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AUSTRIA

December 2016

Partners

H.E. JOHANNES EIGNER, AMBASSADOR OF AUSTRIA: EU: PERHAPS NOT IN FOCUS, BUT CERTAINLY NOT FORGOTTEN ● ERHARD BUSEK, SPECIAL COORDINATOR OF THE STABILITY PACT FOR SOUTHEAST EUROPE: THE EU’S FUTURE CAN BE SETTLED THROUGH SHARED ˇ EFFORTS ● MARKO CADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA: MORE INVESTMENT IN A FRIENDLY ENVIRONMENT ● ERIKA TEOMAN-BRENNER, COMMERCIAL COUNSELLOR AT THE EMBASSY OF AUSTRIA IN BELGRADE: REFORMS ARE PAYING OFF ● BILJANA TOMOVIC, Ó GENERAL MANAGER, BRAMAC KROVNI SISTEMI D.O.O.: MORE POWER TO YOUR ROOF, MORE POWER TO YOUR HOME ● JELENA KNEŽEVIC, Ó MANAGING DIRECTOR, LEITNER LEITNER: SAFETY NET FOR CLIENTS ● UDO FILZMAIER, TAGOR, AND CEO & FOUNDER OF SIE HOLDING AG: TEAM FOR VICTORY ●


COMMENT

Proven

FRIENDSHIP Austrian officials use every opportunity to support Serbia’s progress on European integration and market reforms, and the rise of the mutual trade exchange to a billion euros, which is expected to occur for the first time this year, as well as continued interest in our country among Austrian investors, show that these shifts can also been seen in practice

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he recent presenting of the European in the reconstruction of the “Mitros” abattoir, the way our country has acted in response to Commission’s latest report on Seris now counting on the export of meat and the refugee crisis, which, despite the formal bia’s progress served as a pretext for meat products to Russia, whilst it has also closure of routes across the Western Balkans, Austrian Foreign Minister Sebastian started exporting to the markets of the Euremains one of the key areas where the two ropean Union. Kurz to once again express Austria’s full supcountries work closely together. port for our country and the countries of the However, there is still much to be done Economic cooperation with Austria is crucial for Serbia. As indicated at the beginning of region in efforts aimed at moving closer to when it comes to improving the business climate: corruption, excessive administration the year, this year will see the achieving of the the European Union. This is just one of many and the shadow economy are just some of the goal of the bilateral trade exchange reaching examples of Austria’s verbal and practical complaints that can be heard not only from a billion euros, compared to last year’s €700support to Serbia. Austrian investors, but also many other for€800 million. Austria is simultaneously the Finally, just a day after the election of a eign and domestic companies. biggest investor in Serbia, with as many as new government in August this year, the previous and present Serbian Prime Minister, AlekThat’s why Austria also provides great 500 companies active on the Serbian market. sandar Vučić, travelled to Vienna immediately support to Serbia in advancing the business The Austrian companies that operate on after the election, at the invitation of Austrian environment. The Chamber of Commerce & the Serbia market ensure an ever better ratChancellor Christian Kern. Austria is undoubtedly one From solid cooperation in the area of strengthening security in the Balkans of the European countries that and handling the migrant crisis, to close political ties and economic use every opportunity to highcooperation, Serbia and Austria are building solid circles of friendship light that the progress of the Western Balkans is one of its foreign policy priorities. At the ing for the business climate in Serbia, while Industry of Serbia is at an advanced stage of beginning of this year, Austria announced its we are constantly recording increased interits reform based on the model of the Austrian support for the opening of chapters 5, 15, 25 est among new foreign investors from this system, while constant progress is also beand 26, which relate to public procurement, ing recorded when it comes to cooperation country. Thus, for example, representatives energy, science, research, education and linked to the introduction of dual education. of Austrian company “Immofinanz” opened a culture. Although this has not yet happened, Towards this end, Dr Erika Teoman-Brenner, representative office in Belgrade in Septemthere is a good chance that some of these ber and recently also promoted the project Commercial Counsellor at the Austrian Emchapters will be opened in the near future. bassy in Belgrade, and Ann-Kathrin Hentschel, to construct a retail park worth €10 million The road to Europe, strengthening the rule team leader of the German development coin Požarevac. The second half of the year of law and advancing in economic reforms, are operation project “Reform of vocational edusaw Austrian company “Eyemaxx” launch some of the things that Austrian interlocutors cation in Serbia” signed a Memorandum of construction of a new logistics centre in Novi value, and areas where Serbia consistently Understanding between Advantage Austria Banovci, in the municipality of Stara Pazova, achieves positive results. Moreover, Austria and GIZ, the German Organisation for Interwhere it has operated since 2015, while comalso emphasises the contribution of Serbia pany “Gerlinger”, which invested €23 million national Cooperation.  to strengthening security in the region and

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BUSINESS PARTNER AUSTRIA


INTERVIEW

EU: Perhaps Not in Focus, But

CERTAINLY NOT FORGOTTEN There is admittedly no clear answer regarding precisely when and how the goal of full EU membership will be achieved – but it is certain that convincing reform programmes in the individual candidate countries will greatly help to bring more clarity

H.E. JOHANNES EIGNER, AMBASSADOR OF AUSTRIA

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he Austrian Ambassador to Serbia, H.E. Johannes Eigner, is certain that the EU enlargement process will continue, because, as he says, the rote laid down in Thessaloniki (in the year 2000) cannot culminate in a dead-end street. He describes cooperation with Serbia as being “five-star”, but says that there’s always room for

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BUSINESS PARTNER AUSTRIA


REFUGEE

EU

COOPERATION

I think it is not exaggerated to say that the EU was literally overwhelmed by the magnitude of the refugee and migrant crisis that hit the Union last year and is far from being over

This year’s Western Balkan summit in Paris, held immediately after the referendum in the United Kingdom, was proof that the Western Balkan Enlargement Process remains high on the agenda

I am glad to confirm that our embassy’s activities both contribute to and also reflect the high level of our bilateral relations and cooperation

improvement. He sees new directions for the advancement of relations in regional cooperation, such as that which already exists between Vojvodina and Austrian regions, but also in direct contact with individual cities and municipalities. Apart from contributing to strengthening political and economic ties between the two countries, Ambassador Eigner, who is also a translator, has also embarked on a literary adventure: he has translated into German Filip David’s NIN Award-winning novel “The House of Memory and Oblivion”, which he says is the first German translation of the work of this important author.

• Following the referendum in Hungary, Austrian Chancellor Christian Kern warned the countries of Eastern Europe that “solidarity is not one-way”, insisting that these countries also receive great assistance from other EU members. In your opinion, to what extent does the

• Your Excellency, the latest round of talks among the countries along the so-called migrant route was recently held in Vienna. The meeting showed that a common EU approach to the problem is still non-existent. Does this concern you? - I think it is not exaggerated to say that the EU was literally overwhelmed by the magnitude of the refugee and migrant crisis that hit the Union last year and is far from being over. Or, to be more precise, which hit some of its members particularly hard, among them Austria, who last year Even with the highest degree of unity and unanimity, solutions would not alone accepted close to be easy to find and implement: the best agreed relocation scheme for an 90,000 asylum-seekers, the second highest figure equal distribution of refugees will not work if people refuse to go to certain per capita among all EU countries – there are EU member states which offered to host a certain member states. It turned number of refugees, but which are still waiting for the first arrivals… out that the existing EU instruments, like the Dublin regulation, were only suited for sporadic cases migrant crisis endanger the very idea of unity of asylum seekers, not for that kind of mass inin the EU? flux. And, of course, it is difficult if not impos- It is true that the very spirit of solidarity, and sible to repair a ship in the midst of a storm, hence unity itself – for there is no unity without besides the fact that there a quite contrasta reasonable degree of solidarity – is being put ing views about where to start with the repair to a serious test. However, even with the highworks. In that situation of utmost urgency, reest degree of unity and unanimity, solutions gional approaches, of which Serbia is part, had would not be easy to find and implement: the to be envisaged. best agreed relocation scheme for an equal

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including budgetary support. And the problems, the respective search for solutions, cannot be reduced to merely financial aspect alone. One must have a reasonably clear understanding as to who should do what apart from providing food and shelter. • How far are we from implementation of the proposal that Austria assist Serbia in controlling the border with Macedonia by deploying its policemen and soldiers in that area? This was proposed by Austrian Chancellor Kern at his last meeting with Serbian Prime Minister Vučić. - Austria also clearly recognises the role Serbia plays in tackling the crisis and the need to provide assistance therein. Therefore, already at a very early stage, it sent a number of police officers to the border with Macedonia and is ready to do so again in order to help, this time to strengthen the control of the Serbian-Bulgarian border.

There are a number of reasons for this specific interest Austria has for the Autonomous Province of Vojvodina: historical links, geographic proximity – by air, Graz is closer to Subotica than Niš – and precisely the fact that, as an Autonomous Province, it is a natural partner for Austria’s federal regions, the “Bundesländer”. Styria, for instance, is one of those that has longstanding contacts and cooperation with Vojvodina distribution of refugees will not work if people refuse to go to certain countries – there are EU member states which offered to host a certain number of refugees, but which are still waiting for the first arrivals… • The Serbian delegation warned of an increasing influx of refugees and the financial problem it is facing. Do you believe this appeal will be understood? - Serbia indeed carries a considerable burden and it needs corresponding assistance. And this is also understood by international donors. The EU, for instance, has so far provided around €40 million, through various channels,

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• During your career you’ve also headed the EU office responsible for enlargement. With this in mind, how would you assess the recent statement of Professor Florian Bieber, of the University of Graz, that the Western Balkans is no longer in the EU’s focus due to serious internal problems – namely Brexit and the migrant crisis? How realistic are the prospects of further enlargement after 2020? - Not being in focus does not necessarily mean being forgotten or neglected. And this year’s Western Balkan summit in Paris, held immediately after the referendum in the United Kingdom, was proof that, despite pressing issues like the aforementioned one, the Western Balkan Enlargement Process remains high on the agenda. And it will certainly remain high on the agenda of Austria’s foreign policy; the road embarked upon in Thessaloniki must not end in the middle of nowhere. There is admit-


Austria is a federal state with a total area of 83,858 sq/km and consists of nine provinces – Burgenland, Carinthia, Lower Austria, Salzburg, Styria, Tyrol, Upper Austria, Vienna and Vorarlberg.

tedly no clear answer as to precisely when and how the goal of full membership will be achieved – but it is certain that convincing reform programmes in the individual candidate countries will greatly help to bring more clarity.

I am glad to confirm that our embassy’s activities both contribute to and also reflect the high level of our bilateral relations and cooperation. So, when we speak about further improvement it is like raising a hotel from “five stars” to “five stars+”! But there is, of course, always room to do more and to do it better

• You also spoke recently about the need to strengthen the link between the Autonomous Province of Vojvodina and Austrian regions, in an effort to advance bilateral cooperation, in which Vojvodina is the focus. What is most interesting to Austrian partners in that province?

