friendly investment climate, which the implementation of a project with it covers all the relevant areas, from R&D, investment in high-tech and I am confident will help us attract the European Centre for Disease Pre- financial to know-how. smart technologies, as well as green more sustainable and high-added val- vention and Control (ECDC) which In the future a big opportunity will be economy. These are the areas where ue investments. will enhance their capacities to survey in focusing and implementing the dig- industries create high value added, Slovenia has a well-developed system and control communicable diseases, italization in various areas since there which will enable Slovenia to com- of investment tax relief and R&D tax improve their health emergency pre- is already a strong foundation in the pete on a global scale. Therefore, we incentives, as well as a highly skilled paredness capabilities, and support region. This could lead to tackling the intend to focus on specific niche areas labour force, offering valuable incen- the development of their public health labour shortages and strengthen their and products that are highly export tives and creating a favourable busi- microbiology laboratory systems. In competitiveness. oriented and at the same time attrac- ness environment for potential inves- addition, the EU will also redirect tive for FDIs. tors. We are also working on the screening Besides our excellent geographic lo- mechanism in accordance with the cation, which is definitely one of the EU framework for the screening of main competitive advantages, Slove- foreign direct investments but only to Digitalization is definitely the key competitive nia is rich in natural resources (wood, protect our strategic and critical assets advantage for today and tomorrow’s business and soil, water) and has great potential for and technologies, without undermin- transition to green economy (knowl- ing the Slovenian general openness to everyday life. edge, innovation, existing invest- foreign investment.

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BL: If we draw a parallel to the global BL: What is your estimation, how WE ALL NEED TO READJUST economic crisis that hit the world in long will it take for your country to 2008, will a new crisis have more dev- return to the level where it was at the astating consequences? end of 2019, especially if the world AND LEAVE COVID-19 BEHIND slides into recession? SM: There are several challenges that we face today due to COVID-19 out- SM: I believe that Albania will man- break crisis that are similar to the ones age to achieve positive growth levels in 2008. The first important issue re- next year. This is also supported by lates to uncertainty, as there are many many international organizations If business will questions that no one can answer to that estimate a quick recovery in a certain degree with confidence. We 2021. The structure of the Albanian not adapt in time, don’t know how long the crisis will economy is mostly reliant on domes- consequences may last or if there will be a second wave. tic consumption and has relatively lit- Albania and other be more devastating For these reasons many businesses tle ties to the global supply chain and around the world have factored the global trade. For this reason, I believe countries in the region than those of the uncertainty as an important factor in- that with the accurate government will reach the 2019 2008 crisis. fluencing their decisions. response and increased confidence levels relatively quickly While the 2008 crisis hit integrated fi- from consumers it will result in posi- nancial markets the hardest, I believe tive economic growth. by the middle of next that the devastating wave to the real Tourism is becoming an important year. economy was short run. After the cri- industry and most likely domestic de- sis, most of the service and manufac- mand as well as tourists from neigh- turing industries managed to survive bouring countries will help overcome while mostly financial institutions had the many uncertainties facing the in- to recompose and think differently in dustry this season. However, as the terms of risk and expansion. The im- uncertainties are mostly related to pact on the real economy of the South the public health issues I hope that Eastern European countries was more the government’s measures will be moderate than what is estimated that appropriate to keep in balance the will happen during 2020. health of the economy and public The COVID-19 outbreak crisis has health at the same time. These are a larger geography and has affected unprecedented times that are affect- almost the entire global economy, all ing negatively the global economy INTERVIEW: SAMIR MANE, industries and all business operations. simultaneously. Albania and other Chairman of Balfin Group The fragile economies in South East countries in the region will reach the Europe, depending on the internation- 2019 levels relatively quickly by the al markets, are seriously affected. middle of next year. To leave the COVID-19 crisis behind, “Balfin Group” is conducting business in most of the in order to vitalize the economy”, said Samir Mane, the many businesses would have to read- BL: Which approach is best for SEE, Western Balkan countries and the economic packages Chairman of the Balfin Group, in an interview with the just to these external pressures and especially for Western Balkans candi- have mainly addressed the minimum salary compensa- Business Link Magazine. maybe innovate to a completely new date countries (Montenegro, North- tion, deferral of tax liabilities and government guaranties “The EU and strategic development banks active in the business environment. If business will ern Macedonia, Albania, Serbia)? Do for boosting the lending activity. The Governments have Region are providing financial support as well, which is not adapt in time, consequences may they need to ask the EU for help? targeted all the sectors impacted by COVID–19. I believe quite substantial and definitely will help the Western Bal- be more devastating than those of the that additional measures shall be considered during 2020 kans economy”, he added. 2008 crisis.

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The entire region of the Western Balkans is increasingly seen as a single market, offering more opportunities for both foreign investors and local businesses from these countries.

SM: I believe in the EU project and SM: Overall, the financial sector has BL: What are your country’s plans for that all countries should integrate and been well prepared to face these ex- the next year? join the EU in the near future. This is treme shocks to the economy. Con- a positive political and economic step, trary to the 2008 crisis, banks are in SM: Albania is well integrated with which would lead to greater stability, a more secure position and should the rest of the Western Balkans, and better governance and better business strive to build a strong relationship all of these countries expect to inte- opportunities for businesses operating with their clients and understand their grate into an even larger family, the in the region. The EU has assisted the financial troubles and offer their ex- European Union. This has been a countries of the region with a bilat- pertise to overcome these challenges. year heavily influenced by the pan- eral financial assistance during the Obviously, for some businesses the demic, but the Western Balkans gov- coronavirus emergency. This is a pos- crisis will only help expose underlying ernments' goal of accelerating mem- itive commitment that signals a long- problems they might have inherited bership in the European Union has term relationship between the EU and before the pandemic. For this reason, not changed. Cooperation and joint the Balkans and brings confidence to some businesses might go bankrupt. projects between these countries are many businesses. However, many other businesses that also increasing. Meanwhile, the en- Despite this, most SEE countries could have had a strong performance in the tire region of the Western Balkans is do more to further integrate their past will need the banks to overcome increasingly seen as a single market, economies with each other. Rules and these troubles together. offering more opportunities for both regulations could be better harmon- foreign investors and local businesses ised and at the same time some of fis- At the same time, not all countries will from these countries. All the countries cal policies should not differ from one be affected in the same way. In Alba- of the Western Balkans are trying to state to the other. These policies could nia most banks are well capitalised overcome this difficult moment that be achieved without EU integration. and have a capital ratio of 18% while was created by the pandemic, they SEE countries are in general less com- the minimum requirement is 6%. So are increasing the economic interac- petitive than the EU, and integration far, the banks have adapted well to the tion between them, hoping that these process should pay attention to issues challenges and assisted clients to their efforts will be appreciated by the Eu- relating to good governance, workers requirement. An important factor ropean Union. training, increased competitiveness, played the Central Bank which and research, and development. in collaboration with the government decided to postpone credit instalments BL: How can financial sector be sup- by three months. ported in order to be able to lend to a weak economy later?

