homepage_name! > Editions > Number 138 > Ambassador - Austria

Austria

Austria, officially the Republic of Austria, is a landlocked East Alpine country in the southern part of Central Europe. It is composed of nine federated states, one of which is Vienna, Austria's capital and largest city. It is bordered by Germany to the northwest; the Czech Republic to the north; Slovakia to the northeast; Hungary to the east; Slovenia and Italy to the south; and Switzerland and Liechtenstein to the west. Austria occupies an area of 83,879 km2 and has a population of nearly 9 million people. While German is the country's official language, many Austrians communicate informally in a variety of Bavarian dialects. Austria is a largely mountainous country because of its location in the Alps.

H.E. Mr. Nikolaus Lutterotti, Ambassador of Austria to Serbia

1. Your Excellency, how do you feel about being in Belgrade? Can you tell us about your impressions of Serbia?

It is a great privilege to live and work in Serbia. As an Austrian Ambassador, I could not have wished for a more interesting posting. Even though we do not share a common border, we consider Serbia our neighbor. Serbia lies at a geographic and strategic crossroad and is a key player in the Western Balkans. Working to intensify bilateral relations with Serbia is an incredibly rewarding job, especially because these relations have been developing positively in recent years. We enjoy close political, cultural, and economic ties and are very committed to Serbia's EU accession process. The high intensity of contacts among our citizens creates a special human bond.

My family and I enjoy living in Belgrade, which is a great and exciting city. We equally enjoy traveling throughout the country and exploring Serbia's cultural, natural, and gastronomic heritage, often together with our Serbian friends. It is a real pleasure to discover the country's beauty and enjoy the enormous hospitality from Serbs all over the country. One of our favorite pastimes is to hike in Serbia’s mountains.

2. How long have you held the position of Ambassador in Serbia, and what was the course of your career in diplomacy before you came to Serbia?

I came to Belgrade in March 2018 after working as an Advisor to Chancellor Sebastian Kurz, including during his time as Minister for Foreign Affairs. I spent a large part of my career in multilateral diplomacy at our Mission to the United Nations in New York, first as an expert on human rights issues and later as the Political Coordinator during our membership in the UN Security Council in 2009 and 2010. I have also worked as the Deputy Chief of Cabinet for the 62 nd President of the United Nations General Assembly, Mr. Srdjan Kerim. My first posting, although only short-term, was at the Austrian Embassy in Beijing. Within the Ministry for Foreign Affairs in Vienna, I have also worked as the Ministry's Deputy Spokesperson, in the Department for South-Europe and the Legal Advisor's Office.

3. What is the current diplomatic and economic cooperation of our two countries like, and what was it like in the past? What should be changed in order to improve that cooperation?

Austria and Serbia enjoy close political, economic, and cultural relations. I am happy to say that in recent years our bilateral relations have developed very positively. Our political relations are excellent and have been enhanced through frequent visits and contacts at the political level. During the Covid-19 crisis, Austrian Foreign Minister, Alexander Schallenberg, and Minister for European Integration, Karoline Edtstadler, visited Serbia during their first foreign trip. Austria and Serbia have supported each other in the repatriation efforts of their citizens. The Serbian Ministry for Foreign Affairs was exceptionally helpful. We provided Serbia with basic medical needs for vulnerable groups and people in asylum centers. Through UNDP, we are also supporting the development and the local production of respirators at the University of Kragujevac.

On a political level, we are very committed to supporting Serbia on its way into the European Union. Our bilateral cooperation covers many areas, such as migration, police and justice affairs, the environment, agriculture, education, and of course, economic matters. We are the second largest investor in Serbia; more than 400 Austrian companies are invested in the Serbian economy and provide 21,000 jobs. Generally speaking, Austrian investments follow a long-term strategy and are here to stay, even during crisis times.

4. What is the current situation regarding the pandemic in Austria?

The Covid-19 pandemic is on the rise all over Europe again. Unfortunately, this is also the case in Austria, where we have seen a very worrying increase in new infections. So far, our health care system is well equipped, and hospitals are prepared to treat new patients. We have a capacity of roughly 2,500 beds in intensive care units, of which 1,000 are reserved for Covid-19 patients. Currently, we have 130 patients in ICU treatment. The Austrian government's primary focus is to stop and reverse the trend and bring new infections down again. Together with the nine federal states ("Bundesländer"), measures have been strengthened to achieve this goal, including extending the obligatory use of masks and increasing social distancing rules in public spaces, such as schools, restaurants, shops, and public transport. Even in private areas, there is a recommended limit of six persons at indoor gatherings. The government has also adopted a targeted strategy for testing to be as efficient as possible in containing the virus's spread. Austria maintains travel restrictions that are subject to regular review. To simplify information and transparency, the Austrian government introduced a "COVID-19 traffic light system".