- There are a number of reasons for this specific interest Austria has for the Autonomous Province of Vojvodina: historical links, geographic proximity – by air, Graz is closer to Subotica than Niš – and precisely the fact that, as an Autonomous Province, it is a natural partner for Austria’s federal regions, the “Bundesländer”. Styria,

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do more and to do it better. I would, for instance, wish to see more direct contacts between towns and municipalities, or between schools and youth in general. • You have been in Serbia for almost four years and citizens are likely less aware that you speak many languages fluently and that you recently translated Filip David’s NIN Award-winning novel “The House of Memory and Oblivion” into German. Why did you choose that particular novel and how do you see contemporary literature in Serbia? - Through the years that I have been fortunate enough to spend in Serbia, I succeeded in mastering the Serbian language to the extent to which I can also enjoy in its literature and theatre. And, with hindsight, I would have deeply regretted it if I could not! There is a broad variety of styles and subjects in contemporary Serbian literature and what is also interesting is the I felt that it is not sufficiently known what the Holocaust also meant for number of well-known writSerbian Jews, and so I ventured into the translation of this [Filip David’s ers who have links to Ausnovel] disturbing and fascinating book, in order to make it accessible to tria in one way or another, to German-speaking readers. It was my first translation from Serbian and, name just Dragan Velikić or indeed, the first Filip David work ever translated into German Barbara Marković. So, it was by following cultural life here that I became aware of Filip David’s for instance, is one of those that has longstandnovel when he got the NIN Award. It is a very ing contacts and cooperation with Vojvodina. complex book with different layers, a deeply moving and indeed shocking testimony of what • The Austrian Embassy has been one of the happened here to Jewish families, and particumost active in Serbia for many years, which larly children, during the Nazi occupation. Judghas certainly improved bilateral cooperation ing from myself, I felt that it is not sufficiently between the two countries. Where do you see known what the Holocaust also meant for Serroom for the further improvement of cooperabian Jews, and so I ventured into the translation between Austria and Serbia? tion of this disturbing and fascinating book, in - I am glad to confirm that our embassy’s activiorder to make it accessible to German-speaking ties both contribute to and also reflect the high readers. It was my first translation from Serlevel of our bilateral relations and cooperation. bian and, indeed, the first Filip David work ever So, when we speak about further improvement translated into German. With this, I hope that it is like raising a hotel from “five stars” to “five a great Serbian writer will find his admirers stars+”! But there is, of course, always room to among German-speaking friends of literature! ■

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INTERVIEW

The EU’s Future Can Be

SETTLED THROUGH SHARED EFFORTS Austria faces a stark choice for its head of state: Green Party professor Alexander Van der Bellen or Norbert Hofer of the far-right Freedom Party, who won a decisive victory in April’s first round of voting

ERHARD BUSEK, PH.D., SPECIAL COORDINATOR OF THE STABILITY PACT FOR SOUTHEAST EUROPE

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he current presidential elections in Austria are a completely new move. The candidates traditionally come from the two governmental parties, but this time their representatives did not succeed in the first round of the election. The background to this rift between candidates Van der Bellen and Norbert Hofer is the current political situation with the up and coming “Freedom Party of Austria”, which is without a doubt a right wing party. This is why their candidate, Norbert Hofer, is trying to appear like a softy. Nobody knows what position he might have after the elections,” says Erhard Busek in an exclusive interview for this special “Partners” edition covering the Austrian-Serbian bilateral relationship.

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• Could Hoffer’s possible victory lead to a change in the course of Austrian foreign policy? - For the moment, Hofer does not favour Austria’s exit from the European Union, but nobody knows what will really happen if he is elected. Migrants and tolerance is a general debate in Austria, and Hofer is not alone in being critical with regard to migrants and also limited tolerance. • Considering the large number of Austrian voters with Serbian origins, who do you think will be their favourite in the election? - The majority of Austrian Citizens with Serbian origins are tra-


POLYTECHNIK LUFT-UND FEUERUNGSTECHNIK GMBH Systems and tools for environmental protection ditionally in favour of “The Freedom Party of Austria”. The head of “The Freedom Party of Austria”, Strache, was always against the independence of Kosovo and therefore he was also campaigning for Serbian votes in a very direct way. It is also interesting that this party shows some sympathy for Vladimir Putin.

Energy From BIOMASS

• Have you changed your stance - expressed back in the year 2000 - that Kosovo should be independent? - I did not change my mind. • How do you see Serbia’s EU accession process? - The prospects of Serbia joining the European Union are really positive. I think it is really moving forward, because the government in Belgrade is doing a lot to move the country closer to the European Union. • How would you assess current regional relations in the Western Balkans?

For the moment, the European Union has a lot of internal problems that make it more difficult to determine a timeframe for the European perspective, but Brussels is still interested, as are some member states in particular, like Germany and Austria - Regional Cooperation in general has to grow in Southeast Europe. Not all opportunities are being used to achieve better results in the region by creating more cooperation. For example, in infrastructure and in the economy, and in cooperation that doesn’t relate only to the migrant issue. The friction you are asking about is not very helpful, but it is always a responsibility of both parties.

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he Austrian company Polytechnik Luft- und Feuerungstechnik GmbH, established in 1965, is one of the most important and successful suppliers of firing systems for different types of biomass and is renowned for planning and providing turnkey systems and installations, a specialist for difficult tasks. The company’s current export rate amounts to approximately 99%. The company offers these firing systems in a performance range from 300kW to 30,000kW (individual boiler output). Depending on the type and water content of the fuel. The respective media carriers are warm water, hot water, steam, or thermal oil, in a wide range of applications. The systems can be used for heating and process heat as well as for power generation (steam and ORC process). The performance range extends from 200kW to 20,000kW of electrical power (current). More than 3,000 Polytechnik systems are already in use worldwide. ■

• You are coordinator of the Southeast Cooperative Initiative (SECI), which was initiated by the U.S. as a means of supporting the Dayton Peace Accords. Twenty years after its signing, how would you evaluate the functioning of this agreement? - I was always very critical of the Dayton agreement, because the arrangements concerning the statute of Bosnia-Herzegovina are not sustainable. The differences between Republika Srpska and the Federation are obvious. The international community is always waiting for a move within B-H itself, but obviously there is nothing really happening. The move in Republika Srpska towards an independence referendum was not really helpful. • Many consider that Serbia’s EU accession prospects are rather vague, while the Western Balkan region is no longer in the EU’s focus. What is your assessment of this issue? - For the moment, the European Union has a lot of internal problems

PO LYTECH NIK Luft- und Feuerungstechnik GmbH Feuerungstechnik GmbH - Ogranak Novi Sad Narodnog fronta 89, 21000 Novi Sad, Srbija Viktor Radić, dipl.inž.maš., Regionalni menadžer Mobilni: +381(0) 65 202 6424 E-mail: v.radic@polytechnik.at, www.polytechnik.com BUSINESS PARTNER AUSTRIA

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that make it more difficult to determine a timeframe for the European perspective, but Brussels is still interested, as are some member states in particular, like Germany and Austria. This is shown by the Berlin Process, which created some forward momentum in the last two years. • From the Austrian perspective, how do you see the future of the EU? Are you concerned when German Foreign Minister Steinmeier says that there is a fear that the EU could meet its end?

• How would you rate general bilateral relations between Austria and Serbia? - In general, relations between Serbia and Austria are quite good. Current foreign minister Sebastian Kurz always expresses some friendly statements, but it really depends on what we do for different countries. In the case of Serbia, Austrian foreign policy and the business community are still very much engaged. • Alongside very good economic cooperation, Austria has also engaged in helping Serbia with the reform of education, by proposing the model of dual education. Given that you personally participated in the reform of the education system, what do you think of that model? - The system of the dual education model is really important. It represents one of the possibilities for the economy to move forward, but it is not an isolated field. It also has to be implemented in both school and university education. We are trying to contribute, for example, via the Centre of Advanced Studies, now based in Rijeka, which promotes cooperation for the region and is proceeding quite well. The dual education model is not in favour of a cheap labour force, but rather higher quality among educated people, which enables them to compete as business heavyweights!

• You made an appearance earlier this year as a lecturer at the Faculty for Media and Communications (FMK), where you spoke about the media as a prerequisite for greater democracy. How would you rate the media scene in the region? - The situation of the media – not only in the region, but in In general, relations between Serbia and Austria are quite good. Current general – is for the moment reforeign minister Sebastian Kurz always expresses some friendly ally horrible, but a free media is a precondition for more destatements, but it really depends on what we do for different countries mocracy and, as such, we have a lot to do in this direction. I am very much engaged in fighting - At present there are a lot of opinions regarding the future of on this, but the real dangers are in other countries more than the European Union. I think it would be better to sit together and in Southeast Europe. create more things in common, because the problems are also On the other side, media investments from the West are common and nobody is able to solve them individually. It should not really a success story in the long run. I think more transparency is generally necessary here, but not only in this region, be considered that Europe represents only seven per cent of the rather across the whole of Europe. world’s population but that it still accounts for more than 20 per cent of the world’s economy. Out of this we have to do a lot! • In the region there is an award bearing your name. It is intended for journalists and media experts who contribute to • Do you believe that the migrant crisis has been brought under control, and what does the inability to reach a consensus improving understanding in Europe. Is the role of the individual in today’s world undermined or exaggerated? regarding steps to combat it say about the EU? - For the moment, we have tough general discussions on this. The - The migrant crisis is still not resolved. We have learned a lot, but right understanding about the role of media and democracy is border control, for example, has not yet really been ensured. This lacking. So far, I am supporting this with the Media Award, but alhas to be done jointly, because of the question of how to control so with a lot of training activities and public discussions. ■ the borders of Greece, with such a great number of islands?

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BUSINESS PARTNER AUSTRIA


MORE POWER TO YOUR ROOF  MORE POWER TO YOUR HOME Braas Monier Building Group is celebrating 50 years of its BRAMAC brand • • •

If all the roof tiles that have ever been produced by BRAMAC were lined up, they would have a total length equivalent to 40 times the circumference of the earth at the equator. Every year we produce enough roof tiles to build 64,000 family homes. To date, the Bramac Group has sold 93,193m² of solar collectors. The heat they generate helps to save about 4.4 million litres of heating oil or 11,600 tonnes of CO2.

Biljana Tomović, General Manager, Bramac Krovni Sistemi d.o.o. Braas Monier Building Group is a leading global manufacturer and supplier of pitched roof products, including both roof tiles and roofing components. Please tell us something about how it all started, both in Serbia and globally? - Bramac Krovni Sistemi d.o.o. Serbia was founded in 2002 and is part of the Braas Monier Building Group. We have been making pitched roof products for almost a century and our expertise, developed over this extended period of time, covers all steps of the manufacturing process. We are one of the few manufacturers to sell both a comprehensive range of concrete and clay tiles for pitched roofs and complementary roofing components designed to cover various functional aspects of roof construction. How can a roof have impact on global climate, as one of the highest priority issues? - The Group continuously develops pioneering innovations for sustainable building, such as roof-integrated solar systems. In that way, the Braas Monier Building Group utilises the full potential of roofs in the interest of sustainability – for the benefit of its customers, as well as for the people of today and for future generations. Is that also applicable to our region? - The Group is headquartered in Luxembourg and has operations in 36 countries, with 120 production facilities. In 2015 the company generated revenue of €1,256.7 million. We are present in Southeast Europe under the Bramac Brand, which is celebrating its 50th Birthday this year. In Serbia we sell premium quality roof tiles and equipment, and are well known for our innovative services. The intelligent combination of roofing, solar technology and insulation opens up a completely new dimension: BRAMAC roofs save and generate energy at the same time, helping to improve our climate. We aim to be socially and ecologically responsible, whilst also being economically successful. What is your strategy to achieve further growth and remain sustainable? Speaking about Monier Group, that would be: • • •

Focusing on product innovation such as developing an extensive range of attractive, cost-efficient and energy-efficient roof systems Expanding our existing product portfolio through opportunistic acquisitions in our core regions Leveraging our existing capacity in line with market recovery, while retaining our competitive cost structure - Leveraging our brands to gain market share across our diverse markets

Regarding Serbian market our main focus is and will be in the years to come on improving services related to customer needs as well as implementing inovative products from Monier portfolio in our market. BUSINESS PARTNER AUSTRIA

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INTERVIEW

More Investment in a

FRIENDLY ENVIRONMENT Around 500 companies with Austrian capital already operate on the Serbian market, and it is up to us to create conditions for as many of them as possible to come. The fact that in Serbia they will find a chamber system that works in accordance with the Austrian model provides additional certainty that I’m sure they will appreciate when deciding to start doing business on our market

MARKO ČADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA, CCIS

efficiency of the chamber system to represent the economy at the national and international levels, and to support companies in strengthening their capacities, to grow and develop themselves, to produce and export more, to be more competitive. By building a unified chamber system that will be fully in the function of the economy – with an efficient service, professional and able to recognise its needs and respond to the requirements of business leaders – we are giving our best contribution to overall reforms in Serbia, the advancing of the business environment, and the recovery and strengthening of the Serbian economy.

