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Germany 2017

THE HUB OF CULTURE AND ECONOMY H.E. THOMAS E. SCHULTZE German Ambassador to Croatia

LUKA BURILOVIÄ† President of the Croatian Chamber of Commerce

NICOLAS BARON ADAMOVICH President of the German-Croatian Chamber of Commerce (GCC)

THE SAALFELD FAIRY GROTTOES

Caverns near Saalfeld, have long been famous for their colorful mineral formations formed by water dripping through relatively soft rock. The Guinness Book of World Records has termed the Feengrotten the most colorful cave grottoes in the world.

ANCIENT SOLAR OBSERVATORY The oldest sun observatory currently known in Europe is the socalled Goseck circle in SaxonyAnhalt. It was built some 7,000 years ago, and is considered to be the oldest concrete representation of the cosmos.

THE LARGEST ZOO IN THE WORLD

Germany has nearly 700 zoological gardens, safari parks, aquariums, animal reserves, including 414 zoos. Berlin's Zoologischer Garten is the largest zoo in the world, both in terms of number of species and animal population.

06 CURRYWURST - A CULT CLASSIC Over 800 million currywurst are eaten in Germany each year, and is a street food that has become a cult classic in Germany. There's even a museum in Berlin dedicated to the popular snack.

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5,000 KINDS OF BEER

1,300 breweries in Germany produce 5,000 kinds of beer. German people are the world's second biggest beer drinkers. Munich's Oktoberfest is the world's biggest folk festival, dating back to 1810.

MORE BRIDGES THAN VENICE

The capital of Berlin boasts 960 bridges and 59.8 square km of water consisting of lakes and around 180 km of navigable waterways. Combined with its surrounding state Brandenburg, it houses Europe's largest inland water network.

07 WORLD'S MOST FAMOUS INVENTIONS The Germans are credited with the discovery of insulin, the pocket watch, paraffin, petrol/gasoline & Diesel engines, the automobile engine, differential gear and other important devices, the motorcycle, the jet engine, the LCD screen.

TIMBER-FRAMED BUILDINGS

There are 2.5 million halftimbered houses in Germany, by far the highest number of any country worldwide. These are usually top tourist spots, or, on the contrary, well hidden jewels off of the beaten tracks.

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Germany www.diplomacyandcommerce.hr

OUR AIM - STRONG AND UNITED EUROPE

H.E. THOMAS E. SCHULTZE

Education

GCC – ONE OF THE BIGGEST ECONOMIC 26 ASSOCIATION IN CROATIA

German Ambassador to Croatia

SERVICES TAILORED TO FIT YOUR BUSINESS

NICOLAS BARON ADAMOVICH

President of the German-Croatian Chamber ofCommerce (GCC

CONSTANT GROWTH OF CROATIAN ECONOMY

Director of the Goethe Institute in Croatia

CRADLE OF MODERN POP MUSIC

STILL AFLOAT, STILL LEADING

WORLD LITERATURE FESTIVAL

INDUSTRY VS. TOURISM

IS GERMANY A NEW AMERICA?

THE HEART OF EUROPE

“MADE IN GERMANY” BRAND BOOSTED

BOBAN SPASOJEVIĆ EXECUTIVE EDITOR boban@diplomacyandcommerce.hr

NIKICA MILOŠ

EDITOR-IN-CHIEF nikica@diplomacyandcommerce.hr

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A CULTURAL BRIDGE BETWEEN CROATS AND GERMANS DR. MATTHIAS MÜLLERWIEFERIG

Economic cooperation

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AHK Croatia

President of the Croatian Chamber of Commerce

Economy

GERMAN DUAL EDUCATION MODEL – A REAL EXPORT BULLSEYE

LUKA BURILOVIĆ

Stamp of Quality

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H.E. THOMAS E. SCHULTZE German Ambassador to Croatia

INTERVIEW

OUR AIM STRONG AND UNITED EUROPE 6

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Germanyâ€™s foreign policy remains value-oriented, the EU is not only an economic alliance, it is an union based on shared values like human dignity, freedom of speech, rule of law. We need to jointly defend these values

ermany’s foreign policy is committed to Europe, global engagement for peace and security, promotion of democracy, the rule of law and human rights, says the German Ambassador to Croatia, H.E. Mr. Thomas E. Schultze for Diplomacy&Commerce magazine. He adds that Croatia and Germany have always been close partners. We share the same values, His Excellency says. At the time of great geopolitical changes, the new administration in Washington, Brexit and the migrant crisis, what is Germany's current position on the global geopolitical map, and what does your country advocate in international relations? ― We want the European Union to play an important, reliable and predictable role, both globally and in the European neighbourhood. We need to engage with our neighbours to the east and to the south. Given the challenges of an undeniable climate change with all its global impact we strongly support climate protection. We need a sustainable energy management with a strong focus on renewable energy and energy efficiency. I am convinced that this is also an opportunity for Europe – politically and economically. Our economic policy follows the prin-

ciples of a social market economy with a strong focus on free and fair international trade. What are the medium and long-term goals of the German foreign policy? ― We support a just and sustainable globalization and an international order based on rules. In other words we strive for a world that will still be worth living in for our children. We believe that the European Union can and should play a crucial role in making this happen. If we don’t make the EU a fullfledged global player all members of the union will loose. Therefore strengthening European integration is a key principle of German foreign policy shared by all major parties in Germany. The relations between Croatia and Germany have been continuously good. During the official visit of the Croatian PM, Andrej Plenković to Berlin, even the German Chancellor Angela Merkel called these relations excellent. In which direction are these relations going to develop, in your opinion? ― Germany is the biggest trade partner of Croatia, our economic ties are strong and sustainable. So there is a solid basis

for our mutual relations. For us Croatia is a key partner in the EU in our joint efforts for stability and prosperity in the region. We very much appreciate the strong European policy approach of the current government under the leadership of Prime Minister Plenković and we are confident that Croatia will constructively support all European efforts aiming at further developing the European perspective for the countries in the region. How does the German government view the border conflict between Croatia and Slovenia, and what is the solution to that problem considering the speculations that Washington shares similar views of the issue like Croatia, unlike the German government? ― International arbitration is a valuable instrument of international law and plays an important role in the settlement of inter state disputes. I understand that Croatia also generally agrees to this principle. It is, in our opinion, a key principle of international law that decisions of arbitral tribunals be respected and implemented. Preserving the integrity of international arbitration is in the common interest of all states. We remain confident that the EU member states Croatia and Slovenia will

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therefore find a way to solve this bilateral border dispute amicably. Regional cooperation and the Southeast European countries joining the EU are one of the priorities of the German government in terms of its European policy. What role does Croatia play in all of this, considering it has been an EU member for four years now? ― Croatia has already achieved a lot. As a member of both EU and NATO it plays an important role in supporting the countries in the region and we would like to see even more of this. Socio-economic development of all Southeast European countries in our view is a crucial component of stability and prosperity and will eventually lead to a win-win situation for all concerned - also for Croatia. What are the main characteristics of the German-Croatian bilateral relations? ― As I said before the relations are very close and intense. Croatia and Germany have always been close partners. More than 300,000 Croats live in Germany, more than 2 million German tourists travel to Croatia each and every year. This year we are seeing an all-time high. The relations between our peoples are based on friendship, trust and mutual respect. I am impressed how many Croats speak German fluently. More than 165.000 children in Croatia learn German as a foreign language. More than 380 member companies of the German Croatian Chamber of Commerce and Industry employ roughly 80.000 people in Croatia. So Croatian-German bilateral relations are deeply rooted in our societies and go far beyond daily political business. In which way do you help Croatia in terms of developing civil society and improving the quality of life? The German Federal