5. How did the pandemic affect the development of tourism?

Tourism is an essential part of our economy, amounting to roughly 6% of our GDP. 2019 was an incredibly successful year for tourism, with growth at over 4%. However, this year, our tourism industry has suffered heavily from the pandemic's consequences, especially given the drop in holiday tourism, the considerable reduction in business-related visits, and the lack of congresses and fairs. We also expect a negative trend during the upcoming winter tourism season. To support businesses in the tourism sector, the government has introduced several targeted measures to ensure financial liquidity and safe jobs during this hardship period.

6. Today, Serbia is a candidate country for the EU membership - negotiations started in January 2014. In your view, where is Serbia on its way to EU membership and what will be crucial for Serbia to achieve membership status?

Serbia has opened 18 of 35 negotiating chapters with the European Union, which is more than 50% in terms of numbers. During his visit to Serbia, EU Commissioner Varhelyi presented the new country report, which gives a fair and objective assessment of Serbia's progress in the EU negotiation process while considering the exceptional circumstances triggered by the Covid pandemic. The Commission's report concludes that more progress on reforms and its implementation is required, especially when it comes to the rule of law, independence of the judiciary, the fight against large-scale corruption, freedom in the media, as well as in independent institutions and public administration. But, it also recognizes that Serbia has made progress in harmonizing legislation and adapting legal standards, particularly on economic issues. The Serbian economy has demonstrated solid performance in recent years, thanks also to a mix of government measures that led to high fiscal discipline and a macroeconomic level of stability.

Hence, the report provides a good picture of where Serbia stands and is a useful guide for the Serbian government on priority areas for reforms that would accelerate the accession process. Austria is prepared to continue and intensify its cooperation with Serbia regarding the EU accession process, including through 20 Twinning Projects. While working on these projects, we can see the quality of Serbia's administration and the efforts to improve legislation according to EU standards. After harmonizing the laws, it is crucial to implement the new laws properly.

7. When it comes to investments, how do investors from Austria regard the Serbian market? How many Austrian companies are operating in Serbia at the moment, and which are the most important companies investing in us?

More than 400 Austrian companies are invested in the Serbian market; they employ roughly 21,000 persons in Serbia. Our most significant investments in invested capital are from the services industry, such as banks, insurance companies, or the telecom sector. But we also have large investments in the industrial sector. Overall, we are the second-largest investor in Serbia.

Experience has shown that Austrian companies in Serbia pursue a long-term perspective and keep their locations and employees, even in difficult times. I have no indication that this time around will be any different. Despite all the pandemic-related uncertainties, most of them assume that there will be a robust economic recovery in Serbia in 2021. For most of our companies in the service sector, it is now crucial that private consumption does not collapse. In this regard, the Serbian government's prompt and comprehensive support programs have been beneficial because they have supported the population's purchasing power. Those companies that export from here, on the other hand, depend on demand from abroad and thus on the economic recovery in their most important customer countries, such as Germany or Austria. When we talk about the challenges of doing business in Serbia, they have remained unchanged over the years. In general, they relate to administrative and regulatory issues and to the low growth of domestic consumption and investments. For Serbia as a business location, the government should accelerate fundamental reforms to join the EU with great energy and determination. From an investor’s point of view, that would be a significant signal.

8. How would you describe your cooperation with the Serbian Government and business associations for the purpose of entrepreneurship development?

We have an excellent and long-standing cooperation among our governments, but also between the two chambers of commerce. In education, I would highlight a very successful dual education program, connecting schools and firms to give young people the qualifications to start a successful career. Promoting the private sector and entrepreneurship is also a priority for the Austrian Development Agency. In the framework of their so-called "business partnerships," support is given to sustainable, socially, and environmentally sound projects by making the best use of Austria's business potential. I would like to mention another great project, also funded by the ADA: The project of Caritas Austria and Serbia called “Your Job Srbija" aims to encourage young people in Serbia. The project involves career counseling, training, providing opportunities for internships, and – what we consider particularly relevant – support to young people to start their businesses.