A

fter creating legal conditions, we are also creating practical conditions for the Chamber of Commerce & Industry of Serbia to become a strong association of all businesses and entrepreneurs operating in Serbia, and their effective advocate, says Marko Čadež, CCIS president, with whom we discussed the expected effects of the reform of the chamber system and Austrian investments. • How much will reforming the chamber according to the Austrian model contribute to the agility of the Chamber and strengthening its role in reform processes in Serbia? - The aim of the reform and modernisation that we are conducting according to the Austrian model, and with the strong support of the Austrian Economic Chambers, is precisely to raise the capacity and

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• How far has this process progressed? - The recent signing of the contract between the Serbian Chamber of Commerce, all regional chambers and the and City of Belgrade Chamber, which regulates mutual rights and obligations, completed the first phase in building the unified chamber system, which will start operating as of 1st January 2017. Activities are underway on the organisational and functional connecting of all chambers of commerce in the chamber system, which will have a unique business policy, unified organisational and management structure, a package of standardised services and a unique visual identity. Simultaneously, the integration of regional chambers of commerce will ensure that our services and the activities we perform as a public authority, as well as activi-


ties related to supporting the economy in the field, will be as close as day change the Serbian economy from one dependent on imports to possible to business leaders, with us present in the closest place to one that is, like the Austrian economy, a major exporter, with a developed network of trade centres around the world. where entrepreneurs do business, which will significantly save their time and money, as well as increasing operational efficiency. • How much has this compatibility between the models of the two I would remind you that it was less than a year ago, in December chamber systems also contributed to closer cooperation between 2015, with the passing of the law that incorporates the key principles the chambers and economies of Serbia and Austria? of the functioning of the chamber systems of Austria and other advanced economies, and the introduction of legally-binding, compulsory - The Austrian Federal Economic Chamber and the Austrian chamber membership, the representativeness of the Chamber of Commerce & system are more than just ordinary partners for the Chamber of Commerce & Industry of Serbia – they are our role model and our mentor Industry of Serbia was improved. This enables the CCIS to become a in the great job of reforming and modernising the Serbian chamber strong association of all businesses and entrepreneurs that do business in Serbia, an effective and cohesive representative of the harsystem. These activities have further strengthened the partnership monised interests of the entire economy in front of state bodies and between our chambers and improved the inter-chamber cooperation through which encourage the connecting of our economies and international institutions, a place for reaching agreement, presenting individual companies. Around 500 companies with Austrian capital aland representing the agreed positions of all segments of the economy. ready operate on the Serbian market, and it is up to us to create condiModelled on the example of the Austrian chamber, we are establishing a legal-political department as the central point for collecting, processing, polishing The Austrian Federal Economic Chamber and the Austrian chamber system and creating the balanced interests of are more than just ordinary partners for the Chamber of Commerce & the economy. In the meantime, along with Industry of Serbia – they are our role model and our mentor in the great job business associations that bring together of reforming and modernising the Serbian chamber system foreign investors and bilateral chambers, including Advantage Austria Belgrade, we tions for as many large, medium-sized and small Austrian companies have founded the Council of Mixed Chambers as a permanent platform to come to Serbia, open their facilities and include our companies in for the mutual exchange of information and initiatives, and an open, their production and supply chains. And the fact that in Serbia they constructive and high quality dialogue with the Government and state will find a chamber system that works in accordance with the Austrian institutions, in order for us to jointly and regularly review proposals and model provides additional certainty that I’m sure they will appreciate solve the problems of business leaders. when deciding to start doing business on our market. In parallel with strengthening representation of the economy, we have worked to strengthen service roles - raising our capacities, improving existing services and creating new ones, such as e-services. • How ready is Serbia to attract serious Austrian investments in the IT sector and other areas related to advanced technology? • What are you currently working on and what are the next steps? - We have an expressed interest in there being as much investment as - The further digitisation of our services, and the digitisation of the possible in the coming period in manufacturing and high-tech exporteconomy, is one of the key priorities. As in the previous period, we orientated sectors. According to the statistics of the Austrian Central are engaged in preparations for the introduction of dual education in Bank – by year’s end 2015, companies from Austria had invested here the school system of Serbia and the implementation of pilot projects as much as almost three billion euros. The largest individual Austrian with Austrian, German and Swiss partners. We are also developing the investments are precisely in the field of modern technologies. Telekom Austria Group, in addition to the initial 320 million euros it paid in concept of the future presentation of our economy in the world with a November 2006 for the mobile operator license, continued its investview to the Austrian economy, with the intention and the desire to one

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ments so that the company’s total investment in Serbia over the past ten years, according to company data, exceeded 900 million euros, which ranks it among the biggest greenfield projects in Serbia. Operations in Serbia have also been launched by Austrian company Zumtobel Group, the world-famous manufacturer of cuttingedge LED lighting, one of the leaders in the field of innovative lighting solutions and the production of accompanying components. It has relocated its design centre from Poland to Belgrade, while the Belgrade

edge and able to satisfy the requirements of the markets of developed countries, to comply with the demanded quality, processes and deadlines, to deliver high quality goods and services on time and at competitive prices. The Chamber of Commerce & Industry of Serbia is focused in particular on support for strengthening the capacity of local companies to produce and export more, to educate themselves, to satisfy the required standards, to connect with potential partners – investors and customers abroad – and to include themselves in the production and supply chains of large companies, both domestic and foreign. In the last two years we have organised more than a hundred meetings, from classic days of suppliers, to similar events at which our companies had the opportunity to present their business possibilities, capacities and references, and at which foreign corporations could reach the best suppliers. For example, in the last two-three weeks, representatives of Germany’s Eberspächer were here again to engage in discussions with companies that have entered the final selection, we organised a Day of Suppliers with Austria’s Cumtobelom, and B2B discussions of our companies with Albanian, Turkish, Korean, Russian, Polish, Slovenian and Macedonian firms. Our companies are also helping each other with mutual networking, through clusters and consortia, both national and regional, in order for them to use such association to be able to satisfy the requirements of large companies, local markets and third markets.

office also became its regional cenThe CCIS is focused in particular on support for strengthening the capacity tre as of 1st May, covering the marof local companies to produce and export more, to connect with potential kets of Serbia, Montenegro, Turkey partners and to include themselves in the production and supply chains of and Central Asia (Armenia, Georgia, large companies, both domestic and foreign Azerbaijan, Turkmenistan, Tajikistan, Uzbekistan, Kyrgyzstan and Kazakhstan). This confirms the company’s intention to expand its operations • Next spring will see Serbia host the Sixth Summit of the EU and in Serbia and Southeast Europe, and to remain on this market in the Southeast Europe. What will this event mean for Serbia and the region? long term. This also testifies to the advantages of Serbia as an invest- For a country like Serbia, hosting major international conferences, ment and business destination, and its ability to attract investment in and particularly summits of this format, is simultaneously recognition and also a chance to raise its visibility and present its economic the advanced technologies sector. Alongside other advantages, such potential. For the Chamber of Commerce & Industry of Serbia, as the as geographic position or a favourable tax system, representatives co-organiser, it is a challenge to justify the confidence placed in it and of the company also single out the highly educated and skilled people to meet the expectations of an experienced partner like The Econowho are able to become part of large companies. mist Event, especially after the successful organisation of this year’s And when it comes to Serbian IT companies, they have international experience, are capable of cooperating with Austrian colsummit, which was hosted by Austria. Prior to Austria, this summit leagues and on the most complex international projects, and of apwas organised in Bulgaria, Romania and Croatia. pearing jointly on third markets. Otherwise, this event is an opportunity for representatives of EU institutions, governments and the business and academic communities • Despite there being great expectations that Serbian compaof the region to jointly debate topics and discuss issues of common nies could become suppliers of Austrian and German companies, it interest for the economic prosperity of Southeast Europe. For CCIS seems that a large number of local businesses are not, as yet, up to member companies, which will be able to participate in such an event in the task. What can the CCIS do in this domain? Belgrade in larger numbers, this summit is a good place to acquire useful contacts and exchange opinions and experiences with representa- German and Austrian companies, whether they are importers of our tives of the European Union, the countries and economies of the region goods or investors in Serbia, can count on Serbian manufacturers as and the business community, which is useful for creating optimal solureliable suppliers and partners. Serbia has a long industrial tradition tions for our economy in the upcoming European integration, but also and our companies possess the knowhow required to do business for business talks with companies from other countries. ■ with foreign partners. They are flexible, willing to acquire new knowl-

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CORPORATE

JELENA KNEŽEVIĆ, Managing Director, Leitner Leitner

Safety Net

FOR CLIENTS We at LeitnerLeitner are able to put our knowledge at the disposal of clients so they can develop their businesses steadily

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ith our support, clients can tap into the full potential of their business, says Jelena Knežević, Managing Director at Leitner Leitner.

- This question is very interesting for all companies that provide accounting and consulting services. Continued work on the legislative regulations by the government and competent authorities of the Republic of Serbia should enable significant improvement on the market, but we have often seen such undertakings impose excessive charges. One good example of this is the enactment of the regulations on the method of keeping VAT records in October 2016 (the Rulebook). The Rulebook introduced significant novelties in the area of VAT records and was scheduled to become applicable as of 1st January 2017. However, the deadline was too tight and the change represented a significant burden for companies, as they were not given sufficient

tation of the Rulebook until January 2018, with the aim of including all market participants in the fight against the shadow economy. • One of your areas of expertise is auditing. How do local companies relate to audits and auditors, and what difficulties have you encountered when creating these reports? - A significant development of the auditing profession has been recorded in the last five years, and this development is conditioned by the development of the capital market. It is important to emphasise that the auditor not only provides the audit report, but also services that can help a company’s management to improve their business and their system of internal controls.

• To what extent is the tax system in Serbia compatible with that of the EU and what is the “Serbian specificity” when it comes to this area? - On its road to EU membership, Serbia has been harmonising its tax legislation in order for it to be in accordance with EU legislation. According to the 2015 Report of the EU Commission on Serbia’s progress towards EU membership, Serbia is rated as moderately prepared in the area of taxation. Capacity building of the Tax Authority remains one of the crucial The auditor not only provides the audit report, but also services success factors for the modernithat can help a company’s management to improve their business... sation of the Serbian tax system. Domestic companies are still adapting to the advisory role of auditors In the years to come, improved tax collection will be one of the governtime to adapt their software and fulfil their leDomestic companies have taken on the obliment’s main priorities, laying the ground for more tax incentives that will enable a stable gal obligations. Luckily for taxpayers, the Mingation of having an audit that is prescribed by business environment. the law, but they are still adapting to the adviistry of Finance has established successful cooperation with various trade and professional sory role of auditors. It is necessary to improve • How do you evaluate Serbia’s accounting associations over the past few years. Thanks awareness among companies and introduce system and do you consider the system as to this cooperation, the regulatory authorities them to what auditor can do, so that the skills being to blame for a lot of paperwork in the recognised the importance of dialogue among and knowhow of the auditor can be properly field of accounting? interest groups and postponed the implemenimplemented and utilised. ■

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INTERVIEW

Reforms Are PAYING OFF

The Serbian Government's firm commitment to follow the EU path definitely reinforces the trust and confidence of the Austrian business community in Serbia. The 2nd AUSTRIA CONNECT conference 2017 - the largest gathering of Austrian companies active in the Balkan markets - will take place in Belgrade and provide new business opportunities

ERIKA TEOMAN-BRENNER

COMMERCIAL COUNSELLOR AT THE EMBASSY OF AUSTRIA IN BELGRADE

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DVANTAGE AUSTRIA is very active in supporting closer ties between the Austrian and Serbian business communities, and in contributing to increasing commercial relations between the two countries, says Erika Teoman-Brenner, Commercial Counsellor at the Embassy of Austria in Belgrade. In this interview, Ms Teoman-Brenner speaks about visible progress in the business climate in Serbia, due to reforms, and further steps that are needed when it comes to the rule of law and, more specifically, to transparency and the length of administrative and regulatory procedures. “Any improvement in these areas will impact directly on the outlook of a potential foreign, but also domestic, investor”, says Teoman-Brenner. • How do Austrian companies that already operate here assess the overall business atmosphere in Serbia and what are their forecasts like when it comes to doing business in the coming year? - We know from our latest survey and our daily contacts with companies in Austria and here that their outlook for their future business in Serbia has slightly improved over the last year. They have succeeded in adjusting to the conditions of the market and have adopted their business model accordingly. For those who operate here in manufacturing, Serbia is

