Diplomacy and Commerce No.4

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April 2018 | ISSUE No. 4 | FREE COPY

GOVERNMENTS DON'T TAKE US SERIOUSLY

MLADEN NOVOSEL

President of the Association of Independent Trade Unions of Croatia (SSSH)

WB IS A TRUE PARTNER FOR REFORMS

27 PATRON COCKTAIL FEB page 28

AT RESIDENCE OF US AMBASSADOR

WE WORK PRUDENTLY AND LONG-TERM PREDRAG ŠTROMAR

Deputy Prime Minister and Minister of Construction and Spatial Planning

ELISABETTA CAPANNELLI Country Manager for Croatia and Slovenia, The World Bank

60 YEARS OF LUSTROUS CAREER

HAZU'S GOAL IS CROATIA AS A SOCIETY OF KNOWLEDGE AND SCIENCE ZVONKO KUSIĆ

Academic and President of the Croatian Academy of Science and Art (HAZU)

WE ARE READY FOR ELECTION IF PROPER CONDITIONS ARE CREATED

Sweden

SINIŠA HAJDAŠ DONČIĆ TEREZA KESOVIJA Singer

Deputy Speaker of the Croatian National Parliament and a member of the Presidency of the Social Democratic Party (SDP)

H.E. LARS SCHMIDT

Swedish Ambassador

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ED ITO RI AL

CO N T E N T S

There Can Be Only One Dear readers, As someone said once, it is a disgrace that we even have to say or write something about it, but we obviously have to. This is maybe because the people go particularly crazy in March - some are politely crazy and want to walk in the sunshine, smile without a reason, and fall in love leaving the brain out of it. Others are starting wars and becoming dangerously belligerent. And it was this March when the world became crazy once again.

Another particularly strange thing was the irrational fight over “The Skripal Case”, culminating with Boris Johnson's infamous exclamation that “Putin is going to use it (the 2018 World Cup) in the way Hitler used the 1936 Olympics”. This is not the first time, however. In Beijing 2008, we heard the same being said about China. But there is a problem with using the Hitler parable and it is the following - there's only one Hitler. No-one else is Hitler! You can joke about the “grammar Nazis” but no-one else is a Nazi. Except the Nazis! Especially not the country that beat the Nazis, while being accused by the other that suffered pretty much the same. Instead of rightful criticism, the focus is on the critic, making him preposterous and ridiculous. Don't forget - there can be only one. Only one Hitler! Claiming otherwise is tantamout to shooting yourself in the leg.

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WE WORK PRUDENTLY AND LONGTERM PREDRAG ŠTROMAR

WE ARE READY FOR ELECTION IF PROPER CONDITIONS ARE CREATED

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Deputy Speaker of the Croatian National Parliament and a member of the Presidency of the Social Democratic Party (SDP)

Deputy Prime Minister and Minister of Construction and Spatial Planning

WE ARE A TRUE PARTNER FOR REFORMS ELISABETTA CAPANNELLI Country Manager for Croatia and Slovenia, The World Bank

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ROBERT ČOBAN

Director

HAZU'S GOAL IS CROATIA AS A SOCIETY OF KNOWLEDGE AND SCIENCE ZVONKO KUSIĆ

Academic and President of the Croatian Academy of Science and Art (HAZU)

www.diplomacyandcommerce.hr BOBAN SPASOJEVIĆ Executive editor

boban@diplomacyandcommerce.hr

NIKICA MILOŠ Editor-in-chief

nikica@diplomacyandcommerce.hr

TANJA BANKOVIĆ Editorial manager

office@diplomacyandcommerce.hr

ILIJA PETROVIĆ INDIGOCHILD Art director

indigochild.ilija@gmail.com

ZORAN CVIJIĆ Advertising manager

marketing@ diplomacyandcommerce.hr

JOVANA MARKOVIĆ Advertising manager NATAŠA NEŠIĆ Advertising manager DRAGANA RADOVIĆ Advertising manager RUŽA RISTANOVIĆ Magazine director VANJA KOVAČEV PR&Event support Nord Communications

vanja.communications @gmail.com

Photos GORAN ZLATKOVIĆ GETTY IMAGES TOMISLAV SMOLJANOVIĆ Translation and lecturer MRP EDITORIAL

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CROATIA HAS MANY TASKS TO FINISH MANICA HAUPTMAN

Senior economic advisor, European Commission Representation to Croatia

SINIŠA HAJDAŠ DONČIĆ

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GOVERNMENTS DON'T TAKE US SERIOUSLY MLADEN NOVOSEL

President of the Association of Independent Trade Unions of Croatia (SSSH)

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DIPLOMACY&COMMERCE MAGAZINE CELEBRATES ITS SECOND BIRTHDAY IN SERBIA Event

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60 YEARS OF LUSTROUS CAREER TEREZA KESOVIJA Singer

Translation SNEŽANA BJELOTOMIĆ

SVEN DARRER Advertising manager 091 766 5479 091 377 4358

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Predstavnik za RH

ROBERT ČOBAN Director

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T H E BRE X IT N E G O T IAT IO N S

There’s Something Fishy About Britain’s Brexit Transition Deal The biggest worry about the planned transitional period is that it is too short

AGAINST a backdrop displaying the text of Britain’s draft withdrawal agreement, colour-coded to show areas agreed and yet to be tackled, Michel Barnier, the European Union’s Brexit negotiator, and David Davis, Britain’s Brexit secretary, announced a transition deal on March 19th. It was hard even for the ebullient Mr Davis to hide the fact that Britain had agreed to a “status quo” transition period, in which it will maintain most obligations to the EU while losing its voting rights. At least business was pleased that there will be no cliff-edge exit next March—assuming, that is, the two sides are able to reach some kind of Brexit deal.

What was striking was the acquiescence of most pro-Brexit Tory MPs. Jacob Rees-Mogg, who once likened a status-quo transition to being a vassal state, said Britain had rolled over without even getting its tummy tickled. But he and his allies still gave Theresa May’s government the benefit of the doubt. In effect, they value the prize of Brexit next March so highly that they will accept almost any terms for it.

This should reduce their influence on Mrs May in the remaining negotiations.

One awkward concession concerned fish.

Many Brexiteers say they were promised that

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Britain would take back full control of fisheries next March. Even Michael Gove, the minister in charge, admitted to being disappointed that this has proved impossible. Britain will now stay in the EU’s common fisheries policy until the start of 2021. Scottish Tories are especially upset.

Several said they could not sell such a betrayal to their constituents, and 14 MPs wrote to Mrs May urging her to reject the transition and threatening to vote against a Brexit deal later this year if she does not.

THE REAL CONCERN ABOUT THE TRANSITIONAL DEAL IS NOT ABOUT VASSALDOM OR FISH. IT IS THE TRANSITION’S SHORT DURATION For all their protests, including sending a fishing boat up the Thames to Parliament, Mrs May is bound to accept the transition at the EU summit that was meeting as we went to press. She has no choice. Fishing is too small an industry to jeopardise a future Brexit deal. Just as in 1973, when Britain first joined the club, it is likely to be sacrificed for the greater good,

however loudly trawlermen howl.

The real concern about the transitional deal is not about vassaldom or fish. It is the transition’s short duration. Mrs May had asked for a deal lasting “around two years”; some ministers openly hoped for longer. Yet Mr Barnier is offering just 21 months, to the end of 2020. Trade experts doubt that a comprehensive trade deal of the sort that Mrs May wants can be negotiated, let alone ratified, that quickly. And the text of the transitional deal leaves it unclear whether an extension will be legally possible, let alone politically so.

A big problem is that Mrs May has wasted so much time since triggering the Article 50 withdrawal process last March, not least by holding a general election last June. A majority of the Commons Brexit committee is calling for an extension of Article 50’s two-year deadline.

The home affairs committee similarly says more time is needed to ensure continuing co-operation on justice and domestic security. Time, or rather the lack of it, has become one of Brexit’s most pressing concerns.

From The Economist, published under licence.

The original article, in English, can be found on www.economist.com

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5

I NTERVIEW

We Work Prudently and Longterm The great quality of this government is the stability and constructive talks between the partners. This enables the ministries, led by the Croatian People's Party (HNS), to fully commit themselves to implementing reforms and deal with the issues that have been neglected in the last few decades both in construction and education

PREDRAG ŠTROMAR Deputy Prime Minister and Minister of Construction and Spatial Planning

We should not deal with the past too much, but instead, we need to devote ourselves to concrete work, and here I mean projects and reforms which results will beneficial for business people and citizens alike - says Predrag Štromar, Deputy Prime Minister and Minister of Construction and Spatial Planning. He has recently embarked on resolving a problem from the past, related to property rights.

The amendments to the Housing Lease Act have caused numerous controversies in the public.

Can their implementation help repair earlier injustices without causing new ones?

— These amendments are addressing the problem that dates back to 1998, in a legitimate, fair and sustainable way, and strike a balance between opposing interests of apartment owners and protected tenants with an active role of the state. The proposed changes stipulate legal protection for the lessor and the lessee in the case of cancellation of the lease agreement and in a special case where the local government is obligated to

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provide the protected lessee with another appropriate apartment with the accompanying rights and obligations.

The proposed solutions, mentioned in the Act, stipulate a transitional period lasting several years just to give enough time to everyone to decide on the modality of their occupation. During this transitional period, and after the Act comes into force, the protected tenants retain the status of a protected lessee for five years with a gradual increase in rent. They also receive a state subsidy for the rent after the expiration of the existing status for additional five years (with property and spatial census-

As for the owners of these apartments, the apartments have always been and are privately owned.

The protection of private property is the foundation of the Western culture and enjoys legal protection from all international charters as

A TOTAL OF HRK 2.3 BILLION WERE SECURED FROM EU GRANTS FOR ENERGY RESTORATION IN BUILDINGS OVER THE PERIOD OF THE NEXT FOUR YEARS. THIS REPRESENTS A TREMENDOUS POTENTIAL FOR THE GROWTH OF THE CONSTRUCTION SECTOR es) and have the advantage over other interested persons when renting or selling flats owned by the local (regional) territorial units in the Republic of Croatia, or from the state-subsidised housing construction programme (POS).

In addition to this, the Republic of Croatia and the local self-governments will especially focus on the people on welfare and the Croatian war veterans.

well as the Constitution of the Republic of Croatia.

What is your residential construction policy, both in terms of renovating buildings and in subsidizing mortgages?

— We are continuing with the residential construction through the long-term state-subsidized housing construction programme that was launched in 2001 with

the aim of enabling citizens to address housing issues under considerably more favourable conditions than the market ones. To date, thanks to this programme, a total of 8,035 apartments in 238 buildings in 75 municipalities have been built. We have also introduced a novelty, i.e. the launch of a new housing care programme intending to help retain and attract deficient worker profiles, especially in underdeveloped areas. Furthermore, we are in the process of amending the Housing Loan Subsidy Act, a measure that was popular with young people last year when we received 2,399 applications for subsidized mortgages in a very short amount time.

The state subsidizes half the mortgage over the period of four years under certain conditions. The subsidy period will be extended for two years for each biological or adopted child during its duration.

This is a good demographic measure aimed at halting emigration of young people.

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What are your and your ministry's further plans in that respect?

— Due to the great interest shown by our citizens in subsidized mortgages, we have been working towards further implementation of this housing measure but also towards improving it with the help of the amendments to the relevant law. By analyzing the received and approved applications, we have found that 66.3% of the applications were submitted in the most developed municipalities, therefore a more even distribution of mortgage subsidies is required in line with the development index of the city or municipality where the subsidized apartment or house is located. Also, we will extend the subsidy period from four to five years. Along with some additional stipulations, this is generally the direction which amendments will take. We are also continuing with energy restoration. On 5th February this year, we closed the contest for energy restoration in the public sector buildings, as we have received 200% more submissions compared to the funds we had allocated for this purpose. We are evaluating all of them, and we have already made certain funding decisions.

The contest will be re-opened on 7th May. We are also waiting for certain administrative problems to be resolved so that we can launch a public call for energy restoration in family homes, which our fellow citizens are eagerly awaiting. Other projects pertain to the continuation of the legalization of illegally built facilities, the continuation of the construction of POS flats, the improvement of the spatial planning information system etc.

Of all the areas covered by your ministry, which is the most problematic and in which did you do the most?

— I wouldn't say that we have some major problems, but in order to do our jobs properly, we do need more personnel. I am referring primarily to building inspectors. This

is a very responsible and stressful job. Sometimes, we would run a job ad for a building inspector for months and receive no job applications whatsoever. Regardless, I think that our building inspectors are doing a terrific job.

I think that energy restoration of buildings has become our Ministry's trademark as of late. I would just like to mention that we have a total of EUR 311 million available from the European Regional Development Fund to support energy efficiency, including public buildings and those in the housing sector. Of this amount, EUR 211 million is intended for energy

Let's not forget another important segment which is spatial planning. At the end of last year, Croatian MPs unanimously adopted the Strategy for the Spatial Development of the Republic of Croatia.

The strategy is a fundamental state document for regulating spatial development. The Ministry of Construction and Spatial Planning was responsible for drafting the Strategy, while the Croatian Institute for Spatial Development provided expert assistance.

We are also working hard on technologically improving all licensing processes, as well as linking all of those resources that

THANKS TO THE PREVIOUS TAX REFORM, SALARIES HAVE RISEN BY 6% ANNUALLY AFTER A VERY LONG TIME. THIS TREND SHOULD CONTINUE IF POSSIBLE THROUGH FURTHER TAX EXEMPTIONS FOR CITIZENS AND ENTREPRENEURS restoration in public sector buildings, while the remaining EUR 100 million is meant for energy restoration in residential buildings.

Since 2015, when the first public call was launched, the Ministry of Construction and Spatial Planning has launched 5 calls for energy restoration in public and residential buildings and allocated 172-million-EUR worth of grants.

Which projects, covered by your Ministry's jurisdiction, do you consider to be crucial for further development of the construction sector and spatial planning?

— All indicators show that the construction sector has been growing and will continue to grow in the forthcoming period, which means that construction companies will have enough projects. The construction sector is one of the driving forces behind economic progress. Funding allocated to energy restoration will certainly be of help to many small and medium enterprises, which are actually supporting pillars for the entire construction sector.

we dispose of, including spatial plans, so that everybody can easily see in which areas construction is allowed and in which it is not with via computers. We are also working on digitalizing the land registry which we have to harmonize with the actual spatial situation. A lot of things in this area are not functioning properly at the moment, and our goal is to completely harmonize it with the real spatial situation in two years. This will also reduce building permit costs both for businesses and citizens.

What do you think about reducing VAT and can we compensate the loss of the budget revenue because of lower VAT by introducing other taxes, such as property tax (what does Brussels recommend)?

— The decision on changing the VAT rate or any other measure, like increasing the non-taxable part of the salary or reducing the income tax rate or certain para-fiscal charges, should be made only after a quality analysis. I think that the past tax changes were good

because they resulted in higher salaries for citizens, and lower costs for companies. We should continue in that direction.

As for the real estate tax, Croatia is simply not ready for it. We have to determine the value of real estate beforehand, and the decision to do so and the procedure for determining the real estate tax come under the jurisdiction of the Ministry of Finance.

What are the key results of the coalition's work in the government and HNS?

— I think we made a very good move that benefited this country. As a result of HNS entering the Croatian government, we got the stability that was needed for the economy as well as for other segments of life in our country.

Only now, that we have stability, we can devote ourselves to the much-needed reforms.

Apart from the economic processes which have to continue, we also need to make new decisions, new laws and implement reforms.

Specifically, we are extremely pleased that HNS is the one that has initiated the education reform because the reform has been in the making for 20 years, with nothing done until now. We have done more in the past six months than in the last 10 years as far as the education reform is concerned. Our plan sets exact deadlines for project activities.

We are proud of it and this is definitely the result of the mentioned stability; i.e. the result achieved by this coalition, and not just the HNS. If we did not have a quality coalition partner, we would not be able to come to any agreements, which would, in turn, impede everything.

We are also pleased with the communication. We do not communicate with our coalition partners via media, but we actually, sit down and talk. These conversations are sometimes longer and sometimes shorter, but we usually reach an agreement and then work together in that direction. This is the quality of this Government.

PROPOSAL HNS does not approve the Council's proposal for facing the consequences of the rule of non-democratic regimes, and the use of the "Za Dom Spremni" salute. Do you believe that this proposal could get enough 'yes' votes in the Parliament, and if that happened, how would that affect HNS's support for Prime Minister Plenković??

— Our position is clear - the use of the "Za Dom Spremni" salute has no place in public areas in the

Republic of Croatia. However, only the Council has declared this salute to be unconstitutional so far. The government has not yet said anything about the Council's recommendations, but I think there will be no requests for exemption made because those people who defended this country in the Homeland War (Domovinski Rat) have also defended our institutions and are certainly going to respect the Constitution.

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I NTERVIEW

WB is a True Partner for Reforms ELISABETTA CAPANNELLI Country Manager for Croatia and Slovenia, The World Bank

Croatia needs to address substantial economic, social and institutional weaknesses to boost private sector productivity and competitiveness, raise the quality of human capital and modernize public services. We believe the World Bank plays the key and rather unique role as a partner of Croatia

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While Croatia is finally out of recession and has recorded a solid growth, the pace of this growth is not a guarantee that the country will be in a position catch up to the new member states such as Slovakia soon, or come close to other more developed EU counterparts.

In this interview, Elisabetta Capannelli, Country Manager for Croatia and Slovenia, explains what the country needs do to and what role can the World Bank play in helping Croatia to achieve better results.

gram (projects, investment lending operations, technical assistances, advisory work, etc.) we will focus on in Croatia for the next 5-6 years.

The Ministry of Finance is our main partner in this process and it will have the leading role in the development of our new strategy but we will also hold consultations about the future role that the Bank should have in Croatia, in addition to many stakeholders, central and local governments, civil society, academia, private sector, and the European Commission.

The World Bank's country office in Croatia has been very active.

What is your focus for this year and what projects can you announce for 2018?

OUR ANALYSIS SHOWS THAT CROATIA’S LOW LABOR AND CAPITAL PRODUCTIVITY IS THE MAIN REASON WHY THE COUNTRY IS FALLING BEHIND ITS NEIGHBORS AND COUNTRIES IT ASPIRES TO EMULATE

— We are at a very important stage of our engagement in the country. We have just completed a new diagnostic analysis of the challenges Croatia is facing and we have recently started preparing a new Country Partnership Framework (CPF) between the Republic of Croatia and the World Bank Group.