WE WILL CONTINUE TO SUPPORT OUR CROATIAN PARTNERS IN PROMOTING AND DEVELOPING A MORE PRACTICE-ORIENTED EDUCATIONAL SYSTEM 8

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Parliament has also launched a competition for allocation of scholarships. Could you elaborate on that please? ― Germany supports stronger links between our two countries especially among young people. Several scholarship schemes are available: The German Academic Exchange Service DAAD and the Alexander von Humbold Foundation are accessible for university students and researchers. The East-Commission of the German economy (Ostausschuss der Deutschen Wirtschaft) offers scholar-

VOCATIONAL EDUCATION AND TRAINING (DUALE BILDUNG) IS AN IMPORTANT TOPIC IN OUR ECONOMIC RELATIONS ships for young professionals. As you mentioned, the German Bundestag awards a special scholarship/internship programme in Berlin every year in cooperation with the Croatian Sabor. Furthermore we support the teaching of German as a foreign language at Croatian school through the network of 59 German partner schools across the country and with the activities of the Goethe Institute. This will enable young people to find their dream jobs. I should also mention that the German political foundations are an active partner in fostering contacts between various actors of the civil society. What would you like to mention as an important topic in the economic relations between Germany and Croatia? ― Providing the best possible education and training for our children is of utmost importance for our societies. One of the

major goals is to reduce youth unemployment and to bring qualified young people together with their future employer. Therefore the vocational education and training (Duale Bildung) is one of the main topics in our bilateral cooperation. We will continue to support our Croatian partners in promoting and developing a more practice-oriented educational system which will contribute to more employment in Croatia and to more sustainable growth. As a welcome side effect it will also help to tackle the challenges of demography and improve social cohesion. You have been the German ambassador to Croatia for two years now, and before that you served at the German embassies in Turkey, Saudi Arabia, Afghanistan... What do you think of the life in Zagreb and generally in Croatia, and what similarities do the two friendly nations share? ― My family and I tremendously enjoy living in this beautiful country. We really feel at home in Zagreb with its rich cultural life, we enjoy buying groceries on Dolac and then having an espresso in one of the many coffee places downtown. But we also like to travel and have managed to see large parts of coastal and continental Croatia. My wife and I grew up in a wine growing area in Germany and both of us therefore very much enjoy the food and wine culture of this country. That is certainly something large parts of Germany and Croatia have in common. Although Croatia is not a huge country it is quite diverse with all its different regions like Dalmatia, Istria, Slavonia and others. There are variations in terms of food, habits and the use of some words. In Germany we also find this sort of regional diversity. These differences make Croatia even more interesting and I sincerely hope that in the years to come more tourists will discover and appreciate the beauty of continental Croatia.

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NICOLAS BARON ADAMOVICH President of the GermanCroatian Chamber of Commerce (GCC)

INTERVIEW

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Germany is recognized as an important commercial partner: GCC members employ a workforce of approximately 80,000 employees in Croatia

roatia’s economy is finally back on a moderate growth path. Substantial EU funds stand ready to support investments and development but their utilization rate is far from satisfactory. Structural reforms continue to be an urgent imperative for political decision makers - says the President of the German-Croatian Chamber of Commerce, Nicolas Baron Adamovich for our magazine. You have been in Croatia for many years, and you are well acquainted with its economy. Since joining the EU, how much has the country develop the features of a well-organized, market-driven European economy? ― Croatia’s membership in the EU is a blessing for the country’s economic design and development. It helps strengthening the orientation towards an efficient market economy. While much has been achieved in this context over the past decade, Croatia’s economic constitution still suffers from a number of inefficiencies. One of them is an inadequately strong position of public companies in several sectors – a fact which, as a rule, impedes economic progress. Others are linked to legal practice and public administration. In principle, the theoretical setup does promise fair competition and attractive investment terms in most of the economically relevant spheres. Practical implementation too often still encounters circumstances different from those laws and regulations would have suggested How do you assess the overall economic situation in Croatia? ― Facts and figures support the improved tune, and are by no means limited to the remarkable results of Croatia’s tourism sector. Other important factors relate to impressive growth rates in Croatia’s

foreign trade, sound and growing internal consumption and increasing investments. Also, public finances are showing encouraging trends which provide reasons to believe that budget deficit and foreign debt figures are reasonably well controlled. Alas, unemployment remains very high and particularly so youth unemployment. Unfortunately, this tour d’horizon can’t do without mentioning two major downside risks. One is, of course, the crisis linked to Agrokor which poses a threat to the countless supplier companies and thousands of jobs. The second downside risk is even more significant, certainly so in

MOST FOREIGN INVESTORS OPERATE IN CROATIA VIA COMPANIES REGISTERED IN CROATIA UNDER CROATIAN LAW the mid- and long-term: it’s demographics! The number of employable persons leaving Croatia in search of more rewarding economic terms abroad has reached an alarming scale and threatens to depopulate entire areas. Does the foreign business community have a good, open dialogue with the Government of the Republic of Croatia? ― Yes, this I can absolutely confirm on behalf of our chamber. Doors are open for us in all ministries, on all levels. We also have a particularly intense cooperation with the Croatian Chamber of Commerce, and on the German side, with the German

Embassy to Croatia. We feel that our close and steady contact with effective and potential investors provides us with highly relevant practical information on investment conditions in Croatia. Hence we are more than glad to share this information with public bodies. In some instances we do so in co-ordination with representatives of other business communities, such as our Austrian or Swiss partners. How do you perceive a foreign business community that operates in the country? ― Most foreign investors operate in Croatia via companies registered in Croatia under Croatian law. The overwhelming majority of such companies is managed by Croatian nationals. These companies should not be treated differently from other Croatian companies – neither better nor worse! According to expert research, such as the one done by the Foreign Investors Council (FIC), there is a clear statistical correlation between foreign capital in Croatian companies and above average investment, employment and profitability parametres. Such relation makes it easy to conclude: foreign capital does – with inevitable but rare exceptions to the rule – create a huge added value for the Croatian economy, it brings innovation, jobs, state-of-the-art know-how, financial liquidity, international connectivity – and it pays substantial taxes into the Croatian state budget. What do you see as key challenges when it comes to business climate? ― The key challenges for Croatia’s business and investment climate haven’t changed much over the past years. Tax authorities haven’t succeeded in setting predictable standards in all areas and are at times perceived as taking ar-

DOING BUSINESS IN CROATIA OFTEN MEANS MOVING ALONG A BUMPY ROAD, BUT IN MANY CASES IT NEVERTHELESS BRINGS ABOUT REWARDING OUTCOMES GERMANY 2017

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logistics, agrarian economy and food industry, retail and distribution, IT, mechanical engineering, metalworking industry, forestry and wood processing.

bitrary actions, incidentally to the detriment of successful market participants. Also, tax policies haven’t been sufficiently stable over time to take away investors’ uncertainties regarding a durable tax landscape. Court procedures take too long and their outcomes don’t always seem to follow the same logic. Public administration is often inefficient, bureaucratic and slow – with laudable exceptions of course. Local authorities are regularly reported to inhibit external investments for illogical reasons. Bidders complain about costly public tenders’ outcome sometimes being pre-determined or annulled for marginal reasons. Publicly owned companies’ management needs to be depoliticised. Doing business in Croatia often means moving along a bumpy road, but in many cases it nevertheless brings about rewarding outcomes. Just imagine how Croatia could flourish if most of the business obstacles were changed to the better! How many German companies are interested in investing in Croatia? ― Croatia’s membership in the EU has helped a lot in putting Croatia on the map of potential investment locations since 2013. In the light of this membership, investors count on structural similarities, free trade to and from the huge EU market, and on a familiar set of market economy rules. Insofar investors’ interest – whether from Germany or elsewhere – will always be a function of

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the investment conditions Croatia offers as compared to any other competing location. Croatia’s government therefore absolutely needs to pay steady and intense attention to make sure Croatia offers attractive and competitive investment conditions for local and foreign investors. If Croatia does not succeed in continuously attracting substantial investments, the country’s economic prospects can quickly turn dull – and with them the economic standing and perspectives of its population!

