InFocus Austria 2020 by DiplomacyandCommerce_Croatia

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Austria IN FOCUS

MOZARTBONBON

KRIMMLER WASSERFALLE The Krimml Falls (Krimmler Wasserfalle), in the state of Salzburg, are Europe's tallest waterfalls, reaching a height of 380 meters.

THE OLDEST ZOO Vienna has the oldest zoo in the world, founded in 1752.

A Mozartkugel is a small, round confection made of marzipan, nougat and dark chocolate. It was originally known as the “Mozartbonbon”, and was created by Salzburg confectioner Paul Fürst in 1890

WEINER SCHNITZEL ALPS 62% of Austria's total land area is covered by the Austrian Alps.

The most famous of Austrian dishes is Weiner Schnitzel, which are cutlets of veal, pounded thin, dusted with egg and breadcrumbs, and then fried.

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Excellent Bilateral Relations Come as No Surprise Although Austria and Croatia have no mutual border, their bilateral relations have the neighbour-like intensity. As such, Austria and Croatia are strong partners and close friends in a united Europe in challenging endeavours

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s the youngest EU member state, Croatia has done a wonderful job in chairing the Council of the European Union so far. It has proved to be an ambitious and very generous host, says HE Josef Markus Wuketich, Austrian Ambassador to Croatia. The ambassador notes that Croatia has taken the helm of the EU while it is steering through rough water. “The Croatian EU Presidency comes with an array of decisive tasks: Great Britain has just left the EU, but that doesn’t mean that Brexit is over. The future relationship between the EU and the United Kingdom still has to be regulated. The complex negotiations on the Multiannual Financial Framework (MFF) for 2021 to 2027 are still on-going and have to be brought to a successful conclusion soon, if the EU’s budget is to be in place in 2021”, our interlocutor states. “As I understand, the Croatian EU presidency wants to support the European Commission and the President of the European Council in these challenging endeavours. Acting as an honest broker, the Croatian Presidency wants to facilitate viable solutions. This is a sound approach.” Austria also expects the Croatian Presidency to provide new impulses to

the EU accession process of the Western Balkans countries at the Zagreb Summit to be held in May. Finally the ambassador adds, one should not forget that the presidency brings about huge logistical tasks. In the six months of its Presidency, Croatia will have to organise around 120 events mostly in Zagreb, but also in other parts of the country. How Austria supports the Croatian colleagues? — During the Austrian EU Presidency in 2018, a Croatian exchange diplomat was invited to Austria to gain insight into the processes of running an EU Presidency. He is now back in Zagreb and can put the acquired knowledge into practice. Austria’s newly appointed Minister for the EU and Constitution Karoline Edtstadler paid a visit to Zagreb in mid-January to become more familiarised with the priorities of the Croatian EU Presidency. She offered her good services and Austria’s support to the Croatian presidency. How do you assess overall bilateral relations between two countries? — The bilateral relations are excellent. This does not come as a surprise. Our

H.E. JOSEF MARKUS WUKETICH Austrian Ambassador to Croatia

Further improving the business climate would definitely have an important role in brain circulation between Austria and Croatia, thus making it easier for these young people to move back to their country

common past provides a solid foundation for the Austrian-Croatian relations. Austria also lent support to Croatia’s independence from the very outset. Our countries can boast of very intense people-to-people contacts. Croatia is one of the favourite holiday destinations of Austrians. Every year Croatia registers some 1.3 million arrivals from Austria. Around 80,000 Croats live in Austria. Geographically speaking, we might not be neighbours, but our bilateral relations are, beyond any doubt, of neighbour-like intensity. Today Austria and Croatia are strong partners and close friends in a united Europe. Austria is the largest foreign investor in Croatia today and is the sixth foreign trade partner. How can these relations be further upgraded? — The figures are impressive, indeed. So far, Austrian business has invested €4.4 billion in Croatia. Our bilateral trade volume amounts to €2 billion. There is continuing interest in intensifying economic relations on the part of our business community. Further improvement in business conditions, e.g. through enhanced legal security, reduction of red tape or greater predictability of administrative decisions, would

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provide a strong impetus for upgrading our economic ties. Bilateral relations are not a one-way street. We do welcome Croatian investments in Austria and Croatia’s wish to increase exports to Austria. In the recent poll among the Austrian businesses in Croatia, labour availability featured among the most important concerns, ahead of the qualifications of the workforce and payroll. How much can the dual education help in addressing these challenges? — Labour availability is impacted on one hand by the brain drain that is taking place in Croatia. The government has recognised the seriousness of this problem and is determined to contain this phenomenon. On the other hand, dual education helps in training and educating skilled workers that are in

demand on the labour market, because they have practical workplace experience. To a certain extent, Croatia has got such a model already. However, it would be worthwhile to expand its scope. There are some initiatives underway and Austria will readily support them. What are the possibilities for the brain circulation, having in mind that there is a large Croatian diaspora in Austria? — A couple of months ago I attended the G2.5 Meeting (Meeting Second Generation) and met with young Croatian entrepreneurs from Austria. It was such a pleasure to talk to these young people who are very successful in our country. Many of them are contemplating expanding their business operations to Croatia or returning to their country. While talking to them, it became clear to me that a fa-

Austria expects the Croatian Presidency to provide new impulses to the EU accession process of the Western Balkans countries at the Zagreb Summit in May

vourable business climate also plays a crucial role for brain circulation between Austria and Croatia. Improvement in this sphere would definitely make it easier for these young people to move back to their country. How these relations add to the cultural relations between two countries? — Cultural diplomacy is an integral part of Austria’s foreign policy and plays an important role in our bilateral relations. Our common past and intense people-to-people contacts between Austria and Croatia have created innumerable cultural links. The Austrian Cultural Forum in Zagreb marks its 65th anniversary this year. It organises many intriguing cultural events all over Croatia and has become something like an Austrian cultural trade mark in this country.