In essence, the CPF is a document that will guide our strategic engagement and prioritize the pro-

As far as our ongoing program is concerned, lately we have been deeply engaged with the Ministry of Sea, Transport and Infrastructure (MSTI) and the Ministry of Finance in the restructuring of the Croatian motorway sector. This is an ambitious program of the GoC and a genuine effort is being made to lower the macro fiscal impact of the sector on the economy and to

deepen reforms of the state-owned road enterprises, improve their efficiency and performance, and their planning processes to avoid further accumulation of debt. The project is now being successfully implemented. The process of financial optimization is going well, and a 1.275 million EUR sovereign bond has been raised and on-lent to the road companies for refinancing of their existing short-term, expensive loans. A further amount exceeding 1.8 billion EUR of the existing commercial debt is in the fi-

nal stages of re-negotiation. We are also a partner to the Government in the process of restructuring of the loss-generating railway sector, to again improve the performance, profitability, services and customer’s satisfaction. During 2018 we also expect the Rijeka Gateway Project and the new conteiner Zagreb Terimnal to be finalized, as well as for the foundation of its road and

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railway interlinks to have been established and completed.

Our current portfolio amounts to US$487 million.

What do you see as the biggest obstacles to higher growth in Croatia and what are your recommendations for addressing these specific problems?

— Croatia has come a long way after the six-year long recession and is now achieving solid growth rates of just under 3 percent.

However, a 3 percent growth, even if sustained, will not bring the country to the desired level of development, and Croatian citizens will take a very long time to reach the average European income and similar economic opportunities.

We estimate that, if the growth rate stays at 3 percent, Croatia will catch up to Slovakia’s current per capita income in 9 years and Austria’s in 26 years. If the growth rate slows down to 1.3 percent, which is close to what we and other have estimated as Croatia's potential growth rate, it would take the country 21 years to catch up with Slovakia or 58 years to catch up with Austria.

So, something is not going right.

Croatia faces a big challenge in terms of the convergence with the EU and bolstering its very low potential growth rate.

In regard to the solutions, one needs to focus on what to do in order to increase this potential growth, in the context of the demographic and societal challenges in the ageing population and migration flows.

After your appointment as the Country Manager for Croatia and Slovenia, you have opened a series of relevant issues for Croatia. One of them is the best growth format for Croatia. You have mentioned the Romanian model as one of the possible options. How can this model be implemented in much smaller economies like Croatia's?

— All countries are constantly searching for the answer as to what is the best growth model for them.

There is no standard formula or the perfect model as it depends on natural resources, human capital, location, opportunities. From this perspective, Croatia should be considered lucky and that is the reason why you often hear that Croatia is not using its potential to the maximum. Croatia has also the opportunity to learn from its peers, avoid mistakes others have made before, and apply solutions it thinks would work best in the country’s circum-

stances. If compared to Romania, Croatia could borrow elements of its recent growth success, such as Romania’s focus on removing barriers to doing business, especially for IT and innovative industries, or tackling reforms in its network industries, like unbundling in the energy sector, and improving corporate governance in state-owned

behind the growth, but rather a much larger, dynamic, innovative private sector able to compete at the European level. This brings us back to the question of productivity.

Therefore, what is needed here are committed efforts on boosting the economy’s competitiveness. This requires a comprehensive reform program that will improve the effi-

and an obligation to not only to compare itself to its EU peers, but also, where possible, to outperform others. I believe this is doable and I remain positive about the country’s opportunities, in addition to its natural beauty. Croatia can achieve this by organizing the state in a way that excels in providing services to its citizens, in the major public service areas, from judiciary and business environment to education and human development.

Tourism is one of the most important industries in Croatia, but it should not be the only driving force behind the country's economic growth. What is your opinion?

CROATIA FACES A BIG CHALLENGE IN TERMS OF THE CONVERGENCE WITH THE EU AND IMPROVING ITS VERY LOW POTENTIAL GROWTH RATE enterprises. Another country to emulate could be Poland, which has been experiencing continuous growth based on the implementation of comprehensive reforms, encouraging the private sector to grow, and being focused on using the EU funds in an efficient way.

The Baltic countries are also interesting examples because they have been focusing on competition, improving their business environment, and providing incentives to domestic companies to innovate.

Whichever model Croatia chooses, it is quite clear that the public sector could not be the driving force

ciency of the public administration and strengthen public institutions.

Other key reforms include improving the rule of law, increasing the flexibility of the labor market, modernizing the education system, fostering competition and creating a friendlier business and investment environment. These reforms could be the tide that lifts the boat, benefiting industry and modern services sectors like IT but also tourism and transport. Only with reforms that will substantially improve competitiveness will Croatia experience higher and more resilient growth.

Croatia has an opportunity

ENCOURAGEMENT AND CAVEATS The World Bank considers Croatia as a country that is yet to complete its reforms. Do you think that the society and the government are willing to complete the reforms, and start creating a new growth model?

— I would like to use this opportunity to commend the government on the fiscal consolidation efforts with the trend continuing in the positive direction. We hope that the trend will be sustained because Croatia truly has the opportunity to decrease its public debt to 60-65% of GDP by 2020.

I have also been encouraged by the direction of reforms in the road sector as mentioned before. We hope to see the same determination by the authorities to transform the railway sector in the next months.

While we are encouraged by the direction of the reforms in some areas, we have not seen much progress in others. The consensus between the private and public sectors, civil society organizations and the government is a key element for achieving fundamental changes. I am not sure that the Croatian society fully realizes the risks it faces by postponing reforms or by privileging and protecting just some powerful interest groups in its society. In our conversations with the authorities we see that there is the understanding about what needs to be done and the hope that relevant activities will be expedited. We, in the World Bank, are available to provide the support for the transformation of society, as well as to support and to protect the vulnerable.

— Tourism is and will remain an important sector for the Croatian economy. If everything remains the same tourism will bring in a steady flow of income for years to come.

But let us not forget that Croatia has benefited from record high numbers of tourists also due to the volatile situations in the neighborhood and in competitor countries. Tourists, who used to go to Turkey and Egypt for example, are now visiting Croatia and this could change. It is also a well-known fact that this sector is intrinsically less innovative and has fewer positive spillovers on the rest of the economy. So, while it is good to have tourism revenues amounting to 20 percent of GDP, I would encourage Croatia to invest and work harder on developing its private sector and improving its competition policy and not just to focus on few large firms, including state-owned enterprises, which are dominating the economy. We would like to see many more new firms entering and existing in the market and growing as a driving force of the Croatian economy.

The question that you had raised at the very beginning of the debate about the introduction of euro to Croatia was whether the country had adequate institutions to become a resilient member of the eurozone.

— The process for euro adoption is an opportunity to implement deep, needed reforms. The path towards ERMII entry should be used to strengthen institutions, regulatory bodies, the judicial system, and the public administration, so that when the euro is adopted the economy is strong enough to succeed in the euro area. We would like to see Croatia’s institutions become resilient to the shocks that are inevitable in global economic cycles.

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NATIONAL DAYS

ARRI VALS & D EPAR T UR E S

in April

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VIKTOR OLUJIĆ New member of Managing Board of Asseco SEE Croatia

The Supervisory Board of Asseco SEE Croatia has appointed Viktor Olujić as a new member of the Managing Board of this manufacturer of mobile, security and communications software solutions for financial digital services in Croatia and the region.

Viktor Olujić has been working in numerous positions in the company for 20 years. For the past seven years, he has been managing the Department of product development, authentication solution and payment security which are used by most banks in

SYRIA

Croatia and the region. In collaboration with MasterCard, he worked on the CAP (Chip Authentication Product) specification and managed the team that was among the first four in the world to incorporate this most advanced security authentication solution in the company's own products. He has been developing the SxS security solution, which has been used by over 100 banks and banking groups around the world to protect the safety of their users when making online payments.

National Day

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NETHERLANDS

National Day (King's Day)

MLADEN FOGEC President of IFC

IVO IVANČIĆ New Managing Director of VERN University

So far, Ivo Ivančić has served as Deputy Managing Director, Director of the Administration Office and a member of the VERN University Council. Prior to that, he was the chief executive of communications, and the head of the External Communications Service.

He started his career at VERN as an officer. Ivančić completed VERN's undergraduate studies, majoring in Entrepreneurship Economics, the Spe-

cialist Graduate Studies, majoring in Entrepreneurial Management, and the UBI / VERN's International MBA studies. He also graduated from Heidelberg University and IESE Business School in Barcelona. VERN will be now managed by a three-member board: Chairman of the Managing Board, Branko Štefanović (CEO), Dean Professor Vlatko Cvrtila, PhD, (member) and Managing Director, Ivo Ivančić (member).

SERGE BRUNSCHWIG New executive at Louis Vuitton

As a part of internal reshuffle in the company management, Louis Vuitton Möet Hennessy (LVMH), the world’s biggest luxury goods group, has appointed Serge Brunschwig as the new chairman and chief executive of its Fendi fashion house.

Brunschwig will replace Pietro Beccari, who will now become the Chair-

man and CEO of LVMH’s Christian Dior Couture arm. Brunschwig will report to Toni Belloni, LVMH Group Managing Director. Last month, the company released data on its annual profit, confirming an increase after a revival in Chinese demand boosted sales last year and spurred on some of its major brands like Louis Vuitton.

The current president of the Foreign Investors Council (FIC) in Croatia, Mladen Fogec has been re-appointed as the Council's president at its assembly meeting. Fogec's term as FIC president will expire in 2020. As the Council's president, and in cooperation with other members of the Council's Managing Board, Mladen Fogec will continue to work on boosting the cooperation with state bodies and business associations in Croatia, as well as on establishing stronger connections between existing investors and those who are yet to come to the Croatian market. Zoltan Aldott, CEO of INA, and Viktor Pavlinić, CEO of Tele2 d.o.o., were appointed Vice Presidents of the Council. Michael Georg Muller, CEO of Raiffeisenbank Austria d.d., Burak Baykan, Regional Director of Doğuş Group for Croatia and Montenegro, Dejan Ljuština, partner in PricewaterhouseCoopers Consulting d.o.o., and Tomislav Šlat, director of 3M for Southeast Europe, have all been appointed members of the Council's Managing Board.

DAMIR BRKIĆ New board member at KentBank

KentBank d.d. has appointed Damir Brkić a new member of the Managing Board in charge of the Corporate Sector, Small and Medium Enterprises and IT. Thus, after the appointement has been officially confirmed by the Croatian National Bank, Damir Brkić joined the existing members, Chair-

man Ivo Bilić and Mr. Fikret Kartal at the Board. Brkić spent 16 years in banking and 4 years in foreign auditing services, actively managing the portfolio of medium and large companies in almost all sectors of the economy through various business phases of their development.

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PO LI TI C S

Text: ŽELIMIR MARAS Don't go too far.

Brčko District is one such condominium

Condominium Old concept, dirty word

Overlapping territorial claims have existed since the beginning of the organised state as we know it, but they have been resolved using a wide variety of tools, some now deemed obsolete, all in favour of “French revolutionary practise”, with ‘one state-one flagone nation’ out of many ideas. But let us switch our minds to some more ambiguous solutions that also seem quite adequate: dominions, personal unions, dependencies, one-country-two-systems and... condominiums.

WIN-WIN, LOSE-LOSE, WIN-LOSE

Of course, there are solutions that please everybody, and solu-

tions that please nobody. The first are perfect, the latter are second best, as Brad Pitt would say in “Inglourious Basterds” (Tarantino English orthography, yes). And

the various levels of de facto and de jure recognitions of situations on the ground do not help. I am honestly able to find few people in Serbia who would recognise an independent Kosovo, and few people in Kosovo (provided they are Albanians) who would recognise it is the Autonomous Province of Kosovo and Metohija within Serbia. Few people in Ukraine would say ‘okay, Crimea is Russian’, while there are equally few of those in Russia who would say it is Ukrainian. East Jerusalem? Best not even mention that.

Then there is the type of solution that leaves both sides feeling fairly satisfied. And these solutions, which are blurry and not particularly clear, are always the best.

Like New Zealand, for example. Is it an independent state? Yes. Is it part of the British Commonwealth?

Yes, as it is in a personal union with the UK, with Queen Elizabeth as New Zealand’s ruling monarch.

It has two anthems: the Royal God Save the Queen and the local bi-lin-

IT USED TO BE SAID: YOU CAN'T HAVE IT BOTH WAYS. WELL, MAYBE WE CAN. IT IS JUST THAT IN OUR BLACK-AND-WHITE CONCEPTS WE HAVE FORGOTTEN ABOUT SHADES OF GREY AND THINKING OUTSIDE THE BOX then there are solutions where one side is happy and the other guy is left simply deeply unhappy. This is the worst kind of solution. Or the third best, to remain faithful to Brad Pitt. This is the case with Kosovo, Crimea, Abkhazia etc. And

gual anthem. Take Hong Kong and Macau as other examples. Is Hong Kong a capitalist haven with English as the official language?

Yes. It is democratic? Pretty much.

Is it in China? Yes, since 1997: one country, two systems. Whoever de-

signed such clever systems should be somehow awarded. These are win-win combinations, in the first case for monarchists and those seeking independent, in the second case for unitary communists and Cantonese capitalists clinging to British traditions.

CONDOMINIUM OR NOT?

And now the final question, what is a condominium in this context? It means pretty much the following: every building has two national flags (and the local one), all citizens have dual citizenship and two passports. They can choose their own, say, national football team to play. The police are neutral, as is the army, or both sides are present. You can conduct document administration according to the laws of either country; both languages, both currencies, everything dual. Both countries proudly print maps with the territory within their borders, because it is true. Some people say: I live in Country A, while some say: I live in Country B. And they are both correct.

Well, we have Andorra as a co-principality, but it is more like a fully independent country. This solution may sound strange, but I can’t see ongoing conflicts being resolved without some new Yalta, Potsdam, Berlin Congress or Versaille. Or some war. And this is a peaceful solution. It used to be said: you can't have it both ways. Well, maybe we can. It is just that in our black-and-white concepts we have forgotten about shades of grey and thinking outside the box.

NEW HEBRIDES The last high-profile case was that of the New Hebrides (now Vanuatu), from 1906 to 1980.

The archipelago was a disputed territory, with conflicting claims from France and the UK, but instead of waging war properly to resolve the claims (with was a tradition at the time, and one that neither the French nor the British shied away from), the two friendly powers decided to do the unthinkable and form a joint government. It is not that the territory was going to be declared no man’s land, neither neutral nor independent, but rather it would belong to both

countries. To quote historical facts: “Under the Condominium there were three separate governments – one French, one British, and one joint administration that was partially elected after 1975. The French and British governments were called residencies, each headed by a resident appointed by the metropolitan government. The residency structure greatly emphasised dualism, with both consisting of an equal number of French and British representatives, bureaucrats and administrators. Every member of one residency always had an exact mirror opposite number on the other side who they could consult. The symmetry between the two residencies was almost exact. The joint government consisted of both local and European officials. It had jurisdiction over the postal service, public radio station, public works, infrastructure and censuses, among other things.”

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I NTERVIEW

HAZU's Goal is Croatia as a Society of Knowledge and Science Photo: Maja Hrnjak

Investing in science and education is investing in future, but governments do not immediately see its benefits as they often have to deal with critical situations at hand ZVONKO KUSIĆ Academic and President of the Croatian Academy of Science and Art (HAZU)

When, a century and a half ago, Josip Juraj Strossmayer initiated the founding of the Academy, the guiding idea was that small nations can stand shoulder-to-shoulder with bigger nations with their education, science and culture, that is, occupy the position they are entitled to. Now, we are in a similar position - education, science and knowledge will be one of the most important factors that will determine our position in the European Union and the globalized world, while culture and art will play an important role in preserving national identity and contributing to the European identity - says academic Zvonko Kusić, president of the Croatian Academy of Science and Art, in his interview for Diplomacy & Commerce.

What is the quality of the Croatian science today and how capable are Croatian scientists to participate and contribute to the current debates in the Croatian society and beyond?

— The vision of the Croatian Academy of Science and Art, as the highest level scientific and artistic

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institution in Croatia, is that the Croatian society is a society of knowledge and science, and therefore we advocate the inclusion of Croatian science in the European and global scientific trends. Investing in science and education is investing in future, but governments do not immediately see its benefits as they often have to deal with critical situations at hand.

What we have here is a vicious circle where the poor society has no means to invest in science and education, which in the long run leads to it being unable to develop and as a result, it remains poor or

effort should be invested.

What do you think of the quality of education and what should the education reform look like in order for the education to be able to deal with the 21st century?

Could you briefly explain your view of a comprehensive curricular reform?

— The Croatian Academy of Science and Art has expressed its views on the educational reforms in a timely manner and developed guidelines for education strategy, education system, science and technology that are embedded in

WE NEED TO TAKE ADVANTAGE OF THE POSITIVE SIDE OF GLOBALIZATION, AND THIS IS AN OPPORTUNITY FOR YOUNG PEOPLE TO GRADUALLY ASSUME RESPONSIBILITY FOR CROATIA regresses even further. In the long run, this is certainly unfortunate, and we have to find the right balance, while preventing science, education and culture falling below the level that would jeopardize the development of the whole society in the future. But if money is managed rationally, results and success can be achieved even with smaller amounts. You need to be able to define priority projects and transfer money to them. Today, we live in the culture of spectacle and show business. In order to promote serious things, much more

the Strategy for Education, Science and Technology. Therefore, the Academy supports the need for a general consensus for the continuation of the school reform while fostering a responsible approach to education. In order for the reform to be successful and feasible, it is necessary to have a professional and scientific agreement on the concept, format, content and order of implementation of the comprehensive curricular reform, taking into account other segments from the Strategy for Education, Science and Technology, as well as the

appropriate legal framework. We are committed to the significant involvement of Croatian universities and public scientific institutes in the adoption of key documents and in the implementation of the reform, because educating teachers is a fundamental prerequisite for any education reform.

The reform must be in line with Croatia's needs in order for the country to be more involved with the technologically advanced society, which requires, among other things, continuous improvement of learning in the STEM area. The reform must also take into account all the positive traditions of Croatian education, as well as the Constitution-guaranteed the right for everyone to have equal access to education in accordance with their abilities. The Academy has received the draft national curricula for the subjects of History and Croatian language from the Ministry of Science and Education to be reviewed.

What place does culture occupy in today's Croatia? How many Croatian artists and art communities enjoy respect and are socially relevant?

— In today's globalized world and in Europe, we will solidify our position on the basis of our knowledge and education and retain our identity thanks to our culture and art. Many artists, with many of them being HAZU members, have

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created the permanent heritage for their nation with their artwork and have contributed to the evolution of the Croatian, and therefore, our common European identity.

What position does HAZU occupy in the Croatian society?