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certainly very competitive in terms of labour costs. The service sector, in turn, is very dependent on the domestic demand and sees certain limitations. On a more general level, the firm commitment of the Serbian government to follow the EU-path, definitely re-enforces trust and confidence in the future on the part of our business community. • Zagreb recently hosted the conference AUSTRIA CONNECT - the first and largest gathering of Austrian companies active in the markets of the Balkans, which had a panel discussion dedicated to Serbia. From the perspective of potential Austrian investors, what are Serbia’s main advantages and in which areas do investors have reservations? - Actually, the panel discussions were focusing on project financing by international financial institutions in the respective countries. Regarding Serbia, we had invited the director of the German KfW to present their activities in Serbia. We all know that Serbia needs to invest a lot to upgrade its infrastructure, and Austrian companies have a lot to offer in this regard. Incidentally, I am happy to announce that our 2nd AUSTRIA CONNECT conference 2017 will take place in Belgrade! When it comes to the general investment climate, Serbia has definitely made significant improvements in the overall


business climate through the reforms in the labour and construction law. Apart from the obvious criteria, like costs of infrastructure and labour, they also evaluate very carefully the framework conditions for operating a business. This applies mainly to the rule of law and, more specifically, to transparency and length of administrative and regulatory procedures. Hence, any improvement in these areas will directly affect the outlook of a potential foreign, but also domestic investor. • We recently had the opportunity to hear good news about the activities of Austrian investors in the fields of real estate and agriculture, for example. In which branches of industry are Austrian investors most interested? - It is hard to identify specific sectors, but what we see currently is the interest of Austrian companies rising in the field of assembling electrical and electronic goods, automotive supplies as well as outsourcing IT services. • Which activities ADVANTAGE AUSTRIA in the year behind us would you highlight as being the most important when it comes to strengthening mutual economic relations? - We had indeed a series of meetings and events which hopefully contributed to an increase of our commercial relations. Apart from

There is rising interest among Austrian companies in the field of assembling electrical and electronic goods, automotive supplies as well as outsourcing IT services our participation in various trade fairs in Serbia, we also invited Serbian companies to trade events in Vienna, for example to the MARKETPLACE AUSTRIA FOOD 2016 or the “FUTURE OF BUILDING” conference including B2B-meetings and site visits of outstanding projects. Furthermore, we had large business delegations from Carinthia and Vienna, each headed by the President of the Regional Economic Chamber. A definite highlight was the visit of the President of the Federal Economic Chamber, Dr Christoph Leitl, to inaugurate our Serbian-Austrian project to support the introduction of dual vocational training in Serbia in cooperation with the Serbian Chamber of Commerce. • Some 440 Austrian companies currently operate in Serbia, which raises economic cooperation to a special level. A delegation of Austrian businessmen from Vienna also recently visited Serbia with the aim of exploring investment opportunities. President of the Chamber of Commerce of Vienna, Walter Ruck, said that so-called green technology is a very interesting sector. Can you tell us what this relates to? -We were very happy to see the great interest on the part of these companies in the future of infrastructure development in Serbia. We all know that Serbia is committed to generating 27 per cent of its energy need from renewable sources by 2020. This is a very ambitious target, but quite a few Austrian companies


and their partners here have the necessary knowhow and experience to take up this challenge. The recent Serbian legislation on the feed-in tariffs and the PPA have definitely given the market a boost and we see a lot of potential for investments in this sector.

of foreign investors in Serbia have also at some point voiced their opposition to this idea. How would you comment on this? - We are convinced that the new organizational structure of the Serbian Chamber of Commerce considerably contributes to strengthening the voice of the Serbian business community vis-à-vis the government and on the European level. This is particularly important in times when a country negotiates its access to the European Union. Our experience also shows that legal membership guarantees that the interests of all companies, be they multinationals or small shop owners, are represented in an effective and balanced way.

• What are your expectations of the announced introduction of the dual education system in Serbia, based on the Austrian formula? Is Serbia ready to accept such a system at this time? - We started out by asking our companies here in Serbia what their needs were in terms of training and recruiting qualified staff. On this basis we sought the cooperation of the Serbian Chamber of Commerce and the Ministry of Education to start a pilot project and we are very pleased that this project is advancing in the right direction. We are also ready to share our experience to formulate the legal framework that is indispenThe system of dual vocational training is the key for youth employment and sable to introduce the crucial economic growth. We see a great readiness on the part of Serbian decision- aspects of dual training, i.e. the makers to adopt such a system active involvement of the companies in the training. We are firmly convinced that a system • To what extent has the reform of the Serbian Chamber of of dual vocational training with a strong emphasis on a flexible Commerce according to the Austrian model contributed to and well-designed company based training is the key for youth establishing more effective contacts with businesspeople in employment and economic growth. We see a great readiness Austria? In what phase of realisation is this project today? on the part of Serbian decision-makers to adopt such a sys-The Federal Economic Chamber and the Serbian Chamber tem, albeit with modifications and adaptations to the requireof Commerce maintain indeed very close relations on all ments of the domestic situation. levels of organization. Indeed, we are very pleased to see that certain elements of our chamber system have been • What can Serbia learn from Austrian experiences regarding adopted also in Serbia. For us, the most important principle the establishing of start-up companies? is probably the productive dialogue between the business - We see that Serbia has a very vibrant and creative startworld and the government. Thanks to the initiative of the up scene, so we are not sure that we can teach them somepresident of the Serbian Chamber of Commerce, Mr. Marko thing… Our experience shows that financing is, of course, Cadez, bilateral chambers and other international business the number one topic when it comes to supporting startrepresentations have been recently invited to join the Counups, and that is probably not different in Serbia. However, it seems that it is not so much the initial financial support cil of Bilateral Chambers as a permanent platform for open that is crucial for the success, but support of the growth and constructive dialogue with the government and state inphase of the company. One could also widen the definition stitutions. This is a very effective and results oriented body. of a start-up company, a term that is usually applied to internet-based, new, innovative and fast growing businesses. • Compulsory membership in the Serbian Chamber of ComSome people in Austria argue that any small new business, merce is to be introduced as of 1st January 2017. It is said that like a carpenter or a plumber, deserves the same support the Austrian Chamber of Commerce has been used as a modand attention as a classic start-up, since innovative ideas el, which has helped to reform chambers of commerce here in and openness to new digital applications are required in orSerbia. Some businesspeople in Serbia oppose this idea, even announcing the launching of court proceedings. Associations der for all of these trades to succeed. ■

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CORPORATE

UDO FILZMAIER, CEO and Founder of System Industrie Electronic Holding AG

Team For

VICTORY TAGOR Electronic d.o.o., based in Niš, has the full value-chain, from a sales team to high-tech engineering services, competitive global sourcing and world-class manufacturing of electronic assemblies

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ystem Industrie Electronic Holding AG from Austria (SIE) and Niš’s TAGOR Electronic d.o.o. (Ltd.) had long-term successful cooperation that grew over time into a strategic partnership, which has yet to show all of its capacities.

- At Tagor we are different from many other foreign direct investors in the manufacturing industry in Serbia. We are a company, not just a factory. TAGOR competes and sells its Electronic Manufacturing Services (EMS) in the EU and the Balkans. We have the full value-chain, from our sales team bidding on and winning customers, via high-tech engineering services and competitive global sourcing, to the worldclass manufacturing of electronic assemblies. Only a small portion of TAGOR’s capacity goes to its sister companies. Most FDIs, on the other hand, focus on one or the other aspect only, with many focusing on outsourcing their own labour needs to Serbia. With our approach, we can provide the immense labour and engineering skill and considerable cost-advantage of Serbia to the EU

- We are working with TAGOR on many levels. It has always been the company’s goal to be recognised as an “Austrian” EMS, i.e. a company that is trusted and esteemed for its quality, reliability, professionalism, expertise, precision and speed. We are working hard with the management to exceed the expectations of European customers in all of these dimensions. Multiple long term-contracts and a large and growing number of excellent audit results prove that this is successful. At the same time, we are helping TAGOR win customers in the EU, currently focusing on Germany, Austria and Switzerland, while we are building up an appropriate sales presence there. TAGOR will also show very strong growth in the coming years and we will multiply the company’s capacities. All these are ar-

• Niš-based TAGOR Electronic d.o.o. has received a strategic investment from SIE Holding. What were the major reasons for that decision? - This decision was really easy to make. As a company that develops high-tech products for the medical device and security markets, we already had a longstanding business relationship with TAGOR, as a reliable supplier. I personally knew and trusted the founders and we had the experience that TAGOR is a great company. The second reason was timing. On our side, we were actively scanWith our approach we can provide immense labour and engineering ning the market and the region for skill and the considerable cost-advantage of Serbia to the EU and an investment opportunity with a regional customers across the entire value chain lot of growth potential that fit our industry experience. At the same and regional customers across the entire value eas where we bring substantial experience and time, Goran and Tamara Jovanović, TAGOR’s chain. This concept has already proven very where our competences and TAGOR’s match founders and Managers, were seeking a foreign partner to help the company to outgrow attractive to a substantial number of internaperfectly. tional and very well-known customers in differthe regional market and become a major interFinally, we continue to work on differennational player. Together we are now making ent high-tech fields. For 2017 our revenues are tiating between Tagor and its competitors on rapid progress towards these goals. projected to grow by more than 100 per cent. the basis of world-class value add services. If you have an electronics manufacturing requirement, look no further! Especially if engineering • Where do you see the biggest potential for • How will SIE Holding help the advancement capability is also of interest to you. ■ the growth of TAGOR Electronic? of its Serbian partner?

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ECONOMY

Combatting Unemployment

A PRIORITY

AUSTRIAN CHANCELLOR CHRISTIAN KERN

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he Austrian economic system can be characterised as a free market economy with a strong social focus that also takes into account the weaker members of society. Austria also features a tried and tested system of economic and social partnership, which has traditionally played a strong and reconciliatory role in wage and price policies. Austria is a highly developed industrialised country with an important service sector. The most important industries are food and luxury commodities, mechanical engineering and steel construction, chemicals, and vehicle manufacturing. In the field of agriculture, Austria is witnessing a strong trend towards organic farming. With an overall share of 11.9%, organic farms in Austria occupy a leading position among the EU Member States. In this organic branch of agriculture, 88.1% of enterprises are dedicated to livestock farming. As regards raw materials and energy production, Austria can draw on an abundance of resources. It has natural resources of iron ore, non-ferrous metals, important minerals and soils. The constant

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The Austrian Federal Government wants to further improve the framework for entrepreneurship by curbing bureaucracy, deregulating, supporting new companies, especially start-ups, and combatting unemployment as a priority. The government also continues to follow its course of stabilityorientated, sustainable and growth-orientated budget and economic policy growth of the industrial sector, however, increasingly requires supplementary imports. This is also true of fuels, energy resources and the electricity-generating industry. Austria has its own resources of petroleum and natural gas. The generating of hydroelectric power is constantly being expanded, making Austria the leader in the field of hydroelectric power in the European Union. Austria’s industrial and commercial sectors are characterised by a high proportion of medium-sized companies. Austrian industry covers every branch of manufacturing, from basic goods to the labour-intensive production of highly processed products. The construction of plants and systems (encompassing the planning, delivery, and assembly of turn-key production facilities, including the required knowhow and operational expertise) is accounting for an increasingly important share. This field is strongly exportorientated, as is the electronics sector (including, for instance, the production of integrated circuits). Austria is world-famous for its arts and crafts, most notably fine hand-crafted items, customised jewellery, ceramics, and glassware.


Small and medium-sized enterprises (SMEs) are the backbone of Austria`s economy. In 2012, 99.6 percent, respectively more than 313,700 enterprises of the total business economy, were SMEs.