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Less Red Tape Brings More Business Austrian exports to Croatia, still have not reached the pre-crisis level but the trends are positive. Austrian investors are quite satisfied with the prospects for their businesses but would appreciate if the burden of paper work and red tape is reduced

ustrian exports recently broke the magic limit of EUR 150 billion of which, 1.3 billion EUR were goods and services exported to Croatia. Yet when asked whether she is satisfied with this number Sonja Holocher-Ertl, who is heading Advantage Austria in Croatia said that it is a job of the organisation to always strive for more. “It is Advantage Austria’s mission to help Austrian companies become more competitive on international markets, so we can never be fully satisfied with Austria’s exports”, says Holocher-Ertl . However, she adds that Austrian companies have consistently been

achieving great results on international markets and it is easy to find many Austrian companies who are world leaders in their niche markets. “Regarding Austrian exports to Croatia, they still have not reached the pre-crisis level of 2008, when they amounted to 1.5 bn EUR, but the general trend is positive”, says director of Advantage Austria.

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SONJA HOLOCHERERTL Director Advantage Austria

To what extent the activity of Austrian companies in Croatia mirrors better results of the Croatian economy in the last years? — We have been conducting surveys among Austrian investors in Croatia

Croatia needs a dual education model that is open to all kinds of businesses, no matter if it is trade or industry, big or small. Unfortunately, this process is taking very long

for a number of years now. The surveys also contain questions about performance of the companies for the past 12 months and the 12 months ahead. Since our 2016 survey, these indicators have consistently shown positive results. So, Austrian investors regarded both, the previous 12 months of the respective year and the upcoming 12 months, as predominantly positive for the development of their businesses. The improvement of Croatia’s economy has certainly been playing a vital role in this context. However, I think that with improved framework conditions for businesses, there would be considerably more potential for growth in Croatia. Recently you are mentioning lot capacities of the Croatia IT sector and start-ups. What are the opportunities in that filed for cooperation between Austria and Croatia? — The Croatian IT sector has been developing very dynamically. In Austria there is demand for IT services and hence IT-co-operations between Croatian and Austrian companies seem a logical solution. In order to facilitate this, we have been organizing events where we connect Austrian companies to Croatian IT companies and IT professionals, and in which we explain the benefits of setting up a company in

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There is a growing appetite among Austrian investors for IT services, hence IT-co-operations between Croatian and Austrian companies is growing in importance

Croatia in order to build up IT teams that then can work for their Austrian head-offices. When it comes to workforce – would you say that in spite of brain drain Croatia still offers well-trained workforce to investors? — In our surveys we also ask, which market related factors would need improvement in order to make Croatia more attractive to Austrian investors. Of the 13 prompted factors, the availability of personnel jumped from priority 6 for Austrian investors in 2016, to priority 3 in 2017 and 2018, to priority 1 in 2019. Also troubling is the fact that the qualification of personnel moved from priority 5 in 2016 to priority 2 in 2019. Competition for talent in Croatia has markedly increased, certainly making it harder for investors to secure the workforce they need.

from various countries, which have successful dual education systems, including from Austria via the Austrian Federal Economic Chamber, facilitated through us. Together with the Croatian Economic Chamber, our Advantage Austria office has supported the Ministry of Education in promoting dual education among Croatian companies. We also helped to find companies for the pilot programme of the dual education for sales persons that started in autumn 2019. Regarding models for modern education systems, I’d also like to mention the German School in Zagreb – DISZ, which is located on the Eurocampus

on Fratrovac 36, Maksimir district, and which many people are not aware of. The school provides very interesting education options for both, expats and Croatians, since it brings the German curriculum and teaching methods to Croatia, while still making sure that their graduates can go on to university in Croatia. What I really like about the school is that teachers are focussing on teaching students how to learn, how to grasp new concepts and how to apply critical thinking. Anyone interested should check out its open day on March 28, 2020. Croatian authorities believe that they have considerably improved business climate and cut red tape. What do you and Austrian companies say? — This is an interesting question, which would be worthwhile asking in our next investors’ survey. I actually often ask this question when I talk to entrepreneurs, both Austrian and Croatian. The answer mostly is that they still consider the burden of paper work and red tape as extremely high in Croatia. However, when the authorities talk about improving the business climate and cutting red tape, they are often referring to starting a company or opening restricted professions. In these areas, I believe, progress has been made. Also, electronic communication with the tax authorities has become better I recently heard an entrepreneur remark. However, the burden of the many forms, which still have to be filed for various administrative tasks, I hear, has not decreased much. The fact that you can lodge everything electronically these days helps a little, but the papers still have to be prepared. So, I think there still is room for improvement in this area.