How would you define the gist of the situation in Croatia in terms of the fields that are in HAZU's domain and how much can you influence decision-makers in that context?

— Through its initiatives, the Croatian Academy of Science and Art has solidified its position as a reference point for clearly articulated and constructive stances based on scientific, professional and ethical principles. The Academy's voice is heard, and its opinions, cooperation, patronage and support are sought by a growing number institutions. Ministers and other officials often participate in our meetings. The Academy's opinions from years ago are still heard in the public space. Our points of view, our stances, and our orientation are a guarantee of the society's stability and have a long-term effect. We cannot expect that this will always directly affect the social life, but we are under the impression that it has been, slowly but surely, penetrating the public arena, although the HAZU should not change itself for the sake of being approved, liked or applauded by other people. This U-turn did not happen suddenly, but it is felt. It's hard to say what's causing it. We presume there are three possibilities - one is to do better and more, the other is to be more recognizable, because that is the most important thing in today's world dominated by media, and the third important thing is that there is the destruction of most institutions, lack of trust in them and relativization of authority in today's society. The Academy is somehow positioned as a stable institution, the voice of reason and calmness, I would say, and thanks to its authority, continuity, impartiality and independence,

it is able to gather the most competent groups and individuals in society. If HAZU were to take sides, it would lose its basic mission as a standard and a reference point. We are demonstrating our important role in predicting situations and providing strategic and scientific support for their solution, but without sensationalist activism and making noise in the media.

In developed societies, it is a common practice to first define the goals and on the basis of them, we discuss and draft laws and regulations. In Croatia, it is exactly the opposite and that's not good. The Academy, therefore, looks at the problems over a longer period of time, while the government has to make decisions on a daily basis.

This is why the Croatian Academy directs processes in the society to build a better and more advanced Croatia, which is its main mission.

al community as much as possible so that Croatia, at least indirectly, benefits from them. It is necessary to create an atmosphere in which apathy and hopelessness will be replaced by social optimism and hope that things in Croatia could be better. This is not an easy task, and therefore is particularly important for those who are society's leaders and the media to be more optimistic about the future and motivate young people to stay in Croatia and use their knowledge to build up their country instead of moving abroad to secure the basic existence. By doing so, we are going to overcome the economic crisis faster which, in turn, will create a more favourable environment for staying in the country. This is a vicious circle where the departure of the most active segments of the society slows down overcoming the crisis. Young people need to

AS A RULE, THE ACADEMY DOES NOT REACT TO DAILY POLITICAL EVENTS. NO SUCH ACADEMY IN THE WORLD DEALS WITH POLITICS A significant number of young, educated people have been emigrating from Croatia despite the fact that the country is an EU member. What do you think of the consequences of brain drain, and do you believe there is an effective approach that would allow young intellectuals and experts to stay in the country?

— The best workforce has always emigrated because they have better conditions abroad to continue their careers and it is impossible to completely stop this. These processes occur in other societies too. In such circumstances, we should work towards securing the best possible conditions for these young scientists and experts to ensure that they stay in the country and to act as a catalyst for the development of the economy and society. Those who have left should be helped to be connected to the Croatian scientific and profession-

understand that they decide about their lives and that they should not depend on being given something for free or something being taken away from them. That means they will have to continue learning their whole life and adapting to rapid changes. This is not easy, but it is the only way to create a better Croatia. Thus, economic development and keeping young people in the country are connected - one supports the other - and it is important that progress is made. Obviously, we need to sacrifice something in the beginning to initiate this process. People are ready to sacrifice something when they see a goal ahead and believe in it.

You are the head of the Council for Dealing with the Consequences of Totalitarian Regimes (of the past) which has recently issued a recommendation on the use of the Ustasha-related

salute and the five-pointed red star which were met with strong reactions from the Croatian public, both left and right. What is your view of these reactions and could you explain the Council's decision? Do you think your recommendations can withstand a test of the current legal framework?

— The Council has achieved a great success we could not have foreseen. It has managed to produce a document that is not ideal, but it is realistic, and the critics from both the left and the right are commending the Council because this document will benefit future generations. Communist symbols, that are associated with crimes committed during that era that were often concealed and were not condemned, were deemed controversial for the first time ever.

In regard to the Za Dom Spremni salute, the Council took a united stand to allow the use of the salute only in the context of the Crotian Armed Forces (HOS) and the Homeland War (Domovinski Rat).

None of the 17 Council members disputed that. The Preamble to the Constitution rejects the NDH (The Independent State of Croatia), but it does mention the Homeland War (Domovinski Rat). These are two constitutional categories, and when they collide with each other it is vital to side with the Homeland War since the HOS (the Croatian Armed Forces) members participated in the Homeland War. These are the people who were killed in defending their country.

That was the key element that led to our decision. Now everything is up to the Government! I would also like to commend PM Andrej Plenković because nobody before him dared to do this. This was the step that our country had made. Time will show whether our conclusions were important. Now, legislative bodies need to draft regulation that is more precise, and then it is the judges' turn. We should not let the judges do their work arbitrarily, as we let them in the past.

HAZU IS VERY ACTIVE Which projects and programmes are you going to start implementing by the end of 2018 and what is the framework for their implementation?

— The Croatian Academy of Science and Art will appoint new members in 2018. We are going to select up to 16 regular members, and no more than 16 associate members, while up to 8 members will be re-elected. We are also going to select no more than 9 corresponding members. In 2018, we are also

going to elect the new president, vice president and secretary general of the Croatian Academy of Sciences, as well as the secretaries of the Academy's segments and five members of the Presidency for the period 2019-2022. The Croatian Academy will continue to direct processes in the society and significantly contribute to the creation of a new, better and more advanced Croatia, a country of great potential.

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C O RPO RATE

Diffuse and Integrated Hotels New tourist products that can be formed in Croatia since 2014

ment of an integral hotel. Considering all of the aforementioned, this type of hotel is especially interesting to private renters.

ANA-MARIJA KAJIĆ Licentiate Degree in Law

Diffuse hotels are created by pooling private renters. These are not classic hotels because the accommodation units in a diffuse hotel (apartments, rooms, studio apartments, family rooms) are located in the wider area of the old historical town centres, and in old rural households that have a common reception area, and serve joint breakfast.

•T he term diffuse hotel is described as "part house, part hotel" since it combines the classic hotel and private accommodation.

• A diffuse hotel must have: - shared guest reception facilities - reception area with reception desk and room for stay -s hared areas for preparing and serving breakfast and beverages.

• A diffuse hotel can have the following accommodation units: room, family room, hotel apartment, studio apartment and apartment.

• Diffuse hotels have the option of providing additional services to expand the offer of private renters such as reading / library space, conference halls, local products shops, boat / vehicle rentals, various courses, excursions, workshops, visiting wineries, agricultural production and gastronomy

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workshops, which diffused hotels can provide independently or in cooperation with local service providers.

• The Republic of Croatia has a multitude of old historical towns, both on the Adriatic coast and on the islands and in continental Croatia, where diffuse hotels can: - significantly improve the accommodation offer - extend the average annual occupancy rate - attract guests with higher purchasing power because of: - higher quality and more professional services

• An integrated hotel is a functional unit in a populated area, consisting of common facilities and joint, previously categorized (classified) facilities located in three or more buildings or parts of buildings that can span throughout the area, including in-between facilities that are used for other purposes.

Accomondation facilities must be located in at least two buildings and / or parts of the building, while the catering facilities can be separated from the accommodation facilities by a public or shared area.

• An integrated hotel must have: - shared guest reception facilities - reception hall with reception desk and room for stay - common catering facilities for preparing and serving breakfast and beverages – a restaurant, dining room, snack bar or the provision of breakfast, beverages and drinks in pre-categorized catering facilities or other

HIGHER PROFITABILITY IS THE MAIN REASON WHY PRIVATE RENTERS ARE POOLING TO FORM A DIFFUSE HOTEL - more organized and homogeneous accommodation - better arrangement of the facilities - wider offer of additional services Integrated or combined hotels are a new type of hotels that enables a connection between existing accommodation in rooms, apartments, studio apartments and holiday homes which may be owned by a natural or legal person, or may be leased by one or more natural or legal persons on the basic condition that the listed units have been categorized prior to the establish-

caterers - a common sanitary facility, plus the amenities for reception of guests, breakfast and beverages - accommodation facilities, which have been previously categorized, in at least two separate accommodation buildings.

• Other interested parties, like local communities, can make their facilities and services available to integrated hotels to be used for the tourist / catering purposes, including: - sports and recreational facilities - cinema - library - souvenir shops

• For integrated hotel that has additional facilities, equipment, devices and services tailored to the specific requirements of guests, the caterer can request to have specific standards implemented such as: business, club, meeting, congress, casino, holiday resort, family, health & fitness, diving, bicycle, amenities for persons with disabilities, the elderly and other special legally prescribed standards provided that the accommodation facilities of the integrated hotel are at least four-star, and that the other legally prescribed conditions for obtaining a special standard are fulfilled.

• By establishing or merging into an integrated hotel, the so-called private renters boost the quality of their offer and services, and their accommodation facilities have market recognizability. This also facilitates a joint market entry, creation of new amenities and tourism products and services, and the application of new technologies, all with the aim of expected increase in revenues, or the prolongation of annual occupancy rate, pre- and post-season.

• Considering the needs of the third generation tourists, who are active, demanding and informed buyers of life experiences and stories, cheerful and critical, enjoy motivated travel, have the desire to strongly experience their journey, want individual / personalized service, as well as to discover authentic things, and be part of the local culture, while considering the common interest of private renters and local communities in raising the quality and modernizing the tourist offer and accommodation services, creating new tourist amenities, facilitating creation of new jobs in tourism and finally extending the season and increasing their revenues, we expect a strong growth trend in establishment of diffuse and integrated hotels throughout Croatia.

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15

I NTERVIEW

Croatia has Many Tasks to Finish

The EU economy is continuously showing good economic performance but few members including Croatia are still facing considerable problems. Croatian progress in the implementation of the EC recommendations is mostly limited or there has been no progress noted

continues with positive economic sentiment, improvement in labour markets and increased global economic activity and trade. Overall, EU member states have made progress in reform implementation over the past years with the support of the European Commission.

MANICA HAUPTMAN Senior economic advisor, European Commission Representation to Croatia

Each year, the European Commission undertakes a detailed analysis of each country's plans for budget, macroeconomic and structural reforms. In the previous years, many countries waited for the news with lot of nervousness as the Commission’s recommendations meant a lot of sweat for those which economies were doing badly. However, the scenery have gradually changed, although not for everybody.

How the EU has fared in general?

— The EU economy has been doing well, expending robustly with the positive macroeconomic outlook being matched by improved labour market and social situation.

However, not everyone is benefiting equally from the economic growth and there is still a lot to be done in terms of structural reforms

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and convergence in some of the EU member states. Unemployment and the number of people at risk of poverty are still too high. Social protection systems remain a challenge, since increasing labour mobility and new forms of employment are not easily matched by adequate changes and reforms.

The Commission will present the in-depth reviews as part of its annual Country Reports in early 2018. How in terms of structural reforms as well as situation in public finance Croatia used previous EC recommendations?

— Country specific recommendations are adopted every year by the Council of the EU on the basis of the Commission proposals, which

THE NUMBER OF EU COUNTRIES FACING MACROECONOMIC IMBALANCES HAS ALSO FALLEN AND THUS WE HAVE ONLY THREE COUNTRIES FACING EXCESSIVE IMBALANCES, CYPRUS, ITALY AND CROATIA Despite policy areas where there is work to be done, the overall news in the EU remains positive.

The number of countries facing difficulties in public finances has been steadily declining and we are left with only France and Spain in the corrective arm of the excessive deficit procedure. The number of countries facing macroeconomic imbalances has also fallen and thus we have only three countries facing excessive imbalances, Cyprus, Italy and Croatia.

Economic growth in the EU

means that they are supported by the member states.

In 2016 Croatia made significant progress in the quality of the public finances, with marked deficit reduction and a declining trend of the debt ratio. Last year the Council of the EU abrogated excessive deficit procedure for Croatia on the basis of improvements in public finance in the prior year largely due to economic growth resulting in higher tax revenue and contained expenditure growth. Despite the positive trend, however, the debt

ratio remains high especially when compared to peers (other CEE EU member states).

Country specific recommendations for Croatia do not tackle fiscal policy only of course, but a number of other policy areas. The Recommendations have remained very similar over the years, meaning that Croatian progress in its implementation is either limited or in some areas no progress has been noted; such as in pension system or public administration reform.

On the basis of the analysis in the Alert Mechanism Report Croatia became one of 12 countries that have been proposed to be covered by an in-depth review in 2018. What role such reviews have on government policies?

— Identifying member states for an in-depth review aims to prevent the emergence and build-up of harmful macroeconomic imbalances, which could affect not only the economic stability in a certain member state but also in the euro area and the EU as a whole.

Our macroeconomic imbalances scoreboard points to vulnerabilities such as excessive public and/ or private debt, unemployment and employment levels and net foreign liabilities among others.

In-depth review then tackles the drivers of these imbalances, which is crucial for future policy choices.

For a member state facing excessive macroeconomic imbalances the European Commission can propose the activation of the macroeconomic imbalances procedure

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to the Council which entails agreement on a corrective action plan for the member state in question including a timeline with planned specific policy actions. Such procedure has so far not been activated for any member state.

Analysis of macroeconomic imbalances is not the only subject of the country reports. Apart from this, Commission services are also analyzing developments in the domain of structural policies as well as assessing progress in the implementation of country specific recommendations over the years tackling structural reforms. The most successful policy areas for reforms across the EU have been financial services, fiscal policy and fiscal governance but there has been less evident progress in terms of fiscal sustainability of pension systems, reform in services markets as well as persistently weak access to venture capital for companies.

IN 2016 CROATIA MADE SIGNIFICANT PROGRESS IN THE QUALITY OF THE PUBLIC FINANCES, WITH MARKED DEFICIT REDUCTION. HOWEVER, THE DEBT RATIO REMAINS HIGH ESPECIALLY WHEN COMPARED TO PEERS

Among the EU members which yet have to reach European average, Croatia had one of the largest slumps in the level of public investments. Did that significantly change as the economy recovered?

— Following a sharp decline in public and private sector investments, investment started slowly rebounding in 2015 with growth rate of 3.8%. The latter reached 5.3% in 2016 and decelerated to 3.4% in 2017, partly depressed by Agrokor crisis. In addition, business environment remains burdened with inefficiencies and lack of access to diversified sources of finance.

As for public investment, it lagged behind and began to grow in 2016 with a rate of 4%. Given its budgetary constraints, Croatia is reliant on the European Structural and Investment Funds (ESI funds

or so called "EU funds"). In the period 2015 - 2017, the share of ESI Funds in public investment stood at 80 % and is the second highest in the EU after Portugal. Overall levels of public investments remain modest, especially in sectors such as R&D which is one of the reasons for low performance in terms of quality of scientific output and more generally, limited cooperation between research and business sectors, which prevents successful commercialisation of scientific research.

The European Commission initiated the European fund for strategic investments (EFSI) providing financial guarantee for public or private sector projects and supporting private investment in member states. After three years of operations, EFSI is backing several projects in Croatia and we hope for further financing agreements to be signed in the future, particularly in terms of combining public and private investment, building investment platforms and establishing links with ESI funds.

The pick-up in economic growth and domestic policy actions have helped put the level of nonperforming loans in Croatia in 2017 on a decreasing path.

Do you expect EC to confirm the same trend this year?

— The quality of bank assets in Croatia have been improving and the banking sector remains well capitalized, with notable improvements of profitability and solvency since 2015. In the third quarter of 2017, the NPL rate declined to 10.8 %, mainly due to NPL sales as well as restructuring, which led to more performing loans. The EU average of NPLs for the same period was 4.4%.

Despite the positive declining trend, the overall level of NPLs in Croatia remains high, especially in the corporate sector. The net inflow of NPLs related to the exposure of banks to Agrokor had a negative effect on the NPLs level, however it was less than initially expected.

To tackle the problem of persisting NPLs in several EU member States, the EU ministers of finance agreed on an action plan in July last year. In March this year, the Commission presented its second progress report in this regard, showing that the continuous decline of NPLs, albeit unevenly across the member States. Together with the report, the Commission proposed a new package of measures to tackle NPLs, including further development of a secondary NPL market in the EU as well as enabling accelerated out-of-court settlement for loans granted to businesses and secured by collaterals. However, the primary responsibility for tackling high NPL levels remains with affected banks and ultimately, with the member states.

NEW OPPORTUNITIES FOR TECHNICAL ASSISTANCE TO CROATIA EC has formed a specialized service as a sort of support to the countries in drafting structural reforms. How much is that support used in Croatia?

— The Structural Reform Support Service (SRSS) is a new service of the Commission, available to the member states at their request to assist in the design, implementation and evaluation of structural reforms. The member states submit projects to the Commission annually according to their priorities. Depending on the available budget, a list of projects across the EU is selected each year. In 2017, SRSS supported 150 projects in 15 member states. The initial success of the service is reflected in the fact that demand outweighed the available budget fivefold this

year and ultimately 140 projects in 24 member states were chosen for support, with seventeen in Croatia alone.

Given the demand at hand, the Commission is proposing to increase funding for the 2018-20 period and intends to propose a follow up under the post 2020 multiannual financial framework. Within the latter the Commission has also foreseen a dedicated convergence facility for member states in the euro adoption process, which in itself opens new opportunities for technical and financial assistance for Croatia. Before the adoption of the new financial framework, there will be a dedicated work stream within SRSS to assist countries on their way towards joining the euro area.

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PO LI TI C S

Text: ŽELIMIR MARAS

Referendum Horrors And independence appeal

It is difficult to achieve the right balance between two conflicting urges: to be stable (socalled stabilocracy) and to be, as an exciting new possibility, independent. There is, in fact, just one way to do it right: negotiate with the central government, like Scotland in 2014, Montenegro in 2006, Quebec in 1995. All unilateral moves either fail completely, turn bloody or simply end up as frozen conflicts.

CATALONIA

The trouble with Catalonia is not that they have no right to be independent, nor that haven’t suffered injustice since the Union of Aragon and Castille, the Bourbon Revolution, Austriacists or the Franco dictatorship, but rather merely that Carles Puigdemont did not do what Alex Salmond and Nicola Sturgeon did: negotiate the rules and do the job. Milo Đukanović did his job well. It usually boils down to the voting lists, the time span for YES or NO campaigns, the percentage of qualified voters (usually between 50 and 66.67%), which in the case of Montenegro was 55%.

You can say whatever you want

about Đukanović, but he had fierce opponents in Belgrade – first in the form of strongman Milošević, then the much tougher democrats with legitimacy, like Đinđić, Koštunica and Tadić. But he still succeeded.