CROATIA’S MEMBERSHIP IN THE EU HAS HELPED A LOT IN PUTTING CROATIA ON THE MAP OF POTENTIAL INVESTMENT LOCATIONS SINCE 2013 Which German companies are considered to be the most attractive for investment? ― Germany is a large and wealthy country with countless effective and potential investors into basically every sector you can think of. Topics where we see considerable interest from Germany include tourism, renewable energy, environmental engineering, energy efficiency, infrastructure and

How can Croatia solve the problem of lack of skilled labour, and is dual education a solution to it? ― Our chamber is substantially engaged in supporting the creation of early practical job experience. It does so in a strategic partnership with the Zagreb-based foundation Znanje na Djelu, in an initiative promoting well-organised internships among our members, and by supporting a large student scholarship programme for work placements in Germany (“Stipendienprogramm der Deutschen Wirtschaft”), initiated by Ost-Ausschuss der Deutschen Wirtschaft. Dual education is a topic of its own and, if understood and implemented properly, promises huge beneficial effects for the Croatia’s economy and society. In dual systems, companies run the training themselves and according to their specific needs. For young people, the transition from school to work is made much easier. Our chamber has organised a number of its member firms and vocational schools into a project consortium. Based on the know-how provided by German companies and from the German chamber network, the project seeks to deliver evidence that dual training is feasible in Croatia, and that it is the right choice for companies and for the youth. How many members does the German Chamber of Commerce have in Croatia and what services do they expect you to provide the most? ― We have more than 390 members. Generally speaking, we support interconnectedness between the Croatian and the German business worlds and facilitate market entries for investors from both countries when entering the other country (this is a two-way street). In addition, we speak up for our members’ joint interest vis-à-vis public bodies, ministries and members of the government. We also organize seminars, conferences, delegations’ journeys, trade show appearances, workshops and networking events. While our natural base is Zagreb, we deliberately extend our activities to other regions within Croatia for quite some years already and have, for instance, recently named an honorary representative of our chamber in Split to enhance our presence in Dalmatia. Else, we attend visiting delegations from Germany in Croatia and present Croatia as an investment destination on specialized events in Germany. And, last but not least, we provide basic research, book-keeping and translations services.

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LUKA BURILOVIĆ

INTERVIEW

CONSTANT GROWTH OF CROATIAN ECONOMY

President of the Croatian Chamber of Commerce

In 2015, economic growth stood at 2.2%, and last year at 3.0%. This year's growth is expected to remain on the same level

n an interview for Diplomacy & Commerce magazine, President of the Croatian Chamber of Commerce, Luka Barilović says that the most important things for further economic growth are consistency and removing barriers in doing business. This will bring a better business climate, investors and create new jobs. According to your estimation, how much will the Croatian GDP grow this year, and, generally speaking, how good is this year going to be for the Croatian economy considering various turbulences it went through? ― The GDP data for the Q1 shows that domicile demand did grow during this period, as did the export of goods and services which was more dynamic than in the Q1 of last year. However, this growth is not accompanied by an adequate production increase. The available data for the upcoming period shows that similar trends continued into the Q2. In the first five months of this year, retail recorded a growth that was more dynamic relative to last year's, while the industrial production growth has been considerably slowing down. Additionally and despite the dynamic export growth, the commodity

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balance shows an even more pronounced hike in import and a higher deficit. Which direction should the policy makers take in terms of boosting competitiveness of the Croatian economy? ― Innovation is the key factor in the competitiveness of the Republic of Croatia and in other countries which are similar to the Republic of Croatia (small, open economies) which cannot build their competitiveness on economy of volume. Hence, innovation, in such countries, is the driving force behind productivity, higher efficiency, and generating new markets. Investing in research and development should also result in production of new, innovative products and services, or in finding innovative solutions which add value and help

MOST OF OUR REVENUE FROM GERMANY IS GENERATED BY THEIR TOURISTS

companies to position themselves higher up the global value chain thus increasing their competitiveness and export. Is your proposal to adopt the new format of export assistance and assistance in attracting investments to the satisfaction of the Croatian government? ― Export assistance has been our core business throughout our history. In terms of our cooperation with the government, it would be more accurate to say that our Chamber is coopearing with governments in the best interest and to the benefit of its members. The Croatian Chamber of Commerce was the first chamber to open its door to regional markets following the war, and promote the importance of export. We have been continously and actively developing services that support export in line with the needs of our business community. Also, we are going to start implementing a new business strategy with strong emphasis on internationalization of the Croatian economy. How does this fit into your idea about internationalizing the Chamber through

the cooperation with various ministries? ― Our Chamber has recently signed a cooperation agreement with the Ministry of Foreign and European Affairs based on which we are going to open our offices in Croatian embassies and general consulates in those countries that are crucial to our export, thus providing support to our companies in foreign countries. We are going to promote the best interests of the Croatian economy, but also attract a lot of interest from foreign investors. All of this will be done along with cutting back on costs. At the same time, the Ministry of Regional Development and EU Funds is planning to allocate substantial funds to the internationalization process where we expect a significant number of quality projects that will definitely boost the level of utilization of EU funds to be implemented, as well as have a positive effect on export and the economic growth of our country, all of which will be beneficial to our internalization efforts. Croatia is not the best example of how to use EU funds. However, we still have an opportunity to do this. With joint forces, we can still use almost all funds allocated to Croatia in the 2014-2020 budget period. We are talking about the amount of over 10 billion EUR. What are long-term solutions to some of the biggest challenges like the lack of workforce in tourism and construction despite a relatively high unemployment rate? ― This is a burning issue for the Croatian economy. We need something to extinguish this fire fast in order for the lack of workforce not to negatively affect our economic growth. This is why we are advocating implementation of a more flexible model that would enable companies to hire foreigners

as they see fit, i.e. to approve employment of foreign workers in situations where it has been proven that there was no available workforce on the Croatian labour market (the so-called Slovenian model). Along with bilateral seasonal labour agreements with neigbouring countries in order to facilitate employment of foreigners during the season, other short-term proposals and measures that we advocate are legally allowing minors to work after 8pm, and allowing pensioners to work while they continue receiving their pensions.