How well is dual education received in Croatia? How are you involved in promotion of this type of education? — Croatia has had a dual education system – the JMO Model – for many years. The model was created for and hence is applicable to trades. I believe that Croatia would benefit from a dual education model, which is open to all kinds of businesses, no matter if it is trade or industry, big or small. I think Croatia carefully looked at various systems and is now building their own model, which is understandable. Unfortunately, this process is taking very long and businesses are in need of skilled staff now. Croatia has received much support

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The Time has Come for Quality to Replace Quantity Croatian market definitely doesn’t lack in retail parks and shopping malls, but the future might bring their repositioning and expansion of their offer. Introduction of Euro to Croatia might be one of the factors that could bring mid-range and high-end brands to this market

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roatian market has been rather saturated when it comes to shopping malls and retail parks, and I believe that there isn’t much room for development of new projects in the retail sector, states Paul Merdzo, Director of Supernova Group, which has been very active in acquisitions on the domestic market over the past several years. Merdzo thinks that some parts of Croatia still have potential, so this spring the company will open the Supernova Požega Retail Park. But, as our interlocutor added, “in general, I think that there won’t be any major changes in the retail market in Croatia. What we can expect are changes in the quality and size of the offer in the existing malls in accordance with expansion and brand development strategies”, Merdzo adds.

Which customer segment is your target, and what are the main economic drivers that affect this market segment? — Our portfolio includes different categories of shopping malls, where we target different customer segments. Market segment isn’t defined only by the type of building, but also by the location, consumer habits and their purchase power.

Before the construction of any structure, we conduct a deep analysis of this market and design concepts adapted to customers who gravitate to a particular centre. Retail parks are practical centres that customers visit because they want to do their shopping fast, with parking available immediately in front of the store. In shopping malls like these, customers are generally most price sensitive, so the malls are located mainly in smaller towns and suburban settlements. On the other hand, shopping malls have a wider offer and additional contents aside from just your typical shopping. Such is our Shopping Centre Supernova Zadar, which spreads on 40,000 m2 and aside from 160 stores its offer includes a gastro oasis, the so-called food court, a large playroom and numerous events and contents for the entire family throughout the year. Our portfolio also includes several non-typical retail facilities downtown Zagreb, like the Branimir Mingle Mall and Centar Kapitol (which is currently under reconstruction), where customers satisfy the needs they cannot meet in a typical shopping mall. These customers are not price-sensitive because aside from the specif-

PAUL MERDZO Director of Supernova Group

Introduction of Euro to Croatia might be one of the factors that could bring midrange and highend brands to this market

ic/narrow segmented offer, the thing that’s also very important to them is the entire atmosphere of the mall itself, interior decoration and the destination experience. If we were to assess the Croatian market according to the present and upcoming brands, where would you put it? Are these lower mid-range and high-end brands? — The Croatian retail market is highly developed in the discount and midrange segment, high-end brands aren’t interested in this market due to its small volume and customers’ purchase power, but we see opportunities to open up this market to upper middle class brands in the future. One of the factors that will influence this will certainly be the introduction of Euro. You carried out a number of acquisitions in the previous period? Where is your know-how superior to your competition? — It’s true, we were investors over the past years, focused mainly on acquisitions, and our strategy will continue to follow that path in the future, and developers’ know-how certainly helped us develop. It’s certain that our advan-

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tage, or know-how comes also from the fact that we have in house personnel in the field of finances, law, construction, leasing, marketing, real estate management – all high quality professionals with international experience, because most of them are working on several markets in the region. We also manage all our buildings through our sister companies. On the other hand, unlike the other investors in the retail business, we are completely privately owned, which means that we are extremely flexible and fast when making decisions, and this is largely one of the key competitive advantages. You also have your business interest in hotel construction. Where is the market niche here you believe could have a good value? — Our focus and our key market is the retail business, but we have been monitoring the hotel market for some time already, and we are interested in greenfield investments in Zagreb, Split and Rijeka. We believe that upper middle class business hotels – 4 stars, have the biggest potential. A very successful project is definitely

the Canopy by Hilton Hotel within our Branimir Mingle Mall, which proved to be an excellent location for this market segment.

Centar Kapitol is an extremely significant project in our portfolio, and we expect it to open at the end of this year. If a good business opportunity should appear, we will be ready for new acquisitions

You had a strong rise on the Croatian market over the past few years, what are your plans for the future? — Supernova Group currently owns 14 operative projects, occupying an area of around 260,000 square meters, and we are currently the leading company in terms of the leased area and the number of owned shopping malls. Our centres employ around 6,500 people, and the total value of Supernova Group’s investment in Croatia is more than 420 million Euro. We entered the Croatian market over 10 years ago through greenfield investments as developers of retail parks, shopping parks and shopping malls under the Supernova brand, and over the past years we focused on acquisitions, and one of the most relevant acquisitions was the purchase of existing malls in Zagreb: Garden Mall, Cvjetni, Branimir and Centar Kaptol. Aside from development of our Supernova brand, we focused our forces on designing new brands in our portfolio,

the latest being Branimir Mingle Mall – we conducted a complete rebranding and repositioning on the market with this one. We are currently in the final stage of construction of a retail park in Požega which is to be opened in April. An extremely significant project in our portfolio is the Centar Kapitol, which is still in the renovation process, and its opening is planned at the end of this year. We are still monitoring the market, and we are interested in new takeovers, so if a good business opportunity should appear, we will accept it. The segment you operate in is work-intensive, and it also requires compliance with high standards. How do you rate this market in that segment? — If your question refers to the quality of workforce, it is in no way different from a central European country like Austria. We are proud of our excellent team which is very experienced and motivated, and they successfully wrote the story of the Supernova Group over the past 15 years. Their knowledge, competencies and skills in different markets are certainly the greatest resource of this company.