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We are Preparing the Third Set of Measures At this point, it is difficult to estimate how long the coronavirus pandemic will last, IN THE FIGHT AGAINST COVID-19 whether the world will experience a second wave after the summer season, etc.… INTERVIEW: DRAGICA SEKULIC, Minister of Economy of Montenegro

BL: And that wasn’t all? BL: Can we compare the new crisis to readiness to protect its member states the one in 2008? and candidate countries. Therefore, I DS: In addition, the Program specifi- believe in even stronger support in the cally distinguished the sector of tour- DS: It is similar with comparing the period ahead. ism as particularly vulnerable, as well current crisis with any other, includ- as those companies whose employees ing the 2008 crisis. The causes and the BL: Which approach is the best for had to be in quarantine, self-isolation way countries and national economies SEE countries to preserve their econ- in their homes taking care of chil- are dealing with the crisis differ, and omies, especially for Western Balkan dren younger than 11 years of age as therefore the consequences. For the countries? What is key to recovery the consequence of arranging online same reason, it is inconvenient to dis- and what are your country's plans for school sessions. Furthermore, the cuss the time it takes to recover. I want the next year? second set included other subsidiary to be an optimist and to believe in one measures for companies such as delay of the most optimistic scenarios where DS: Every country has different chal- of customs duty payments, fast VAT in the next few years economies will lenges; each sector has different chal- refund and short-term aid for social- return to the level they were before the lenges as well. It is mandatory, follow- ly vulnerable categories. In addition, pandemic. ing the analysis of effects of economic the Ministry of Agriculture and Rural packages of measures, to clearly define Development designed a specific and BL: What would the crisis at the EU the needs and based upon the needs generous aid program for the sector of level mean for Montenegro? And do and to create demands i.e. the future agriculture. We will present the third you see a solution at the EU level acting. That can sometimes be money, package of measures very soon. This which could mitigate the consequenc- sometimes technology and know-how, package will be focused on develop- es of the pandemic? sometimes equipment. After preserv- ment. ing the health and life of every citizen, DS: Every crisis shows a lot - it shows each country will have economic re- BL: How long will it take for the econ- strength of the state, the strength of covery set as a priority, so that will be omy to return to the level from the society and personal strength in each the priority of Montenegro and oth- end of 2019, especially if the world individual. It also reveals good and er states in the region. Economy can “So far, the Government of Montenegro has adopted tion - what measures Montenegro has applied in the fight economy slips into recession? reliable partners and importance and be strengthened by supporting each two sets of economic recovery measures that are still be- against the coronavirus. worth of joint action. This crisis has company, providing new investments, ing implemented. The first set was adopted during the “The second set of economic measures, adopted in late DS: It is premature to talk about the demonstrated Montenegro's readiness capital projects and creating new em- first days of restrictive measures (at the early beginning April, which has been implemented since May 2020, as- consequences of the COVID-19 cri- to face such a great challenge, to be ployment opportunities (jobs). With of restrictive measures) and it was focused on delaying sumes direct state aid for the economy through subsidies sis. We are witnessing quite different the last country in Europe with the that regard, our country will provide tax payments by the legal entities to the State, delaying for salaries of employees. Depending on the category forecasts by some of the most eminent first registered case, as well as one of multiplicative support for companies credit payments for citizens and legal entities for three of the company, i.e. weather the company was required financial institutions. At this point, the first countries to be COVID free. in the upcoming period through sever- months by introducing a ‘credit moratorium’ and specific to be closed during restrictive measures or jeopardized it is difficult to estimate how long This crisis has also demonstrated a al programs and measures, with par- credit line introduced by the Investment Development while the restrictive measures were in the force, the Gov- the coronavirus pandemic will last, strong partnership between Montene- ticular attention given to the domestic Fund in order to improve the liquidity of Montenegrin ernment of Montenegro provided subsidies for employ- whether the world will experience a gro and the European Union, due to production. companies”, this is part of the answer from Dragica Seku- ees ranging from 50% to 100% of minimum gross salary second wave after the summer season, the fact that the Union has shown its lic, the Minister of Economy of Montenegro, to the ques- for two-month period (April and May)”, she said. etc.…

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ne often reads that after Thirdly and speaking of China: Cov- Covid-19, nothing would be ering up and denying the Covid-19 Othe same. It seems to me that virus for too long is harming China’s ideological ideas are too often packed reputation and position. And there are into predictions. Here is an attempt several more suspicious facts not yet for a sober analysis: clarified.

Firstly, some things will change, but Fourth, there is a certain chance in not nearly as much as some people Iran that the mullahs regime will ul- dream of. People and systems have the timately be overthrown by the disas- natural tendency to return to the usual trous consequences of Covid-19 in and safe routine very quickly. Or as their country. This crisis can also be the German philosopher Georg W.F. just as destabilizing for Russia and Hegel so aptly said: "But what experi- Turkey. In some countries, especially MARTIN ENGELBERG ence and history teach is that peoples in Africa and South America, the con- He is predestined to take on import- United States already a few years ago The future of the euro, Member of the Austrian and governments have never learned sequences are still unforeseeable. ant functions at international level. and the creative potential of working Parliament anything from history.” together in one place was recognized. the common currency, Fifth, there will be some dramatic Seventh, the future of the euro, the The trend towards online learning will be seriously Secondly, the analysis of data will defi- changes, especially in Europe. The common currency, will be seriously was very strong even before the Co- challenged very soon. nitely make a (further) quantum leap idea is to save the European idea, a challenged very soon. Italy, Spain and rona crisis and will certainly continue. There will be some forward. The merging of cell phone community of cooperation, free trade, possibly France are facing very seri- dramatic changes, data, face recognition, algorithms and peace and prosperity. But honestly ous budgetary problems. Particularly Last but not least: 2020 and 2021 biological monitoring has made a de- speaking: the EU institutions them- especially in Europe. since they were in a bad condition will show very strong birth cohorts. cisive contribution to coping with the selves have largely failed in their role already before. Or as Warren Buffett But will probably also be those years The idea is to save Covid-19 virus in some countries. Re- of coordinating a common approach has put it so greatly: “Only when the when divorce rates will make a big the European idea, gimes like that of China will certain- against the virus, coordinating the tide goes out do you discover who's leap. ly not give up the opportunities that measures, and allocating the best been swimming naked”. There will be a community of have been gained and will continue to possible aid measures. In this regard, a lot of blood, sweat and tears. Martin Engelberg is Member of the advance them. In Western countries, nothing will be the same as before. cooperation, free trade, Austrian Parliament, member of the the rule of law and civil society insti- Eighth: The economies of the coun- Foreign Policy Committee and spokes- peace and prosperity. tutions will face the major task of not Sixth, regarding Austria it can be said tries of the Western world and those person for International Development throwing the baby out with the bath- that Chancellor Sebastian Kurz has of Asia including China, which were Cooperation of his party (ÖVP). He water: On the one hand to use the finally established himself as an ex- economically healthy before the cri- is a leadership consultant and coach absolutely beneficial possibilities of cellent leader far beyond Austria. His sis, will rebound soon. Due to the and lecturer at the Vienna University data analysis and not to demonize ev- professional, calm and at the same experience during the Corona crisis, of Economics and Business. Further- erything and on the other hand not to time determined action in the crisis professional trips may be replaced give in too quickly when the pressure has received the greatest recognition somewhat by increased video confer- more, he is president of the Sigmund for more state access to the data of the across all party and national borders. encing. A stronger tendency towards Freud society and columnist with the citizens increases, especially under the Sebastian Kurz's word will have even home office is rather unlikely, espe- Jewish magazine “NU”. title of health care. more weight in the EU in the future. cially since a peak was passed in the