One cannot say that Puigdemont had a tougher job with Rajoy than anyone had with “Sloba”. Simply, Puigdemont knew that the 50% threshold could not be reached peacefully, so he provoked incidents to heat up the situation, as in the Belfast Easter Rising of 1916.

The majority of Irish people were

tourism is its greatest potential and nobody likes a warzone, the new international brigades will not help, and so the best option is to renegotiate the Catalan position.

Well, maybe that was the crucial objective: to make a hot fuss and negotiate from a tougher position.

Rajoy also proved not to be a wuss, so get back to the table and talk.

And the Estelada Blava, the Flag of Catalan Separatism, reflects aspirations to unite five regions of Països Catalans: Valencia, the Balearic Islands, Andorra and Perpignan, and that won’t work at all. Puigdemont wanted to be caliph instead of the caliph, with his own money and presidency. Here in this region, we know about that all too well.

KURDISTAN AND ONE STEP BEYOND

The same applies to Kurdistan.

We all like the heroic battle of the Kurds against the notorious Is-

AND THE REFENDUM IS JUST A TRUMP CARD, NOTHING MORE. NOW VENETO IS PREPARING SOMETHING. RESPECT, BUT FIRST NEGOTIATE. OR YOU WILL HAVE TO NEGOTIATE LATER then opposed to independence, but their opinion was changed by the cruel reaction of British troops.

Thank God the same didn’t happen in Barcelona, though it came close. Rajoy could have done things much better. In other words, Catalonia cannot be independent, as the EU said that was illegal, 50% is unattainable in a referendum,

lamic State, their female fighters, their respect for minorities, and the secularity of their society. But they simply cannot expect Baghdad to say “Oh, okay, no problem, pack your bags and leave, don't forget the oil! Good luck, guys!”

Even Denmark or Finland could say something louder than that.

It is, once again, not about the

RIGHT, but rather about the procedures. Just like the situations in the Crimea, Abkhazia, South Ossetia, Nagorno-Karabakh, Republika Srpska, the Preševo Valley, Serbian Krajina, Transnistria (you name it) could not and cannot be resolved without talks with the respective central governments, and until that they will all remain frozen. When Montenegro seceded, nobody in Serbia claimed that it should stay with Serbia. You can only call for “another referendum, since the circumstances are different”. Like in Scotland, or Quebec, or with Brexit. But you can organise as many referenda as you want, if you are, say, Transnistria, and you vote OUT, but Moldova says ‘no, you cannot leave even if you de facto depart’, then you have to negotiate.

And a referendum is just a trump card, nothing more. Now Veneto is preparing something. Respect, but first negotiate, or you will only have to negotiate later.

AFRICA

And the worst problems, of course, are awaiting Africa. Europe’s borders are somewhat natural, but in Africa they are arbitrary and colonial. The Republic of Ambazonia (formerly British Cameroon) decided to overturn its unification with French Cameroon, and Biafra wants to resurrect its attempt to leave Nigeria after 50 years. This is all about oil, money and language, but it is also all highly flammable. Many will follow.

And the central governments will not just sit idly by and watch.

SUI GENERIS And now the funny ending. EU representatives have claimed that the situations in Catalonia and Kosovo are incomparable, since Kosovo is a “sui generis” case. Supposedly, the International Court of Justice confirmed that proclaiming independence is not contrary to international law.

But in reality it did not. As Tibor Varadi said, the ICJ concluded elegantly that making declarations is not illegal. So, my declaration that I am the President of Russia is not illegal, it is just a nice try, right?

And we know that Kosovo is not sui generis. And they know that too. In fact, everyone knows! Sui generis is a term that’s used when you want to do something that contradicts all regulations and you desperately need justification. For example, all students have to attend college classes, but not me, since I am “sui generis”. Nobody is allowed to drive drunk except me, as I am “sui generis”, so it does not apply to me, right? Well, sui generis is rubbish and you know it. Just a lame excuse.

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www.diplomacyandcommerce.hr

T H E M A L M O - PA L E RM O E X P RE S S

Two Giant Engineering Projects Will Alter the European Landscape Two giant projects should improve links between Europe’s north and south

WHEN the Berlin Wall fell, Europe began repairing its sundered east-west transport networks. A revived Paris-Moscow train heralded the new era. Berlin’s cathedral-like main station, opened in 2006, became the continent’s new hub. But old north-south bottlenecks are back in the spotlight. Of the nine “Core Network Corridors” currently earmarked for EU investment, six are more vertical than horizontal. The centrepiece of this strategy is the “Scandinavian-Mediterranean corridor” from Sweden and Finland, through Denmark, Germany, Austria and Italy to Malta in the south. This programme—jointly funded by the EU and member states—includes railway electrification, port modernisation and the two largest engineering projects on the continent.

The greatest progress has been at the route’s northern end. The Oresund link, a 16km roadand-rail, bridge-and-tunnel link from Malmo to Copenhagen that opened in 2000, has knitted the two cities into one region. The next step is to link them to Hamburg with a tunnel bearing two train tracks and a four-lane highway under the Fehmarn Strait, explains Lars Friis Cornett, deputy director of the forthcoming Fehmarnbelt project, soon to be the biggest construction site on the continent. This would create a new regional economy dubbed “STRING”.

Why is it necessary? With their tightly interlinked shipping lanes and industrial supply chains, Copenhagen and Hamburg are already one economy in many senses. But getting between them is a hassle. The land route—taken by hundreds of lorries a day—is a six-hour drive.

There is a sea link, but this too is tortuous. After the short run from Copenhagen to the southern Danish coast, the train slows as it enters the port of Rodby. On special rails it enters a ferry alongside the cars and trucks. Passengers disembark and hurry to the on-board shop (alcohol and cigarettes can be sold only in German waters, which account for just 17 minutes of the trip). After an hour the ferry docks at Puttgarden and passengers return to the train, which pulls out onto German tracks and speeds on to Hamburg. The whole journey between the two cities takes four hours, 33 minutes.

The Fehmarnbelt project was agreed on by German and Danish governments in 2007, and endorsed by Danish planning authorities in 2015. Now it just remains for German planners to give it the green light by 2020, when construction is to start. Despite protests, the plan-

IN ITS OWN WAY, THE MALMO-PALERMO EXPRESS WOULD BE AS GREAT A POLITICAL ACHIEVEMENT AS ITS PARIS-MOSCOW COUNTERPART ners are confident that they will have clearance by next year. Funded by the Danish government, which will recoup its money from toll charges, construction will involve sinking large sections of tunnel units into the seabed; the “Lego principle”, Mr Cornett calls it. When completed in 2028, this will be the longest immersed tunnel in the world. With associated road and rail improvements it will cut the Hamburg-Copenhagen train ride to two hours, 40 minutes. Builders expect road traffic across the strait in 2030 to be more than double what it was in 2011.

From Hamburg the immediate journey south

is smooth on Germany’s autobahns and highspeed train tracks. The southward rail fork via Berlin was accelerated by a recent upgrade of lines through Saxony and northern Bavaria.

On December 8th Angela Merkel joined other dignitaries for a train ride of less than four hours from the German capital to Munich, down from more than six hours.

Then, though, the journey slows drastically.

From Innsbruck in Austria the train creeps up to the Brenner Pass, through which 40% of all trans-Alpine traffic travels along a narrow, steep shelf that winds along the side of a valley. The train goes so slowly that passengers can observe Alpine flowers peeping through the snow.

Not until two hours after leaving Innsbruck, at Fortezza in Italy, does it speed up downhill, snow giving way to vineyards and the plains of the Po valley. The roads are no better: 1m lorries a year travel through the pass and long tailbacks are common.

Hence the impending Brenner Base Tunnel, 40% funded by the EU and the rest by the Austrian and Italian governments, which at 64km from Innsbruck to Fortezza will be the longest in the world when it opens in 2026. It could transform intra-European trade by increasing the daily number of trains through the pass from 240 per day to 591, mostly carrying goods.

From Fortezza the speed picks up thanks to the Italian rail network. Since 2009 sleek Frecciarossa and Frecciargento trains have cut Milan-Naples travel times from eight hours to just over four. But from Naples the investment stops. There is a slow, twice-a-day service to Sicily with a ferry from Salerno, and one a day from Villa San Giovanni. The contrast with Europe’s north is stark: the Strait of Messina is half as wide as the Oresund crossing, but a bridge to Sicily has been a glint in politicians’ eyes for decades. The island remains too poor for it to be economical to build such a link and run highspeed trains to Palermo, its capital.

That is a reminder to European politicians, who are fretting about the revival of the eastwest divide. That rift is about politics, a product of historical happenstance. It is soluble. But the continent’s north-south rift is in many ways deeper: it involves intransigent barriers like high mountains and foaming seas, as well as deep cultural and economic differences.

From The Economist, published under licence.

The original article, in English, can be found on www.economist.com

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I NTERVIEW

We are Ready for Election if Proper Conditions are Created The government, with Prime Minister Andrej Plenković at its helm, has succeeded in annulling all the positive results that we left as our legacy and has demonstrated that it has no strength or determination to tackle the problems surrounding it SINIŠA HAJDAŠ DONČIĆ Deputy Speaker of the Croatian National Parliament and a member of the Presidency of the Social Democratic Party (SDP)

The Deputy Speaker of the Croatian National Parliament and a member of the Presidency of the Social Democratic Party (SDP), Siniša Hajdaš Dončić is wellknown for his criticism of the ruling party and its work in the government. But he is also quite hard on certain opposition parties that undermine the dignity of the Parliament. In an interview for Diplomacy & Commerce magazine, he argues that his party has far better solutions than the Croatian government for the issues such as economic challenges posed by Agrokor and INA. He also talks about more important political threats such as the country turning towards the right-wing option.

As a representative of the opposition and as the Deputy Speaker of the Parliament, what is your view of the current state of affairs in Croatia politically, economically and democratically? You said that a crawling

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conservative revolution was under way.

— Instead of progressing, we've been regressing politically, economically and democratically. We are stuck, we are stagnating, and in many areas, we are even deteriorating. Unfortunately, in a very short time of just two years, this government, put together by the Croatian Democratic Union (Hrvatska Demokratska Zajednica – HDZ), has succeeded in annulling all the positive results that the SDP-led government had achieved in Croatia. After we pulled the country out of the crisis and the recession and restored order in it, industrial production is

There has been a lot of difficulty in regulating the Parliament's work - frequent recesses, the issues with the uncertain majority and similar. What is a possible solution to this problem?

— The Parliament is the central place of Croatian democracy, and apart from being a legislative body, it is also a representative body in which the most diverse political ideas and attitudes should and need to be heard. Unfortunately, the ruling majority, which is on rather shaky legs because it is cloned and composed of unnatural partners from the opposite side of the political spectrum while

THE RULING MAJORITY IS ON SHAKY LEGS AND IS SHUNNING FROM WELL-ARGUED DEBATES THAT THE OPPOSITION INSISTS ON WHICH IS THE REASON WHY SUCH DEBATES ARE SUPPRESSED IN THE PARLIAMENT now down again, GDP growth has been slowing down, young people are leaving Croatia, and there are no new investments, while the government and PM Plenkovic have no strength, determination or will to face the problems surrounding them. One of these problems is certainly the crawling conservative revolution, which is slowly evolving into open sympathy for fascism.

hanging by a thread with every major vote, does not like a well-argued discussion as it usually tries to skip or suppress it, sometimes even through a gross violation of democratic motives. It is unacceptable that they are refusing to hear the opposition's proposals or include them in a debate agenda, even when all the formal prerequisites have been met. We should

also mention here that sometimes some opposition members in the parliament justify the implementation of stricter discussion rules because of the way they behave, their attitude and the way they communicate. I am always in favour of a free, open, polite and, above all, well-argued debate, and against insults, aggression or abuse, not only of my fellow MPs but also of the public that watches parliamentary sessions. I am willing to support any changes to the procedure that would be made in that direction.

It's only natural that opposition parties always advocate new elections. How much is the SDP ready for a possible new election and does the party have enough capacity party to enter the race soon considering the divisions and its current state?

— We are not a party that wants to be in power for the sake of power.

For us, as the SDP, the state is not a prey, but rather something that we want to serve responsibly.

Both the party and I personally are interested in power in the context of having better and more efficient solutions for Croatia than our political opponents who have been perpetually demonstrating that they are not cut out to deal with the situation at hand. In this regard, I think it is necessary for

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this government to leave, and it is up to us to demonstrate to the citizens that we have the capacity and the knowledge to take on the responsibility for governing Croatia. Regarding the elections, we have to be prepared for them whenever they happen to be, and that is something that our citizens and our voters expect from us.

The relations within our party should not affect our readiness to participate in an election at any given time. Different thinking, different solution proposals and even personal ambitions of any party member have to be treated in a positive manner because if that is missing, and if there is no dynamics in the party, there is no democracy either. Of course, everything has to happen under the framework of the relevant procedure, as the basis of the democratic system, and there has to be awareness that we, as in everybody in the party, are working on the same task which is to achieve a better life for all Croatian citizens.

Agrokor has to be completed in a way to preserve jobs, maintain production and prevent Agrokor's companies from going out of business, and this is something that we will definitely insist on and even help with. Furthermore, we expect more than just financial restructuring and new loans that would temporarily extend Agrokor's life.

We expect a serious organizational restructuring that will enable real and long-lasting sustainable and profitable business operations

The situation in Agrokor is one of the burning economic issues.

What is the SDP's stance on this issue (new management, Ramljak's resignation, Todorić), and do you share the same views as your party? What is the solution to this whole process?

A SIGNIFICANT NUMBER OF PEOPLE IS LEAVING CROATIA BECAUSE THEY DO NOT WANT WHAT WE NOW HAVE WHICH IS A U-TURN TOWARDS CONSERVATISM AND PROMOTION OF BACKWARD IDEAS

— Unfortunately, there has been a lot of scamming going on in Agrokor, as it happens in most of the things that HDZ is involved in.

This swindling has already begun with the non-transparent adoption of a law called Lex Agrokor, followed by the appointment of an entire army of advisers, a possible withdrawal of money from the company, etc. In this way, the whole process is significantly compromised and someone should be held accountable like, first and foremost, Martina Dalić, who has the highest political responsibility. The entire process of rescuing

— We have already voiced our objections to Minister Dalić's work, and these are, as I have just mentioned – swindling and non-transparent processes in Agrokor; from the appointment of trustees and advisers who have been receiving huge financial benefits to some other issues that involve her, such as conflicts of interest. Here, we are specifically talking about INA and Minister Dalić's not being excluded from the decision-making process.

We think that the arguments for the dismissal of Minister Dalić are more than sufficient. Whether these arguments are put above

The opposition has announced that it would instigate a motion of no-confidence against Martina Dalić. What is the opposition's main reason for doing this and how realistic is the no-confidence vote considering that this would not be the first time that such initiatives of revocation and motion of no-confidence against the government are launched? Does Andrej Plenković's government have the majority or do you have it?

the personal interests of the MPs who make up the ruling coalition today and who make their living from working for this government, really does not depend on us. It is up to us to point out irregularities and demand responsibility, as well as ask for resignation. It is up to the people in power to demonstrate if their responsibility lies with the citizens, or with their party and their coalition buddies.

You were the Minister of Maritime Affairs, Transport and Infracture in the government led

by Zoran Milanović. Currently, there are a number of projects which implementation has been announced and that are of great importance to Croatia. The Pelješac Bridge is one of them. Do you think that the construction of the bridge will start soon and are Chinese companies the right choice for contractors?

— Most, if not all of the infrastructure projects we are talking about today, were prepared by the

SDP-lead government. That's the fact! However, we never saw these projects as party projects, but as national projects, and in this sense, we want them to be implemented regardless of who's in power HDZ or SDP. That also goes for the Pelješac Bridge. We have secured co-financing through the European Union institutions, and it is up to the present government to realize the project. A public procurement procedure was carried out and the Chinese consortium was selected as the most favourable bidder. I hope that the Chinese companies will do the job well. The best price

is certainly one of the most important factors, but quality, safety and adhering to deadlines are as equally important. The government has to monitor and control that. That's their duty!

You are known for being an unconventional politician so what is your view of Croatia turning right-wing? How much are people, who are leaving the country now more than ever, doing so because the right-wing inclination, in addition to escaping the bad economic situation?

How is this going to affect future generations?

— A U-turn towards radical right wing has never brought anything good to any country. Quite the opposite! The final result was always violence, conflicts, wars and tragedies. We do not want that! We want a good life for all our citizens; we want a tolerant society that adopts progressive and not backward ideas; we want Croatia to move forward, and not to further sink into the ghettoization. I am firmly convinced that a significant number of people leaving Croatia do so precisely because they want the same thing we do. However, they have also noticed that Croatia is turning conservative, that negative ideas are being supported and that society is becoming less tolerant. And there is also the corruption for which the state and the judiciary have no right answers.

Trials last forever, and sentencing doesn't even happen. The biggest punishment is community service like peeling potatoes or working in an old people's home. People go where the situation is different!

Unemployed people are not the only ones who are leaving. There are people with decent salaries who, apart from good wages, also want a good life for themselves and their families. It is up to us to do this in Croatia - provide good life for everyone.

NO IMMINENT SOLUTION FOR BIG ISSUES In which way is the dispute over the border with Slovenia going to be resolved and how much do you, as a representative of the opposition, contribute to the decision making process and submission of proposals in the Parliament? Croatia also has an unresolved dispute over the border with Serbia. What is your take on this issue?

— The Slovenian Prime Minister, Miro Cerar has resigned because of internal political relations in Slovenia. This means scheduling new elections, an election campaign, and then definitely a tougher

stance on foreign policy issues, including the border issues with Croatia. We've seen this happen many times. I do not expect ongoing issues to be solved soon, i.e. certainly not until after the election. Still, I hope that all of the ongoing issues will be resolved in the spirit of good neighbourly relations and in a friendly way because neighbours are forever. Everything else would be bad for both Croatia and Slovenia. And this does not only apply to Slovenia, but to all of our neighbours, including Serbia.

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I NTERVIEW

Governments Don't Take us Seriously We need reforms that are tailor-made to the workforce and the citizens, not only to the politicians

MLADEN NOVOSEL President of the Association of Independent Trade Unions of Croatia (SSSH)

At this point, we perhaps have the last opportunity to make a decision about starting to catch up to the rest of Europe, or remaining at the bottom longterm. The living and working conditions of workers seem to always be out of focus for politicians, says Mladen Novosel, president of the Association of Independent Trade Unions of Croatia (SSSH).