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Sports Car Designed for the Future! About the history of Porsche brand, to this day! C O R P O R AT E

he history of Porsche brand is starting with electricity. Electric drive is embedded/rests deep in Porsche’s DNA. Ferdinand Porsche, founder of the namesake company, was fascinated by electricity from his teens, and the first vehicles he designed were also electrically powered. In early 1898, Ferdinand Porsche designed the first Porsche – Porsche P1, also known as the Egger- Lohner electric vehicle, C.2 Phaeton model. The vehicle was powered by an electric motor

The Taycan Turbo develops 500 kW, or up to 680 horsepower

with 3-5 horsepower and developed a top speed of 25 km/h. In 1990, Ferdinand Porsche designed the first functional hybrid car, the “Semper Vivus”, which means “Always Alive”. It extended the range of the vehicle by using an internal combustion engine as a generator, thus enabling the supply of electric motors housed in the wheels of the vehicle. With the new 2010 Cayenne S Hybrid, Porsche paved the way for electromobility at the company. After this came the first parallel full hybrid in the luxury class, the Porsche Panamera S Hybrid. Today, considering the excellent technology, performances and effectiveness, Porsche Centre Zagreb delivers approximately 75% of Cayenne vehicles and around 95% of hybrid Panameras in Croatia. All of the above represents an extremely strong foundation, and demonstrates the years of experience and success in development of electromobility. One of the bravest fundamental decisions of the Porsche brand, tied to development of the sports concept of a completely electric vehicle, lies precisely in development of 800volt technology, which establishes the fundamental requirements of the entire powertrain, from the battery, the

concept of electronics and electric motors to unbelievable sports performances, and the ultra-fast charging process. Unlike the electric vehicles present today, Taycan’s power is continuous at multiple accelerations. ORIGIN OF THE NAME The name comes from the Turkish word “Taycan”, the word that meets each phonetic, legal, creative, strategic and model-specific requirement. Made of two terms of Turkish origin, this word roughly translated means the soul of a fiery, or rather young lively horse. This is precisely what the first fully electric Porsche is: lively, impulsive and powerful. The name reflects the source and the future of the brand: the horse inside the Porsche badge, the expression of its soul on the path to a new era of a sports car. A perfect choice also tied to the advertisement campaign: “Soul, electrified”. PREMIERE On September 4th, 2019, Porsche presented its first fully electric sports car to the public, with a spectacular world premiere held simultaneously on three continents. "The Taycan links our be-

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ginnings and our heritage to the future. It carries forward the success story of our brand – a brand that has fascinated and thrilled people the world over for more than 70 years," said Oliver Blume, Chairman of the Executive Board of Porsche AG, who opened the world premiere in Berlin: "This day marks the start of a new era." ABOUT THE MODEL, AVAILABLE VERSIONS, PRICES, START OF DELIVERY The Taycan is the first production vehicle with a system voltage of 800 volts instead of the usual 400 volts for electric cars. This gives special advantage to Taycan drivers, on the road, in about 5 minutes, the car battery can be charged by using DC current of high voltage stations for charging, in order to reach the range of 100 km (in accordance with WLTP testing). Maximum charging power in ideal conditions is 270 kW/h. The Taycan is currently available in three versions: Taycan 4S, Taycan Turbo and Taycan Turbo S Names of the Turbo S and Turbo models are there for other reasons, just like everything else with the Porsche brand, everything was made according to the plan, including the marks Turbo and Turbo S which mark the power of the model, the trim, they don’t have turbines, if that was your original thought… The most powerful version, the Turbo S, with the Overboost function combined with Launch Control has a whopping 560 kW or 761 horsepower. The Taycan Turbo develops 500 kW, or up to 680 horsepower. Taycan’s entry version, which is far more favourable, we can safely say – the Taycan 4S, comes with the selection of car batteries.

It usually comes with the Performance battery with total capacity of 79.2 kW/h, and another option is the Performance Plus battery, which comes as a standard in stronger versions, the Turbo and Turbo S, with 93.4 kW/h. The accelerations are amazing, and the strongest Taycan model accelerates from zero to 100 km/h in only 2.8 seconds, while the Turbo version needs 3.2 seconds. The Taycan 4S reaches 100 km/h in only 4 seconds. Maximum speed for Turbo versions is limited to 260 km/h and for the 4S version to 250 km/h. Maximum range for the Turbo S version is 412 km, Turbo version’s maximum range is 450 km, and the 4S version’s range is 463 km. Combined consumption of energy is 26-26.9 kW/h, with 0 g/km CO2.