DUAL EDUCATION IS A LONG-TERM SOLUTION TO LACK OF WORKFORCE Everybody favours the German dual education model now. How many elements can Croatia 'borrow' from it? ― In practice, both German and Austrian dual education models have proven to be very successful. Thanks to our good, longterm cooperation with our counterparts from the German and Austrian chambers of commerce, we had first established contact and then started to create our own model that is very much alike the aforementioned ones, but it is also different to facilitate the peculiarities of our labour market and in the structure of our economy. The support from the Ministry of Science and Education is the key ingredient in implementing the said model. We have been constantly communicating and cooperating with the Ministry apropos the relevant issues which is why we expect to create concrete benefits both for our members,

i.e. the business sector, and for our education system which stands to make a good and modern step forward towards achieving the same or similar effect to that in Austria and Germany. What do you think of the idea of Germany increasing its spending in other to boost the growth in rest of Europe. What implications would this decision have on Croatia? ― Germany is the strongest economy in the European Union. Its 82.8 million inhabitants make 16% of the EU population, and generate around 20.6% of the EU's GDP. Germany is also one of the top external trade partners of Croatia, i.e. one of the top five countries that we export our goods to, and the most important market for export of our services. In terms of goods' export, Germany often occupies third or fourth place, while, in services' export, it has been occupying the number one place for years. Let me just illustrate to you the importance of German demand for the economic growth in Croatia with the following information – in order for our GDP to grow by just one percent, we need to increase our export to Germany by approximately 55%, as well as our export of services, particularly the tourism ones, by 27%. One of the prerequisites for higher export of our goods and services is higher demand in Germany. Considering that Croatia occupies only 17th place on the list of countries that Germany mostly imports from, and that our share in German import is only 0.14%, this is not a necessary prerequisite. If export our goods did increase by 50%, our share in German import would still be under 0.2% which, from the standpoint of German economy, is rather negligible.

GERMANY IS THE STRONGEST ECONOMY IN THE EUROPEAN UNION. ITS 82.8 MILLION INHABITANTS MAKE 16% OF THE EU POPULATION, AND GENERATE AROUND 20.6% OF THE EU'S GDP GERMANY 2017

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“MADE IN GERMANY” BRAND BOOSTED

Reinforced Trust, the Stamp of Quality

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— Text —

Nikica Miloš

ollowing the recent blow to the image of the “Made in Germany” brand, in the wake of the Volkswagen affair, a question arose as to whether the brand that was synonymous with quality would survive. It did survive, and remains the unshakable symbol of a “job well done”. The first thing to do was for the German business to have both of its feet firmly on the ground. There is a time to kill and a time to heal, they say, but here it was more like “there is a time to be killed and a time to be healed”. The shady business of the famous VW was once a hint of great danger, but now, in these increasingly shifting times, it seems like a nightmare Germany had… twenty nights ago.

has made Germany so resilient during times of crisis. The Economist’s facts show that “Germany is more dynamic than the rest of continental Europe: its unemployment rate fell from 11.7% in 2005 to 6.7% in 2014. And it is more balanced than its fellow European dynamo, Britain, where the economy is dominated by London and the financial-services industry.” Germany's industry is decentralised and regionalised, while the UK's is centred in Southern England. Germany is diversified

towards the mid-sized enterprises, while the UK tends to be full of giants. Germany is, finally, dedicated to production, which, surprisingly, has never failed to find its market, despite Chinese cheap products and globalisation. The United Kingdom likes to produce things elsewhere – a clear legacy of empire. Now the Brits count their money in London’s City and the Germans count money too, but not only that. Not all of their eggs are in the same basket, as has been evident from 2008 onwards.

THE STRENGTH OF GERMAN MITTELSTAND

Germany is not only home to some of the world’s biggest companies, but also hosts some 1,300 medium-sized companies, so-called Mittelstand, which is in fact the core strength of every economy. Wait! Was it not enough just to get the big players in to fix everything, as many of the Eastern European leaders thought back in the ‘90s, thus repeating the fatal mistakes of the South Americans and Africans during the post-colonial period? No! It is instead crucial to have medium-sized, often family-owned companies that dominate global niches. Some of them should, for instance, dedicate themselves to producing things like hospital beds, like Tente. And it is precisely these Mittelstand that

GERMANY IS DECENTRALISED AND REGIONALISED IN INDUSTRY, DIVERSIFIED TOWARDS MIDSIZED ENTERPRISES AND DEDICATED TO PRODUCTION GERMANY 2017

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THE PROBLEMS OF THE “ECONOMIC SUPERSTAR” OR “THE RICH WEEP TOO”

It went so far that the politicians dubbed their country a “Superstar” that had learnt how to stay afloat in the fluid and flexible modern economy and amongst the storms, and despite the hyper-competition. But then, in 2015, Volkswagen did the unthinkable: it cheated. It was Germany’s biggest company and, after Toyota, the world’s second-biggest carmaker, and it had been caught using clever software to make a “slight detour” around America’s strict emissions standards. “The Volkswagen scandal is a disaster for the whole of the German automotive industry”, commented the famous Handelsblatt. And Doreén Pick, famed professor of marketing from Belgrin’s Freie Universität, said that the Volkswagen’s fiasco jeopardised the image of all products bearing the “Made in Germany” label, since it was precisely Volkswagen that embodied the faith in everything Germans consider their best qualities: sincerity, efficiency, reliability. ING were more alarmingly brutal: “All of a sudden, VW became a liability to the German economy, even more than the Greek sovereign debt crisis.” Indeed, if you are “better than Greeks and Italians”, how can you afford to act like Rodney and Delboy in Peckham?

THE PHOENIX RISES AGAIN, THOUGH

However, this turned out just to be short-term crisis. In the end, a good system overrides malfunctions and overcomes obstacles. Co-determination produces social harmony, and slight mismanagements turning huge in the end were not fatal at all. Angela Merkel has reversed some of

the negative trends of previous governments by introducing a minimum wage and increasing retirement payments, thus eliminating the social gap and social fears, and making Germans more proud, secure and confident that their country will not become another Britain, or any other Anglo-Saxon country. Since they are Germans, and would like to remain so. And only those who are deeply committed to their jobs, and who are confident that their country is the best place to live, will have a strong national brand. It certainly does not depend on the nation, race or geographical position. Japan or China can do the same, since they believe that they will be better off if

they stay within their system. And so we have received the “Made in Japan” brand, which still holds strong, and the “Made in China” brand, which is getting ever stronger. “Made in Germany” is being boosted once again, as just one scandal cannot destroy an economy; a system that is deeply positive, with apprenticeships and commitments, and with faith in engineers and quality. Many of those who promoted other models were full of “Schadenfreude” when VW did what they did, but now it is time to admit that the brand “Made in Germany” is no longer questioned, and only the greatest superstars can survive and recover from bad times so quickly.

MANY OF THOSE WHO PROMOTED OTHER MODELS WERE FULL OF “SCHADENFREUDE” WHEN VW DID WHAT THEY DID, BUT NOW IT IS TIME TO ADMIT THAT THE BRAND “MADE IN GERMANY” IS NO LONGER QUESTIONED 18

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STILL AFLOAT, STILL LEADING — Text —

Nikica Miloš

Frankfurt

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Germany, a conservative and down-to-earth nation at the very heart of Europe, has a similarly conservative, downto-earth economy, one that suits the spirit of the nation. Conservative? Well, perhaps in the modern sense of that word

rientated towards quality, manufacturing and SMEs, avoiding the relocation of factories and the devouring of small enterprises by giants, Germany was dubbed “old-fashioned” in the 1990s by Tony Blair’s New Labour, “The Third Way Left”, modern globalist and the like. They were a laughing stock. Well, Tony, who’s laughing now?