Tourism is an essential pillar of the Austrian economy. Austria is a mountainous country with one of the largest natural land reserves in central Europe. In the global political arena, Austria is increasingly becoming an international meeting point, which is illustrated by the large number of summits and conferences held there. At the same time, the country’s relevance as a vital transit country between the economic areas of Europe is increasing, especially for European energy supplies, including petroleum, natural gas and electricity. In order to continue on this path and strengthen foreign trade integration, the “go international” promotion initiative supports Austrian enterprises in opening up new markets based on new products and services, so that Austria can profit from the growth potential of promising markets and cushion possible effects of political and economic crises in regions of conflict. The recovery of the Austrian economy is further bolstered by demand stimuli mainly resulting from the reduction of the tax burden by wage tax reform. The Federal Government wants to further improve the framework for entrepreneurship, for example, by curbing bureaucracy, deregulating and supporting new companies, especially start-ups. Combatting unemployment is a priority. AUSTRIA IS A HIGHLY DEVELOPED INDUSTRIALISED COUNTRY The Federal Government also continues to follow its course of stability-orientated, sustainable and In the field of agriculture, Austria is witnessing a strong trend growth-orientated budget and ecotowards organic farming. With an overall share of 11.9%, nomic policy. The structural deficit organic farms in Austria occupy a leading position among the adjusted for cyclical and one-off efEU Member States. In this organic branch of agriculture, 88.1% fects decreased continuously in the of enterprises are dedicated to livestock farming past few years. In 2015, the structural balance showed a slight surplus. Austria‘s budget policy aims at maintaining its sustainable orientation. SUPPORTING INVESTMENTS, In this context, the following actions are given priority: STRENGTHENING COMPETITIVENESS • Further reduction of bureaucracy and deregulation; Backed by favourable financing conditions and an increasing • Implementation of the major tax reform 2015/2016, while nonneed for replacement investments, investments are again picking wage labour costs of enterprises will be gradually reduced by up to up. For the first time in three years, construction investments are €1 billion per year until 2018; also expected to grow this year, thanks to increasing housing con• Stepping up investments for the future in order to strengthen struction; the federal residential construction initiatives (housing the growth factors of Austria‘s economy (e.g. start-up package); investment bank WBIB, Austrian Real Estate) will further accelerate this also comprises the digitisation initiative and measures aimed the positive trend of construction investments. Through WBIB, new at addressing the labour market and employment situation; ground is broken insofar as European funding is used for residential • Continuation of structural reforms.

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AUSTRIA HAS CAUGHT UP SIGNIFICANTLY IN THE FIELD OF RESEARCH AND INNOVATION OVER THE PAST 15 YEARS

FOCUSING ON RESEARCH AND EDUCATION As international comparisons show, Austria has caught up significantly in the field of research and innovation over the past 15 years. The R&D ratio is above three per cent and, as such, markedly exceeds the EU average of two per cent. As a result, Austria records the third-highest R&D ratio of all EU countries. Further efforts are needed to continue this successful track record. A decisive impetus is the increase of the research premium that has already been adopted. In the next few years, a substantial challenge will be to raise private and public R&D and promotional budgets in order to achieve, by 2020, the objectives agreed in the 2011 Federal Strategy for Research, Technology and Innovation. The targeted and strategic application of open innovation is aimed at improving Austria‘s competitiveness significantly and generating a dynamism that could not be achieved by means of traditional methods. The international dimension is also becoming ever more important in the field of research, technology and innovation, in particular with a view to non-European countries.

construction in a budget-friendly and Maastricht-neutral way. Business investments result both in an economic stimulus and Business investments result in the introduction of new technologies and processes that, in both in an economic stimulus and in turn, raise competitiveness. Therefore, it is necessary to create the introduction of new technoloa favourable investment climate not only with regard to the gies and processes that, in turn, business cycle, but also in the medium and long term raise competitiveness. Therefore, it is necessary to create a favourable investment climate not only with Therefore, the “Beyond Europe” and “Global Incubator Network” regard to the business cycle, but also in the medium and long term. programmes support Austrian enterprises in their efforts toOne of the main reasons for the reluctance to invest is weak domeswards further internationalisation. tic demand coupled with low sales expectations in the euro zone. Yet Education and innovation shape the future of society and deanother restraining factor is the financing situation for start-up entermine the lives and professional careers of our young people. A trepreneurs. In order to reduce the dominance of credits in corporate comprehensive reform of education sectors is the sustainable refinancing, the focus is increasingly on alternatives, such as the equity sponse of the Austrian Federal Government to the challenges in the initiatives of the public promotional agency Austria Wirtschaftssereducation and school system of today and tomorrow. With this, the vice (AWS), as well as the strengthening of crowdfunding. The Alterbasic competences, talents, interests and gifts of children are to native Finance Act (Alternativfinanzierungsgesetz) establishes an be strengthened right from the start, regardless of children’s social innovative, modern legal framework for crowdfunding and public background. Within the framework of the existing budgetary path, participation models in Austria that can serve as an example for Eumore pedagogical, organisational, personnel and financial leeway is rope. Additionally, the public sector makes effective investments for to be opened up at schools. the future, for example, in the € 1 billion broadband initiative.

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EXPLOITING THE POTENTIAL OF THE DIGITAL SHIFT OPTIMALLY Digital Roadmap Austria is designed to shape the digital shift optimally, in order to strengthen Austria as a location for doing business and innovation and enable all people to benefit from its advantages. Digitisation already pervades all policy areas today: it plays a special role in research policy, in which specific programmes are implemented. Additionally, digitisation is relevant in numerous other fields. “Industry 4.0� relates to the integration of cutting-edge information and communication technologies into products and processes in manufacturing and logistics across technologies and enterprises. This creates great economic possibilities and new employment opportunities for Austria as a location for industry that are promoted by targeted measures, such as pilot factories, research

TOURISM IS AN ESSENTIAL PILLAR OF THE AUSTRIAN ECONOMY

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THE REDUCTION OF NON-WAGE LABOUR COSTS, INITIATED IN 2016, PROVIDES INCENTIVES FOR GROWTH AND EMPLOYMENT

The reduction of non-wage labour costs, initiated in 2016, and the decrease of tax rates in the course of tax reform provide incentives for growth and employment. It is to be expected that both corporate and public investments will generate stimuli for the labour market. In addition to combating unemployment, increasing employment among older workers and women are employment policy priorities – in accordance with the EU recommendations. Apart from additional funding for active labour market policy, the focal areas of employment policy are a bonus-malus system, easier reintegration into working life, in particular for women, based on specific services of counsel ling and support institutions, as well as stronger integration of people with impaired health through targeted assistance, rehabilitation and retraining. Another key issue is integration. At least some sectors complain about a shortage of skilled workers again and again. As a result, it is necessary not only to improve the qualifications of the domestic workforce, but also to identify existing qualifications of migrants, to upgrade them where necessary – in particular with regard to German language skills – and appropriately deploy potential workers. The Recognition Act (Anerkennungsgesetz) made a good step in the right direction.

programmes and endowed professorships. However, digitisation is As international comparisons show, Austria has caught up also on the advance in other areas significantly in the field of research and innovation over the past 15 – in the education sector, but also years. The R&D ratio is above three per cent and, as such, markedly in public administration, transport exceeds the EU average of two per cent and healthcare. This generates potential not only for raising effiMAKING THE MOST OF OPPORTUNITIES ciency, but also for improving quality of life through smart services. Austria’s economic policy faces diverse challenges. At present, At the same time, digitisation also raises challenges that need to be the debate mainly focuses on strengthening economic growth, addressed as quickly as possible, for instance, with a view to fair concombating unemployment and further cutting red tape. Rising digditions of competition, data protection and a changing world of work. itisation is one of the most important topics of the future. Austria has to shape the digital shift actively in order to make the most of CREATING INCENTIVES AND STIMULI FOR EMPLOYMENT new opportunities. The development of innovative products and With regard to the labour market, Austria has played a leading services contributes decisively to securing prosperity in the counrole for a long time, achieving the lowest unemployment rate in the try in the long term. An additional success factor is, and will be, EU. However, a relatively low level of economic growth and rising laEuropean integration, from which a strong exporting country like bour supply has resulted in the unemployment rate also increasing Austria continues to benefit. One thing is clear: we need sensible considerably in the past few years – and continuing to augment in European solutions for transnational challenges. There is no way contrast to the EU average, meaning that Austria has lost its place around that, however difficult they may be. ■ among the top-5 Member States. Development of unemployment rates: Euro area average and Source: Austrian Federal Ministry of Science, best performers  Research and Economy

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THE DUAL EDUCATION SYSTEM IN AUSTRIA

Building Experts Through

PRIVATE-PUBLIC PARTNERSHIP

Austria’s education system is ranked among the best in the world – and it is largely orientated toward the needs of the business world

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jects are often carried out by schools working together with ocational Education and Training (VET), which comthe business community, such as diploma projects focusing, bines theoretical and practical teaching, is applied in for example, on the practical implementation of research and preparing for careers requiring apprentice training, development findings. as well as in higher vocational schools. Curriculum and training courses are tailored to the requirements of the business In addition to focusing on gaining practical experience, the world. Apprentices are professionAustrian education system attaches considerable importance ally trained in companies or gain on-the-job experience within the to specialisation. This not only takes place at universities or context of internships. during a person’s studies, but beforehand, at school In Austrian education, joint pro-

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The principle of statutory health insurance in Austria, combined with the co-insurance of children and non-working partners, ensures that 99% of the entire population enjoy health insurance coverage.

This two-pronged approach is considered to be exemplary throughout Europe and is a key factor underlying the success of Austria as a business location. Foreign investors highly value the specialised skills and the sound, fundamental knowhow of Austrian employees. In order to further build upon these high standards, Austria invests 5.8% of its gross domestic In comparison to secondary level vocational pathways in product on education. Germany and Switzerland, the pathway offered by the Austrian In addition to focusing on gaining practical experience, the VET colleges enjoys the highest academic reputation, given that Austrian education system atit provides full academic access to universities, universities of taches considerable importance applied sciences and short-cycle academic qualification options to specialisation. This not only takes place at universities or durOn the other hand, Austrian enterprises increasingly seek ing a person’s studies, but beforehand, at school. Students to transfer the dual system of apprenticeship to their estabalways have the opportunity to specialise, whether at higher lishments abroad for their own workforce requirements. This secondary technical, polytechnic or business schools. For double dynamic has led to an increasing trend to transfer the example, the Polytechnic Secondary School for Mechanical Austrian dual system of apprenticeship to other countries, inEngineering offers more than ten different courses of study. cluding a number of developing and transition countries, which Three quarters of all Austrians take advantage of this offer has implications for the Austrian Development Cooperation in the school system and successfully complete a secondary (ADC). There is reason to believe that dual system transfer school education. activities will increase in scope and political importance, both In the last few years, Austria has experienced growing inwithin and outside development cooperation. ternational interest in its dual system of apprenticeship. This The Vocational Education and Training (VET) system of is commonly attributed to an increase in youth unemployment Austria displays a ‘dualistic structure’ as it builds on both in many countries in the European Union and beyond, while the dual apprenticeship training and full-time vocational schools. statistics show moderate scores for all core countries of the Austria has the strongest tradition of full-time vocational dual system (Austria, Germany and Switzerland).

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In comparison to secondary level vocational pathways in Germany and Switzerland, the pathway offered by the Austrian VET colleges enjoys the highest academic reputation, given that it provides full academic access to universities, universities of applied sciences and short-cycle academic qualification options. Around 30% of all students in the tenth grade are enrolled in a VET college. There are six major VET college types covering the fields of engineering, arts and crafts; business administration; management and service industries; tourism; fashion and design as well as agriculture and forestry. After three years of relevant professional experience, graduates

First Steps Towards a Dual Education System in Serbia schooling. The historical development of the prestigious VET colleges, which combine ‘higher professional education with sophisticated general education’ builds on this tradition. The VET colleges became institutionalised in their present form in the 1960s, but have their roots in previous centuries. The creation of a strong full-time vocational schooling sector goes back to the influence of French educational ideals (based on full-time school-based VET) imported by Dumreicher in the nineteenth century and even educational reform policies dating back to Maria Theresa’s reign in the eighteenth century. These influences led to a strong school-based VET sector that, in combination with the also significant dual apprenticeship training sector, provided the basis for the creation of the VET colleges. The massive expansion of VET colleges from the 1970s onwards was supported by strong youth demand for VET college qualifications and financing by the Government The VET curriculum takes one year longer than that of the general academic secondary school. In five years, it leads to the double qualification of a VET diploma and an academic baccalaureate: the academic baccalaureate offers general access to higher education, while the VET diploma provides the right to exercise higher level occupations.