Unlike the electric vehicles present today, Taycan’s power is continuous at multiple accelerations

These values were obtained according to WLTP tests. Extremely low drag coefficient, cd: 0.22, contributes to low energy consumption, and therefore the excellent range. “The puristic exterior design with Porsche DNA is also present in the Taycan. Taycan’s interior brings unique interior design. Typical for Porsche, the driver-oriented, standalone instrument console with a variety of selectable displays, a central 10.9 inch display, and a centre console display are all part of the rich standard equipment. Also, for all the fans of digitalization, which is very prominent with Taycan, the display for front passenger is also an available option. The entire system can be controlled with the voice command “Hey Porsche”. With the Taycan, Porsche offers an entirely leather-free interior for the first time as an alternative. The interior is entirely made from innovative recycled materials to underscore the sustainable concept of the electric sports car. The Taycan has a front 81 l-trunk under the hood and a rear 366 l-trunk in the back. The base price for Porsche Taycan is HRK 856,000.00, and pre-ordering can be done at the Porsche Centre Zagreb. Considering the limited quantities, buyers of the first electric Porsche sports sedan will need to be fast. Deliveries start in late February. For more information, visit the Porsche Centre Zagreb, where our friendly staff awaits you, and they will gladly answer all your queries and advise you on the ideal options for you. Also, there is an option to book a test drive. Porsche Centar Zagreb Velimira Škorpika 21-23, Zagreb 0800 0365 www.porsche.hr

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Porsche – A Year of Novelties

Satisfied customers are our goal, and record sales are our business ideal C O R P O R AT E

his year, we will pay special attention to female customers, because female customers are basically the ones who decide on everything, including the purchase of a car, says Hrvoje Lapic, Porsche Brand Manager.

Which models from the Porsche gamma are most sought after on the Croatian market today? — Porsche has been posting a double digit growth for several consecutive years already, and the entire Porsche team in Croatia is responsible for that, as well as the gamma of vehicles that Porsche offers on the market. The most sought after model. It’s hard to choose one. Porsche is best known for its icon, the 911 Carrera, and this is the most desirable model, it’s our timeless machine. But if we look at the bestselling models in Croatia, it’s the Cayenne. The Cayenne which recently got its Coupe version, and it is breaking all the records. Porsche Macan is right behind it regarding the number of delivered vehicles in the Republic of Croatia, therefore we could say that, if we observe the number of vehicles delivered, third place would go to Carrera, Panamera and the 718 model. And now we’re getting the Porsche Taycan – our fully electric Porsche that simply delighted the entire world. Taycan. The international media are

writing all about Porsche Taycan. Can you please tell us more about it, when is it coming, it’s price, what do you expect? — Yes, Porsche Taycan is coming. We already have the first vehicles in our store in Zagreb. How to briefly describe the Taycan – it’s simply fantastic. Everything we announced over the past years has become a reality. The full electric Porsche comes in three versions: Porsche Taycan 4 S, Porsche Taycan Turbo and Porsche Taycan Turbo S, and it all started back in 1898 with the first electric car made precisely by Porsche. Its electric range is over 400 km, the car charges within minutes with ultra-fast chargers, acceleration from zero to 100 km/h is achieved already in 2.8 minutes (Turbo S), and the prices start already from HRK 860,000 for the Taycan 4S.

HRVOJE LAPIĆ Porsche Brand Manager

We are witnessing more and more often that car shows are not organized every year, as was once the rule. What is your answer to such challenges? — Car shows are always interesting and the public likes visiting them, however, I’m certain that the time is coming that will require some alternative organizations regarding car exhibitions for a large part of the audience What other novelties from your company can you announce?

How is the electric Taycan relevant for brand positioning? What is their place in your business plans on this market? — The Taycan is a great moment for us, and a big step forward for what's to come. Electric cars are part of our present, and especially our future. Porsche will not forget where it came from, but we look ahead to be ready for what awaits us. Which market segments are in your focus, when it comes to 2020? — Definitely the Taycan, whose name comes from the Turkish word meaning “Soul of a spirited young horse”, but the other models are also always in our fo-

Taycan

Our policy is clear, by 2025 every other Porsche will be an electric or hybrid car that Porsche will manufacture Carrera

Cayenne Coupe

cus. This year, we will focus more on the female population because we believe that we have plenty of interesting products to show and tell precisely to women, therefore we will try to get closer to women with our activities in this year since they are always the ones who make the final decision on so many things, including the purchase of a car.

— Porsche has a genuine Product offensive this year, so we will briefly mention just a few: • Macan GTS is coming • 718 Boxster and Cayman GTS with 4.0 atmospheric engine • 992 Trubo and Turbo S • 992 Targa • Cayenne / Cayenne Coupe GTS • And of course, the Taycan All this gives us the right to expect satisfied customers and record-breaking sales results this year as well.

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Waiting for Schengen New impetus during EU Presidency

here are countries that don’t share borders, but seem to be “best friends”. This is the case with Hungary and Poland, Greece and Serbia, Portugal and the United Kingdom… And that is also the case with Austria and Croatia.