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BL: How much have you invested The EBRD offers tailor-made business advice in WE PLAN TO INVEST in the Western Balkans so far and in which sectors? technical assistance programmes where local and 21 BILLION EUROS IN EBRD COUNTRIES international consultants help companies cope ZH: The Western Balkans is a priority with the current crisis and then grow again. This INTERVIEW: ZSUZSANNA HARGITAI, Regional Director for Western Balkans EBRD region for the EBRD and to date we have provided €13 billion total financ- support is co-funded by the EU. ing to the six countries. Our financing is for a wide range of sectors that are key to the economic growth of the region: agriculture, manufacturing, tourism, renewable energy, environ- is co-funded by the European Union. • We are expanding financing under mental, digital and transport infra- Recently we have rolled out a dedi- our Trade Facilitation Programme, structure and the financial sector – to cated EBRD-EU programme in North keeping open the channels of com- reach out to SMEs. Our focus is on Macedonia, which combines credit merce. increasing the competitiveness of the lines to participants like Sparkasse • We are also offering fast track re- private sector, the green agenda for Banka, Ohridska Banka SG and structuring for distressed clients. the Western Balkans and contributing Komercijalna Banka with investment • Another element is a new Vital In- In 2020, we expect our to connectivity in the region and with incentives and technical assistance. frastructure Support Programme the EU. SMEs can use the funds to improve to meet essential infrastructure re- support to the Western their production capacities and en- quirements, including financing for Balkans to rise by BL: Do you predict different measures hance processes and product quality working capital, stabilisation and around one-third up for large companies in difficulties and with the introduction of EU standards essential public investment. for small ones? What kind of mea- in environmental protection, product The emergency support is available to €1.7 billion from a sures? safety and quality and similar. for all key sectors of the economy. record €1.3 billion in ZH: All businesses have been affect- BL: What does the Solidarity Package BL: How can companies apply and 2019. ed by the coronavirus one way or an- mean precisely? Is that a guarantee when is this package available? other and just like Tolstoy’s unhappy scheme, or some other instrument? families, all companies – large and Which one? ZH: Companies with financing needs small – are affected in their own way. above EUR 5 million should contact ZH: Our Solidarity Package is a com- our offices in our respective countries, One billion euros in financing was the “In the Western Balkans, we are plan- lic infrastructure - help with economic Some food producers are doubling, prehensive series of response and re- with contact details on www.ebrd. EBRD’s initial response just at the be- ning a sharp rise in financing. In 2020, rebound and creating jobs. if not tripling their efforts to meet in- covery measures. com. Those that require smaller fund- ginning of the pandemic. Since then we expect our support here to rise by I trust you will see palpable impact creasing demand. Others, like electric- • Its central pillar is a Resilience ing should contact the EBRD’s partner we have significantly expanded the around one-third up to €1.7 billion of our investments that will be com- ity companies and municipal service Framework providing finance to banks in their countries. support available for countries in our from a record €1.3 billion in 2019. The bined with advice on policy reform providers, are experiencing a financ- meet the short-term liquidity and regions to combat the impact of the EBRD will specifically target micro, needs on the path to EU accession. ing gap as collection rates drop due to working capital needs of existing BL: Do you think about support after coronavirus and support the recovery. small and medium-sized enterprises Our support will focus on improving a lower demand. clients. Demand is strong and, as the pandemic, because the economy Over the period 2020-2021 we are and trade finance, as well as infra- efficiency and transparency of public It is also inevitable that many com- part of the scaled up response, fi- can’t be recovered overnight when prepared to provide financing worth structure services in the energy and governance, developing competitive panies will need more than just new nancing available under the Frame- fight with the virus is finally over? €21 billion in the 38 economies where municipal sectors. and inclusive economies, significant- or restructured loans to survive and work will increase to €4 billion we currently invest, said Zsuzsanna The Bank will also deliver investments ly accelerating transition to a green protect assets. The EBRD offers tai- from €1 billion until a further as- ZH: We are committed to financing Hargitai Regional Director for West- aimed at supporting economic re- economy, enhancing, and reaping lor-made business advice in technical sessment of needs before the end the post-coronavirus recovery. As ern Balkans EBRD in an interview with covery, supporting new investment, the benefits of regional integration”, assistance programmes where local of this year. We have widened the President Suma Chakrabarti said, the the Business Link Magazine. whether private corporates or in pub- she said. and international consultants help framework’s scope to include the €21 billion package is “a sort of down companies cope with the current cri- affiliates of existing clients. payment—not the end of the story.” sis and then grow again. This support

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After the Crisis is Before the Crisis: BUT NOW IT’S ABOUT ECONOMY

DR. WALTER DÖRING Deputy Prime Minister and Minister of Economics of Baden-Württemberg (ret.) Managing Partner ADWM GmbH - Akademie Deutscher Weltmarktführer

The Federal Government has started an enormous liquidity aid program fast, but these aids will mainly benefit larger companies, but small and medium-sized enterprises can fall by the wayside. 2. We need reforms in the tax system and an incentive for new jobs.

o, the corona crisis is far And as always, when State subsidies » Here is a new idea for moderniza- from being overcome. The should be distributed fast and in an tion: Why do we not let the State Neasing that is now talking unbureaucratic manner, there is un- take over social security contribu- place in Germany, which varies in the fortunately the danger that fraudsters tions from tax resources for all new- 1. Let’s launch an offensive for 16 German Federal States, must not might try to profit from these benefits. hires by the end of 2020? a modern infrastructure! obscure the fact that this easing of re- So we urgently need to look close- » Research funding worthy of the strictions is granted only on an exper- ly, and that costs time. Time is what name. » Instead of sitting on the plane just imental basis and, for the first time, small and medium-sized enterprises » Introduction of degressive depreci- sit at the desk. And there we note Photo credit: Hans Kumpf only on a temporary basis – under do not have. ation. that there is a lack of comprehensive strict monitoring of the current infec- Moreover, the zero-interest-rate poli- » Tax cuts for small and medium-sized broadband and mobile communi- tion figures, which have now been set cy has been dragging some firms from incomes to stimulate the economy. cations. Now it is high time for the We have to think of at clear maximum figures from which cheap credit to cheap credit for years – » Complete abolition of the so-called expansion of the digital network in- the easing must be immediately with- and these “Zombie firms” should now what has to be done for Soli. This would help the middle in- frastructure. drawn. not longer be kept alive artificially by the companies in order come classes. » We must build a European high If it had gone exclusively after the Government funds, so it is necessary » Germany must allow more employ- speed network. This would be a to ensure their existence German chancellor, this easing would to look twice carefully, what requires ee participation in the companies. flagship project and a symbol of a not yet exist. twice the time. for the next years; » A very fast and simple help would European recovery program – For a The Federal Government has started Taking all into consideration, we nev- be: You just have to allow the com- Europe that does not break up, but we need an extensive an enormous liquidity aid program ertheless have to think of what has to panies to offset past tax years. And finally grows closer together. faster than anybody has expected, but be done for the companies in order recovery program. if you furthermore pay back these » Digital Pact 2.0 and an innovation the problem is: These aids have been to ensure their existence for the next companies the income taxes they offensive for schools and universi- and will mainly benefit larger com- years; we need an extensive recovery had already paid in 2020, then they ties. panies, but small and medium-sized program. would have immediate liquidity. A » Digital turbo for public administra- enterprises are in danger of falling by So, what has to be done? I propose a further advantage of this proposal: tion. the wayside. nine point program. Nobody could call it a “subsidy”.