Are you satisfied with the current position of trade unions in Croatia in the social dialogue with employers and the Croatian government?

— With every new government, we start a tripartite social dialogue from scratch, because they simply do not know what that is. Today, this dialogue is at the lowest point in the last few years. Goverment members and the Labour Minister (that is ever since he became Vice President of the Economic Social Council) rarely come to the Council's sessions nowadays. If they don't feel the urge to meet up with trade unions and employers once a month to discuss the key economic and social development issues in Croatia, then it is clear that the

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government does not take the social dialogue seriously. The latest example is the pension reform. We haven't even started having serious discussions with social partners, and yet the media have been reporting that the key decisions have already been made.

The situation is a bit more complex with the HUP (the Croatian Employers' Association). Trade unions, that are members of SSSH, have signed hundreds of collective agreements at the employer level, which means that many employers do have a social dialogue on salaries and working conditions. The other thing with the HUP and its branch organizations is that they

the activities stated in the agreements. SSSH is committed to the development of autonomous social dialogue with the HUP and its organizations, because we consider it to be a part of our responsibility.

We share a lot of similar views with the HUP in terms of public policies, and but they have to understand that the sectoral social dialogue and collective bargaining are in their own best interest too.

Are you involved in consultations on the economic growth models in the country?

— The Croatian problem is, first and foremost, that no one thinks about "economic growth models" in this country. For years, we have been warning that Croatia lacks a clear socio-economic development strategy, and that we have adopted the existing sectoral strategies and goals only because of the EU. However, the government has recently formed a body in charge of

FOR YEARS, WE HAVE BEEN WARNING THAT CROATIA LACKS A CLEAR SOCIO-ECONOMIC DEVELOPMENT STRATEGY, AND THAT WE HAVE ADOPTED THE EXISTING SECTORAL STRATEGIES AND GOALS ONLY BECAUSE OF THE EU still do not recognize the interest in collective bargaining because they don't use collective agreements to deal with their labour-related issues. Rather, they want the government to resolve them through regulation. Nevertheless, we have two branch collective agreements in the private sector today - in construction and hospitality industry - which, following the decision made by of the Labour Minister, have been extended and bind all employers to participate in

drafting the Croatian Development Strategy, with SSSH also playing a role, probably thanks to its 2016 pre-election platform called "For Croatia of Satisfied Peopke" which mentions the Strategy as one of our requirements and which contains our vision of socio-economic development of Croatia. It remains to be seen how effective this body is going to be. We will certainly be an active participant.

What are the specific recom-

mendations relating to improving the current position of the workforce and what are the most common problems you face?

— We can stop emigration and the declining birth rate by increasing wages and improving job quality.

Although salaries have finally started to grow, largely as a result of our engagement too, we are still the only new EU member state where salaries are lower than in the pre-crisis period. On the other hand, the job quality continues to decline, as evidenced by the fact that we are the absolute record holder in the EU in terms of precarious work. In practice, workers continue to face numerous violations and abuses of the Labour Act and collective agreements, from employers disrespecting their working hours and workers being unpaid for their overtime, to undocumented work and a part of salaries being disbursed in cash.

Instead of constantly changing the labour legislation, as it has been done in the past 15 years, the government must finally make serious effort to enforce the laws in practice and seek new, normative and non-normative solutions to begin to improve the job quality.

The implementation of extended collective agreements, that are binding to all employers and cover all workers in the said branches, must be supervised.

How important are trade unions in regard to Croatia's accession to the EU and do you expect to see the concrete effects of adopting the European Pillar of Social Rights?

— Trade unions, both in Europe and in Croatia, support the European project, and see it as the

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only way to preserve the results of the European social model in the conditions of globalization. Unfortunately, over the last ten years, the EU has neglected the importance of social dimension, focusing only on the interests of big capital and corporations. Such policies of interest, geared only towards selected groups and not citizens, are now backfiring. Populist movements are thriving because disappointed citizens support cheap promises.

Therefore, the European Pillar of Social Rights may be our last chance of restoring Europe's trust in the European project. But the full construction and implementation of the Pillar is still a long way off.

At the EU level, and in relation to European public policy, SSSH operates through membership in the European Trade Union Confederation (ETUC) and has its representatives in the European Economic and Social Committee (EGSO) which is the advisory body to all decision-making bodies at the EU level, and in the European Social Dialogue Committee (SDC), a bipartite body of employers' and trade unions at the EU level. SSSH will also do its best at the European and national level on the implementation the European Pillar of Social Rights which is exactly what we have been doing recently by having our say in the final text of the National Reform Programme (NPR) under the European Semester (ES). Social indicators will have to be incorporated and monitored through the ES this year.

indicate that more than a half of all jobs will be technically altered due to the effects of digitalization. New social risks will emerge as a result of these changes which we should predict and find solutions for. For example, the workers that are employed via digital platforms should be able to enjoy in the adequate labour and social rights, from the right to appropriate salaries and the work-private life balance, to the right to protection of personal data and social security rights such as pension, health care, unemployment benefits etc.

they are targeted and spent. We are offended by the prejudiced statements that unemployed people are lazy and we reject the claims that all of them are unemployable.

SSSH has been persisently advocating with the government to start implementing employment policy as an integrated public policy linked to other policies (economic, educational, social).

The Croatian Employment Office (HZZ) does not create new jobs, but rather implements measures on raising the employability of the lesser employable categories

I WOULD LIKE TO MENTION THAT EMPLOYERS (HUP) HAVE A CONSTANT ACCESS TO THE GOVERNMENT

What are your estimates of the effects of digitalization on the job quality and quantity in Croatia?

Despite a relatively high number of unemployed, Croatia is forced to import foreign workers during tourist season. In your opinion, what is the solution for these difficult to employ people to find at work?

— Although Croatia chronically lacks in serious labour market analyses, including assessments of the effects of digitalization, it is clear that, in the coming years, digitalization will exert a strong influence on the job structure and quality and on the overall employment level. Rough estimates

— Structural unemployment is our long-term problem that is not being addressed in the right way.

The statement that „the country has no money“ to deal with this problem simply does not work because there are significant budget (both national and EU) resources available, but the question is how

and helping employees with adapting to technological change in order to save their jobs. This means that public funds should not be spent on the easily employable worker categories who can find jobs without the help of these measures anyway. This is exactly what happened with the professional training for work without employment (the socalled SOR) programme which has pushed all others measures aside, and thanks to which, most of the funds went towards employing university graduates who are

the most employable part of the workforce. In recent years, politicians have expressed much more interest in ostensibly reducing the youth unemployment rate, rather than developing long-term employment measures for the unemployed, where unqualified or low-skilled workers make up a significant share.

Croatia is the only EU member where salaries are still lower than they were in 2010. This has spurred emigration, and since last year, after a couple of years of economic recovery, we are finally beginning notice an increased demand for workers. Instead of using this issue of worker shortage to tackle the problem of long-term unemployment, our government decides to import foreign workers - 31,000 this year alone. That many workers were not in demand even when the country's economic growth was at its peak!

Employers who, until recently and despite many people looking for jobs, have been forcing their staff to work in poor conditions and for low wages, are to blame for this situation to a large extent.

Meanwhile, thanks to the ability to work in other EU countries, and considering that salaries in Croatia are too low to live on, workers have been leaving the country.

Now, we come to the issue of seasonal workers. Croatian tourism cannot count on domicile seasonal workers because they cannot survive the whole year working seasonal jobs in Croatia. They go to other countries because they can live the rest of the year in Croatia with the seasonal salary they have earned in Germany, for instance.

Workers need more security and a decent pay, therefore SSSH wants the government to redefine what is "a permanent seasonal worker" in a way of guaranteeing the worker an adequate income and social rights (for example, the possibility of doing documented off-season work without losing the rights of permanent seasonal worker).

WE ARE THINKING LONG-TERM What is your message for employers and decision-makers?

— I would like to recommend to employers to stop viewing workers as an easily replaced overhead, and finally start realizing that investing in people, good working conditions, and training for their workers are in their best interest too. More secure, more satisfied and highly qualified workers are more productive and contribute to the employer's competitiveness in the global market. Recently, for

the first time ever, I heard an employer saying that they view workers as an investment, and not a cost. Things have begun to change because of the lack of workers!

Politicians, on the other hand, should start thinking long-term, not just while they are in the office.

A consensus on the socio-economic development needs to be achieved, and tripartite social dialogue is a suitable tool for joint work and involvement of social partners in the decision-making process.

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Beautifully shaped, full breasts are the main symbol of femininity, so it comes as no surprise that an increasing number of women are deciding to do breast augmentation. The desired appearance of breasts is achieved by inserting top

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In mini-abdominoplasty, the only region that is corrected stretches from the belly button to the pubic region. The excess skin and fatty tissue is removed, and only the lower part of the abdominal wall is tightened. The cut is somewhat smaller than with complete abdominoplasty. Abdominoplasty

WE OFFER YOU SUPERIOR SERVICES BACKED BY THE LONG TRADITION, KNOWLEDGE AND ACQUIRED SKILLS IN THE FIELD OF AESTHETIC MEDICINE ABDOMINOPLASTY

Abdominoplasty is an aesthetic reconstruction procedure that removes excess skin from the abdomen together with the fatty tissue, and is often done along with the tightening of the lax muscles of the abdominal wall. There are different conditions that require different surgical approaches, but general procedures come under one of these two categories - complete abdominoplasty and mini-abdominoplasty. The complete abdominoplasty is done when the

can also be combined with liposuction of the abdomen and other parts of the body, if necessary, for the body to be beautifully contoured and sculpted.

FACE LIFTING

The skin on the face is most exposed to atmospheric influences and harmful substances from the environment, and therefore the face ages the fastest. As we grow older, the skin loses its elasticity, wrinkles and excess skin appear, and our face takes on a sad and

tired look. Face lifting is a radical procedure that removes all excess skin from the face and straightens wrinkles. After a face lift, your face will look fresh and radiant again. It can be done in general or local anesthesia, and you will completely recover in two weeks. Most importantly, there will be no visible cuts or signs of operation. The only thing that will be different is you looking much younger.

BLEPHAROPLASTY

The skin around the eyes is gentle and thin, so the first wrinkles usually appear in this area. Apart from appearance of wrinkles, the eyelids change their appearance, excess skin is created, fat pads accumulate, and this results in a tired and sad look, even if you do not feel that way. All these problems can be eliminated thanks to blepharoplasty. This is a procedure that will remove unwanted effects of aging and excess skin. The procedure is done in local anesthesia, and the complete recovery lasts only 10 days.

Other procedures that you can do at our polyclinic include rhinoplasty, ear pinning, lip plumping, raising or lowering breasts, and buttocks and calf enlargement.

Enrich your natural beauty!

Get the desired look at reasonable prices.

Get ready for the summer and be happy with your appearance.

GOOD TO KNOW! We have an office in Zagreb too, where you can visit us and have examinations, consultations and carry out small procedures. We also offer transport to the clinic. If you arrive by plane, train or bus, do not worry; our driver will bring you to the clinic and take you back to your desired destination.

You can find more information at www.poliklinika-arcadia.hr, or by calling us on +385 43 675 200 and immediately scheduling a consultation and an examination.

E-mail: poliklinika@poliklinika-arcadia.hr

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CO LU MN JAGODA POROPAT DARRER

Business Communications Professional

POWER LEADERSHIP:

THE ART OF BEING RIGHT

In the movie ‘Red Sparrow’, the fascinating Jennifer Lawrence showcases something we trust to be movie-like spy adventures of a young Russian prima ballerina becoming a part of the elite squad of Russian intelligence.

Although, this entertaining fiction does lie on some universal psychological and rhetorical truths, namely every human being is a puzzle of needs, and you have to find the missing piece to gain a position of power Automatic imitation is commonly used to refer to cases in which an individual, having observed a body movement, unintentionally performs a similar body movement or alters the way that a body movement is performed. Neuroscientists suggest that automatic imitation is mediated by the mirror neuron system. Mirror neuron is a neuron that fires both when somebody acts and when somebody observes the same action performed by another (Keysers 2010). Many studies link mirror neurons to understanding other people goals and intentions providing a mechanism for action-understanding, imitation-learning, and the simulation of other people's behavior (Schippers, Roebroeck, Renken, Nanetti, Keysers, 2010).

In addition to the psychological ways to infer someone's behaviour and then use it in a social context for persuasion, there's a rhetorical way as well.

In his book Eristic Dialectic: The Art of Being Always Right, the renowned philosopher Arthur Schopenhauer listed innate capabilities of astute people of replying to any argument with a dishonest trick in order to help less natural astute persons to recognize such behaviour and fight it in any debating situation. He "collected all the dishonest tricks so frequently occurring in argument and clearly presented each of them in its characteristic setting, illustrated by examples and given a name of its own”…such as Becoming Personal, Insulting, Rude - argumentum ad hominem, argument of pity - ad misericodiam, argument of popularity - ad populum, Generalizing upon Your Opponent's Specific Statements, False Propositions, Make

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Your Opponent Angry, Generalize Admissions of Specific Cases, Choose Metaphors Favorable to Your Proposition, Agree to Reject the Counter-Proposition, Claim Victory Despite Defeat, Use Seemingly Absurd Propositions and many more adding a means to be used against them, as a kind of guard against these fallacious arguments.

FEMALE POLITICIANS VS. MALE POLITICIANS - APPROACH TO PERSUASION

The best way to fight fallacious arguments are active listening, identifying logical incoherence in your opponent speech, always

masculine feature, did not always contribute to the efficacy of leadership. Instead, the transformational leadership has emerged, and its efficiency is supported by an increasing number of researchers. It is interesting to note that many of the traits of the transformational leadership (such as collaboration and empowerment) are traditionally associated with women, which illustrates that many feminine features contribute to the leadership efficacy (Radu, Deaconu, Frasineanu, 2017).

Things get very interesting in regard to gender differences in using arguments to win a dispute in the political arena.

The best way to fight fallacious arguments are active listening, identifying logical incoherence in your opponent speech, always warning your opponent about the fallacious arguments, and defending yourself with simply emphasizing the truth, insisting on facts, data and real arguments.

warning your opponent about the fallacious arguments, and defending yourself with simply emphasizing the truth, insisting on facts, data and real arguments.

Traditionally, the most appreciated leadership characteristics are masculine in their nature. Aristotle highlighted gender as an important part of the speakers’ ethos. Nevertheless, assertiveness, individualism, and task orientation, perceived as a

Some scholars have defined two gender-associated language styles as rhetorical tools that are used by men and women to achieve certain objectives.

Masculine language is commanding and instrumental; it is considered conducive to politics.

Feminine language is intimate and unifying; it is considered too passive for politics (Larner 2009).

Male rhetoric is therefore often adhered to as competitive and ag-

gressive (Maltz and Borker 1982; Mansfield 2006) whilst female discourse is characterized as supportive and inclusive (Maltz and Borker 1982).

However, Kišiček (2008) conducted a research that included, among others, Croatian politicians, both female and male and found „...that there are gender-related differences in the frequency of certain types of arguments, but also in the frequency of eristic arguments and logical errors.

However, many of the rhetorical elements have been found to be the characteristic of political discourse itself and that they are not gender-dependent.”

Women use facts, data, topos, logical conclusions, excellent word choice, appropriate metaphors, and they convey the message confidently, calmly, using positive body language as well as their male colleagues.

Moreover, there was a male politician recognized as a female and another one vice versa – a woman speaker recognized as a man by the examinees. Yet, there are differences. Male politicians are keen use fallacious arguments such as argumentum ad hominem, and ad populum. Female politicians are more likely to use the trick argumentum ad misericordiam to evoke pity, and use the argument of authority more frequently than men which portrays them as an authority rather than ‘others’. Kišiček (2010) concludes that women politicians are equally persuasive as their male counterparts.

The power of the true leaders, regardless of the gender, lies in perceiving others’ needs and the will to perform as a real leader entering the wardrobe of eloquence to which naked thoughts go to get dressed, as Pirandello describes rhetoric.

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C O RPO RATE

Dentum Dental Clinic

Dentum Best Dental Treatments Dental tourism is a growing trend and an increasing number people are deciding to come to Croatia for dental treatment every year. But why?

There are many reasons, and the most obvious is the price-quality ratio.

Croatian dental clinics focusing on dental tourism are modern and up-to-date, with highly educated and professional dentists and sophisticated technology.

As market competition is very strong, clinics which provide services to foreign patients need to constantly improve, and always keep one step ahead of the competition. This ensures that patients from all over the world will receive the best possible service.

For many patients from the European Union, the Dentum dental clinic, located in Croatia’s capital, Zagreb, is the first port of call in Croatia. Over the years, the clinic has specialized in providing first class dental treatments for foreign patients, and the entire team are highly profficient in English, Italian, German and French.

Since the majority of the clinic patients come from the United Kingdom, Italy, Germany, Austria and Switzerland, and because the clinic has provided service to European patients for a number of years, the staff know exactly how to best meet the needs of their foreign patients.

THE PEOPLE BEHIND DENTUM: THE A-TEAM

Dr. Andrej Božić and Dr. Petar Bago are the founders of the clinic.

They established the clinic back in 2013, and since then, the team has grown to 11 highly educated dentists, 11 dental assistants and 10 patient care consultants, who coordinate patient travel details, appointments and post-treatment care.

The expertise of the entire dental team is reflected in the education and professional achievements of the clinic’s founders. Dr. Petar Bago received his degree in Aesthetic Dentistry from the prestigious University of California in Los Angeles, and he has since performed thousands of complex surgical and aesthetic treatments. As a result of his expertise and experienc, Dr. Božić is an official opinion leader for Nobel Biocare, the world’s best dental implant brand.

Together they have over 26 years of experience and are constantly passing on their knowledge to each and every member of their team.

DENTAL TREATMENTS AT DENTUM

Generally, the Dentum team provides patients with all kinds of dental treatments - from smaller,

aesthetic treatments such as tooth whitening, free-hand bonding and veneers, to challenging oral surgeries - there is nothing they cannot do for you.

However, in recent years, they have specialized in the All-on-4 treatment concept, which is also the most requested treatment from European patients.

With the All-on-4 treatment concept, it’s now possible to provide toothless patients, or patients whose teeth are in really poor condition and need to be removed, with a full set of teeth on just four implants in only one day.

Allround service that leaves no wish unfulfilled In addition to the expertise and first class treatments, the Dentum clinic wows patients with the allround service, providing patients with: 1 FREE LUXURY ACCOMMODATION WITHIN THE CLINIC

The Dentum team understands that patients need peace and com-

DENTAL TREATMENTS IN CROATIA ARE PERFORMED UNDER HIGHER QUALITY STANDARDS, BUT THE PRICES ARE ON AVERAGE 70% LOWER

fort for the healing process, which is why every patient is provided with luxury accommodation in the same building as the clinic. That way the patients can fully focus on their treatment, without the need to search for accommodation themselves.

