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Austrian - Romanian ties focus on untapped potential

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By Cristian Cojanu
In spite frequent changes in legislation and dwindling numbers of skilled workers, Romania continues to be an attractive market for Austrian investors, according to Her Excellency Ms. Isabel Rauscher, the Ambassador of the Republic of Austria. In an interview with Business Arena, the Austrian diplomat outlines the priorities for bilateral cooperation, prospects for even closer economic cooperation and Austria's view on the future of Europe.
From Brexit, to a rise in euro-skepticism and populism, the European Union has seen some difficult times lately. Many leaders have suggested that profound changes were necessary so the EU could adapt to the new realities on the continent. What is Austria’s view on the issue? What needs to change in the EU, so things could run more smoothly? Would Austria support a multi-speed Europe?   
Undoubtedly, the European Union has been confronted with unexpected challenges over the past decades; allow me to recall, as examples, the financial crisis, events in our neighborhood, the migration crisis, terrorism within the EU and Brexit. In our view, certain adaptations are called for to the way – and the rapidity in which – the Union reacts. Furthermore, we need to concentrate on priorities, i.e. those areas in which acting jointly as a Union provides added value and added impetus.
The European Union is, at present, at a turning point. Austria is in favor of tackling the challenges that lie before us in a more efficient way. The upcoming departure of the United Kingdom from the EU should provide / serve as momentum to bring about certain adjustments to the current approach and procedures.
This is why the debate on the future of Europe is of utmost importance: in our view, the EU should concentrate on key challenges, bring subsidiarity to the fore and regain the trust of its citizens.
The key policies and challenges are migration and protection of our external borders, internal and external security, economic and social development, deepening of the Economic and Monetary Union, the future scope and priorities of the EU’s finances and the functioning of the Union.
I would like to explain this more in detail: from an Austrian point of view, the EU should cooperate more closely on the big issues in line with the principle of subsidiarity. At the same time, the EU should avoid overregulation and restrain itself on issues where Member States or regions can act more efficiently on their respective levels. Consequently, Austria is committed to “doing less more efficiently”, as proposed in the European Commission White Paper on the Future of Europe. In domains with only limited EU added value the EU-27 should stop or reduce its activities.
Austria is not in favor of a multi-speed Europe. We have instruments for a differentiated integration at hand, if needed, but our focus is rather on the combination of joint priority actions and subsidiarity. We should avoid creating gaps between or camps among Member States and should instead jointly shape our European future.

How would you characterize Romanian – Austrian relations, and what areas of cooperation could be improved?
The excellent relations between Austria and Romania are shaped by geographical proximity, historical commonalities and intensive economic links. Our cultural ties are extremely close, similarities obvious. Naturally, there is always room for more – for increased investment opportunities, for deeper in-depth knowledge of the other, for additional city partnerships and for more people-to-people contacts.
It is precisely this varied and open-ended agenda which not only constitutes our professional life but also makes it so interesting and rewarding.

What was the estimated volume of bilateral trade in 2017?
According to the figures just released for 2017, the total volume of bilateral trade amounted to 3.65 billion euros. This is an increase of 9.1% compared to 2016 and confirms the steady annual growth in our bilateral trade.

What is the total volume of Austrian investment in Romania, and how many Austrian-owned companies are currently registered in Romania?
As you are aware, Austria is one of the leading investors in Romania. Some of the most significant investments ever made outside Austria in its post-war economic history were undertaken in Romania. I need only refer to OMV/Petrom and Erste Bank/BCR.
The total volume of Austrian investments is to the order of 7.58 billion euros. Over 3,000 firms with Austrian capital are registered in Romania and these companies directly employ more than 100 000 Romanians.

Is there any untapped potential for economic cooperation between the two countries? In what sectors?
As always, and as I mentioned earlier, there are infinite possibilities for further cooperation. Romania has significant potential and manifold resources. Given the expertise available locally, Romania is a particularly attractive location in the field of information technology.
Another potential of special interest lies in the tourism trade, both incoming and outgoing. There are still vast untapped opportunities for expanding in this sector.
Furthermore, to take just a few examples, Austria is a leader in the field of effective use of alternative energy, energy generation from waste recycling and biological agro-production.

What are the main difficulties that Austrian investors have encountered in Romania lately?
To what extent could those negative aspects deter further investments here?
Romania is and remains of interest to Austrian investors. Some concerns that have been mentioned to me by Austrians doing business in Romania are an increasing lack of skilled labor and certain regulations that at times seem erratic in their repeated and unexpected changes.

What specific improvements in the local business environment could encourage more Austrian investors to come here? 
A stable economic and legal environment – stable in the sense of predictability and continuity in the legal framework would certainly reassure many current and future investors.

What assistance can the Embassy provide to Austrian investors looking for opportunities in this market? 
The Commercial Section of the Austrian Embassy, the Austrian Foreign Trade Center, is the representative of the Austrian economy in Bucharest. It is extremely active in promoting and supporting Austrian investors, in bringing Austrian expertise and Romanian demand together and in acting as an interface between interested investors and identifiable possibilities. The Austrian Foreign Trade Center offers a broad variety of services both to Austrian companies and to their international business partners.

What are your main professional objectives in 2018?
In the second half of this year, Austria will assume – for the third time since we joined the EU – the Presidency of the Council of the European Union. In this role, we will be followed immediately by Romania which will take over the Presidency during the first half of 2019. Our joint professional objectives will clearly be marked by the agenda of our back-to-back Presidencies.
At the same time, 2018 is a year of historical relevance both to Romania and to modern Austria. Both of our states were founded in 1918, both of us now look back and celebrate jointly a centenary of our modern existence.

What major objectives would you like to have achieved by the end of your term in Bucharest?
I have just arrived, so I prefer to look forward rather than pre-empt a retrospective!
Having said that, naturally I very much hope and intend to push forward certain projects and agendas in the coming years – politically, economically, culturally and people-to-people. By the time I move on, I would like to know that our contribution as a team at the Austrian Embassy will have left tangible proof of the ever-intensifying relations between Austria and Romania.

The interview is also available in our print edition of Business Arena.

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