THE BALKANS BEGIN AT THE RENNWEG Some say that “the Balkans begin in Vienna”, i.e. that this is because of many years of “Austria socializing with crown states in the Habsburg Empire, which were all positioned east or south of Austria itself. To be more specific: Prince Metternich is reputed to have said, "The Balkans begin at the Rennweg". The Rennweg is a street that led southwest out of the Austrian capital, Vienna. It runs through modern Vienna's third district, Landstraße. Since Vienna’s plan to unite German countries under the crown of Vienna fell through, some other countries were left to unite. And this is where the Austrians proved to be very successful. While other colonial powers sought to create colonial empires outside Europe, quite successfully, Austria created its empire “continuously”, in Europe (except for their small adventures in China and In-

dia). Specifically, Croatia and Austria were part of the same union for almost 400 years; Habsburg Monarchy (15271804), Austrian Empire (1804-1867) and Austro-Hungarian Empire (1867-1918); with Croatian regions Istria and Dalmatia being under the Austrian rule since the 1867 Compromise until 1918 collapse. As a consequence, Austrians became “specialists” in trade and doing business with countries of Eastern Europe – while some other countries in the West supplied, and some other had traditionally different markets – Britain had its Commonwealth, and Spain had Latin America. The three countries that understood Eastern Europe and the unstable Balkans the best were Germany and Italy, two giants, and Austria, “the old acquaintance”. Even though we in Croatia don’t like to think that the Balkans starts even in Novi Zagreb (where it actually starts), the Austrians jokingly say that it starts in Vienna itself. ECONOMY AS THE SECOND ARM OF A FRIENDLY HUG It is interesting that the number of Austrian companies in Croatia is increasing every year. There were 650 of them in 2017, where this number went over 700 in 2018, and was around 750

C O O P E R AT I O N

Today’s Croatia and its economy cannot be imagined without Austria and Austrian investments in the crisis and crucial period

in 2019. Since the declaration of independence, Austria has also been the largest foreign investor in Croatia, precisely because Austrian businessmen weren’t afraid of the idea to invest in a war-torn and unstable former socialist country, but they recognized potential there which was fully seen with Croatia’s accession to EU in 2013, when already everyone discovered Croatia. But the Austrians were here first, and they were here a lot, when there was nobody and when there wasn’t much money. Today’s Croatia and its economy cannot be imagined without Austria and Austrian investments in the crisis and crucial period. Even today, Austria is the biggest investor in Croatia, and its fourth foreign trade partner. In addition to brisk activity in the area of entrepreneurial activities and FDIs, foreign trade with Croatia is an important component of Croatian-Austrian economic relations. Austria primarily exports raw materials such as leather, wood products (chipboard, softwood), industrial products such as winding wire, electrical conductors and body parts as well as consumer goods such as cell phones, televisions and chocolate. Croatia exports goods such as machines and mechanical devices, tractors and

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vehicles, electrical appliances, wooden and iron goods, shoes, furniture, leather and edible preparation. Most of Croatia's exports are re-exports from Croatian manufacturing companies of Austrian origin of investment. In 2015, the volume of Austrian exports to Croatia was around € 1,375 billion; Croatian exports to Austria were around 540 mil. €. This results in a trade balance surplus for Austria of approximately €835 million. And the similar trends continued in 2016-2019, with the figures slightly higher every year. NEW INVESTMENTS AND NEW DEVELOPMENTS Austrian-Chinese capital wants to invest in the territory of Croatia and they want to open an industry supporting aircraft industry (construction of a plant for manufacture of internal parts for airplanes in the business zone Jakovlje, FACC Company). In 2019, Minister of Economy, Entrepreneurship and Crafts Darko Horvat met with the Minister of Digital and Economic Affairs of the Republic of Austria, Elisabeth Udolf-Strobl, when they talked about common industrial policy, dual education, digitalization, artificial intelligence, as well as about further strengthening of economic cooperation between two countries, and this will be in Croatia’s focus during its presidency of the EU. “Full application of the dual education system and inclusion of entrepreneurs

in the forming of quality work force, digitalization and digital transformation, joint industrial policy and development of artificial intelligence, protection of market competition, new incentive framework for entrepreneurs, tourism – these are the priorities that Croatia will present to Europe and European countries during its presidency of the Council of EU,” Horvat says. With the planned accession of Croatia to the Schengen Area, Croatia’s many advantages are yet to come to the fore. SAILING THE THREE SEAS One of the new initiatives that will shape the economic future of the region and that might be of utmost importance for Croatian economy is the Three Seas Initiative, or Trimarium, a bit of Pilsudski's Intermarium, but a bit modified. The Three Seas Initiative (3SI, TSI, I3M), also known as the Baltic, Adriatic, Black Sea (BABS) Initiative, is a forum of twelve states in the European Union, located in CEE. The combined area connects the Adriatic Sea, Baltic Sea, and Black Sea. The initiative aims to create a regional dialogue on a variety of questions affecting the member states. The twelve members met for their first summit in 2016, in Dubrovnik. The Three Seas Initiative has twelve member states along a north–south axis from the Baltic Sea to the Adriatic Sea and the Black Sea: Austria, Bulgaria,

Most of Croatia's exports are re-exports from Croatian manufacturing companies of Austrian origin of investment

Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The area of the Baltic, Adriatic, Black Sea (BABS) Initiative covers 28% of Union territory and 22% of its population, but also only around 10% of GDP. The export-oriented companies will boost their exports by building efficient transport corridors and modern transport infrastructure. In 2018, at the Bucharest summit, Croatia proposed 11 projects, 3 in the field of energy, 7 in the field of transport connectivity and one in the field of digitization. Total value of Croatian projects is €1.78 billion. The Office of the President points out that the most significant projects in the field of energy are the LNG terminal in Krk with dispatch gas pipeline (230 + 35 million €) and the Ionian Adriatic Pipeline (€600 million), in the field of transport it’s Rijeka Port (€348.4 mln) and construction of the second rail and overhaul and modernization of railroad on the Škrljevo-Rijeka-Jurdani section (€305 mln). In the field of digital communication, national program for development of broadband infrastructure in areas where there is no commercial interest for investments (value €101.4 million) is most important. All this will contribute to greater interest of investors in Croatia, and Austrian investors, as investors from a Member State, already expressed their interest in development of new areas in Croatia.

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A Cup of Coffee is Your Entrance Ticket Around the year 1900, a visit to a Viennese café was a spectacular experience, newspapers were displayed on custom-made stands, waiters wore tailcoats and ceilings were decorated with elaborate chandeliers

afés are an everyday element of city living and in Vienna and they are at the heart of life in the city. At the turn of the 20th century, the Viennese Coffee House used to be the intellectual hub of the city, and to this day, people enjoy the unhurried atmosphere to meet friends, work or hold business meetings. UNESCO declared the traditional Viennese coffee house an intangible cultural heritage in 2011. Today’s coffeehouse culture is booming as more and more people are looking for a place to rejuvenate. Looking at how cafés were an essential part of Viennese life raises interesting questions about how we live and socialize in the modern city today. In Vienna, there were cafés for everyone: artists, intellectuals, the respectable and the not-so-respectable bourgeoisie. People came to cafés to chat, eat, read, work, play, gamble and discuss. A café is a place where the rigid social hierarchies could loosen up a little bit. The fluid character of this social space stimulated the minds whose intellectual and creative achievements made such a substantial contribution to the development of European modernity at the time. More than 300 years later, the Kaffeehaus is still an institution. The Viennese have developed a whole culture around coffee drinking and elevated it to an all-encompassing attitude of life. As you step inside a Kaffeehaus, you immediately feel at home; the setting is spacious yet intimate, there is plush seating around marble tables, the scrape of traditional Thonet wooden chairs on parquet floors and mirrors reflecting the mood. Take your seat in an era far removed from the modern hustle and bustle. Your entrance ticket is a cup of coffee, just

as it has been for generations. Once you have ordered coffee, be it a Kleiner Schwarzer, Kapuziner, Einspänner or Melange – and these are just some of the specialities – sit back and relax. Life happens here and everyone plays their part. The Viennese Kaffeehaus is an extended living room. It is ideal for people who need company to be alone. It is both a stage and a private space. Around the year 1900, a group of authors went down in history as coffee house literati: they not only socialized in a Kaffeehaus but used it as their workplace. Peter Altenberg even wrote the address of his local Kaffeehaus on his business card and had his mail delivered there. Before writers claimed the Kaffeehaus as their own, composers had also discovered its charms - Johann Strauß, both father and son, introduced new works here, and even Mozart and Beethoven performed in a Kaffeehaus. INDULGENCE ON THE MENU A particular joy of the Viennese Kaffeehaus lies in its service: the opening times alone, from early morning until midnight, are impressive. And, of course, there is the wait staff. Male waiters are addressed as “Herr Ober“ and reward a prompt order with some banter and Viennese charm. We should also mention the comfortable seating and of course, the light snacks, sweet or savoury, which make a prolonged stay in a Kaffeehaus very pleasant and satisfying. If you thought Vienna was all about the Schnitzel, think again. Its culinary scene is varied and creative, with a long history that is partly rooted in the numerous crown lands of the former Habsburg Empire. After all, Vienna is the only city in the world that has an entire cuisine named after it. Cakes and pastries are a special attraction of every Kaffeehaus. Take the

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UNESCO declared the traditional Viennese coffee house an intangible cultural heritage in 2011

Sacher Torte for example, which was even a subject in a legal battle. Imagine a chocolate cake so decadent that it incites a 25-year long legal dispute. It was Vienna’s famous Sachertorte that caused a lengthy dispute between two imperial confectioners. Don’t trust any old confectioner who wants you to believe that his Sachertorte is the real deal. The cake might taste amazing and the chocolate glaze could have the signature silky sheen, but family Sacher keeps its secret recipe under lock and key. It’s no surprise that the Sachers became so protective of their cake. One Viennese pastry maker, in particular, posed a serious threat to their dessert monopoly. LOOKING FOR SOMETHING DIFFERENT? In Vienna, there is always room for fresh ideas in amongst all of the dyedin-the-wool coffee house tradition. Alternative coffee houses that are a far cry from the typical marble tables, Thonet chairs and liveried waiters are growing like mushrooms in the city. The majority of these coffee shops celebrate the barista’s art with directly sourced, fairtrade coffees, many of which are roasted according to the owners’ individual specifications. Espressomobil follows a completely different business model having reduced the coffee house format to a three-wheeled Italian moped. These mobile coffee shops park up at some of the city’s busiest squares, switch on the coffee machines and serve up premium coffee to take away.