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3. Promoting innovation for 7. Very important for the climate protection European industry: THREE SETS OF MEASURES Functioning supply chains » Priority for climate protection WILL “CURE” THE ECONOMY FROM COVID-19 through innovation. An example is » The smooth working of supply INNOVATION the future topic of hydrogen. chains is a critical requirement for the industry to get started again. MILA CAROVSKA 4. Shorter planning and This requires an internal European Vice Prime Minister of North Macedonia approval procedures vote as a matter of urgency. We created three sets of » The corona crisis has shown, and 8. Without European solidari- measures with a total SHORTER PLANNING still does, that decisions can be tak- ty, no country is recovering value of 555 million en quickly – if only the authorities want it! We also need this spirit now » No question: Every head of Govern- EUR, i.e. 5% of the for large infrastructure projects and ment has taken his/her oath to do GDP of the Republic of the expansion of electricity and gas the best for his/her country. But this networks for renewable energies. must include: It can only go well if North Macedonia for its neighbors are also doing well. 2019. 5. We need a boost for mobile MOBILE WORK work 9. No benefits without own contribution » First it was a compulsion to work in the home office, then it became a » It cannot be that the same com- habit and finally almost a passion. panies which pay their managers We urgently need a legal framework bonuses in the time of corona ask for mobile work, just the same as the STIMULUS for subsidies, which all taxpayers one the Netherlands has introduced. have to finance. Only those com- » A boost is also necessary for safe panies should have the chance to data protection as well as for data profit from subsidies, if they re- In the very beginning when the COV- was to maintain the liquidity of com- applications and research to artifi- nounce on bonuses and dividends ID-19 pandemic was declared by panies and to save jobs in the first two cial intelligence and e-health, as we for their shareholders. It is neces- the WHO, the Government of the months of the pandemic. We mostly learn from the discussions around a sary to prove capitalism to be able Republic of North Macedonia has focused on supporting the compa- recognized the dangers that might nies in the most affected sectors, such corona tracing app. SUPPLY CHAIN to manage the corona crisis, help the poor and spend money for recovery occur for its citizens and companies. as tourism, HoReCa and transport 6. We need a comprehensive programs to enable the small, medi- Therefore, using analytics and close which, due to the closure of borders stimulus package program um-sized and big enterprises as well cooperation with the chambers of and the protective measures, were to keep their employees “on board”, commerce, unions and civic organiza- definitely most limited, but also for » We need a recovery plan designed in pay fair wages and salaries and thus tions, we instantly started a process of other affected companies. such a way that it has as great an pave the way for new wealth in ev- creating measures. We created three The first two sets of measures were impact as possible on aggregate de- ery European nation. sets of measures with a total value of directed at maintaining the liquidity mand. EUROPEAN SOLIDARITY 555 million EUR, i.e. 5% of the GDP of companies, savings jobs, but also » Part of this should be: Public pay- of the Republic of North Macedonia for those who will lose their jobs, and ment morale offensive. for 2019. the most vulnerable social categories. The joint work and commitment Here I would like to emphasize the in- have helped us to come out in April terest-free loans, but also the financial with two sets of economic measures support for payment of salaries or the CONTRIBUTION that responded to each of the three possibility to use 50% subsidies for scenarios and whose main objective contributions. The companies have

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shown great interest in the two sets of Like everywhere in the world, 2020 5% measures; this shows that the meas- will end in recession with an estimated OF THE PRESERVING JOBS GDP ures were designed appropriately and fall of the economy. According to esti- reflect the real needs of the companies. mations by the World Bank, the IMF WILL BE THE BIGGEST CHALLENGE National Bank enabled postpone- and domestic institutions such as the ment in settling loan obligations for NBRNM and the Ministry of Finance, both the companies and the citizens. the movements are from -1.4% to DAVOR MAJETIC We implemented several other tax and -4% (according to the IMF -4%; MF President of the Croatian Employers' Association (HUP) customs duty relief that contributed to -3.7%; NBRNM -3.5%, WB -1.4% increased liquidity of the companies. up to -3.2%). It is also important to mention the Using the third set of measures we ex- care of the state for the workers who, pect gradual recovery, especially when unfortunately, lost their jobs due to borders reopen and the large multina- the crisis. Some of them used unem- tional companies start working again. ployment benefits through the Em- In the fourth quarter, if things are go- ployment Agency, whereas others ing in a good direction, we expect a were registered in the reformed social mild economic growth. 555 MILLION € protection system. This point to the In 2021, according to international fact that we faced the corona crisis financial institutions, greater rates of with fully prepared systems thanks to economic growth are foreseen, up to We created three sets of the set of reforms that were conducted 7%. However, we cannot claim that in the area of social protection in the this will happen for sure because measures with a total period before the global pandemic. At many parameters are involved, most value of 555 million the same time, we enabled paid leave of all the spreading of COVID-19. for one parent with children of up to The fact that we are a small country EUR, i.e. 5% of the 10 years of age, as well as continua- can be used as an advantage, because GDP of the Republic of tion of the paid maternity leave until by using flexibility and adjustment, North Macedonia for the end of the state of emergency. we can enter these flows and impact But we did not stop there. The third positive economic trends. 2019. set of measures is in its operationaliza- tion phase. These measures will stim- I am very pleased with the fact that ulate personal consumption and will in these difficult times, when we are he crisis of COVID-19 caused vices to clients in any way. Due to the maintain the level of liquidity of the fighting an unknown enemy, we are the cessation of all economic relaxation of measures, most compa- companies while providing opportu- not alone. The EU is our strategic eco- Tactivities in the whole world, nies have started operating again and nity for finding new markets. nomic partner; our strong ally is the including Croatia. In this situation, optimism is back. the companies, which were good and The measures adopted then had their This crisis has shown that interven- NATO Alliance and North Macedonia Now, when most tions from the state are inevitable has become its full-fledged member. I successful, were left without goods, effect and were good for the purpose so that we can create conditions for believe that even closer cooperation but also without demand. The most of preserving jobs, and reduced initial companies have started severely affected are those sectors that nervousness among employers. Fur- functioning in the new normal. It has between the governments of the mem- operating, it is necessary taught us that we will need to get used ber states, as well as the governments could not do business during the coro- ther effects depend on future develop- to functioning with the coronavirus of the candidate countries would con- navirus lockdown, namely tourism ments and business growth until the to adopt new measures, and that nothing will be as it was be- tribute to faster recuperation. It is a and catering, and retail chains that end of the year. which will be adapted to fore. The crisis requires coordination key to use this period for adoption of specialize in non-food products. Also The economy-supporting measures between the countries, at a very high cohesive measures and harmonized other service activities, mostly small had to be adopted quickly in order this period. level, most of all to protect the health protocols for the use of the measures and micro entrepreneurs and crafts- to prevent the initial negative effect of the citizens. for all EU member-states. men, such as hairdressers, beauticians as soon as possible. Now, when most and all those who, due to protection companies have started operating, it measures, could not provide their ser- is necessary to adopt new measures.

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That is why the Croatian Employers' crisis has also highlighted the impor- Association (CEA) requested and held tance of creating conditions needed to BUSINESS RECOVERY a meeting with the Prime Minister and advance other parts of the economy, Ministers of the Republic of Croatia such as the food industry, the metal- to raise issues of additional measures working industry, the ICT industry, Now that the FROM “CORONA SHOCK” aimed at preserving jobs, restoring liq- and increase greenfield investments normalization of uid funds to the economy, turning to that are lacking. This will make tour- Federal Economic Minister Altmaier came out with a four-step plan to domestic consumption in a way that ism grow, but its share in GDP will be business operations the state and local communities do lower, making us less sensitive. is underway, give the economy a perspective of hope and to launch an economic restart, not stop investing, as well as a more liquidity is crucial provided, that the pandemic can be successfully contained. significant turn towards domestic Unity or solidarity at EU level? products and services. According to so that business the announcements from the govern- In this fight we must be united. I be- can be reactivated ments, new measures will be adopted lieve that work will be done at EU lev- and therefore new he effects of the coronavirus a variety of further immediate meas- soon. el to establish a common framework pandemic on all aspects of life ures and most importantly, it comes for assistance, as indicated. According measures need to Tin Germany are tremendous. up with a needs-based economic stim- to available information, the Europe- be adopted as soon The economy went down at fright- ulus package. Challenges an Union is mobilizing the resources ening speed and many companies are Specially designed for small and me- at its disposal to help Member States as possible so that still in a state of shock, some are on dium-sized companies is the KFW- In the next period, the biggest chal- in this crisis. employers know what the brink of financial ruin. The Ger- Quick loan program with accelerated lenge will be to preserve jobs in con- We believe that Croatia will try to use man government has done as much payment and simplified conditions. ditions of reduced consumption and all available EU funds to overcome to expect. as it could to help the economy to Since the SMEs are the backbone of business activity. Now that the nor- this crisis. Employers, also have high survive the crisis. Federal Economic German industry and particularly malization of business operations expectations of the EU, which is ex- Minister Altmaier came out with a affected by the crisis, it is crucial to is underway, liquidity is crucial and pected to ensure the free movement of four-step plan to give the economy a give utmost support to these compa- therefore new measures need to be people and goods. perspective of hope and to launch an nies. Another key component in the adopted as soon as possible so that Positive side economic restart, provided that the support measures for companies is employers know what to expect. We Elections and decisions pandemic can be successfully con- the emergency aid program that helps will see to what extent the economy The positive effect that COVID-19 tained. The four-step plan includes in- solo-employees, freelancers and com- can be recovered, what will domestic The parliamentary elections are ahead has had on us is that we are ready to creased possibilities for companies to panies up to 50 employees. The Fed- consumption be like, to what extent of us, and in the period of 'technical' do business online. For the last three MARJOKE BREUNING use short-term work. Short-term work eral Government and the Länder are our neighbours and our key export government we cannot expect any years, the CEA has been emphasizing President of the Chamber of has gone up to a peak of more than 10 working closely together to make sure markets will recover, whether people more substantial moves. The task of Commerce and Industry of the need for a digital revolution in million employees at the end of April. the aid reaches those who need it the will refrain from traveling, especial- the new government must be to restart the Stuttgart Region order to be more productive through Despite this the federal plan provides most. ly outside their countries, and also the economy. As before, the CEA will the use of new technologies. Moreo- whether a second wave of infection introduce the new government to our ver, the government itself has shown will occur and repeated quarantine demands and will continue to advo- that it can also go digital if necessary. measures. cate reforms such as the reduction of We insist on further digitalization of When it comes to tourism, the mul- para-fiscal levies, adjustments to the the government and the economy and tiplier effect of the lack of tourist Labour Act, and judicial reforms as on building a new structure of pub- income will have the biggest impact the three most important issues for the lic administration on this experience. on the Croatian budget, so the new improvement of the business environ- Digitalization has proved to be crucial measures need to ensure maximum ment. The list of priorities includes the for the continuation of the business of preconditions to recover a lost tourist issues of sick leave regulation, more many entrepreneurs in this crisis, so season. Tourism accounts for 17 per- efficient territorial organization and we must fully embrace it in order to cent of Croatia's GDP and is vitally comprehensive reform of the health be ready for new challenges. important to be improved. But this system.