2 FREE AIRPORT TRANSPORT SERVICE

One more thing not to worry about when traveling to Dentum for dental treatment is how to get here. After arriving at the airport, our driver picks up patients and brings them to the clinic safely.

3 FREE FIRST VISIT AND CONSULTATION WITH DENTISTS

The Dentum team is aware that traveling to another country to get dental work done is not something that can be decided overnight or via email. That is why all patients are invited to the clinic for a first free visit. During this visit, a dentist examines the patient and on the basis of this examination, a fully tailor-made treatment plan is created. With this, the patient can decide whether to proceed with treatment or return home without having any work done.

4 CERTIFIED CLINIC Dentum is also an officially certified clinic from leading dental brands, including Nobel Biocare and Straumann. In addition, the clinic proudly holds other official certificates, such as the ISO 9001:2015, which is recognised as of quality management system standard.

To find out more about Dentum, visit our website www.dentum. com or get directly in touch with us by calling on our European telephone lines: UK line: 020 376 939 73 Italian line: 041 868 550 7 Austrian line: 0720 775968 General line: +385 1 5802 333

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PEO PLE & EVENT S

Mrs. Ružica Lamešić, Mr. Pavo Djedović

22 THE FIRST OF FEB

THIS YEAR'S JOUR FIX

Mrs. Ružica Lamešić, Mr. Pavo Djedović, Mr. Ante Pavić

Several dozen members and guests of the German-Croatian Chamber of Industry and Commerce gathered at the Antunović Hotel for the first of this year's Jour Fixe. The newly appointed director of the biggeset bilateral

chamber of commerce in Croatia, Sven Thorsten Potthoff gave the welcome speech and thanked the host. He also expressed his satifsfaction with an impressive number of 4,360 participants in the Chamber's 78 events and projects last year.

27 PRESENTATION FEB

OF THE RIJEKA 2020 PROJECT

The „Meet the European Capital of Culture 2020“ presentation was held at the President's Office for the representatives of diplomatic missions and international organizations accredited in the Republic of Croatia. The presentation was prepared by the representatives of the City of Rijeka and the company Rijeka 2020 d.o.o., which is in charge of implementing the project. The purpose of the presentation was for the diplomats to get acquainted with the preparations and plans for the implementation of the project and for them to actively participate in the exchange and cooperation in the field of cultural diplomacy with their suggestions and ideas. Along with Rijeka, Ireland's Galway has also been declared the European Capital of Culture 2020.

AmCham staff

Mrs. Kolinda Grabar Kitarović, President of the Republic of Croatia

H.E. W. Robert Kohorst, Ambassador of the United States of America, Mrs. Andrea Doko Jelušić, Executive Director of AmCham with guests

27 PATRON FEB

Mrs. Nina Obuljen Koržinak, Culture Minister

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COCKTAIL

The American Chamber of Commerce had the honor to organize its traditional Patron cocktail hosted by H.E. W. Robert Kohorst, Ambassador of the United States of America. This, now traditional event, was a good opportunity to discuss Croatia’s business climate with the Ambassador and executives of the AmCham Patron members.

www.diplomacyandcommerce.hr

06 NATIONAL DAY

MAR

OF BULGARIA

The National Day of the Republic of Bulgaria was celebrated on the 6th of March at Palaca Dverze Hall in Zagreb. The Embassy organized a reception, attended by the members of the government, parliament and the Presidential administration, heads of diplomatic missions in Zagreb, representatives of business, central and local administration, scientific, cultural and public organizations and the Bulgarian national minority in Croatia.

Mr. Haşim Koç, TIKA and Mr. Goran Denis Tomašković, the Association of Blind Persons, Zagreb

H.E. Tanya Dimitrova, Bulgarian Ambassador to Croatia and Academic Paveo Rudanq, Secretary General of the Croatian Academy of Sciences and Arts

Mr. Anes Hasanovic, Assistant at TIKA's office, HE Mr. Ambassador Mustafa Babür Hızlan, Mr Goran Denis Tomaskovic, Director of the Association of Blind People in Zagreb, Mr Nikola Arbanas, Director of Sfera Visia d.o.o., and Mr Danijel Koletic

13 SOAPS WITH MAR

Mrs. Diana Glasnova, Editor-in-Chief of Rodna Rech, Mr. Stjepan Sučić, Deputy Chairman of Matitza Hrvatska, Mr. Stjepan Mesić, Former President of Croatia, H.E. Ms Tanya Dimitrova, Bulgarian Ambassador to Croatia , Mr. Rashko Ivanov, head of the Bulgarian National Minority in Croatia

DOTS PROJECT

TIKA (Turkey Cooperation and Coordination Agency) has signed a 240,000- kuna donation contract stipulating TIKA's donating funds towards the implementation of the Soaps With Dots project to benefit the Association of Blind Persons in Zagreb. This project also enables the exchange of know-how regarding the blind and the visually impaired persons. Thanks to the project, a number of blind and visually impaired people will be getting permanent jobs. The Soaps With Dots project is a logical continuation of TIKA's activities. The Agency has spent 1.1 million EUR on 27 projects implemented in Croatia in the past three years.

Mr Ceann Comhairle, Mr. Seán Ó Fearghaíl , from the Lower House of the Irish Parliament

15 ST. MAR

PATRICK’S DAY

The Irish Ambassador, H.E. Olive Hempenstall and the Embassy of Ireland hosted the annual St. Patrick’s Day celebration at the Hotel Esplanade in Zagreb .

The Ceann Comhairle Mr. Seán Ó Fearghaíl, the “Chairman” of Dáil Éireann (the lower House of the Irish Parliament), welcomed the guests, as did his host in the Republic of

H.E. Ms Olive Hempenstall, Ireland's Ambassador and Mr. Gordan Jandroković, the President of the Croatian Parliament

Croatia, Mr. Gordan Jandroković, the President of the Croatian Sabor. Approximately 300 honoured guests from Croatian diplomatic, political, cultural and economic circles were in attendance. Irish dancing and music were performed by Zagreb’s Celtic Fantasy. Irish food and drink was enjoyed by all.

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29

PEO PLE & EVENT S

15 SWEDISH MAR

BUSINESS CLUB

The newly established Swedish Business Club aims to be the focal point for Swedish companies in Croatia, but also for Croatian partners with an interest in Sweden. The business forum in the autumn, that will gather Swedish and Croatian managers, institutions and experts, will serve as a springboard for the future cooperation. The Swedish Business Club (SBC) was founded by nine Swedish companies, including Astra Zeneca, Bisnode, Ericsson Nikola Tesla, Saab, and Tele2, along with the Embassy of Sweden.

Ivica Jakić, President of the Swiss-Croatian Business Association, Martina Dalić, Croatian Economy Minister, H.E. Mr. Stefan Estermann, Swiss Ambassador to Croatia with his associates

H.E. Lars Schmidt, Swedish Ambassador and Mr. Niklas Johansson, State Secretary to Minister for Enterprise and Innovation Martina Dalić, Croatian Economy Minister, H.E. Mr. Stefan Estermann, Swiss Ambassador to Croatia

23 SWISS-CROATIAN MAR

BUSINESS ASSOCIATION

The regular biannual meeting of the Swiss-Croatian Business Association (SCBA) was held in Zagreb at the Association's seat. The Deputy Prime Minister and Minister of Economy, Small and Medium Entreprises and Crafts of the Republic of Croatia, Mrs Martina Dalić was the guest of honour. In the official part of the event, the members and partners were greeted by the president of the SCBA, Mr. Ivica Jakić and the Swiss Ambassador to Croatia, H.E. Mr. Stefan Estermann. Mrs Dalić then gave an overwiev of the reform efforts of the Ministry she leads and the Government. A buffet lunch followed after the official part of the event, hosted by the SCBA and the Embassy of Switzerland in Croatia.

Club’s founders and members

Deputy President of the Croatian Chamber of Commerce for International and EU Affairs, Ivan Barbarić, Secretary of the Chamber's Wine Association, Igor Barbarić, President of the the Croatian Chamber of Commerce, Luka Burilović and Economy Adviser to the Croatian President, Marko Jurčić

27 CROATIAN WINES MAR

30

CONQUERING US MARKET

Twenty two Croatian wineries presented themselves to American distributors and winemakers at a joint presentation in New York, organized by the Croatian Chamber of Commerce's Wine Association. The presentation titled 'Vina Croatia

- Vina Mosaica' gathered 300 potential distributors and wine experts with the goal of facilitating a stronger breakthrough of the Croatian wineries into the US market, which is in the top five non-EU markets for Croatian winemakers.

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C O LU MN DANIJEL KOLETIĆ

APRIORI WORLD

BRANDING IN DIGITAL SPACE Cities and places on the planet Earth have never been more accessible. At the time when Facebook was founded not so long ago, in February 2004, the communications and advertising industry could not even fathom that digital platforms like Facebook, Instagram, LinkedIn, Snapchat and Twitter would become one of the most influential, crucially important tools of today

You can find information, discover and get closer to any destination and to almost every corner of the planet on a daily basis through technology platforms such as Google Maps, numerous tourist portals, platforms and websites which present destinations, hotels, swimming pools and beaches.

Thanks to these opportunities, branding in the tourism industry has changed travel habits. Also, the capabilities of the digital industry, over the last few years, technologically created tools in the background that are used for interacting and bringing your digital story closer to target customers. Recent research shows that digital platform users have all chosen their own platform on which they mostly publish their news, information, communication or marketing messages they use to sell or announce an event.

We can observe branding in digital industry from two aspects.

The younger population has opted for Instagram and Snapchat, while those over the age of 35 are more inclined towards LinkedIn and Facebook. But there are those who have moved their lives to digital platforms and use all social networking opportunities. In that industry, the first aspect relates to Facebook, Google, Twitter and various other social media which have positioned themselves on the new global lists that evaluate and discuss brand values. Back in the day, Mercedes, Coca-Cola and many others were topping these global lists. Albeit, they are still present there but do not occupy the positions they once had, although they are still in the top group of the world's most famous brands.

Millions of different brands

have conquered digital space through multitude applications.

Various types of software have enabled the creation of new brands in the service sector that are known only to specific target groups such as accounting, tourism and other services. This category includes Uber, Booking, TripAdvisor, but also brands that millions of people use to buy through on a daily basis, such as Amazon, eBay and Alibaba. All these brands have their digital value which is measured by the number of perceptions and global recognizability. You are probably wondering why is this important? When one of these brands decides to be sold or

brand which also closely relates to the company's reputation.

The other side of branding in digital space is created through new strategies, tactics and tools that enable it. However, there are people who are behind all of this.

In the past five years, new specialized agencies or digital communication departments have been set up. There have been new professions created in the digital communication system because, ultimately, people and knowledge are the keys to branding in digital space. Today, we have a tsunami of different messages and different information in the same space. Everywhere you go, a new message or a new brand

THE YOUNGER POPULATION HAS OPTED FOR INSTAGRAM AND SNAPCHAT, WHILE THOSE OVER THE AGE OF 35 ARE MORE INCLINED TOWARDS LINKEDIN AND FACEBOOK wants to find new investors, the value of their brand, logo and name will play the key role in evaluating their overall value. Auditors will determine the precise value of their assets, production, and people through income, and look at revenue and expenditures. When this is scored under the highest value, they will be given an estimated value of their

appears with each click. Thanks to the increasingly sophisticated use there are almost no tools that serve solely product and service advertising but they also facilitate monitoring. We all keep forgetting that we are part of the global cyberspace. I'm sure that most of you who are reading this are using some of the services in this space, but you also have your own

social networking preferences. By making the decision to be part of the social network, you have given permission and agreed to making your posts globally public. We are moving towards the time when the new General Data Protection Regulation (GDPR), that has 3,999 amendments, and which main message is „my data belongs to me“, will come into force. You are wondering why is this important for digital space branding?

Simply put, there are no coincidences anymore. Depending on your personal interests, but also on the brand's interests, your behaviour and your purchasing habits are closely followed, providing you have shown them online. All of this is analyzed by someone with the goal of making a targeted advertising message that is just right for you. For example, last week you wanted to buy a shirt online or searched Rome as your potential travel destination. All of a sudden, in your next search, you see a marketing message about a product or destination that interests you.

Did you notice that? Nothing is accidental, as more and more information is available.

Brands invest millions in a variety of campaigns where the key to success is creativity, superb photography, short inspirational video content, and the most important thing - the story, or the communication and marketing message.

Just like brands, it is also important that you present yourself in digital space through the careful choice of photos, messages and stories since you have also become a brand. The luckier ones have even managed to become influencers in this space. Unfortunately, new generations live in cosmetic and not in content-heavy time.

To be continued...

31

EVENTS

Diplomacy&Commerce Magazine Celebrates its Second Birthday in Serbia Diplomacy&Commerce Awards given at the celebration

The awards were presented to individuals, companies and organizations that distinguished themselves in humanitarian work, CSR activities, merging business and culture, and contributing to the improvement of business conditions, bilateral cooperation, civil society and the economic environment in our country. The Diplomacy&Commerce Awards were given out in eight cateogries to companies and organizations, and in one category for “contribution to development of civil society and advancing economy.

The jury members were the following: Marko Čadež, President of the Serbian Chamber of Commerce, Martin Knapp from AHK, Sanja Ivanić from CCIFS, Mirjana Kojić from CCIS, Ana Grujović from SSCC, Marija Radulović from the HPK, Danijela Fišakov from the SPK, Fanina Kovačević from the HBA, Ruža Ristanović from Diplomacy&Commerce, and Robert Čoban,

32

President of the Color Press Group.

The magazine's director, Ruža Ristanović said that over 60 companies and organizations had been nominated for the award and that deciding on the winners was no easy feat.

President of the Color Press Group, Robert Čoban thanked the guests and said: "In the latest Orient Express film, the train is stuck in Slavonija, somewhere between Vinkovci and Slavonski Brod, because of an avalanche. However, in the

film, the flat Slavonija resembles the Italian Alps where the scenes were actually filmed. The film director obviously thought that the Slavonian Plain was not interesting and inspirational enough for the audiences.

This is also often the case with our media, especially those which are geared towards foreigners. The truth that they portray is often one-dimensional. When we launched Diplomacy & Commerce magazine two years ago, we had exactly the opposite idea which is to show the readers – both

Robert Čoban with ambassadors of "Orient Express" routes countries

domestic and foreign - the Serbian economic, political and public world exactly as it is, with all the nuances, positive shifts and problems.

Why is the Orient Express the underlying theme of this year's event? Through its several routes, for the past 135 years, this train has been connecting exactly 10 countries and cities, from the United Kingdom in the West to Istanbul, Turkey in the East. The Great Britain is on its way out of the EU, while Serbia and Turkey are still not members. Switzerland does not want to become a member, while other countries are en route to the EU membership. Regardless of their statuses, all 10 countries are in Europe and apart from the railroad, we are all also connected by the fact that we belong to this continent and that we aspire towards the same values. Since our previous celebration, last year, we have also launched a Croatian edition of Diplomacy & Commerce magazine, as well as organized a number of

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AWARD WINNERS Special award for contribution to the development of civil society went to the Beogradska otvorena škola – BOŠ (Belgrade Open School).

Award for improvement of bilateral cooperation and economic environment went to the Chamber of Commerce of Serbia.

Mihajlo Vesović, Adviser to the President of the Serbian Chamber of Commerce

Award for business innovation went to Eurobanka ad Belgrade.

Vesna Djukić, Director of BOS

Award for the foundation of the year went to Hemofarm foundation.

Award for humanitarian work went to Telekom Srbija and Alumil Yu Industry.

Award for contribution to the development of art and preservation of heritage went to DDOR Insurance.

Award for the best socially responsible campaign went to the Coca-Cola company for their project Rosa Parenting School.

Ingeborg Ofsthus, General Manager of Telenor Serbia

Rita Lozinski, Director of Alumil

new conferences and events.“ Executive editor in Croatia, Boban Spasojević was the host of the celebration.

The guests enjoyed in the dishes from eight international cuisines of the countries that lie on the legendary Orient Express blue route, prepared for them by the chefs from the Stanica 1884 restaurant. Bands Sputnik and Girls, Boys and Toys were in charge of musical entertainment.

The celebration was attended by a number of guests; the representatives of the Government of Serbia,

Dušan Mihajlović, member of Eurobank's Executive Board

Award for the best socially responsible campaign went to Telenor.

Suzana Djordjević, Director of the Hemofarm Foundation

Dr Giorgio Ambrogio Marchegiani, CEO DDOR

diplomatic corps, and political, cultural and public figures in Serbia, including: Gordana Predić, State Secretary at the Ministry of Culture, Gender Equality Commissioner Brankica Janković, Advisor to the President of the Serbian Chamber of Commerce Mihajlo Vesović, German Ambassador H.E. Mr. Axel Dittmann, Bulgarian Ambassador H.E. Mr. Radko Vlajkov, Slovenian Ambassador H.E. Mr. Vladimir Gasparič, Swiss Ambassador H.E. Mr. Philippe Guex, Turkish Ambassador H.E. Mr. Tanju Bilgic, Israeli Ambas-

Martin Knapp, AHK and Predrag Ćulibrk, Telekom Sbija

sador H.E. Ms Alona Fisher-Kamm, the ambassadors of Egypt, Korea, Qatar, Algeria, Portugal, Brazil, and Mexico, and the representatives of the Italian, French, Bulgarian, Polish and other Embassies. The following representatives of the business community also attended the reception: Predrag Ćulibrk, Director of Telekom Serbia, Ingeborg Ofsthus, General Manager of Telenor Serbia, Abhay Parnerkar, Country Manager at Coca-Cola Central Eastern Europe, Rita Lozinski, Director of Alumil, Dušan Mihajlović, Member of Eu-

robank's Executive Board, Suzana Djordjevic, Director of the Hemofarm Foundation, Vesna Djukic, Director of BOS, Giorgio Marchegiani, Director General of DDOR Osiguranje, Dragan Filipović, Director of Generali Osiguranje, Daniel Berg, EBRD Director, Dubravka Negre, EIB Director, Predrag Radlovački, Director of MPC Holding, Jasmina Knežević from Bel Medic, Attorney Goran Draganić, Srđan Šaper from I & F McCann, Ivan Stanković from Communis, Sanda Savić from Hemofarm and many others.