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SEBASTIAN KURZ, Austrian Foreign Minister (left), CHRISTOPH LEITL, President of the Austrian Federal Economic Chambers, SRĐAN VERBIĆ, Serbian Education Minister, and MARKO ČADEŽ, President of the Chamber of Commerce & Industry of Serbia

During his six-day trip to the Western Balkan countries, Austrian Foreign Minister Sebastian Kurtz visited Belgrade on 6th February. He praised the impressive pace at which Serbia was implementing reforms and thanked Prime Minister Vučić in particular for “bringing stability to the region“. “Serbia is a very important partner for Austria and the most important country here in the region,” stated Kurz. At the same time, Austria is the largest foreign investor in Serbia. Together with the President of the Austrian Economic Chamber, Christoph Leitl, and Serbian Economy Minister Žejlko Sertić, Sebastian Kurz signed a MoU regarding the dual apprenticeship training system.


Establishment of CCIS Business Academy from most VET Colleges of Engineering, Arts and Crafts and VET Colleges of Agriculture and Forestry can apply for the official title ‘Engineer’ at the responsible ministry. While these engineering titles are not official academic degrees, they nevertheless enjoy a very high reputation in the Austrian labour market. In fact, many graduates from the VET colleges choose to not access higher education studies but directly enter the labour market. When VET college graduates do decide to access higher education, the recognition of their relevant prior learning has to be granted.

Europe is facing a large problem with youth unemployment .The best recipe for combating youth unemployment is a combination of training in enterprises and schools The VET colleges enjoy an excellent reputation both with young people and Austrian employers. They are recognised as enabling students to acquire skills beyond the upper secondary level. For example, in job advertisements there is frequently no difference made between graduates from the VET colleges and bachelor graduates from universities of applied sciences. That is, employers often open the same job position for both VET college graduates and university of applied sciences graduates. One reason why some employers prefer graduates from VET colleges to holders of a bachelor’s degree is the greater proportion of practical training that the VET colleges offer, which is in line with the skills demanded by smalland medium-sized firms that dominate the Austrian economy. However, the VET colleges do not replace the traditional institutional logics and forms of education in the fields of VET and HE, but rather represent an addition to these two fields while at the same time drawing on both of them. This type of change resembles most closely the change mode of layering, allowing VET colleges to become firmly established and even expand as a hybrid located between the systems of dual apprenticeship training and academic secondary schooling. ■

CHRISTIAN HOFFMANN, Managing Director of Modul University Vienna (left), WALTER RUCK, President of the Chamber of Commerce of Vienna, and MARKO ČADEŽ, President of the Chamber of Commerce & Industry of Serbia

Marko Čadež, President of the Chamber of Commerce & Industry of Serbia (CCIS), Walter Ruck, President of the Chamber of Commerce of Vienna, and Christian Hoffmann, Managing Director of Modul University Vienna, signed a Memorandum of Understanding on 22nd September that represents the first step towards the establishing of the CCIS Business Academy. - Modul University has rich experience of educating personnel in accordance with the needs of the economy. Their model cannot be fully replicated, but together we will develop models in accordance with the needs of the Serbian market, said CCIS President Čadež. Among the first activities, according to Čadež, are MBA programmes for advancing the competencies of businesspeople and acquire knowledge for better operations. “We have identified three domains in which Modul University has great experience. These are the areas of tourism development and hotel management, public management and the sustainable development and management of new media and information,” explained the CCIS president. Ruck, President of the Chamber of Commerce of Vienna, noted that Modul University is a scientific institution known for educating personnel in the fields of the economy and tourism, not only in Austria but also further afield. - It is nice that openness and a good climate exist, and that we can offer new solutions in Serbia, where, apart from education, we are also planning joint scientific research works that will be useful for both sides, said Modul University MD Hoffmann. Modul University Vienna is one of Austria’s leading private educational institutions. It was founded by the Chamber of Commerce of Vienna and is the largest private provider of education in Austria. The university’s curricula are approved by the Austrian Accreditation Council.

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MIGRANT CRISIS

Good Host, But For

HOW MUCH LONGER? Austria joined the EU almost 22 years ago, alongside Sweden and Finland. With 67 per cent of the Austrian population voting in favour of membership in a national referendum in June 1994, the accession treaty was signed later that month

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hen 10 more states, mostly from Eastern Europe, But times have changed and the effects of the global financial joined the EU in 2004 – adding 74 million people to crisis were also felt in Austria. Unemployment began to rise and the population of the Union – Austria and Germany those who felt that their jobs were secure found themselves facinsisted on a transition period of up to seven years in ing the prospects of unemployment. which they could exercise control over their labour markets. The As trains full of refugees crossed through Austria it was eviEastern European states had less competitive economies, a lower dent that the women, babies and small children shown in press gross domestic product per capita and significantly lower wages. photographs were only a small minority. The large majority were The considerable differences in income between “old” and “new” able-bodied young men of between 20 and 35. Many Austrians EU member states caused great public concern at the time. wondered how little Austria, whose migrant camps were already Historically, Austria’s reputation for accepting refugees has full to overflowing, could successfully integrate them and, above been excellent. During the Hungarian uprising of 1956, it opened all, find work for them. its borders to thousands of Hungarians. One has only to recall The influx of migrants over the past 18 months is set to lead to James Michener’s famous statement in his book The Bridge at a 35 per cent hike in spending on social benefits in Austria by next Andau (1957), in which he chronicled the uprising: “If I am ever year, according to research commissioned by the City of Vienna required to be a refugee, I hope to make it to Austria.” Much the and conducted by the Austrian Institute of Economic Research. same happened during the Prague Spring of 1968, when Austria opened The past 18 months’ influx of migrants is set to cause a 35 per its borders to let in thousands of cent jump in social benefits spending in Austria by next year, Czechoslovakians. And, during the according to research commissioned by the City of Vienna and Balkan War of 1995, it again took in thousands of people fleeing the forconducted by the Austrian Institute of Economic Research mer Yugoslavia.

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This study stated that two-thirds of social welfare recipients swers must be found,” said Sonja Wehsely, Vienna City Councillor depend on benefits for over 13 months, while only nine per cent responsible for social welfare, as quoted by The Local. gain permanent employment. Tensions over the migrant influx have been running high both Thus, the gloomy prognosis for the coming year is a dramatic within and beyond Austria: at the beginning of September, the Ausincrease in social welfare spending in Austria, up by 35 per cent trian authorities warned that they would sue Hungary if it does not since 2014. Without the migrant influx, according to the study, take back refugees under the Dublin Accord, which stipulates that that increase would only have amounted to 15 per cent. migrants must be sent back to their initial point of entry into the EU. Moreover, the research makes it clear that the “prospects of employment for migrants are particularly Tensions have been running high in and outside Austria unfavourable”. over the migrant influx: at the beginning of September, the Austrian newspaper Krone also Austrian authorities warned they would sue Hungary if the reported on the social spending islatter does not take back refugees under the Dublin Accord, sue, citing a few examples of abuse which stipulates that migrants must be sent back to their by migrants and asylum seekers. initial point of entry into the EU In one case, an unemployed couple of migrants with 11 children have lived in Vienna for years, earning In August, Austrian officials issued a few statements express€5,200 a month in child benefits. In another, a man came to Austria with his wife and five children, and together they received €3,300 ing outrage over Germany’s ‘open door policy,’ which is seen by a month on social welfare. Following such reports, local authorimany in the EU as an incentive for refugees to come to Europe. “Austria is not a waiting room for Germany. The ‘we can do it’ ties say that reforms are required to tackle the crisis. policy is irresponsible,” said Austrian Defence Minister Hans Pe“One can ask the question which integration services must be adopted in order to receive the full guaranteed income... New anter Doskozil. ■

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AUSTRIA – CHAMBER ACTIVITIES 15.11.2016

Memorandum of Understanding Between Advantage Austria Serbia And GIZ Signed Dr. Erika Teoman-Brenner, Commercial Counsellor at the Austrian Embassy in Belgrade, and AnnKathrin Hentschel, team leader of the GIZ project “Reform of vocational education in Serbia”, signed a Memorandum of Understanding between Advantage Austria Serbia and GIZ. The memorandum aims to establish continuous communication and cooperation between the two organisations regarding the introduction of elements of dual education to the educational system in Serbia.

02.11.2016

Dual Education – Training For Mentors

The Commercial Section of the Austrian Embassy in Belgrade – Advantage Austria hosted a business delegation of Austrian companies that was led by Walter Ruck, President of the Vienna Chamber of Commerce & Industry. The aim of this visit was to attract the attention of Austrian companies in various fields, such as construction, banking, environmental protection and others, to projects in Serbia. One of the main points of the programme was also dual education, which the Austrian Chamber of Commerce – via Advantage Austria in Serbia, i.e. the Commercial Section of the Austrian Embassy – is revitalising in accordance with Austrian educational standards. At the headquarters of the Chamber of Commerce & Industry of Serbia, which – alongside the Ministry of Education, Science and Technological Development – is the main partner in the implementation of dual educated, a cooperation agreement was signed between the CCIS and Vienna’s Modul University. By signing this memorandum of cooperation, CCIS president Marko Čadež, Walter Ruck and Christian Hofmann, Managing Director of Modul University, took the first step towards establishing the CCIS Business Academy. The visit concluded with the participation of the Austrian delegation in a meeting of the Austrian Business Circle.

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Early November saw the Serbian Chamber of Commerce & Industry host a two-day workshop, entitled “Train the trainers”, as a joint project of the Commercial Section of the Austrian Embassy - Advantage Austria, the Austrian Development Agency - ADA, the SCCI’s Centre for Dual Education and the Ministry of Education of the Republic of Serbia. Under the auspices of the project to revitalise dual education in Serbia, and in cooperation with retail chains dm-drogerie markt, Delhaize and Univerexport, a group of future mentors was formed and will be tasked with carrying out practical training of traders-trainees within their companies, while students will study theoretical lessons at the Trade School in Belgrade. To this end, Advantage Austria invited Mrs Michaela La Marca from Austria to hold a workshop and introduce 30 future mentors to the pedagogical challenges of this training, which is planned to be launched as of February 2017.

22.09.2016

Vienna Chamber President Visits Serbia


15.06.2016

Debate on The Implementation of The Law on VAT And The Law on Corporate Gains Tax

Austrian tax advisory company Confida Consulting organised a seminar – in cooperation with the Commercial Department of the Austrian Embassy, the Delegation of German Industry and Commerce - AHK, the Swiss-Serbian Chamber of Commerce, the Chamber of Italian-Serbian Businessmen, the Slovenian Business Club and the Hellenic Business Association seminar – on the topic: “Ambiguities in the application of the Law on VAT and the Law on Corporate Gains Tax in the taxation of the activities of foreign entities”, in response to a series of taxation-related bylaws that were adopted at the beginning of 2016. Among the topics discussed were issues of the taxation of permanent business units, such as branches, representative offices and construction sites, as well as using tax credits on the basis of taxes paid abroad, and how and when managerial services between related parties are taxed. Numerous representatives of the aforementioned chambers of commerce and business associations had the opportunity to receive on the spot answers and clarify any doubts regarding taxation laws.

07.06.2016

Austria – Land Of Good Tastes Austrian food industry products stand out in particular for their high quality and creativity. It was with this in mind that the Commercial Section of the Austrian Embassy organised a business meeting in Belgrade under the working title “Austria – land of good tastes”. The event saw fourteen renowned Austrian manufacturers of food products and beverages exhibit their delicacies for Serbian retail chains with a wide range of products, as well as holding a total of 140 individual meetings with the country’s largest retail chains, importers and distributors.