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FOR COMPANIES WE NEED TO CHANGE OUR BUSINESS MODELS FAST In Baden-Württemberg companies can get from 9,000 up to 30,000 euros depending on their size. INTERVIEW: HRVOJE KOLARIC The money is a financial contribution in the form CEO of Belupo and Member of the Podravka Management Board of a non-repayable subsidy.

“The crisis caused by the SARS-CoV-2 pandemic is an ex- ample of a disruptive crisis that has changed the existing paradigms of both the social and economic systems. It has subjected us to numerous restrictions but also point- ed to new opportunities. It has changed the company management logic by redefining the processes. It addi- In Baden-Württemberg companies That’s why the German government tionally boosted the digital transformation and changed can get from 9,000 up to 30,000 euros has recently also come up with a pro- 9.000 -30.000€ the work organization process in some organizational depending on their size. The money is gram to support companies in reas- units, driving it toward smaller teams, as well as the use a financial contribution in the form of suring their supply chains, which is of new communication channels and tools”, this is how a non-repayable subsidy. The Cham- carried out in Baden-Württemberg by CEO of Belupo and Member of the Podravka Manage- bers of Commerce and Industry and the German Chamber of Commerce ment Board Hrvoje Kolaric answered to what extent the the Landesbank of Baden-Württem- for the Stuttgart Region. It provides coronavirus has affected his business. berg jointly work on the applications. information to companies whose In a unique and unprecedented coop- supply chains are affected and sup- Belupo is the second largest pharmaceutical company in eration payments were executed rap- ports them in finding a solution. It Croatia. It is strategically oriented toward increasing ex- idly and easily. By May 11, 2020, the also reflects the companies needs to ports and developing new products that meet the needs Chamber of Commerce and Industry the government so that political deci- of the demanding foreign market, so in the countries of for Stuttgart Region processed more sions can be influenced by the reality Central and Eastern Europe, where it has its branches than 80,000 applications for emer- that companies face these days. The and companies, it is developing and growing. But, in the gency aid. This is a great success. German Chambers of Commerce are new circumstances, all companies need to be fast, Kolaric But not only financial aid is needed well skilled for this task. They have said, because the present knowledge, competences and right now. Many companies are not a great experience in accompanying resources lose their value in a crisis. able to fully restart their business their member companies’ internation- “In this context, we needed to change ourselves and our due to logistic problems. In many al affairs over many years and they business models since ‘best practices’ no longer apply cases international supply chains are can rely on a huge international net- due to the reshaping of their former context. New as- still being disturbed or interrupted. work of partners such as the German sumptions have emerged, upon which we need to build Container ships with loads of com- Chambers Abroad or the German Em- our future business logic. I dare to say that we have han- ponents don’t get the permission to bassies. Solution to the crisis is to quickly dled our adjustment to the rapid changes very well, kept land, custom clearance is not carried We are convinced that working to- identify the weaknesses of the pace with our defined business plans, and achieved re- out because of certain restrictions or gether in this and in many other ways sults”, he said. components can’t even be produced is the key to getting the business of existing business paradigm and create because of a lack of material or man- our region restarted even under past a new one and build an organization, power. There is a vast range of possi- lockdown conditions and we hope ble obstacles within the supply chains that the close relationships of the offer and market that will be in line and they are preventing companies Baden-Württemberg economy to our with the new logic. from heading back to the pre-corona foreign partners can fully be revived. production rates.

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BL: Do you have an internal strategy for overcoming the crisis and which WE MUST MAKE TECHNOLOGY one? AVAILABLE FOR ALL HK: In a crisis such as this one, it is obvious that the pharmaceutical in- CHRISTINE ANTLANGER-WINTER, Country Director Google Austria dustry is every country’s strategic industry. The sustainability of the healthcare system depends on its strength. In the past few months, Be- lupo did not face any significant drop in sales revenues – moreover, we are close to reaching the planned figures for the first five months of this year. Nevertheless, one of the greatest chal- lenges that have systematically im- peded our business on the Croatian market is debt collection – we are now managing to collect our accounts re- from the Government to release all its existing business paradigm and create ceivable after 120 days. potentials, for the benefit of the entire a new one and build an organization, However, in the context of revenues society. This process commenced by offer and market that will be in line earned on our export markets, in par- amendments to critical legislation in with the new logic. It will take us ticular the Russian Federation where the area of medicines, which took al- some time. we obtain over fifty percent of our most a decade and was completed in In the past three months in Belupo, all export revenues, we are facing unsta- early 2019 when the new Medicinal organizational and business processes ble Ruble exchange rates in relation Products Ordinance was enacted. have been proceeding at a more inten- to euro and HRK. Still, with intensive The upcoming part of the process sive pace. Our production worked in and focused work on our internal ad- comprises further stronger inclusion three shifts, including Saturday, qual- justments and with putting additional of generic medicines in the treatment ity control as well. We felt occasional efforts in managing our costs side, I of patients in Croatia, following the delays in logistics and distribution and believe we will be able to compensate models applied by wealthier coun- procurement, but with a proactive ap- for the foreign exchange losses in- tries that use this medicines portfolio proach and contacts with diplomatic curred so far by the end of the year. in their treatment pyramids to make and consular missions in the markets he past few months have left for online shopping or how to buy them available to as many patients in which we operate, we managed to Technology can both their marks. While parts of online grew by 200% worldwide. BL: Are you a beneficiary of any of the as possible and to achieve significant ensure continuity of supply. No mar- help us come out of the the economy have been able Information, shopping, learning, en- measures put in place by the Croatian savings. This should also be done in ket and no patient was left without T crisis faster and create a to continue with some semblance of tertainment and connection became Government? Croatia, for which the Ministry of the necessary therapy. I am extremely normality thanks to advances in re- online first as we searched, messaged Health and the Croatian Health In- proud of all my associates who have more resilient and more mote work, online shopping and tele- and streamed, accelerating the adop- HK: Many Croatian companies have surance Fund are directly responsible enabled the smooth operation of all human future. medicine, many areas have faced huge tion of technology by many. survived thanks to these measures. Be- and authorized. organizational units over the past challenges. lupo has not used them so far because months. Repairing our economies quickly is there was no need. BL: When do you expect that the busi- The crisis has given us an opportunity Throughout lockdown, it has become paramount but we must also fight the ness activities will return to normal to take a proactive approach by ques- clear that the use of technology has urge to restore what we had before. BL: Do you need state support in and what are necessary prior circum- tioning and modifying the existing been critical. Things that felt nov- In the face of dramatic change, we some other way - which way? stances? business logic. Based on my experi- el at first - like working remotely, or should plan not just for recovery but ence, I strongly believe we will know hosting video conferencing are now for a review of our economic policies HK: The Croatian pharmaceutical in- HK: The solution to the crisis is to how to use it. becoming the norm. People searching and values. Technology can both help dustry needs direct strategic support quickly identify the weaknesses of the