SAY NO! When the 1990s came, something strange happened in the Western World. All of a sudden developed economies started to relocate their most valuable factories around the globe. Some chose Eastern Europe, some Mexico, some China. All of a sudden, countries like the UK or Belgium were left without the majority of their factories – just like in the U.S., following the signing of the NAFTA agreement. They were all “clever”: with costs reduced, let’s buy all the small brands and factories and unify them, or simple change them, or close them down. Nikšić Beer produced in Serbia? Anyone who knows anything about the typical taste of Nikšić beer knew it was different – good, but different. Tony Blair blew the fanfare and declared “it is a new economy!”, but we saw how it ended. First, the 2008 world economic crisis hit economies orientated towards services harder than those orientated towards manufacturing. Then the disenfranchised masses, angry over the dislocating of their jobs, voted for Brexit. Then Trump. Syriza came somewhat prior to that. And Germany, as old-fashioned as they called it, was still afloat amidst the storm. That was because Germans had preserved the good quality of their goods, which were still manufactured in Germany, and not in China or Hungary. Not to say anything about goods from China or Hungary. Simply, what was known as being the best, as being German, remained German. Poland soon followed suit and is now one of Europe’s most resilient economies. The German economic miracle is not a miracle at all. It is just a matter of “keeping things as they are, since a winning team should not be changed”. Just like Joachim Löw.

FACTS AND FIGURES And the facts confirm the following: Germany is the largest national economy

in Europe and the world’s fourth-largest by nominal GDP and fifth largest by GDP (PPP). Germany’s economic model is based on the social market economy concept. The country has taken care of its working classes since the times of the German Empire and Bismarck. As Richard Branson noted, “Customers don’t come first. Employees come first. If they are satisfied, they take care of the customers.” And they are loyal to their companies, I would add. The same applies: if a country takes care of its citizens, they will take care of their productivity and jobs, and their companies, remaining loyal to both their companies and the country as a whole. Germany has done that.

GERMAN ECONOMIC MIRACLE IS NOT A MIRACLE AT ALL. IT IS JUST „KEEP IT AS IT WAS, SINCE THE WINNING TEAM SHOULD NOT BE CHANGED“. JUST LIKE JOACHIM LÖW It is a country of export surplus. Namely, in 2016 “Germany recorded the highest trade surplus in the world, worth $310 billion, making it the biggest capital exporter globally”. Not America, not China, but Germany. Well, a year ago we discussed what the brand “Made in Germany” means. It means exactly that: trust and quality. Germany is the world’s third largest exporter, with 1.21 trillion euros in goods and services exported in 2016. And it is not as though Germans deeply dislike services and prefer to work hard in their factories. On the contrary, the service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%, while exports account for 41% of national output. However, Germans are the leaders of producing in anything that you should put your trust in. The country’s top 10 export commodities are vehicles, machinery, chemical goods, electronic products, electrical equipment, pharmaceuticals, transport equipment, basic metals, food products, and rubber and plastics. German vehicles? I doubt anyone has any real dilemma believing in their reliability.

MAKE IT GREEN

If you know Germany deeply and intimately, you know that in Germany you cannot establish a bus route between two cities or villages if there is an existing railway. This is both part of the protection of a state-owned enterprise that everyone likes and keeping the country green. Free enterprise? Not here! State railways come first. And renewables come first too. Germany is the first major industrialised nation to commit to the transition to renewable energy, a process dubbed Energiewende. Germany is the world’s leading producer of wind turbines. Renewables now produce over 27% of electricity consumed in Germany… And that is only set to increase.

MAKE IT FAMILY ORIENTATED An economy can be easily determined, in my experience, according to two factors: how many state-owned railways and trams it has, and how many small and medium-sized enterprises (SMEs) it has. If an economy has a lot of rail tracks and a lot of SMEs, it is developed. If every town has its newspaper and brewery, it means the economy is stable. If citizens must use vans, cars etc. for transport, and if all the companies are giants and small businesses vanish, it means the economy is far from stable. Well, it might be that I am “just a European”, as they called me in Brazil, or “just another socialist” (I was called that in the same place), but I tend to like an organised state that takes care of you and takes care of its small firms. And, guess what? Some 99 per cent of all German companies belong to the German category of “Mittelstand”, meaning small and medium-sized enterprises, which are mostly family-owned. However, they don’t lack big players either. Of the world’s 2,000 largest publicly listed companies measured by revenue, the Fortune Global 2000, 53 are headquartered in Germany, the top ten of which are Volkswagen, Allianz, Daimler, BMW, Siemens, BASF, Munich Re, E.ON, Bayer, and RWE. I guess anyone can name eight out of ten of these company names in their sleep.

EPILOGUE Remember Joachim Löw? Yes, the German national football coach. He has a had string of successes – some bigger, some smaller. But he is stable in being in the top three every time. Winning tactics should not be changed. Germany persisted with its own opinion, and did so well. Don’t be too modern... Just be smart. GERMANY 2017

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ECONOMIC COOPERATION

INDUSTRY VS. TOURISM The most important partner

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Nikica Miloš

ctually, Germany is the most important partner, as it is to many other Central and Eastern European countries, but the critics say that the situation could be much, much better, since the political cooperation is far better than the economic one.

DISBALANCE OR COMPATIBILITY?

As Deutsche Welle cleverly pointed out, numerous indicators show the extremely unequal trade relationship between the two countries. However, tourism keeps this relationship in balance to a certain degree, with very interesting statistical indicators. The trouble is that the relations are rather one-way orientated, so it practically means that the German economy, as a world's gigantic influencer, affects

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Croatian economy enormously, while the other way round... we cannot claim the same. Not too much of it anyway. Croatia has a kind of misfortune like all the other Eastern European countries, except Poland, Russia and partially Ukraine, that it is too small to exert influence, except in the segment of summer tourism. Thus, it represents only one of the smaller markets for the potent German economy that can

CAN WE GET MORE? YES, BUT NOT EASILY. THEY PREFER COOPERATION THAT IS LONG-TERM

still enjoy a balanced state protection. And this protection for German companies in Croatia equals the one enjoyed by domicile companies in terms of production, as well as cross-border, in the segment of placement. The Germans think long-term and in a stable manner. It is common belief that Germany’s interest, as well as the interest of other major European exporters dictated the long-term Croatian monetary policy that favoured them over Croatian producers. But such structural positions are more or less known, therefore, we pay attention to the final result, that is, the share in the trade. And the share, and its final results, could be quite surprising. Believe me, they are. Just wait a few minutes. When we talk about the commodity exports, Germany is very important for