The food industry is one of the leading economic sectors in Austria. Over 200 companies with 26,000 employees produced goods worth €8 billion in 2014; 60 per cent of those products were exported to 185 of the world’s countries. When it comes to the foreign trade exchange between Serbia and Austria, growth was recorded in both import and export rates compared to 2015. Exports increased by over 10% (€550 million), while imports jumped by as much as 15% (€395 million).

16-20.05.2016

Austrian Stand at The 2016 Technical Fair The Technology Fair, held at the Belgrade Fairgrounds, saw seven Austrian companies gather at the joint “Austria” stand, which was organised and financially supported by the Austrian Chamber of Commerce - Advantage Austria. These companies, which are partly already represented in Serbia in the form of subsidiaries, presented their products and responded to questions from visitors. The event culminated with a cocktail reception at the “Austria” exhibitors’ stand, where Austrian companies and their Serbian partners gathered. BUSINESS PARTNER AUSTRIA

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13-15.04.2016

10-12.03.2016

Education Expo – EDUFair

Delegation of the Province of Carinthia Visits

The Commercial Section of the Embassy of Austria one again took part in the education expo in Serbia, EDUFair, which was held this year at Belgrade’s Crowne Plaza Hotel. EDUfair™ has for 13 years assisted students in making choices about their further education and future careers, under the slogan “And what are you going to study?”. The Commercial Section of the Austrian Embassy invited Austrian educational institutions to participate at its stand, in order to present their study programmes in Austria to interested students. Advantage Austria organised the visit to Serbia of a delegation consisting of 24 members – business leaders from the Austrian province of Carinthia, enabling them to probe the Serbian market and refresh old contacts. The event included B2B meetings, organised in cooperation with the Chamber of Commerce & Industry of Serbia, with Serbian companies and exchanges of information on the possibilities of cooperation. The delegation was received by CCIS Vice President Miroslav Miletić with close associates. “We can learn from the experience of the Austrian economy, which developed in the mid-90s from being an economy dependent on import to an export-orientated economy with more than 50,000 export companies, thanks to WKO,” said Miletić. “Austrian business leaders are very interested in the Serbian market and Serbian companies, which could be their suppliers and partners. This is the largest delegation that the Chamber of Commerce of Carinthia has ever sent to visit a country,” said Jürgen Mandl, President of the Chamber of Commerce of Carinthia. The three-day visit culminated with a gathering of Austrian business leaders from the Austrian Business Circle at Belgrade’s Hyatt Regency Hotel, where entrepreneurs had the opportunity to exchange experiences and gain first-hand information from Austrian businessmen already doing business in Serbia.

09.02.16

08.02.16

Memorandum on Dual Education

Universities Sign Memorandum of Understanding After more than 10 years of sharing information and knowledge, the IMC University from Krems, Austria, and the Faculty of Geography of the University of Belgrade have signed a formal Memorandum of Understanding. Cooperation between the universities will be realised through the establishment of joint scientific and research projects, exchanges of students and teachers, as well as numerous other activities. The event was followed by the ‘Austrian Business Circle’, a meeting of Austrian businessmen, in the presence of Austrian Foreign Minister Sebastian Kurz, Serbian Minister of the Economy Željko Sertić, Austrian Chamber of Commerce President Christoph Leitl and the President of the Serbian Chamber of Commerce and Industry, Marko Čadež.

Austria’s Federal Minister for Europe, Integration and Foreign Affairs, Sebastian Kurz, President of the Austrian Economic Chamber, Christoph Leitl, Serbian Minister of Education, Science and Technological Development, Srđan Verbić, and President of the Chamber of Commerce and Industry of Serbia, Marko Čadež, jointly signed a Memorandum on Cooperation in the development of elements of dual education in secondary vocational education in Serbia. The aim of the memorandum is to ensure Austria’s support for Serbia in introducing dual education, which, according to research, can help reduce youth unemployment significantly.

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WIENER STAATSOPER - VIENNA STATE OPERA

Home to the World of

PERFORMING ARTS

The history of the Vienna State Opera is nothing short of remarkable. From its construction in 1869 to today, this historic institution has lived through many great sweeps of European politics. From the culture of the High Renaissance and the declining power of the Ottoman Empire to the fall of the Hapsburg Monarchy and the U.S. Marshall plan, the grandiose building has seen just about anything you can imagine

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he Ottoman Empire and its great Sultans represented an existential threat to Vienna for centuries. Following two immense sieges of the city in 1529 and 1683, the Ottoman tide began to recede back across the Balkans, with the Austrian and Russian empires close behind.

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The threat of the Ottomans, along with that of the Hungarians earlier, led to the construction of one of the most extensive sets of city fortifications in history. But by the mid 19th century these threats were gone and the monumental walls of Vienna were becoming a barrier to trade and commerce.


Tourism is an essential pillar of the Austrian economy. The direct contribution of travel and tourism to Austria’s GDP is forecast to rise by 3.5% per annum from 2015-2025, to €22.8 billion.

Surprisingly, the public was far from pleased with the deIn response to these problems, Emperor Franz Joseph I of Austria ordered the fortifications and moats be destroyed to sign of this centrepiece of the new Vienna. They believed it to make room for a massive ring road, which would become the be insufficiently grand, even if this is difficult to imagine for any centrepiece of his new Vienna. This change was in line with modern visitor. This unfavourable impression was at least partNapoleon’s demonstration in France that wide boulevards ly due to the fact that the level of the Ringstraße was raised by made crowd control much easier. one meter, making the building looking as if it was sinking. The Vienna Court Opera (as the building was called until the The opera house was callously called the ‘Königgrätz’ of fall of the Hapsburgs) was the first major building completed architecture, referring to the disastrous loss to the Prussians along the new ring road. Built in a grandiose Neo-Renaissance in 1866 in response to these criticisms. style to reflect the origins of its art, construction began in 1861 On May 25, 1869, the opera house solemnly opened with and finished in 1869. The structure of the opera Mozart's Don Juan in the presence of Emperor Franz Joseph and house was planned by the VienEmpress Elisabeth nese architect August Sicard von Sicardsburg, while the inHowever, the popularity of the building grew under the arside was designed by interior decorator Eduard van der Nüll. It was also impacted by other major artists such as Moritz von tistic influence of the first directors: Franz von Dingelstedt, Schwind, who painted the frescoes in the foyer, and the faJohann Herbeck, Franz Jauner, and Wilhelm Jahn. The Vienna opera experienced its first high point under the direction of mous “Zauberflöten” (“Magic Flute”) series of frescoes on the Gustav Mahler. He completely transformed the outdated perveranda. Neither of the architects survived to see the opening of ‘their’ opera house: the sensitive van der Nüll commitformance system, increased the precision and timing of the performances, and also utilized the experience of other noteted suicide, and his friend Sicardsburg died of a stroke soon afterwards. worthy artists, such as Alfred Roller, for the formation of new On 25th May 1869, the opera house formally opened with stage aesthetics. While Vienna escaped any serious damage during the dark Mozart’s Don Juan, in the presence of Emperor Franz Joseph years of the First World War, the end of the Austro-Hungarian and Empress Elisabeth.

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tor Karl Böhm conducted the first opera performance in the post-war era: Beethoven’s Fidelio. By now, the Vienna State Opera has experienced it all. Today, the Vienna State Opera is considered one of the most important opera houses in the world; in particular, it is the house with the largest repertoire. It has been under the direction of Dominique Meyer, along with musical director Franz Welser-Möst, since 1st September 2010. VIENNA STATE OPERA BALL

VIENNA OPERA BALL At the Vienna Opera Ball, the Vienna State Opera is transformed into the world’s most famous ballroom. This ball of balls creates opportunities for encounters between artists, politicians, businesspeople, and ball enthusiasts. The calendar of the Viennese ball season is filled with more

Empire and birth of the Republic of Austria in 1920 meant it was time for a name change for the Court Opera. So, in that year, the Vienna State Opera was born. Unfortunately, Vienna’s luck didn’t last into the Second World War. Extensive bombing destroyed or damaged much of the historic city centre. After escaping much of the war inToday, the Vienna State Opera is considered one of the most tact, the Opera was significantly important opera houses in the world; in particular, it is the damaged by allied bombing on 12th March 1945. After the war, house with the largest repertoire debate raged over what should be done with the structure. Ultimately, conservation reigned and the Vienna State than 450 balls, but the Vienna Opera Ball is the most brilliant Opera was restored to its original splendour between 1948 of them all, and thanks to TV broadcasting, it reaches an audiand 1956. But, at the beginning, everyone was wondering: ence of millions at home and abroad. The event is a big musical where was the money going to come from? Austria was incelebration at the end of Shrovetide, which combines high culdependent but broke. Enter the U.S. Marshall Fund. ture and entertainment. The committee, consisting of approxiDesigned to rebuild Europe, the Marshall Fund joined tax mately 150 pairs of young men and women in white ball gowns revenue, private contributions, and even donated materials and tails, ensures a glamorous opening of the Opera Ball. from the Soviet Union in rebuilding the opera house. ConducFor the ball preparations the seats must be removed and

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the parquet floor laid, and a sea of flowers is added: 650 arrangements and bouquets of thousands of flowers and plants decorate loges, tables, and walls. Transforming the ballroom takes 21 hours - a marathon job for more than 500 people. The next Opera Ball will be held on 23rd February 2017. THE NEW YEAR’S CONCERT The Vienna Philharmonic presents annually at the New Year a program consisting of the lively and yet nostalgic music from the vast THE NEW YEAR'S CONCERT repertoire of the Strauss family and its contemporaries. This concert is now broadcast to over 90 performances sell out, the company is trying to increase its countries around the world. revenue and reach with live streaming to homes worldwide. Due to extremely high demand, tickets for the New Year’s The State Opera has 1,709 seats and 579 standing places. Concert are drawn by lot over the website at the beginning of In the 2014/15 season, a total of 361 performances were each year. In this way, music lovers from all over the world have watched by 598,951 visitors. The 284 performances on the an equal chance to purchase these highly desired tickets. In the 2014/15 season, a total of 361 performances were Between 2nd January and 28th February 2017, applications will watched by 598,951 visitors. The 284 performances on the main be accepted to take part in the stage of the Wiener Staatsoper achieved an average attendance drawing for tickets to the end of 99.02% of seating capacity of year concerts 2017/18. TOTAL OF 361 PERFORMANCES AND 598,951 VISITORS According to the Vienna State Opera spokesman, 70% of the audience is Austrian, particularly from greater Vienna, and another 30 per cent comes from abroad, mostly elsewhere in Europe. The annual budget is €109 million, of which €59 million comes from the Austrian government and another €34 million comes from ticket sales. Because most

main stage of the Wiener Staatsoper achieved an average attendance of 99.02% of seating capacity. The season included eleven premieres (opera, ballet, children’s opera) and 63 different works as well as four tours. Total expenditure was €111.67 million, of which state subsidy contributed €59.48million. Ticket revenues hit a record €34million. ■

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PEOPLE WHO CHANGE THE WORLD: Sigmund Freud (1856-1939)

Father of MODERN

PSYCHOLOGY Sigmund Freud was a late 19th and early 20th century neurologist. He is widely acknowledged as the father of modern psychology and the primary developer of the process of psychoanalysis