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STRATEGIC WORK ON MODERNISATION IS THE ONLY WAY

JANOS ZEMBERI Owner, SAT-TRAKT Company

did not need them during the state of 300% emergency - such as educational facil- ities, some public enterprises, as well INCREASE as catering and sports facilities. We had also immediately organised and opened an emergency line for elderly citizens in quarantine so that our em- ployees would bring them food and medicine. Regarding wholesale capacities, there has been a slowdown, and we have indeed had significantly fewer inquir- We saw a 300% us come out of the crisis faster and backbone of our economy and create ies into our capacities abroad. How- create a more resilient and more hu- 85% of new jobs. This is especial- increase in people ever, none of our existing users had man future, the one that reflects our ly true of our local businesses which cancelled their existing subscriptions. taking training during new values. Yet this will only happen have heroically helped us all through Despite continuing to analyse in detail lockdown, and we will if technology is equally available for this crisis, many of which had to the situation, its consequences, as well everyone, and that responsibility falls quickly pivot online to support their Because of the new circumstances, we had chosen as potential future opportunities, we do more to understand to both industry and governments. bottom lines. Consumers are likely to immediately fund the expansion of network are noticing that business is starting to what tools and Firstly, that means helping people to continue to shop more online and awaken and that new service inquiries find work. By partnering with polit- most businesses will operate under capacities, which was an unplanned investment certifications can help are coming in. ical-economic stakeholders we can social distancing and restriction for for this period. The state reaction to this crisis was reach those displaced or help those who are the most vulner- many months. timely and very useful. As a larger able from the crisis and ensure they believe that there was no business number of our customers had started business entity with hundreds of em- vulnerable to this crisis. have the opportunity and means to It will take many years for our econ- venture or economy left unaffect- working from home, there has been a ployees, we can compare assistance access new types of jobs or training. omies to recover from the effects of ed by the novel coronavirus and significant increase in internet traffic, in the amount of three minimum this crisis, and the way we work and I the SAT-TRAKT company had been as well as in the use of landlines. wages for each employee to just the We’re accelerating our Grow with do business is changing more quickly grappling with the problem since the Because of the new circumstances, right amount of oxygen we needed to Google skills training to help people than we could have imagined. Goog- day it begun. we had chosen to immediately fund breathe. get the skills they need for future jobs le has responded during this crisis in Our company is specialised in the the expansion of network capacities, All in all, during this great crisis, SAT- or for a change in career. We saw a order to help businesses digitise and wholesale trade of telecommunication which was an unplanned investment TRAKT has shown great flexibility 300% increase in people taking train- help countries take advantage of new services. On offer are a wide range of for this period. We do not, however, and efficiency. We can say with cer- ing during lockdown, and we will do technologies. Focusing on what we telecommunication services and alto- regret this decision, as it allowed for tainty that our years-long work on more to understand what tools and can do better, and not just on what we gether we are the leading distributor the unencumbered functioning of the infrastructure modernisation has led certifications can help reach those dis- had before, will build resilience and of cable television in Vojvodina, as system. It also demonstrated our flex- to our belief that, once the pandem- placed or vulnerable to this crisis. make European businesses stronger well as one of the leading internet ibility in a particularly difficult period. ic subsides, we will be a healthy and than ever before. providers in Serbia. Due to the state Showing our social responsibility, we strong company. Next, we need to help small businesses of emergency in our country caused also accommodated requests to tem- recover quickly, as they represent the by the epidemic and because a large porarily suspend services to users who

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THE “LAND OF COOPERATIVES“ JOINTLY FIGHTS COVID-19

DR. ROMAN GLASER President of the Baden-Württembergischer Genossenschaftsverband

The BWGV members consist currently of 168 cooperative banks, 317 agricultural cooperatives and 313 commercial cooperatives. More than 32,000 people work for these cooperatives.

Compared to Baden-Wurttemberg, than ever before. Cooperative compa- During the past decade, 280 cooper- formation and services on COVID-19 The cooperatives in there is no other federal state in Ger- nies are sustainable, secure and relia- atives were founded in Baden-Wurt- as well as webinars and other support many with a higher relation of cooper- ble and this way a perfect example of temberg in many different sectors measures are positive examples of the Baden-Wurttemberg ative members to residents. Therefore, social market economy. In 2016, the – like, for example, urban and rural association‘s support for its members. – as well as the we call it the “land of cooperatives“. UNESCO showed its appreciation for development, digitalization and plat- Despite the very challenging situation, whole economy – are About 4 million of Baden-Wurttem- the cooperative idea by adding it to forms, renewable energy, mobility, as the crisis can be a big chance for ur- berg’s 11 million inhabitants are mem- the famous “list of intangible cultural well as medical care. The core con- gently needed economic and social heavily affected by the ber of a cooperative organization. Al- assets”. cept of cooperatives can be flexibly changes. During the COVID-19 lock- COVID-19 pandemic though most of them are members in The Baden-Württembergischer Geno- applied to the most diverse industry down, people seem to have changed one of the multiple Volksbanken and ssenschaftsverband (BWGV) acts as structures. Thus, we can look forward their view on the importance of re- but they are also key Raiffeisenbanken cooperatives, they an association of more than 800 coop- to many more cooperative approaches gional products, services and com- players in overcoming it exist in more than 50 different busi- erative companies in the federal state in the future. panies. This could – if it lasts – once ness sectors – like agriculture, crafts, of Baden-Wuerttemberg. The BWGV The cooperatives in Baden-Wurttem- again lead to a renaissance of coop- for their members and services, trade and renewable ener- is already 156 years old and serves his berg – as well as the whole economy – eratives and the outstanding cooper- customers. gies. Cooperatives are jointly owned members with high quality services are heavily affected by the COVID-19 ative idea. The BWGV is convinced and democratically controlled enter- including audit, consulting, educa- pandemic but they are also key play- that the cooperatives as well as the prises with the legally defined goal of tion as well as political and public ers in overcoming it for their members small and medium-sized economy in promoting the economic activity and affairs. The BWGV members consist and customers. The BWGV supports Baden-Wurttemberg in general will the success of its members. For more currently of 168 cooperative banks, its members by offering many practi- jointly cope with the economic crisis than 150 years, cooperative organ- 317 agricultural cooperatives and 313 cal services, strong political advocacy and will become stronger through this izations are based on the principles commercial cooperatives. More than and professional communication. A challenging situation. of self-help, self-responsibility and 32,000 people work for these coop- digital platform with all relevant in- solidarity – and they are doing better eratives.