Croatia - it is one of the four most important export destinations (in addition to another Croatian neighbour, Italy), but from the German perspective, it looks a bit different. The official figures show that Germany is Croatia's second largest foreign trade partner, immediately after Italy. In Germany, in terms of imported goods, Croatia occupies merely 70th place in terms of representation, if we consider the pre-2015 data. This is less than satisfactory, having in mind that there are little over 40 countries in Europe and just few economic superpowers elsewhere, like China, Brazil, Japan, South Korea, the USA, Canada, India, Australia, Turkey or so. So, something or someone took our position. While we lament about our position and the Old World in general, new economic tigers like Indonesia, Vietnam or Mexico are grabbing their market share. The centre of the world's production is shifting eastwards and towards the Third World which is not Third anymore, with BRICS and G20 looming on the horizon. So, the old Austro-Hungarian thinking, so prevalent in all of the countries around us, which says that we are in the middle of the top industrial production, is not valid anymore and we cannot cling to the old dreams anymore, to quote The Smiths and Morrissey. If we however, kiss the illusions goodbye and stop lamenting about the de-industrialisation of our country, there are better figures to mention. When it comes to the export of services, primarily those in tourism, the Germans choose Croatia as the fifth most frequented destination for holidays, not only for the coastline and summertime fun on the beach. This is very much felt in Croatia; the consumption of German guests makes up more than a quarter of Croatia's total tourism revenues. Zvonimir Savić, director of the Financial Institutions, Business Information and Eco-

nomic Analysis Department of the Croatian Chamber of Commerce (HGK), commented on the relationship that marks this economic dependence for Deutsche Welle and said the following: "The high share of German consumption in our tourism resulted in a strong impact of the demand in Germany on the developments in the Croatian economy. Namely, this demand, which determines the level of exports of goods and services to Germany, accounts for about 16 percent of foreign demand for goods and services from Croatia, or about five and a

YES, WE GET MORE FROM GERMANY THAN THEY DO FROM US! YES, IT IS BECAUSE OF THE TOURISTS. WE BUY GOODS, THEY BUY SERVICES. PRETTY COMPATIBLE, RIGHT? half percent of total domestic and foreign demand in the structure of the Croatian GDP, and therefore significantly determines its movement" explains Savić, adding that because of such large profits from German tourists, Croatia has been making a surprise appearance among the largest EU economies for over a number of years, achieving a surplus in the trade of goods and services, which, in 2015, amounted to about half a billion euros. Almost 28% of foreign tourists in Croatia are Germans. Yes, we get more from Germany than they do from us! Yes, it is because of the tourists. We buy goods, they buy services. Pretty compatible, right?

GIZ AND AHK

Croatia is, of course, lucky enough to carry out the economic cooperation though several organisations and institutions, namely GIZ and AHK. GIZ operates in Croatia on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) within the framework of the Open Regional Funds for South-East Europe. On the other hand, AHK describes itself in the following way - “the German-Croatian Chamber of Commerce and Industry (DKIHK) is part of a worldwide network of 130 foreign trade chambers and a delegation of the German economy in 90 countries. Since its inception in 2003, the German-Croatian industrial and trade chamber has had more than 390 members, among which there are a number of reputable German companies that perform their business in Croatia and Croatian business establishments in Germany. DKIHK offers many interesting services for members and non-members.” If we have a look at some other countries, like those in the EU that joined in 2004, we could certainly do more. Can we get more? Yes, but not easily. Kristian Žaper thinks that partners from Germany can certainly be distinguished in some aspects: "Their companies, unlike others, are looking for reliable partners with whom they can achieve long-term cooperation. It is not easy for them to get an opportunity because they are reluctant to change their established relationships". It is tough to get in but if you stay reliable, you can stay easily. This analysis can be used for future benchmarks and determining the directions of our economic relationships. He adds: "It may be necessary to map the solutions in the nearby countries like the Czech Republic and Slovakia, which, besides having lower benefits, give high production and export", says Žaper for Deutsche Welle.

WHEN IT COMES TO THE EXPORT OF SERVICES, PRIMARILY THOSE IN TOURISM, THE GERMANS CHOOSE CROATIA AS THE FIFTH MOST FREQUENTED DESTINATION FOR HOLIDAYS GERMANY 2017

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EDUCATION

GERMAN DUAL EDUCATION MODEL – A REAL EXPORT BULLSEYE Many European countries have recognized this model as an efficient instrument in ensuring high quality, professionally trained workforce, and their better inclusion into the labour market

acing a high unemployment rate and lack of professionally trained workforce, Croatia has joined a new trend which is supported, among others, by the German-Croatian Chamber of Commerce and Industry.

HAT IS EXACTLY DUAL W EDUCATION? It is a principle of how two partners function – there is school, on one side, and a company, on the other, which share responsibility for vocational education of young people. The emphasis here is learning through work. Under this dual education system, from the very beginning of their schooling, students are also working in companies three to four days a week, where they are taught practical knowledge. The theoretical curriculum is taught at their school one or two days a week. By doing so, students are being educated in a way that suits labour market needs. The fact that over 2/3 of young people in Germany have chosen dual education, and that the youth unemployment rate in this

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country has been the lowest in the EU for years, speaks in favour of just how successful is this cooperation between business sector and education system. It is clear that the German dual education model cannot be fully translated to other countries. However, its main elements can be implemented in other education systems with bilateral chambers of commerce playing crucial role in supporting this intention.

RETAIL AND TOURISM JOBS WILL BE 'DUALIZED' FIRST The German-Croatian Chamber of Commerce and Industry (AHK) is implementing a pilot project with the goal of realizing, testing and evaluating the results of dual vocational education in Croatia. The Federal Ministry of Economy and Energy (Bundesministerium für Wirtschaft und

Energie – BMWi) and the Association of the German Chambers of Commerce and Industry (DIHK) are funding the project. The first vocations to be included in dual education are those in retail and tourism, followed by technical jobs. The focus is on German standards, as well as on the framework curricula and test rule books which are used in Germany. Mid- and long-term, AHK plans to advise Croatian companies how to train students, coordinate cooperation with vocational schools, train mentors in companies, and perform quality tests. It is also important to show to both students and their parents that dual education is not a one-way street but should be viewed as a practically-oriented foundation for life-long learning, and, simultaneously, as a job seeking orientation. Although this is a long process, implementing dual education according to German standards would permanently contribute to bridging the gap between expectations and needs of companies, and skills of students in vocational schools.

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AHK CROATIA

GCC – ONE OF THE BIGGEST ECONOMIC ASSOCIATION IN CROATIA The Chamber has over 390 members from German, Croatian and international business sphere which are actively contributing to advancing German-Croatian economic relations

n 2016, the German-Croatian Chamber of Industry and Commerce (GCC) organized and actively participated in 75 projects, events, seminars and conferences in Croatia and Germany covering different topics. Since its foundation in 2003, the German-Croatian Chamber of Industry and Commerce, with headquarters in Zagreb, has had three main tasks and activity segments: • O fficial representation of German economy in Croatia – The German-Croatian Chamber of Industry and Commerce is one of the central organizations of the Federal Republic of Germany engaged in promoting German external trade. Its task is to represent interests of German companies in Croatia, provide Croatian companies with required information, and promote Germany as a location for doing business. • O rganizing its members – The German-Croatian Chamber of Industry and