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Good Things Come in Threes

A vibrant cast of culture, cuisine, and cool in Austrian cities hoever coined the phrase “Good things come in threes” likely didn’t even appreciate the truth this rings when applied to a round trip through Austria. While long hailed as a premiere destination for its stunning natural settings, which offer a year-round backdrop for outdoor recreation – worldclass skiing in the winter, and a host of hiking and lakeside pleasures in the

summer – Austria’s enchanting cities are also worth a starring role in this alpine country’s blockbuster visitor offerings. Salzburg, nicknamed ‘Stage of the World’, with its baroque beauty and musical score which seems to thread through much of its history, delights guests with some 4,500 cultural events annually. Graz, Austria’s second largest city, surprises with its foodie flair, laid-back attitude, and eye-catching ar-

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chitecture making many a self-guided sightseeing tour deviate off script to discover a hidden gem or two. And, combining a young urban feel with a cool alpine vibe, Innsbruck truly lives up to its billing as ‘Jewel of the Alps’ in its enviable location hugged by mountains that beckon exploration and set the scene for this Tirolean capital city.

There’s nothing better than being unexpectedly delighted and thoroughly captivated on any travel itinerary

SALZBURG Salzburg has long been a favourite location of the cinematic world - with of course The Sound of Music its most notable production – and one stroll around this walkable city shows any visitor why. Attractively situated on the banks of the Salzach River, with its Old Town streets and alleyways watched over by the Hohensalzburg Fortress, the largest, fully preserved medieval castle in Europe situated on a hill high above the city, it’s no surprise that Salzburg

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most well-known is the Salzburg Festival, celebrating music and drama, and this year in its 99th installment when the curtain rises on 20 July, 2019. It would be amiss not to also sing the praises of this ‘green’ city with plenty of parks and the natural oasis of local mountains, pastures and forests that surround Salzburg. Whether simply out for a fresh air ramble, a leisurely cycle, or for those with the endurance for a marathon, Salzburg offers plenty of recreational diversion as well. One of the best tips to make the most of your stay is the cost-saving Salzburg Card which offers free admission to a host of city attractions, as well as complimentary use of public transportation and a variety of other discounts.

is well-deserving of its nod by UNESCO World Heritage. In summer, the soundtrack to this city rings everywhere – from Mozart’s birth house at No. 9 along one of Salzburg’s most famous pedestrian streets, the Getreidegasse, to the many cultural events that take place during the summer months. Among the

GRAZ There’s nothing better than being unexpectedly delighted and thoroughly captivated on any travel itinerary. In fact, maybe even left wondering why you hadn’t known of this gem before. In entertainment, it’s sometimes referred to as a ‘sleeper hit’. The southerly Austrian city of Graz with its charming laid-back attitude firmly knows that dining al fresco goes hand-in-hand with its sunny Mediterranean-influenced climate; that architecture is best contemplated through the striking coming together of historical heritage and avant-garde new designs; and that culture transcends age with its calendar of events often held at out-of-the-ordinary locations. Much on the summertime programme also highlights Graz’s well-respected culinary scene - if food is a way to everyone’s heart then it’s hard not to fall in love with this Styrian capital city. From restaurants helmed by internationally-recognised chefs, to local haunts, to enticing sidewalk cafes, to festivals celebrating all things gastronomic, this UNESCO-recognised destination, with its landmark Clock Tower overlooking the city, knows the recipe to the goodlife and is happy to take all the time it needs to give visitors a taste.

Graz surprises with its foodie flair, laid-back attitude, and eye-catching architecture making many a self-guided sightseeing tour deviate off script to discover a hidden gem or two

INNSBRUCK The kind of mountains you well imagine in Austria ring the cool and chic city of Innsbruck which sits at the heart of the Tirol. As the host city of two Olympic Winter Games, this former imperial capital, once a favourite of Emperor Maximilian I, can definitely be lauded for giving summer the royal treatment as well. In fact, you couldn’t write a better summertime script if you tried – in the morning, explore this unique and appealing city influenced by not only by nature and a strong tradition, but also by its urban draws and sporting appeal which includes leisurely recreation as well as many organised events from trail running to mountain biking to urban obstacle courses (cool!) Then, in the afternoon, experience the futuristic vision of the late architect Zaha Hadid on the Hungerburg Funicular which transports visitors from the city center to the Nordkette mountain range in just minutes. From here, easily connect to the mountain cable car system taking guests to its highest point of 2300m from where the 360-degree panoramic views showcase this stunning region dotted with holiday villages. Once back down on the ground, though perhaps with your head still a bit in the clouds from the beauty of all of it, end the day in atmospheric Innsbruck doing some shopping or taking a coffee break along the broad pedestrian ways of Maria Theresien Street, and don’t miss a visit to Innsbruck’s most famous sight – the Golden Roof, tucked away in the Old Town and a reminder of Innsbruck’s rich imperial history. Three amazing cities - all worth a viewing this summer.

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The kind of mountains you well imagine in Austria ring the cool and chic city of Innsbruck which sits at the heart of the Tirol Photo: Hamidreza Ardalani on Unsplash