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The common, applicable EU rules re- The common, applicable disputed state presidency suddenly garding budget and debt policy have came together to call for unity to all EUROPE, CORONA AND resulted in sufficient financial resourc- EU rules regarding citizens of the country. es being available during the crisis so budget and debt Many of the so often blocked institu- WESTERN BALKANS that the preventive state can fulfill its tions suddenly showed an unknown tasks. After the crisis, it will be neces- policy have resulted ability to act. For the first time in a sary to return to these rules. to be pre- in sufficient financial long time, the people of Bosnia had pared for a coming crisis. Because the resources being available the impression of a functioning state. FRANZ SCHAUSBERGER next pandemic is bound to come, even It remains to be seen whether this sit- Professor of Modern Austrian if we don't know from where, where during the crisis so that uation will continue. History and when. the preventive state can To fight the pandemic in the Republi- Former governor of Land The force of the pandemic necessi- ka Srpska, the regional health minister Salzburg tated rapid government action - also fulfill its tasks. Alen Seranic, a Bosniak, has achieved President of the Institute of at the risk that parliamentarism and great popularity in the crisis. As an the Regions of Europe democratic practices would be re- epidemiologist with practical expe- duced and freedom rights were dras- rience, he has a high level of exper- tically restricted. This was neither out The countries of the Western Bal- tise. He provides careful information of joke and madness nor from the in- kans are far less affected by the coro- about the situation and gives credible tention to transform democratic states na wave than some other European recommendations for action. into authoritarian ones. It was in the countries. Governments in Southeast It was also possible during the crisis interests of human health and safety. Europe have responded to the pan- that the EU Council on 26th May However, once the pandemic subsides, demic with strict measures from the adopted two agreements with Mon- normal democratic standards must be start. Strict exit restrictions, curfews tenegro and Serbia on border man- restored as quickly as possible. and closed borders have largely pro- agement cooperation between these Despite the corona crisis, there has tected the population and prevented countries and the European Border been noticeable progress in the rela- rapid spread. The ailing health sys- and Coast Guard Agency (Frontex). tionship between the EU and the West- tems, weakened by corruption, also These agreements allow Frontex to ern Balkans. At the end of March, the managed to some extent to meet the assist Montenegro and Serbia in bor- go-ahead for negotiations with North current challenges. der management against illegal immi- Macedonia and Albania was given. At Due to poor pay and nepotism, many gration and cross-border crime. the virtual Western Balkans Summit medical professionals have left the on May 6, the EU Commission an- Balkans in recent years. The current In the first big conference, the Institute nounced that it would receive Corona scandal about the Prime Minister of of the Regions of Europe (IRE) will aid worth over three billion euros. In the Federation of Bosnia and Herze- deal with all questions about “Europe addition, agreement was reached on and Corona - Dangers and Chances” he corona crisis hit all Euro- The corona crisis has shown the ur- govina over the suspicion of abuse of support as part of a longer-term eco- at the 16th Salzburg Europe Summit pean, state, regional and local gent need for much more technologi- office, money laundering and bribery nomic and investment plan. from September 27th to 29th, 2020. levels with full force. While cal sovereignty and self-sufficiency in in connection with the purchase of T The visit of the two Austrian minis- High-ranking representatives from the European Union, after initial hes- Europe vis-à-vis other players such as 100 ventilators for people with coro- ters, Schallenberg and Edtstadler, to business, science and politics will dis- itation, tried to activate the necessary China, the USA and Russia. Only in na shows how vulnerable and fragile Albania, Serbia and Kosovo* on May cuss the effects of the pandemic on coordinating and financial support in this way will Europe manage to be a this system is. 29 should also underpin this perspec- economy, finance, democracy, Euro- line with its very limited responsibili- strong common economic and polit- In Bosnia-Herzegovina, with perhaps tive of a rapprochement with the EU. pean integration and how to deal with ties in the health sector, the EU Mem- ical player towards all those whose the most complicated state structure The task now is to make progress in the consequences of the crises. ber States acted very differently. intent is to weaken Europe as polit- in Europe, the ethnic-national incen- the reforms demanded by the EU, ically as possible. Climate protection diary speeches that were common particularly in the areas of justice, the Where the EU has competences re- and digitization must also be part of before the corona have almost com- constitution, the rule of law and free- garding the corona crisis, there are an innovation program for greater pletely disappeared. The chronically dom of media. effective measures, for example in the prosperity.

area of economic aid.

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reaches about 70% when it comes to It is very important for businesses to adapt to the WE NEED TO ADAPT small businesses). Such figures show us small businesses will be the hard- new circumstances, upskill the staff, reorganize, est hit from the current COVID-19 reprioritize and restructure their business model, AND REACT QUICKLY pandemic, however, the effects of the reshape their mindset and shift to digital where ongoing coronavirus crisis are being felt in every sector of the economy, di- needed. BERAT RUKIQI rectly and indirectly. President of the Kosovo Chamber of Commerce However, during this crisis, assistance • Grants dedicated to investments should be targeted to those types of in new equipment, staff training businesses likely to bear a large bur- and retraining, certification, and den of negative impact (HoReCa, a scheme to support employment. tourism companies, individual farm- • Partial payment of electricity costs ers, etc.). The majority of businesses or investments in energy efficiency. were/are impacted in the following • Subsidy of salaries (in the amount areas: sales, staff availability, supply of 170 euros), for sectors with sig- chain and finance. It is very important Different scenarios have he effects of the pandemic last is difficult to predict and depends nificant decrease in turnover, at Covid-19 have already been on various factors (we can and can’t for all sectors, especially small busi- least until 31 August 2020. been designed locally Tdevastating for Kosovo’s control). One thing is clear, that the nesses, to be provided with support by • Rent compensation (50% of the and globally, however, I economy. Economic growth is ex- economic cost and consequences of government and financial institutions. value), at least until 31 August TAX BREAKS pected to decrease from -2% to -5 %. Covid-19 are going to be considerable Securing liquidity is crucial at this 2020. UP TO 5 YEARS believe that we will need The pandemic had negative impact in and we need to adapt and react quick- point, therefore, small business should • Grant for preparations of firms to two to four years to remittances and FDI, decrease in ex- ly so the recovery doesn’t last for years advocate for efforts to provide imme- export: dedicated to: staff re-train- diate liquidity and keep companies ing, implementation of protection As we continue to adapt to this un- recover. ports and general decline in economic and years. Different scenarios have activity. Furthermore, there are over been designed locally and globally, solvent in order to combat this chal- measures and safety and health precedented situation, Kosovo Cham- 100,000 people who are not in the however, I believe that we will need lenge. Moreover, it is very important standards for COV-19; implemen- ber of Commerce is committed to workplace, since the imposition of two to four years to recover. This is for businesses to adapt to the new cir- tation of international standards serve as a voice of businesses and restrictive measures, to prevent the dependent on the policy response and cumstances, upskill the staff, reorgan- and criteria for export, promotion advocate for all businesses affected spread of the pandemic. It’s a fact the adaptation of different sectors of ize, reprioritize and restructure their of companies and products; by Covid-19. As a chamber and legal now that the pandemic has affected our economy to the new circumstanc- business model, reshape their mindset • Lending with 1%-2% interest, for representative of businesses we will the supply and the demand side local- es. Having in mind that the crisis has and shift to digital where needed. increasing the export capacity of continue to advocate and work in the sector: wood, metals, plastics, the economic recovery plan and help ly and globally. The productive capac- also affected the mindset of the pop- Our recovery package ities of countries across the world are ulation, this could potentially be the food and ICT. businesses recover as fast as possible. being affected, as the measures mean opportunity for further development • Grant allocation for digital trans- On the other hand, considering the The Kosovo Chamber of Commerce, less people working and disruptions of the sectors of economy which in- formation and creation of e-com- importance of digitalization during in the capacity of legal representative to supply chains. Demand is also be- clude new technologies, innovations, merce platforms. this time, we will help businesses dig- of the business community, with a net- ing affected as fewer jobs and less in- digital transformation of current busi- • ‘Tax breaks’ up to 5 years, depend- italize, through the Center for Digital work of 15,000 members, organized come means less spending locally and nesses, etc. ing on the value of investments, Transformation (a part of Kosovo in 30 sector associations and 7 region- globally. On the other hand, during for new investments, including Chamber of Commerce). At this time, al units, has already prepared the first and after the world economic crisis, foreign investments. it is important for all the key stake- draft of proposals for the economic Kosovo has experienced a decrease Surviving of a small business • VAT at the rate of 0%, for produc- holders to coordinate their efforts, in- recovery package. Such package is di- in exports and mainly in attracting tion inputs and equipment pur- cluding government, business associa- vided in four areas including: liquidi- foreign direct investments. Moreover, The majority of businesses operating chased by local producers. tions, local and international partners ty, competitiveness and integration in the biggest impact was the decrease of in sectors affected by the preventive • Differentiated VAT rate (8%), for and every citizen, so we could miti- global supply chains, digitalization, remittances considering that diaspora measures had turnover zero for two the tourism, HoReCa, real estate gate the crisis and get back to normal tax and non-financial instruments/ was living and working in countries months and about 50% of active and transport sectors. again. measures. Some specific measures of that were more affected by the crisis. businesses were closed due to the this proposed package for economic How long the economic impact will preventive measures (this percentage recovery include:

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AUSTRIA – COUNTRY OF POSSIBILITIES

AND HIDDEN CHAMPIONS ABA – Invest in Austria has already received

INTERVIEW: GERLINDE GAHLEITNER, Director Southeastern Europe at ABA – multiple awards for Invest in Austria its consulting services, including being named the world’s best investment promotion agency by the World Bank.