9. What is the nature of the foreign trade cooperation between our countries and which industries in Serbia have the most potential? What does Serbia export , and what does it import from Austria?

Before the start of the pandemic, our trade was developing very positively. In 2019 we had an all-time high of EUR 1.5 bill. in bilateral trade. The main Austrian export products are machinery and equipment, pharmaceuticals, and paper, whereas Serbian exports to Austria were mainly agricultural products, steel, cables, and lighting fixtures.

In 2020, we witnessed a decline due to the pandemic. Based on the latest data – covering the first six months of this year – our bilateral trade declined by roughly 17%. All the product groups have been affected, which reflects the overall contraction of demand in Europe. Against this general trend, we witnessed an increase in Austrian shipments of pharmaceuticals to Serbia. Serbia exported in the same period almost twice as much frozen fruit as last year. Given the uncertainty of the pandemic's evolution, it is difficult to predict developments next year. Still, we hope that our bilateral trade will grow again. It will depend on the situation in our two countries and equally on the global economic recovery, given the extent to which our companies are integrated into international production chains.

10. Can you tell us about the relationship between Serbia and Austria in the fields of science, culture, and education?

Serbia and Austria's cultural and scientific exchange is extensive and deep, dating back to the 18 th century. The exchange of artists and intellectuals has primarily developed on a grassroots level, explaining why it proved so fruitful and sustainable. Notable examples are Vuk Karadžić, Jovan Cvijić, Paja Jovanović, Milutin Milanković, Milo Dor, and Želimir Žilnik.

The “Austrian Cultural Forum” in Belgrade is the primary institution dedicated to fostering exchange between Austria and Serbia in culture and science. It supports around 100 events per year in Serbia. It is the first to get information about open calls, stipends, and artist-in-residence programs. The “Austrian Institute” provides German language courses (now also online) and internationally recognized language certificates. The Austrian libraries in Belgrade and Novi Sad have extensive Austrian literature collections and organize their own events. Two Austrian lecturers teach students enrolled in German studies about the cultural specificities of Austria and Austrian German. Regarding literary translations, the Traduki network supports translations from German into the languages of Southeast Europe and vice-versa and has strong ties with many Serbian publishers.

When it comes to science, Austrian and Serbian universities cooperate on dozens of research projects through the CEEPUS network. With CEEPUS, Erasmus+, and some specialized programs, students and scientists' exchange now has an excellent institutional footing, and I expect it to intensify over the next years. The Embassy has recently established a platform for alumni associations of Austrian universities in Serbia, providing alumni with an opportunity to exchange and network.

Education is a pillar of Austria's foreign policy in the Western Balkans. The Austrian Ministry of Education and the Trade Chamber have successfully implemented a dual education program in Serbia to give young people the qualifications to start a successful career. Austria also has a long-lasting partnership with the Serbian Ministry of Education on quality management in schools. The Austrian Cultural Forum engages with schools through traveling exhibitions, film programs, and by providing them with Austrian teaching materials.

11. How would you present your country as a tourist attraction? Which characteristics and sights would you highlight?

Austria offers an incredible cultural and natural diversity as a tourist destination, with six national parks, ten UNESCO world heritage sites, and seven crafts recognized as humanity's intangible cultural heritage. Besides Vienna, Salzburg, Graz, and Innsbruck being renowned for their architecture and history, their museums, and the quality of their theatres and concert halls, other Austrian regions provide an equally unique and rewarding experience.

The Austrian Alps are perfect for alpine skiing and other outdoor activities in winter, such a cross-country skiing, tobogganing, ice skating, or dog sledding. In summer, you can hike through stunning mountain ranges and swim in beautiful mountain lakes. The Danube region is ideal for family holidays, cycling, trekking, and visiting baroque monasteries and wine tasting. The Pannonian plain in Austria's east will be somewhat familiar to Serbian tourists. It resembles Vojvodina, but with Neusiedler See, a steppe lake ideal for birding, swimming, and windsurfing.

I would also recommend a region that might be less well-known in Serbia but has a lot to offer: Vorarlberg, the westernmost province bordering Switzerland, is remarkable not only because of its pristine alpine landscapes and high-end ski resorts, but also because it is an international center for contemporary, sustainable architecture – and will also treat its visitors to exceptional cheese.

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