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Commerce comprises of companies that are actively participating in bilateral economic relations. These member-companies give authority to the Chamber in promoting bilateral economic relations as a representative of government, economy and administration. • Providing sevices to companies – Under its brand DEinternational, the German-Croatian Chamber of Industry and Commerce provides support to both German and Croatian companies relating to their external trade. The German-Croatian Chamber of Industry and Commerce, which was established on 30th October, 2003, was the first ever bilateral German external trade chamber of commerce founded in ex-Yugoslavia. The

establishment was a result of the consistent measures implemented by the German government on promoting external trade relations, and it sent an important signal about the stabilization of economic relations between Germany and entire region. The German-Croatian Chamber of Industry and Commerce represents bilateral economic interests in front of government institutions, state and town bodies, and other organizations relevant to economic relations. It also contributes to the development and strengthening of ties between German and Croatian business people thanks to its diverse offer of events. Additionally, it promotes development and advancement of business relations between German and Croatian

companies, while, on the political and administrative level, it advocates improved business climate in Croatia. As an official representative office of the Free State of Bavaria, the German-Croatian Chamber of Industry and Commerce also promotes the cooperation between the Republic of Croatia and the Free State of Bavaria. As a service provider and an experienced and competent partner, the German-Croatian Chamber of Industry and Commerce provides support to German and Croatian companies in breaking into new markets, market analysis, and preparing for doing business in both countries. Furthermore, via its daughter company DKIHK Poslovne Usluge d.o.o. and its brand DEinternational, the Chamber provides many other services. Selected activities and projects for promotion of bilateral economic cooperation. The aim of most projects implemented by the German-Croatian Chamber of Industry and Commerce is providing support to small and medium enterprises in breaking into new markets. In the last several years, the Chamber specialized in the following thematic segments and competencies which, in return, contributed to its better profiling in the country: • Energy (with a focus on renewable energy sources and energy efficiency) • E nvironmental Technologies (Water, Waste Water and Waste Management) • Tourism •A griculture and food industry •R etail and distribution • I nfrastructure and logistics

• Industry (metallurgical, wood processing, chemical and pharmaceutical industries) In addition, in 2016, the Chamber had a record number of participants in their events. Professional and networking events in 2016 brought together a total of 3,000 participants. Also, over 700 inquiries from the two countries were processed. One of the more relevant topics for the members of the German-Croatian Chamber of Commerce and Industry is vocational training with an emphasis on dual edu-

IN EARLY 2017, THE CHAMBER STEPPED UP ITS ACTIVITIES RELATING TO START-UPS AND INNOVATION, AND ORGANIZED A SERIES OF EVENTS cation. On the back of that, the Chamber has been further focusing on vocational training (education and additional training) with an emphasis on dual education in line with the German model. Training of skilled labour should be in accordance with market needs. To that end, effective measures such as the certified Examplary Company for Professional Practice programme, and an appropriate educational and seminar programme have been imple-

mented, with the pilot project called Dual Education in Retail standing out. In order to draw attention to Croatia as a supply market, the German-Croatian Chamber of Industry and Commerce published the Suppliers Catalogue, and, in 2017, participated in the German Initiative for Finding Suppliers in Croatia and the Western Balkans under the leadership of the German Federal Association of Materials Management, Purchasing and Logistics (BME) for the third consecutive time. After Munich and Dortmund, this sourcing conference, well known outside Germany too, was held abroad for the first time - in Belgrade, on 31st May. Along with the industry branches that had already participated in this event, the automotive industry and the engineering industry, this year's initiative was attended by representatives of IT companies for the first time. Over 45 German suppliers met 140 selected companies from the Western Balkans, including 21 companies from Croatia. In early 2017, the Chamber stepped up its activities relating to start-ups and innovation, and organized a series of events with the view of connecting Croatian and German start-ups, incubators and accelerators. For instance, each month, one Croatian start-up is being presented. Furthermore, the Chamber gives out annual awards for the best start-up and the best innovation, and will soon launch a website that will connect start-ups in tow countries, and the start-ups with established companies in Croatia and Germany.

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Piroshki Photography@Geothe-Institut

DR. MATTHIAS MÜLLERWIEFERIG

INTERVIEW

A CULTURAL BRIDGE BETWEEN CROATS AND GERMANS

Director of the Goethe Institute in Croatia

One third of pupils and students learn German at Croatian schools. The Croatian Ministry of Education supports the Goethe Institute in their plans

he Goethe Institute in Croatia offers German language courses and supports schools and teachers in teaching German, as well as implementation of the European Language Policy of multilingualism, says Matthias Müller-Wieferig, PhD, director of the Goethe Institute in Croatia for Diplomacy&Commerce magazine. What new dimension can institutions like the Goethe Institute bring to the domicile culture? ― Library and digital media information as well as literature and translation support programmes are vital elements of intercultural exchange – and Goethe Institute provides information on arts, media, and politics in Germany. In our cultural programmes, artists and experts from Germany take part in festivals, events, and debates all over Croatia. Which programmes implemented by the Goethe Institute would you like to single out in terms of Croatian people's

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reactions and acceptance? ― During my first few weeks and months in Croatia, I saw some remarkable programmes and projects like a conference on reconciliation, migration, and integration in Petrinja which was co-organized by the French, Croatian, and German partners and civil society activists. In Rijeka, I met future partners and organizers of the upcoming

DURING MY FIRST FEW WEEKS AND MONTHS IN CROATIA, I SAW SOME REMARKABLE PROGRAMMES AND PROJECTS European Capital of Culture 2020, including the mayor. And at the Zagreb Music Bianniale, I witnessed a very informed audience, interested in the music of our time.

What forms of civil and artistic activism in Croatia do you promote through the ACTOPOLIS project? ― Together with Oberhausen – in Germany´s most industrialized region of Ruhrgebiet – the colleagues from the regional Goethe institutes organized an exchange covering common topics in Europe: city development, culture and urbanism, and new initiatives and networks among cultural projects and individuals. From Athens to Istanbul, Sofia to Sarajevo, Belgrade to Bucharest, each city – and sometimes one of their quarters – presented their own local situation, their life and work environment, mobility and change, private needs, the common usage of public space, investment, development, and gentrification. This year's World Literature Festival will showcase many German films, based on novels, in Croatian cinemas in September. How hungry is the Croatian audience for films that are not from Hollywood? ― The programme actually presents some of the most interesting German

Photo: Damir Žižić@Geothe-Institut

novels through the eyes of some of the best German directors such as Fatih Akin, Wolfgang Becker, Doris Doerrie or Volker Schlöndorff. Most of the films premiered on Berlinale 2017 and, for most of them, the Literary Festival is a rare opportunity to catch up with the latest film productions from Germany. In terms of global audiences, megastar actors and directors, and huge production budgets, the European film industry has never had a chance to commercially compete with the Hollywood industry – but in terms of authentic authors´ films and a cultural tradition of art-house cinema many countries, like Croatia and Germany, share the same European cultural traditions of filmmaking and low-budget productions which are always appreciated by smaller, but nevertheless enthusiastic audiences. To what extent are contemporary German writers present in Croatia today, and what makes them appealing to the Croatian cultural environment?

― Michael Krüger, one of our guests at this year’s World Literature Festival, is one of the most prominent publishers and poets from Germany. Daniel Kehlmann, Austria-born author, is among the most widely read writers of today. The

DEUTSCH ONLINE IS ONE OF THE WAYS TO LEARN GERMAN LANGUAGE most prestigious post-war generation of German language writers – from Heinrich Böll to Günter Grass and Siegfried Lenz, Ingeborg Bachmann or Paul Celan – are probably as well-known in Croatia as anywhere in the world. Elfriede Jelinek, Katja Lange-Müller and Herta Müller, especially after she received the Nobel Prize, have been enjoying a wider recognition as well.

When it comes to a younger generation of writers who are dealing authentically and sometimes critically with Germany today, we are very engaged in translating their books into Croatian, and providing book information to schools and libraries. Uwe Timm, Marcel Beyer and Katrhin Passig are among those recently translated. How much is the German language present in Croatian schools currently, and, on the back of that, who is the target group for your German language courses? ― As German is a compulsory foreign language at Croatian primary schools, we see a huge interest in our new German courses for kids and youth. Moreover, the Goethe Institute has introduced additional early learning classes in 16 out of 40 public nurseries in Zagreb. The Zagreb Resolution on Multilingualism, the economic sector and tourism, the Croatian coast and the proximity to the German speaking countries, all motivate Croatian citizens to learn German.