Is Austria still an “East-West bridge- About 20 percent of the population ABA – Invest in Austria (ABA) is the We advise foreign companies and head” despite our radically changed have a migration background, and first contact for innovative company startups interested in establishing world? three-quarters of them come from founders and interested investors. Central and Eastern Europe. These business operations in Austria on all Austria’s central location at the in- migrants have above-average qualifi- ABA – Invest in Austria is the invest- business location issues. terface of important transport routes cations and speak an average of three ment promotion department of the enables optimal market access i.e. as languages. national business development agen- the starting point for the prosperous cy ABA (Austrian Business Agency), “Austria ranks among the most innovative and successful DACH markets (100 million con- How does ABA specifically support which reports directly to the Federal countries in the European Union. The dynamic business sumers) or as a hub for the entire EU international companies aiming to set Ministry for Digital and Economic location stands out thanks to its modern infrastructure, region. Not only does it leverage the up business operations in Austria? Affairs (BMDW). With its three de- high-quality technologies and well-trained, highly moti- benefits of a common internal market partments i.e. ABA – Invest in Aus- vated specialised personnel. However, unknown to many, due to its EU membership but serves We advise foreign companies and tria, ABA – Work in Austria and Austria is also a country of hidden champions”, said Ger- as a North-South and East-West in- startups interested in establishing Location Austria, Austrian Business linde Gahleitner, Director Southeastern Europe at ABA terface, offering strategically crucial business operations in Austria on Agency promotes Austria abroad as a – Invest in Austria. advantages for international trade in all business location issues. Services business and research location, an at- Europe. Austria is still the number range from site selection, consult- tractive labour market for specialised She explained that Austria boasts the most world market one business location for building up ing on labour and tax regulations, and skilled employees and as a film lo- leaders in relation to the number of inhabitants. “Niche ties to South East and Eastern Europe. funding and financing possibilities, cation for international film produc- players in all sectors such as Kreisel, Doppelmayr and Vi- These dynamic markets are a magnet cooperation partners and support in tions, advising clients proactively and raTherapeutic manufacture outstanding, leading-edge for many multinationals. Moreover, handling formalities with public au- individually. ABA – Invest in Austria products. FACC helps the international aviation industry Austria has more qualified special- thorities to gathering information on has already received multiple awards to reduce fuel consumption by deploying new materi- ists with foreign language skills for schools for employees’ children and for its consulting services, including als. Companies such as Red Bull, Swarovski and Manner doing business internationally than the best residential areas. being named the world’s best invest- which are not necessarily perceived as Austrian brands other Western European countries. ment promotion agency by the World have gained a worldwide reputation”, she said. Bank.

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Serbia seems to be one ADVANTAGES AND POSSIBILITIES of preferred locations. It OF ALUMINUM combines the potential of motivated human KEVIN KRETZ, Managing Director, Alutec metal innovations GmbH & Co. KG resources to build up a new business and create local employment with the aspiration of getting connected to the European market and all its possibilities.

challenge of global sourcing strate- gies, best flexibility on customer re- quirements for a competitive product is daily business. Sometimes it is demanding and it af- fords all the creativity to design tech- nological high-end solutions with commercial cleverness and fast adap- tion to continuously changing condi- tions. The three managing partners of alutec, all experienced hands-on managers who are in this business for many Alutec has been a family owned com- cise CNC-production lines. The sur- years now, are united in their fascina- pany for more than 30 years in the plus material is no waste. It’s recycled tion of these challenges. The combination of market for impact extruded and ma- almost 100% to become again a raw With the intention of business devel- chined aluminum parts. With its 200 material for alutec. With a big range opment, the managing partners be- high precision, process employees Alutec is located in Stern- of impact extrusion presses and ma- lieve in their global expansion strategy capability, the light enfels, a small village in the southwest chining equipment, alutec is able to in order to establish alutec technology of Germany close to Stuttgart. The process about 2,000 tons of alumi- clusters at places with best conditions. weight and many other area is well-known for its high-tech num per year. As part of this strategy, Serbia seems excellent properties automotive and mechanical engineer- The combination of high precision, to be one of these preferred locations. of aluminum, enables ing companies. The technology of process capability, the light weight It combines the potential of motivat- aluminum impact extrusion has the and many other excellent properties ed human resources to build up a new alutec to deliver millions great advantage of forming cold ma- of aluminum, enables alutec to deliver business and create local employment of parts per year to terial into an almost perfect net shape millions of parts per year to automo- with the aspiration of getting connect- by one press stroke in very short pro- tive business customers worldwide. ed to the European market and all automotive business cessing time. Only a small amount As a 2-tier supplier for automotive its possibilities. Alutec will evaluate customers worldwide. of material needs to be machined by OEMs, alutec knows the market rules both, chances and risks, again with standard technologies like drilling or concerning “zero-defect” deliveries optimism, creativity and strong belief milling in highly productive and pre- at a maximum of effectiveness. The in shared success.

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WHO WE ARE AND WHAT WE DO?

The Southeast European Business Development We are offering advertising opportunities in the Network (SEEBDN) is an independent business as- region, as well as in the EU and the international sociation of prominent managers, enterpeneurs and market, mainly through the Business Link maga- diplomats from the countries of Southeast Europe, zine, and organization of occasional meetings for Germany and Austria. We are a not-for-profit asso- business people from the SEE and the EU in order to ciation (eingetragener Verein) based in Vienna. connect them with companies interested in business partnerships. The SEEBDN aims to enhance international busi- ness operations of SEE economies, particularly with Our organization would mainly focus on business the EU market, focusing particularly on developing activities of small and medium-sized enterprises, new business networks and stimulating business modern technology transfer, know-how, and would operations of small and medium-sized enterprises also stimulate the use of digitalization and enhanced (SMEs) on external markets, but we are not neglect- activities towards developing a business network ing large companies either. aimed at linking SEE countries with interested com- panies in the EU. In this process, the SEEBDN will seek to support inclusion of SEE economies in European Commis- The SEEBDN shall provide additional financial re- sion’s development projects, as well as in national sources from EU funds, funds of EU member states projects of EU members states, aimed at boosting and other sources. Provision of regular online access foreign economic ties. to programs of support to SMEs, which are offered by the EU or state and business agencies from the re- For the benefit of its members, the SEEBDN will gion and the EU (tenders, other calls for proposals). use different resources. The SEEBDN shall seek to link business people, scientists, politicians and other If you wish to join our association and use all busi- stakeholders in European and regional processes of ness opportunities that we can offer to our mem- importance for the SEE economies. We shall also bers, for more information please visit our official strengthen the flow of reliable, topical, economic, website: www.seebdn.eu. financial, business and political information and analyses of importance for the SEE region.

CONTACT US WEBSITE: www.seebdn.eu ADDRESS: Krottenbachstraße 151/3 A-1190, Vienna TEL: +43 1 4780080 E-MAIL: [email protected]

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