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B USINESS NEWS Valamar Riviera

Bureau of Statistics

LOAN AGREEMENT Valamar Riviera has signed an agreement with the European Investment Bank (EIB) stipulating a 16-million EUR loan. This is the first EIB transaction in Croatia with a private sector company that benefits from the support of the EU budget guarantee under the European Fund for Strategic Investments (EFSI), the financing component of the Investment Plan for Europe (IPE), also known as 'Juncker's Plan'. The EIB loan will co-finance the completion of Valamar Girandella Resort with the construction of the first five-star Kinderhotel in Valamar Riviera’s portfolio. With the hotel opening in April this year, the process of repositioning destination Rabac as leading leisure destination for high-end guests will be completed. This loan is complementary to an intermediated loan of EUR 44 million granted to Valamar through Croatia’s public development bank HBOR in March 2017.

GROWING IMPORT AND EXPORT

In January this year, the Croatian export of goods amounted to 7.8 billion kuna, which is a 2.8% hike compared to the same month last year, while the value of import amounted to 13 billion kuna or

14.4% more relative to the same period the year before – the data collated by the Croatian Bureau of Statistics (DZS) shows.

The most important individual external trade partners of Croatia are still Italy, Germany and Slovenia. Exports to Italy rose by 12.8% to 1.9 billion EUR at the end of December, exports of goods to Germany amounted to 1.72 billion EUR (18.5% growth), while exports to Slovenia dropped by 2.4% to 1.5 billion EUR. At the same time, import from Germany amounted to 3.4 billion EUR, which is an 8.4% growth. Import from Italy increased by 13.2% to 2.82 billion EUR, and from Slovenia by 8.5% to 2.34 billion EUR.

Rimac Automobili

NEW CONCEPT 2

Nokia

SALE OF BLOCK OF SHARES The Finnish government has acquired has spent about 844 million euros on acquiring a 3.3% stake in Nokia thus strengthening national influence over the telecom network gear maker. “We believe that this will be a good investment. One must remember that Nokia is Finland’s largest company and its Finnish ownership has been rather thin,” the CEO of the state-owned company Solidium, Antti Makinen said. According to Makinen, this year, the holding company started playing a more active role in the boards of companies in which it has shares. The holding company manages smaller holdings in 13 Finnish companies which are listed on the stock exchange and were mostly formed in the industrialization period under the state’s auspices. Ten years ago, Nokia was the world's leading mobile phone company and was the driving force behind the Finnish economy, with a 4 percent share in the Finnish GDP and a 20 percent share in Finnish exports.

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Mate Rimac presented his new electric powered super-car Concept 2 at the Geneva Car Show. The Croatian electric car Concept 2 has 1914 HP, 690 more than the company’s previous model, it reaches a speed of 100 kilometers per hour in 1.97 seconds and 300 kilometers per hour in 11.8 seconds. With this speed, Concept 2 is

consdered the fastest electric car in the world. The Concept 2 will have Level 4 self-driving capability. „This car was developed frm scratch, and nothing was taken from the Concept 1. The drive system was developed specifically for this car. Our initial idea of an electric supercar was taken from the Concept 1“, Rimac says.

SAAB

OPENING A SOFTWARE DEVELOPMENT CENTRE Sweden's Saab plans to build a software development centre and is also considering the construction of a science park in Croatia - the chairman of Saab's board Marcus Wallenberg says. The Swedish company plans to invest 50 million euros in both projects. Saab is interested in Croatia due to the shortage of computer engineers in Sweden, a problem that the company is trying to solve together with the equipment manufacturer Ericsson Nikola Tesla which will play a role in the construction of the software centre. Another reason is the successful cooperation between Croatian and Swedish universities, particularly in the field of robotics. Although it is not yet clear what will be the centre's core activity, it has been estimated that it will employ several hundred people mostly

from Croatia. As far as the science park is concerned, there is a great interest in applying the Swedish concept of linking government, industry and the scientific community (there are currently 31 such scientific parks in Sweden) in Croatia, and the first step will be the drafting of a preliminary study and a discussion with all stakeholders in this extensive process.

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B USINESS NEWS Croatian National Touris Board

13 NEW DIRECT FLIGHTS TO GERMANY „Croatia is a very sought-after destination in Germany, and in accordance with the plans presented by the largest partners in the German market, we expect to maintain positive trends in 2018. In this context, airline companies play a crucial role, which is why we are especially pleased with the announced flight schedules, which, as it is the case with the biggest airliners, also imply introduction of new flights and the increase in the rotations in the existing flights“, says the Director of the Croatian National Touris Board, Kristijan Staničić. The biggest number of new flights, 13 of them, are to and from Germany. Many airliners, including easyJet, Eurowings, Ryanair, Lufthansa, Condor and others, have announced new flights to Zadar, Rijeka, Pula, Split and Dubrovnik – says Mr. Staničić and adds that many of them are pre- and post-season flights.

Eurostat

WOMEN ARE PAID LESS

For the EU economy as a whole, in 2016, women's gross hourly earnings were on average 16.2 % below those of men in the European Union, i.e. they earned 0.84 EUR per hour against 1 EUR per hour for men. On average, women earned less than men in all Member States, however this gender

pay gap varies. The largest differences were observed in Estonia (26.9 %), the Czech Republic (22.5 %), and Germany (22.0 %) – says the Eurostat’s report published on 8th March, the International Women’s Day. In Croatia, in 2014, the difference in pay was 8.7% - the report has shown.

Lindt & Spruengli

OUTSTANDING RESULTS

FlixBus

ENTERING TRAIN BUSINESS Five years after FlixBus launched its innovative concept of continental bus transport, which had been previously seen only in aviation, the company is now moving into the rail transport business. The first destinations that FlixBus will service are Hamburg, Düsseldorf and Cologne. By the end of the year, the FlixTrain service will connect a total of 28 destinations throughout Germany.

The Croatian branch of FlixBus CEE, which is responsible for the company's operations in Central and Southeastern Europe, says that FlixTrain service will be available only in Germany for now. However, it is expected to expand to the rest of Europe. For now, there are no concrete plans for Croatia because, although the freight / cargo transport market has been liberalized here, the passenger transport market remains to be closed at least until the end of 2019, as the state has the right to retain the monopoly held by the Croatian Railways in passenger transport until 2029.

The market liberalization and the arrival of mainly foreign the competition can devastate thel national railway carrier, because, in 2016, HŽ Cargo (Croatian Railways Cargo) held 85% percent of the cargo rail transport market, while last year, it dropped to 60%.

The Swiss chocolate maker, Lindt & Spruengli has been trying to reach as many chocolate fans as possible in Japan, China, South Africa, Brazil and Russia, saying that this group of countries carries a „huge potential“ for the company. Lindt says that their branches

in those five countries recorded oustanding results in 2017, with the organic growth of 12.4%. Elsewhere in the world, Lindt's products remain as popular as ever. The company's net profit last year grew by 7.8% to 452.2 million Swiss Francs (389 million EUR), while its revenue reached the 175-year-high, exceeding 4 billion Swiss Francs. Good business news were recorded in nearly all of the company's subsidiaries except for the United States, the biggest chocolate market in the world, where Lindt recorded a slight drop in sales last year.

Jadranka Group

HIGHER SALARIES Lošinj-based Jadranka Group and its companies will increase the salaries of their employees by 2% as of 1st April. Also, the company will increase the Easter bonus for its workers from the current 700 kuna to 900 kuna. Wages grow in companies Jadranka, Jadranka Hoteli, Jadranka Trgovina, Jadranka Kampovi and Kamp Slatina. In addition, the employees of the Jadranka Hotel and Jadranka Kampovi, which have high-indemand positions in housekeeping and food & beverage departments, will see their net salaries grow by 20% in the season regardless if they are seasonal or permanent employees. Jadranka Trgovina says that the lowest net salary in their company, during the season, will be

4,000 kuna regardless of the position in the company and if an employee is a seasonal or permanent one. Jadranka Group manages five high class hotels, restaurants, villas and apartments located in the most attractive locations of the island of Lošinj, with four campsites on the islands of Lošinj and Cres, as well as 20 retail outlets.

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FESTI VALS

Spring - Festival Time

ADBLOCK AT ADVERTISING FESTIVAL IN ROVINJ

Although, the organizers of the Days of Communications Festival announced that they would bring several notable names to the festival, it seems that they still have a few aces up their sleeve. At the official announcement of this year’s festival programme, they revealed that AdBlock would participate too. Laura Sophie Dornheim, head of Communications Department at eyeo software, which produces AdBlock Plus, AdBlock Browser and Flattr, will speak on behalf of the AdBlock system which primary purpose is to block ads while browsing.

At the programme’s presentation, Chairman of HURA’s Board, Davor Bruketa said: “The Days of Communication Festival is the place where we present world-wide practices in the communications industry. Of course, we also bring lecturers who talk about the best global practices, but at the same time we allow visitors to speak to the people whose method of work we are questioning while not ignoring the influence that their work has on the direction of industry’s development and its perception in the eyes of the general public.”

Director of the Days of Communications and the head of the Festival’s programme, Dunja Ivana Ballon, added: “This year, we are bringing great names and are pushing the envelope. One of our guests will be the head of Donald Trump’s presidential campaign, the global creative director of one of the lead-

36

ing social networks – Twitter, and a spokeswoman for AdBlock who is also here to promote the so-called Acceptable Ads Initiative.

The Festival will take place in Rovinj from 12th to 15th April.

During the three days, the festival’s programme will take place in three separate venues. Along with 16 top lecturers that will speak in the main venue, the festival participants will also have the opportunity of seeing other content including the presentations of the finalists of the Effie Competition, which celebrates efficient campaigns, as well as the finalists of the young hopes competition called Young Lions Croatia. Good practices and discussions, that are open to all festival visitors, such as PPP and Beers after the Programme, will take place this year too, but with an added format of debates.

NEM - TRADITIONALLY IN DUBROVNIK

If you want to see interesting discussions about the latest achievements and trends in the global, regional and domicile TV industry, then you have already secured 'an accreditation' for mixing business with pleasure at the one and only New Europe Market (NEM), the largest regional event dedicated to the TV industry in the CEE region, which will take place from 11th to 14th June in Dubrovnik, for the sixth consecutive year.

New Europe Market, a media event attended by the biggest ex-

NEW EUROPE MARKET TAKES PLACE FROM 11th TO 14th JUNE IN DUBROVNIK

perts from the field of television and media, would like to reveal to you first panel discussion titled "Hunting for the Audience: Can local production make a difference?".

The main question that the panelists will be asked is whether it is possible to boost the public television audience ratings with locally produced content.

The first panel discussion in Dubrovnik will be moderated by Gün Akyuz, a research editor from C21 Media, a renowned international publication dedicated to the television industry.

Director General of the Slovak TV station Markiza, Matthias Settele, Programme Director of the Czech Television, Jan Maxa, CEO of RTL Croatia, Henning Tewes, CEO of Croatian Radio and Television, Kazimir Bačić, Gabriella Vidus, Director of RTL Hungary, and Director of Antenna International, Pete Smith will make sure that the debate is intriguing and dynamic.

One of the more prominent panelists, Pete Smith, who is the Director of Antenna International and the head of Antenna's European Network, has been focusing on rapid media growth in Eastern Europe and investing in software and digital companies over the past few years: "As new platforms are emerging and incorporating unique and autochthonous content, I really believe that we are entering the golden age of local content production," Pete Smith said about the topic of the first panel discussion at this year's NEM.

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PSYC HO PO LITICS Text: ŽELIMIR MARAS

Values, Not Facts Why do people vote contradictorily all around the globe? thing they think is unacceptable. It could be same-sex marriage or immigrants or whatever.

STRICT FATHER

During the last presidential elections in the USA, Bernie Sanders came out with a truly baffling conclusion: many people who they tried to persuade to vote for Hillary actually voted for Trump. And, furthermore, they concurred with all the arguments presented by Sanders and his Democrats, but still... voted otherwise.

How can that be? The answer is deeply rooted in psychology. It is not the facts we’re talking about, but rather the values.

ONE ROTTEN APPLE DESTROYED THE WHOLE BASKET

But what do you mean when you say: values? What values? Let me give an example. You take an old age pensioner and, as a leftist and a social liberal, say something like “we will make your pensions higher”. Okay, they agree, great.

“We will make nursery schools free for your grandchildren”. Great!

“We will shorten the working week”. Superb! “We will make same-sex marriages legal”. And they disagree and decide they will

vote for the other candidate. “But, hello, the other candidate promises you longer a working week, lower salaries and pensions, and more expensive nursery schools.

Why on Earth would you vote for him?” “Because I oppose same-sex marriages”. “But they have nothing to do with you; you will probably never see a gay couple in your life, just let them be! Think about what

Another example was voting for Trump in Latin American communities, which was inexplicable for Democrats. Jesus! The guy basically promised to expel Latino immigrants from the country, yet an enviable number of Latinos still voted for Trump! Why? Of course, maybe Bones or Dr Brennan hate psychology, but nothing can be explained without it. In this it cases it boils down to the so-called Strict Father, as a figure. This role is of crucial importance in Latino culture, and they feel a father must be

SERBS ARE LOVERS OF STRONG LEADERS AND STRICT FATHERS, BUT THEY ARE NOTORIOUS FOR HAVING OUSTED OR KILLED MOST OF THEIR LEADERS, AND MAYBE WE HAVE THE GRIMMEST AND SADDEST TRADITION OF ALL is good for you!” “No, I would rather starve and suffer than let those people get married”.

Are we clear now? The basic point is that sometimes, as a politician, you miss the core of your electorate.

You present the benefits and try to make the benefits apply to everyone, but then some of these proposed benefits are in deep discord with the values of targeted people, so they discount all the good things and just think about how to oppose the one

harsh and strict. So, if Trump said “I will expel all illegal immigrants and criminals”, many Latino voters saw the classical family scene. One good son, working hard and legal, and one troublemaker. And here comes the Strict Father to say “No eres mi hijo! Lárgate de esta casa!” (I deliberately put it in Spanish to remind you of Televisa shows. It says: “You’re no son of mine! Get out of this house!” So, the “Good Son” believes the Strict Father is right to

expel the “Bad Son”, who is ruining the family reputation. Oh, Democrats, in their Protestant minds, forgot about the Strict Father.

THE OTHER SIDE OF THE COIN

And don’t be to linear either.

Don’t forget that national and personal values can contradict one another. Serbs are lovers of strong leaders and strict fathers, but they are notorious for having ousted or killed most of their leaders, and maybe we have the grimmest and saddest tradition of all, from Karađorđe onwards: the Serbs are rebels and hajduk highwaymen.

And you never know when this will resurface, and the same goes for Ukrainians. In Russia and Belarus, the Strict Father is cool; in Ukraine, the Cossack rebels are cool. That’s why there have been so many revolutions there and why the constant quarrels with Russia. And, to complicate things even further, not all Ukrainians are rebels. Some of them, especially in the southeast, are not Cossack, but rather that area was settled by the Russian Empire. And those people like Strict Fathers, which is the reason for any clash within Ukraine.

So, before you enter politics and start considering elections or international relations, you should first analyse the collective unconscious and values of the people you are seeking to rule, as opposed to the benefits you give them or appealing to their rational mind.

EAST IS EAST AND WEST IS WEST AND NE’ER...

Another example of the Strict Father syndrome can be seen in Europe. From Orban to Putin, Vučić to Erdogan, Kaczinski to Lukashenko. In patriarchal countries it is always easy for a politician to be positioned as a “Father of the nation” and to be “fair and strict”, punishing errors and mischief, and awarding good deeds. And the people, having this model in their heads for centuries, follow the leader, especially when it comes to Orthodox societies, where the Byzantine tradition of the “Holy Trinity” of Emperor, Patriarch and Army Commander

is deeply rooted in the collective mind. Why is it so easy to have Putin in Russia and Lukashenko in Belarus? Because the people like tsars! And it is “good tsar, batyushka-tsar”. It’s as simple as that.

Why it is smooth for Azerbaijan to switch from father to son with the Alievs as presidents? Because in Muslim culture that is the norm. In Serbian culture, every village had its “kmet” or “knez”, who was a local leader and also a Strict Father figure. Thus part of the problem with conservative democracies in Eastern Europe is in the collective unconscious.

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I NTERVIEW

60 Years of Lustrous Career Love has always been the driving force in my life. Love towards my family and friends, singing, music, nature, animals...

TEREZA KESOVIJA Singer

Tereza Kesovija had a concert at the Vatroslav Lisinski Concert Hall in Zagreb recently, celebrating the 60 years of her fascinating career. She received a standing ovation while her son gave her the biggest and most beautiful surprise of the night – he spoke of the love and support for his mother in front of the packed audience. Needless to say, everybody was very touched.

In an interview for Diplomacy&Commerce magazine, the diva of the Croatian music scene talks about love always being the driving force in her life and about her good-natured spite that has always pushed her forward.

You have recently celebrated 60 years or rather 6 lustrous decades of your career with a concert at the Vatroslav Lisinski Hall. Who is Tereza Kesovija today, and are you aware of the success and the impact you have had with the musical legacy you are leaving behind?

— Working with the same fervor and the same love for the past 60 years is the guarantee of survival,

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both for me and others who experience this. Today, I am aware of the fact that a person should never slacken in any respect, and especially not forget or ignore the most important thing in life - love. This word, in its full meaning, is written in capital letters. Love brought me to where I am here today, because for me, thanks to the auspicious circumstances, love for singing has become my profession. Today, I am a happy and fulfilled woman brimming with love.

really believed in me, and believed that I could do more. The pastoral (village) has always been living in me, and I portrayed the tradition in my part of the world through the instrument that I played. Wherever I happened to be in the world, the beauty of rural is something that exalted me as a person while preventing any ugly thoughts from appearing. I saw myself living there without actually realizing what my destiny had in store for me. Maybe I was imagining it, but I did not know that there would be many suprises in my life, that are now behind me. So, here I am, here with you, with my family and my fans.

You were a role model for many people. They wanted their career to emulate yours. And this remains true to this day. Did you have role models, and what advice would you give to your

YOU NEED TO LEARN AND EVOLVE. EVERYTHING THAT WE DO REMAINS FOREVER. THAT'S WHY OUR OPUS SHOULD BE COMPLETE At the very beginning of your career, could you have even fathomed all of the professional success you have today, and would you have done something differently if you had to do it all over again?

— Before I started my career, I lived in a rather special environment as far as people are concerned, but also the nature that matters to me a lot. I am talking about my Konavle and my Dubrovnik. As a flute student I played in Dubrovnik, and the people who were in charge of deciding what I should do next

younger colleagues?