S

igmund Freud was born in Freiberg, Moravia in 1856, the encourage the patient to tap into the unconscious mind and let go oldest of eight children. His family moved to Vienna when of the repressed energy and emotions therein. Freud called this Freud was four years old. He studied at a preparatory function repression and felt that this action hindered the development of emotional and physical functionality, which he referred to school in Leopoldstadt where he excelled in Greek, Latin, as psychosomatic. The element of using talk therapy eventually history, math, and science. His academic superiority gained him became the foundation of psychoanalysis. entry into the University of Vienna at the age of seventeen. Upon completion, he went on to pursue his medical degree and Ph.D. in neurology. “Religion is an illusion and it derives its strength from the Freud married Martha Bernays in 1886, and the fact that it falls in with our instinctual desires.” couple had six children. The youngest of Freud’s chil—Sigmund Freud dren, Anna Freud, became an influential psychologist and ardent defender of her father’s theories. After working with Joseph Breur at the Vienna General HospiFreud drew heavily upon the emphasis of philosophers such tal, Freud traveled to Paris to study hypnosis under Jean-Martin as Nietzsche, Dostoevsky, and Kant. Freud’s theories continue to Charcot. When he returned to Vienna the following year, Freud influence much of modern psychology, and his ideas also resonate opened his first medical practice and began specialising in brain throughout philosophy, sociology, and political science, with thinkers such as Jacques Lacan and Karl Marx drawing heavily upon and nervous disorders. Freud soon determined that hypnosis was Freudian theories. Freud’s emphasis upon early life and the drive an ineffective method to achieve the results he desired, and he began to implement a form of talking therapy with his patients. This to pleasure are perhaps his most significant contributions to psychology. Even contemporary psychologists who disavow Freud’s method became recognised as a “talking cure” and the goal was to

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theories often take an interest in a client’s early life and the relaDream interpretation. Freud believed that dreams could be tionship between child and parent. Some of Freud’s most signifiinterpreted to glean important information about a person’s psycant theories include: chology and personality, and he believed that dreams frequently The development of the unconscious and conscious minds. served as wish-fulfillment devices. Freud argued that the mind consists of the conscious mind, which Freud has played a seminal role in popular culture. Images of contains the thoughts and beliefs of which we are aware. The una patient lying on a couch, for example, are allusions to Freud. His conscious mind, by contrast, is a repository for repressed memoremark, “Sometimes a cigar is just a cigar” is still sometimes used ries and unexpressed desires, and problems with the unconscious to indicate that not every action has deep psychological meaning. mind can lead to problems with behavior and emotional regulation. In addition, Freudian slips occur when a person says what his or The structural model of personality. Drawing upon his theory of the unconscious mind, Freud developed the concepts of the id, ego, and superego. The ego is the everyday personality that we present to the world, but represents only a fraction of a person’s true self. The superego, by contrast, serves as a sort of conscience and internalises moral, social, and cultural norms. The id is a pleasure-seeking, primitive structure that is present at birth. It forms the foundation of a person’s personality, and unconscious id desires can explain seemingly unexplainable behaviors. Stages of psychosexual development. These stages, which include the oral, anal, genital, latent, and phallic, represent different stages of child development during which a child has a major psychological task he or she must complete. The primary task of the anal stage, for example, is toilet training. Failure to competently complete a major developmental task can lead to later psychological problems related to that stage. For example, children who have trouble during toilet training may SIGMUND and ANNA FREUD grow into anally retentive adults. One of the most popular and widely debated sub-theories within the The concept of defence mechanisms. Freud's defence stages of psychosexual development is the Oedimechanisms—which are still a part of contemporary pal complex. During this developmental challenge, psychology—are tools of the unconscious mind that are a son is incestuously attracted to his mother and designed to alter reality in order to avoid pain and suffering feels rivalry toward his father. He must resolve this challenge by identifying with his father. The concept of defense mechanisms. Freud’s defence mechaher unconscious mind is thinking or desires. For example, a woman nisms—which are still a part of contemporary psychology—are might say, “I want my ex-boyfriend dead” when she meant to say, “I tools of the unconscious mind that are designed to alter reality want my ex-boyfriend back.” in order to avoid pain and suffering. Repression, for example, is Freud developed cancer in 1923 and passed away sixteen the tendency to forget troubling events, while projection is the years later. His ideas are still debated today, and his techniques tendency to project one’s own traits onto someone else. Freud’s and interpretations are widely accepted as the basis of modern defence mechanisms were further developed and codified by his psychoanalysis. Sigmund Freud is considered one of the most influential people in the history of psychology. ■ daughter, Anna Freud.

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AUSTRIAN WINE

Bringing The Old World

INTO THE FUTURE

WINE REGIONS OF THE DANUBE VALLEY

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istory tells us that early cultivation of vines for grape production dates back to 700 B.C., yet it was the Romans who brought organised viticulture to the River Danube nearly 700 years later. Wine production flourished and continued even as the Romans withdrew from the region. However, between the 10th and 12th centuries, the Cistercian order (a group of monks who left Burgundy in search of a simpler life of serving God without profit) began to introduce Burgundian vine-growing and winemaking techniques to the region, along with the Bavarians, who began building the trellis along the Danube, which makes today’s modern wine industry possible. The wine-growing country of Austria is known for its diversity of grape varieties and the versatility of its wine producers. Around 20,000 vintners cultivate grapevines and make their own wines at all levels of quality, and for all occasions. In Austria, there are 35 grape varieties - 22 white and 13 red - officially approved for the production of Qualitäts-

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Small is beautiful – that is what best describes Austrian wine, when put into an international perspective. There are no run of the mill wines, but rather rare specialities. Austrian wine is one of the most interesting phenomena happening in the world right now. These wines are found on every good wine list and appreciated by wine experts wein (quality wine) or Qualitätswein of a special ripeness and type of harvest (Prädikatswein – sweet wine) and Landwein. The proportion of red wines has doubled over the last two decades and now represents one third of Austria’s vineyards, which total 46,000 hectares. Today, Austria is enjoying a renaissance as a wine-producing nation. It has worked its way free from decades-old controversy caused by a careless few, and has emerged as a role model for modern European wine – a leader in quality and innovation. Balancing the traditional with the modern, the Austrian wine industry has retained such classics as sweet Ausbruch and Strohwein, while actively developing modern, consumer-friendly wines such as its signature style: crisp, white, aromatic Gruner Veltliner. Officially, 35 grape varieties are permitted for use in Austrian quality wine, of which almost two-thirds are white-wine varieties. In terms of volume, Gruner Veltliner is by far the most important, followed by


Measures to protect the environment are not only taken by the federal authorities of Austria, but also by Province governments and municipalities, all of whom make considerable investments.

exports and reputation – but stricter wine laws were enacted and Riesling. The finest wines made from these two varieties come from the industry has recovered. the famous Wachau, Kamptal and Kremstal regions. Austrian wine laws are strongly influenced by those of neighborOther varieties important to Austrian wine include Chardonnay, Sauvignon Blanc, Welschriesling and Pinot Blanc (known here by its German ing Germany. The country’s wine quality classification system is based name Weissburgunder). Austria’s red wines are made primarily from Blauon must weight (sugar content) of the grapes, measured on the Klosfrankisch, Zweigelt, Saint-Laurent and Pinot Noir (Blauburgunder). terneuburger Mostwaage scale (KMW). There are three basic qualLocated right at the heart of Europe, between the latitudes of ity levels: Tafelwein, Qualitätswein and Prädikatswein. The labeling 46°N and 48°N, Austria lies parallel with central France and south of terminology is also similar to Germany’s, although the required must Germany. Logically, the climate is slightly warmer than that of Germany, weights tend to be higher. and this is reflected in the wine styles; Austria has a much greater focus on red wines than its cooler northern neighbor. But there is far more to the Austrian climate than just latitude; topography plays a pivotal role. Much of the country – particularly the western half – is dominated by the chilly Eastern Alps, and to the east lies the vast, warm Pannonian Plain. Austria’s wine regions can be found primarily in the north-east of the country, in the state of Niederosterreich bordering Hungary, the Czech Republic, Slovakia and Slovenia. Very little Mediterranean influence makes it over the Alps into Austria, creating a strongly continental climate, with pronounced temperature shifts from day to night and from summer to winter. Numerous varied mesoclimates lie inbetween the extremes of course, moderated by large bodies of water such as the Danube river (which flows through the northern regions), and Lake Neusidl (see Neusiedlersee). Viticulture in Austria dates back to Roman times. Evidence of vineyard cultivation surrounding Carnuntum and Thermenregion sugWINE TASTINGS IN AN AUSTRIAN WINE CELLAR gests that vines were planted here 2000 years ago. The steep Austria's wine regions can be found primarily in the northeast of the terraces along the Danube River and its tributaries in Wachau and country, in the state of Niederosterreich, which borders Hungary, the Kamptal were built by monks Czech Republic, Slovakia and Slovenia from monasteries in Bavaria and Salzburg. The vineyards of VienAustria wines also follow the Districtus Austriae Controllatus na have a rich tradition of Heurigen (meaning both wine tavern and the (DAC) appellation system, introduced in 2003. In a similar way to the wine served inside), where locals can enjoy the proprietor’s homemade AOC classification in France, the DAC wine laws impose certain conwines. For much of the 20th Century, Austria was associated with sweet, straints covering permitted grape varieties, alcohol levels and oak mass-produced wine made of Gruner Veltliner and Muller-Thurgau, maturation regimes. The goal of these is to ensure that wines bearing a but producers are now turning out crisp, dry wine styles, some of DAC title represent an authentic example of the classic regional style. which age very well. This move to drier wines partly resulted from As of mid-2015, Austria had nine DAC titles. the 1985 anti-freeze scandal, in which diethylene glycol (a key ingreAlthough there is no DAC title for the Wachau region as yet, qualityconscious producers there have developed their own 3-tier wine style dient in anti-freeze) was found to have been added to some bulk-proclassification: Steinfeder, Federspiel and Smaragd. For a full descripduced wines to increase levels of sweetness and body. The scandal led to the collapse of the Austrian wine industry – in terms of both tion of these titles, and Wachau wines in general, see Wachau. ■

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CONTEMPORARY ART: Manfred Kielnhofer Kili, designer, sculptor, photographer…

Guardians of TIME

For decades now, products from Austria have fascinated both consumers and critics. Austria has some surprises for international attention: for ages, the biggest strength was in sculpturally shaped designs, but cultural tradition and the natural setting of the country can also be found in modern forms

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ne of the prominent representatives of contemporary art design in Austria is certainly Manfred Kielnhofer Kili. He was born on 28th January 1967 in Haslach an der Mühl, Austria. Manfred “Kili” Kielnhofer attended the Linz Technical College, where he took his final exam in 1995. He was engaged with technique and design, while art on buildings led him to his special way of art. Since 2000 he has lived as a freelance artist in Linz, wherehe launched Gallery Artpark in 2005. Kielnhofer’s most famous work is “Guardians of Time“. Draw-

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ing on religious and supernatural phenomena, the Guardians of Time are stone statues cloaked in hooded robes and positioned to appear as though they are moving forward in some kind of ritual. In some cases the figures stand alone; in other instances they are grouped together as if whispering to each other. Kielnhofer places his statues in public places like ancient castles, old mines, plazas and parks. They are installed and moved without fanfare, heightening the eerie, mystic aura they emit. The first of these mysterious figures was created in 2006. Since then, Kielnhofer continues to


create and install these statues all over the world. Guardians of Time sculptures observing and pretending the world. It relates to the idea that since the beginning of time mankind has had protectors, both for historic and mystical reasons. It seems that only man himself is a potential source of danger for his own existence. In his artworks Manfred Kielnhofer deals with the natural human desire for security. Thus his oeuvre reflects genuine exploration, consideration and discussion of both the current and historical moods and sensibilities of his social environment. His works captivate with elaborate combinations of light and different techniques. In 2012 the artist created the first in a new series of miniature guardians made of plastic. Behold shrouded figures standing watch over us all, each of

MANFRED KIELNHOFER KILI

them covered in light in all places both light and dark. These are a set of sculptures called Light Guards, designed and executed by designer / artist Manfred Kielnhofer. Each of them is a lamp sculpture, fabric draped over an invisible human-like shape. Each one of them is also polyester matched with energy sensitive lamps glowing at 32 W each. These seem so spectacular. They remind us of the band SUNNO))), except they’re light and spectacularly gorgeous instead of darkest night. To have these standing about your city is to have something miraculous keeping an eye on your whole population. In 2009, Kielnhofer developed a new sort of ‘act photographs’, which involves the construction of a waterplate in his studio, where he can take photos of models sitting or lying down, likely on a mirror. ■

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