— I did have role models. They were there somewhere, just across the road from Dubrovnik where I grew up, in Italy. To be more specific, my role models came from the famous San Remo festival. Let's not mistake role models for idols; they are not worshiped people. I do not like when someone tells me that they adore me. You can respect me, love me, but do not idealize me. My role models were Mina and Milva, and not only because of their singing, but also because how they carried themselves, performed, their gestures... And that is the

whole point – to be a role model to someone in every aspect. I would also like to be a role model to them in terms of cooperating with foreign record companies. In my career, I have recorded for many world famous, renowned labels like, for instance, EMI, Pathe Marconi - today's Warner, Columbia, CBS, Barclay, Sonopress, Phillips Italy and Philips Germany, and even the Russian record label Melody and the Bulgarian Balkanton.

Today, and I am not talking only about Croatia, but the whole region too, there are very few rounded-off personalities which can been seen from how they interpret music.

My advice to them is that they have to be good at performing which is something that you can see and hear with real artists. That is my advice to young people who want engage in this noble profession.

You studied the flute, and you also play the piano. How important is music education to you, or does it all boil down to having talent?

— Education is absolutely necessary! Talent is not enough.

True, talent is the backbone, but if there is no knowledge applied in upgrading your skills, you will not be an artist, but just a musician. You need to learn and evolve.

Everything that we do remains forever. That's why our opus should be complete.

You wrote two books including an autobiography titled "That's Me" which was in the making for a very long time. Could you reveal to our readers what prompted you to write a book? Is Tereza in the book the real Tereza and is there anything that you have

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left for another book, the sequel to the first one?

— Truth be told, when I was nearly finished with the book I said to myself that one day I would figure out how much I had left out. It's just the way it goes! When overwhelmed by emotions, you want to write and describe everything, but that is not doable. I have inadvertently left out certain people and situations. My guiding thought was to describe my Konavle and Dubrovnik, because I have the pathological love for them. Actually, the first story that I started my book with was the death of my mother whom I had never met. The book was written very gradually, and is an account of a certain period, and history, as well as a document about national costumes, traditions, life and the era in which I grew up. I am an avid reader and, as a little girl, I used to read under street light. My brother and I read a lot, day and night, and everything that I adopted through reading surely had an impact and resulted in the decision to start writing myself.

years. There is no energy at these festivals, no proper approach to them, no real experience... Also, many have been wondering where have all the real festival stars gone, and why festivals have no real value any longer. Festivals have lost their charm. Audiences are not drawn to them, there is no enthusiasm, no feeling of festivity, and a certain quality level. Back in the day, the songs had meaning and the melodies were pleasant. Today, it's all a bit different. It's important to be yourself and have a unique appear-

Back in 1965 you moved to France where you built a successful career. Your concert at the famous Olympia in Paris was your crowning achievement.

You competed at the Eurovision song contest twice – once in 1966, representing Monaco, and then in 1972, representing Yugoslavia. When you turn back time and reminisce about that period of your life and career, what is the first thing that comes to your mind?

— That was a glorious and fruitful

I LOOK FORWARD TO EVERY NEW PROJECT. I SEE MYSELF MORE CLEARLY NOW THAN EVER BEFORE AND I AM MORE MATURE THAN EVER BEFORE BECAUSE OF THE EXPERIENCE I HAVE

During your career, you often sung in front of diplomats, ambassadors and politicians. When they listened to you and reacted to your energy, charisma and voice, were they any different to, for the lack of a better term, 'ordinary people'? Who enjoyed music the most?

— As a rule, there should be no difference. Maybe the "ordinary people", who are not under so much stress and responsibility in life, are more likely to enjoy music.

But politicians are people too! They also like to relax and enjoy. Out of many politicians that I used to sing to and liked to sing in front of, Tito was the most relaxed. He was a real hedonist, loved singing, music, and the people around him. I am not referring here to the man who was the leader, but to Josip Broz. The first one is a politician, the other is an ordinary man. In the end, music and singing are a cure for the soul, everyone loves them and everyone enjoys them in their own way. I am here to convey an emotion and a message in my own way.

You have performed at numerous festivals, and you have won at many of them. What do you think of the festivals today, and the quality of singers and songs?

— Everything has changed over time, and even festivals that do not resemble the ones from yester

ance, but how you sing is even more important. It seems to me that we are somehow lacking in rounded-off performers; you know, the ones that are 'the whole package', so to speak. In this day and age, you are one of the two, but not both. This certainly affects everyday life and survival of festivals. While we are on the subject of festivals, I would just like to mention that that I performed songs by such reputable composers as Zdenko Runjic, Nikica Kalodjera, Arsen Dedic, Kemal Monteno, Djelo Jusic and others at festivals all over Yugoslavia.

time that I remember very fondly.

However, not everything went smoothly although it seems so at this time distance. I have something in me that is primordial and that is also inherited and genetically directed – spite - which, when real, can be used very successfully.

Spite is a powerful force to have - I want it because I want it! And when we talk about that period, that's the first thing that comes to my mind.

My career in France started back in 1965, when I performed „Lara's Theme“ („La Chanson de Lara“) from the film Doctor Zhivago. I

THE FIRST LADY OF CROATIAN MUSIC She recorded songs in nine languages. In 1999, she was knighted for her exceptional contribution to culture (Chevalier des Arts et Lettres – Order of Arts and Letters) by the President of the Republic of France (Tereza received the title from the then French President, Francois Jacques Chirac).

Shortly thereafter, she was given the Golden Charter of Humanism. Her French LPs and ESPs are re-edited in a digital format, featuring the works of French composers and writers which makes them "patrimoine francais" (in French, cultural goods, heritage). Tereza has also performed at the great concerts of UNICEF in Montreal, Paris and Geneva.

was the first to record and sing this famous song in several languages.

In terms of my career in France, I would also like to mention the collaboration with the stars such as Serge Lama, Tino Rossi, Gilbert Bécaud and Rita Pavone. I had the first concert in France in 1988, in Olympia, Paris. In 2007, nineteen years after having my first concert there, I had a total of four concerts in the famous Olympia.

Your French period, the music, the art... When did you start really liking it and did you ever consider any other country, music, or art? Why did you choose France?

— Good question! My view is that there are no coincidences in life. Tito Strozzi was somewhat to blame for me leaving for Paris. He had a friend who had a friend who was looking for young talents to perform in the cabaret at that time.

These were the golden years of Paris! The young talents included Gabi Novak, Ljiljana Petrovic, Lola Novakovic and myself. After several elimination rounds, I was the only one left, even though they were very frustrated that Gabi just thanked them and returned home. In the end, they chose me as a temperamental Mediterranean.

They believed that I was the best choice for singing chansons, which were very popular back then. That was indeed the golden age of Paris, which now exists only in memories. The time of the real, fine cabaret! That's the reason I chose Paris and France.

What is Tereza Kesovija looking forward to? What makes her happy? What kind of message would you like to convey for the end of this interview?

— I look forward to every new project. I see myself more clearly now than ever before and I am more mature than ever before because of the experience I have. I was very happy with my concert in Lisinski, and marking this remarkable career of mine. I'm very proud of that, and I wanted everyone to be proud of me. I have experienced something phenomenal from the person I am most proud of - my son, who is really not that fond of photographers and public appearances. My son Alan stepped onto the stage, and made the audience cry by saying that I was the best mum in the world. My message to your readers would be – love yourself, respect yourself and take care of yourself.

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T H E E CO N O M IS T E X P L A IN S

Why is Finland so Happy?

It is not because of the weather

IN THE 1860s Finland suffered a famine that killed about 9% of its population. It has come a long way since. Earlier this month Finland was named the happiest country in the world by the UN’s Sustainable Development Solutions Network. Three of its Nordic cousins, Norway, Denmark and Iceland, took the next consecutive places. Finns can boast of myriad other number-one spots. In recent years their country has been named the most stable, the freest and the safest by various organisations. These may be understandable; but in a country where temperatures regularly hover around -20°C and some parts hardly get any sunlight for a big chunk of the year, what do the locals have to be so happy about?

The World Happiness Report, as the survey was called, used global polling data from Gallup to measure how pleased people felt with their lives. The researchers then tried to explain the differences using variables such as GDP per person, social support, healthy-life expectancy, freedom to make life choices, generosity, and freedom from corruption. The differences between top-ranking countries are tiny, and the top five have not changed for years. This year’s report measured immigrant happiness for the first time, and Finland topped this category as well. This suggests that happy societies

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are those with supportive social systems and institutions that make it harder for people to fall through the cracks. They are also more willing to accept and integrate immigrants. Unsurprisingly, the poorest and most violent countries were the most miserable—there is little to celebrate in war-torn Yemen or Syria.

The secret to Finland’s happiness might just be how boring it is. A Finnish saying sums it up well: “Happiness is having your own red summer cottage and a potato field.” Free education, generous parental leave and a healthy work-life balance ensure that people have the time and

THE FINNS HAVE A WORD, SISU, WHICH MEANS STOIC PERSEVERANCE AND GRIT, WHATEVER COMES YOUR WAY the means to pursue their pleasures, no matter how mundane. Over 80% of Finns trust the country’s police, education and health-care systems. And because of progressive taxation and wealth redistribution, the lifestyles of the rich and the poor are not dramatically divergent.

Neither are those of men and women. Finland is widely considered one of the best places in the world to be a mother, and to be a working woman. Though suicide rates are distressingly

high, Finland has reduced these by 30% since 2000. The happiness of immigrants stems from a strong support network and integration policies, but also from the fact that immigrants in Finland tend to come from places that are culturally close, like neighbouring Estonia and Russia.

The rankings contain some surprises. The happiest countries are not necessarily the richest. Though America has doubled its income per person in the past 40 years, this seems not to have increased the subjective well-being of its people. It has slipped to 18th place, five rungs down from 2016. Britain comes in 19th. The researchers cite obesity, depression and opioid addiction as some of the factors dragging down rich countries. What is more, people of different ages, cultures and social classes define joy in different ways. People in Latin America reported they were significantly happier than their country’s wealth, corruption or high levels of violence would suggest, since their happiness is connected to strong family bonds. Other cultural factors and national characteristics may also play a part. The Finns have a word, sisu, which means stoic perseverance and grit, whatever comes your way.

From The Economist, published under licence.

The original article, in English, can be found on www.economist.com

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PO LI TI C S

Text: ŽELIMIR MARAS

Migrant Crisis ...Inner Migrant Crisis

Yes, in a James Bond manner. When we mention the migrant crisis we all think about the painful scenes of Middle East, Afhgan, Pakistani or African migrants heading to Europe in inhuman conditions. But we forget another migrant crisis. The flood of (predominantly) young people from the Eastern Europe (including the Eastern EU) to the Western EU, the UK, Iceland and Norway. The flood of 20 million and counting.

And the scariest part is that these people are not coming from the devastated countries or failed states but from the fresh EU member. And they have no intention of coming back home. Of course, there are Spaniards in Poland too, but the number of Poles and Lithuanians in the UK and elsewhere is so high that it supposedly play one of the roles in Brexit decision.

The trouble is also that the brain drain affected severely the economic growth in the Eastern EU, as well as demographical structure. It was a great benefit for the west, but it was disastrous for the East. Unless we count the “drop of unemployment rate” which is something many governments brag with. To stop it, we need the Pan-European initiative from Brussels. My invention? No. It is the report from the IMF. After 2004 and the “Eastern explotion” the prospects were jolly, but professor Aaron Clauset from

the University of Colorado estimated that the 10 Eastern EU members would have been better off in they stayed out of the EU! Which is something that many in Hungary, Poland or especially Slovenia are well aware of, but the firm proWest ideas prevail.

FACTS AND FIGURES

And now facts and figures.

From the West to East, from 2004, only 0.5% of economic migrants went to Poland, Czechia, Slova-

second-hand member, fuelling the rage of Romanians” / said Calin Popescu, the President of Romanian Senat to the EC. And with the Europe in multiple gears, or whatever it might be called, it is highly unlikely that the European Union would be unified any time soon. Let us examine some scary facts. Bulgaria's population declined from a peak of 9,009,018 in 1989 (this was a bad Socialism, right?) and since 2001, has lost yet another 600,000 people, according

THERE IS A JOKE: TWO SERBIAN DOCTORS MEET IN THE STREET. THE FIRST SAYS: GUTEN TAG! THE OTHER REPLIES: GUTEN TAG! kia, Slovenia, Croatia, Romania, Bulgaria, Estonia, Latvia and Lithuania. Tha vast majority of 70% of the people went to Germany, France, Italy, Spain and the UK. The fact is that one of 30 Lithuanians, one of 60 Poles and one of 200 Hungarians live in the UK. “It is time for Romania to become a full member of the EU, and to a

to 2011 census preliminary figures to no more than 7.3 million, further down to 7,245,000. This represents a 24.3% decrease in total population since the peak, and a -0.82% annual rate in the last 10 years. Bulgaria and Latvia are the only countries in the world to have a smaller population today than 1950. When Latvia split from the

Soviet Union, it had a population of 2,666,567, which was close to its peak population. The latest census recorded a population of 2,067,887 in 2011, while the state statistics reported an estimate of 1,986,086 for 2015. This represents a 25.5% decline. Lithuania experience Ta 23.8% decline since the peak census figure in 1989, and some 13.7% since 2001. Georgia, in the last Soviet census of 1989, had a population of 5,400,841 and the state statistics reported an estimate of 4,010,000 for 2014 Census, which includes estimated numbers for quasi-independent Abkhazia and South Ossetia. This represents a 25.7% decline since the peak census figure, but nevertheless somewhat higher than the 1950 population. Ukraine is some 20% below the population of 1993, etc. And who was doing better off? Funnily enough, Belarus, Serbia, Hungary with “only” 7% decrease, Croatian with 8% and Russia with only 4% decrease, and it is the only country in East Europe which reversed its population decline.

BENEFTITS FOR SOME, DISASTER FOR OTHERS We know that many people are not among us any more. The West is benefitting from the “new blood”, and we are certainly not. Even the infamously insensitive IMF noted that. And it will continue, now perhaps not towards the UK, but somewhere else for sure.

Germany, perhaps. Everybody is talking about moving to Germany in the streets these days. There is a joke: two Serbian doctors meet in the street. The first says: Guten Tag! The other replies: Guten Tag!

What good it can be for the millions of young Ukrainians, who got the opportunity for a visa-free travel? Or Georgians or Serbs, Macedonians? Well, in Serbia the people are emmigrating more than ever. One day the only working force would really be the ones for assembling electic parts for 200 euro salaries. But the unemployment rate figures will be quite low. Because there would be no people. Like in Bulgaria or Latvia. This time for real.

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C ALEND AR & NE W S ANA SLADETIĆ

Silently Loud Ana Sladetić's art project, called „Silently Loud“, plays with with the perception of listening to the recount of the viewpoints, life and work of a generation of women, and it is based on personal memory and experience. We hear their voices all their lives, but did we really hear and awaken them?

There is a minimalist wooden six-pointed prism in front of the observer that resembles a trunk with rods. Since the sound is transmitted through the metal via vibration, when a person bites it or and presses their ear against the prism, the vibrations of the sound pass through the bone in the central ear to the centre of the brain, and the person "hears" the sound in their bones.

By listening with our body, the author wanted to remind us of the traditional stories about the experiences of the women of yesteryears – mothers, grandmothers, grand grandmothers whose voices are no longer with us.

In this interdisciplinary research, Ana Sladetic has been researching the phenomenon of purity for some time. The notion of purity and its applicability and change in the context of a certain timeframe illustrates the development of society, cultural and social phenomena, but also the context of the role women play as an active factor in purity, all the way to becoming

a passive consumer and back. The phenomenon of purity has experienced a certain transformation both in the private and social spheres: there is a transformation of the notion of what constitutes a family - from a traditional to nuclear family - and the change of women's role both in society and in the labour market. By cleaning our environment, home and work space and doing personal hygiene, we ritually give up the negative aspects of our life and create fresh beginnings.

Project curator: MARTINA MUNIVRANA

Photo: Davor Puklavec /PIXELL

THE YEAR OF TROY IN CROATIA BEGINS

What awaits us is a wealth of events, travelling exhibitions and the Summer Festival of Troy that will take place at the Lapidarium of the Archaeological Museum in Zagreb.

The Year of Troy event marks 20 years since Troy's inclusion into the UNESCO World Heritage Sites - said Ambassador of Turkey to the Republic of Croatia, H.E. Mr. Mustafa Babur Hizlan at a conference attended

by Professor Rüstem Aslan, PhD, head of archaeological research at Troy. On the occasion, Directors of Archaeological Museums in Zagreb and Zadar, Sanjin Mihelić and Jakov Vučić, PhD, respectively, announced a wealth of events in Croatia, including the traveling photo-exhibition and the Summer Festival of Troy in the Lapidarium of the Archaeological Museum in Zagreb, that will mark the Year of Troy.

THE PREPARATIONS FOR THE PREMIERE OF PUCCINI'S TURANDOT 42

POPE FRANCIS' LATEST BOOK 'GOD IS YOUNG' PRESENTED This is an international publishing project that includes the simultaneous publication of books in 13 world languages. The Pope's book 'God is Young' was published two years after the book 'The Name of God is Mercy', released in over 100 countries, and after the book 'Our Father'. The latest book by the Pope Francis is expected to mark his pontificate in 2018 by becoming a global bestseller, just like his previous two books. Presenting the Croatian edition, Director of Verbum, Dr Miro Radalj said that the book was intended for all people, not just the Christians, since the Pope Francis wrote it for everyone. With this book, he sends a liberating message that the hope surpasses the present and determines the future in order for us to truly restore the world that we live in.

The Zagreb Opera is getting ready for the last premiere of this season – Giacomo Puccini's 'Turandot' – which is co-produced by the Croatian National Theatre from Zagreb and Associazione Arena Sferisterio – Macerata Opera Festivala.

The premiere will be staged on 18th May, 2018, conducted by Marcello Mottadelli and directed by Stefano Ricci. The opera is a result of a creative project called ricci/forte. Nicolas Bovey is the set and light designer, Gianluca Sbicca is a costume desiner, and Luka Vukšić will conduct the choir. Marta Bevilacqua is in charge of choreography, while Darijan Ivezić will be assistant conductor, Liliana Laera assistant director, and Gianluca

Carrozza assistant choreographer.

Turandot is the last opera by the great Italian composer Giacomo Puccini, who, because of his sudden death from an illness in 1924, failed to complete it.

The opera was subsequently finished

by Franco Alfano two years later with the libretto written by Giuseppe Adami and Renato Simoni. In an effort to move away from Verism, Puccini reached for a German interpretation of the legend about the Chinese princess Turandot, composed by Friedrich Schiller and re-arranged by the Italian writer Carlo Gozzi. The old story is based on the epic of The Seven Beauties, written by the Persian poet Nizam in the 12th century.

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