AS GERMAN IS A COMPULSORY FOREIGN LANGUAGE AT CROATIAN PRIMARY SCHOOLS, WE SEE A HUGE INTEREST IN OUR NEW GERMAN COURSES FOR KIDS AND YOUTH GERMANY 2017

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Nikica Miloš

CULTURE

CRADLE OF MODERN POP MUSIC The country that changed it all and changed everyone

Nick Cave, 1986. Photo: Yves Lorson

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ell, I am not referring to the victory at the 1982 Eurovision Song Contest, nor am I referring to pretty Lena from 2010, or Modern Talking, or Sandra, or Nena. I am talking about the people who were so profoundly changed by the touch of Germany that they invented completely new types of music, who further influenced other musicians and countless other people with their feelings, lyrics and music that it changed our world forever. And here's the biggest secret of all: it all started in Germany.

HAMBURG It is no secret that The Beatles were just American-inspired rock ‘n’ roll wannabes from the port city of Liverpool, at the end of Europe. Truth be told! And then they popped in and said “Hello” to to another port city, the one in Germany. But this one was neither provincial nor Americanised. It was good ol' Hamburg, Hanseatic place, the crossroads of influences. Like a phoenix rising from the ashes, in 1960 it rose up and reshaped itself as a modern, cosmopolitan place. Beatles historian Mark Lewisohn writes: “They

HEROES PERHAPS BEST EPITOMISED THE DIVIDED EUROPE AND THE COLD WAR. AND BOWIE WAS, AND IS, THE ULTIMATE INFLUENCE

pulled into Hamburg at dusk on 17th August, the time when the red-light area comes to life ... flashing neon lights screamed out the varied entertainment on offer, while scantily clad women sat unabashed in shop windows waiting for business opportunities.” It was a shock for the young Brits. And they were a fivepiece band back then. One of the crucial members, as the film “Backbeat” showed us, was Stuart Sutcliffe, who was a friend of John Lennon and who was desperately in love with Astrid Kirchher, a beautiful German photographer. Her existentialist friends, inspired by French philosophers, were wearing black turtlenecks and wore fringe. She did Stuart’s first makeover in 1961 and gave him a “European” haircut. Soon the rest of the crew abandoned their “Elvis” hairstyles and preposterous American jackets and adopted the Hamburg style. They invented a whole new fashion, and new music. They conceived hits that fused American rock ‘n’ roll and European traditions, spicing up rock ‘n’ roll with German and undeniably British sensibility. They even recorded some of their first songs in German. If you’d like to hear “I Wanna Hold Your Hand” in German, do a YouTube search for it as “Komm gib dir dein Hand”. It is touching. GERMANY 2017

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BERLIN

Who was not changed by Berlin? Let's start with David Bowie. Arguably the most important musician that has ever walked this Earth, he lived in Berlin between 1976 and 1979, where he made three albums that were crucial to his career. Before the end of 1976, Bowie’s interest in the burgeoning German music scene, as well as his drug addiction, prompted him to move to West Berlin, in order to clean up and revitalise his career. There he was often seen riding a bicycle between his apartment on Hauptstraße in Schöneberg and Hansa Tonstudio, the recording studio he used, located on Köthener Straße in Kreuzberg, near the Berlin Wall. Inspired by Krautrock and Kraftwerk synth-pop beginnings, he caught the Zeitgeist. Heroes perhaps best epitomised the divided Europe and the Cold War. And Bowie was, and is, the ultimate influence. As for arguably the greatest modern band, Depeche Mode, music history records the following: “For their third LP Construction Time Again, Depeche Mode worked with producer Gareth Jones, at John Foxx's Garden Studios and at Hansa Studios in West Berlin (where much of David Bowie’s trilogy of seminal electronic albums, featuring Brian Eno, were produced). The album saw a dramatic shift in the group’s sound, due in part to Wilder’s introduction of the Synclavier and E-mu Emulator samplers. By sampling the noises of everyday objects, the band created an eclectic, industrial-influenced sound, with similarities to groups such as the Art of Noise and Einstürzende Neubauten, the latter having subsequently also released work on the Mute label.” Einstürzende Neubauten, the fathers of industrial music, banging on metal barrels and creating other “machine” sounds, changed the sound of these suburban Brits from cheerful electronica to something much darker and a bit sinister. Still a great influence on many bands today, Depeche Mode successfully mixed splendid melodies with something profoundly dark. And it came from Germany, from Berlin, from the Divided Capital. There is

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something so deeply German in that turnover and the result. No wonder they are still so popular there. Nick Cave? He too moved to West Berlin in 1985 and drastically changed his musical style. It was once again a result of Einstürzende Neubauten, and Blixa Bargeld even became a member of Cave’s Bad Seeds band. He was influenced by

ALL THE SEMINAL MUSICAL ARTISTS WENT TO GERMANY TO FIND AND REINVENT THEMSELVES. GERMANY IS THE SECRET CRADLE OF MODERN MUSIC, AND IT IS A MUSIC HUB TODAY Gothic Americana and blues, but the feeling that has marked his career came from the dark, gloomy streets of West Berlin. Where could a tortured soul feel better than in the city that was a cage surrounded by the Wall? The champion of dark music was marked and changed by Berlin, and no matter where he went afterwards, Berlin never left him. Nor did it leave all of us who listened to all of them.

DÜSSELDORF Last but not least, the magic Kraftwerk. The guys who perhaps influenced as many people as The Beatles were, finally, true Germans. And they are as German as you can get. Deliberately emphasising “German spirit” in their music, they were a) high-tech (among the first bands to use synthesisers); b) punctual; c) repetitive; d) melodic; e) non-verbal; f) uniformed. They wore matching clothes, played repetitive melodies, with almost no movement on stage, with singing that is somewhat cold and distant. And they created an entirely new direction in music, electro-music that still rules to this day and is omnipresent. And they also influenced bands like Duran Duran, which epitomised the New British Sound of the ‘80s. The Beatles were infected by Germany and created the distinctive British music style of the ‘60s. Bowie did it in the ‘70s, while Duran Duran, Depeche Mode and Nick Cave did it in the ‘80s and beyond. Without Germany, music as we know it would not exist. Britain as we know it would not exist. Oh, wait. It happened once before. Remember Prince Albert, the husband of Queen Victoria? How he reshaped Britain? Well, enough said about German culture.

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CULTURE

WORLD LITERATURE FESTIVAL

he fifth World Literature Festival, organized by the publishing house Fraktura, took place this year with the focus on the German culture and literature. The festival was opened in Zagreb with the guest appearance by the award-winning Austrian-German writer, Daniel Kehlmann. Until 9th September, the audiences in Zagreb and Split were able to enjoy in the presence of the 50 renowned literary figures from 17 countries. For Diplomacy & Commerce magazine, some of the festival participants relayed their impressions of the global literary scene, the inspiration for their work, and the direction that the global literature was heading in. Rita Monaldi & Francesco Sorti live in Austria. They have had very little experience with the Italian literary scene, and have subsequently discovered that the competition entries were sent to the jury members (average age: 70) with such a delay that almost none have managed to read them. They used Umberto Eco's quote as an inspiration: "The adverbs, of course". They believe that literature is an expression of power, and as such it takes the direction determined by its masters. Daniel Kehlmann – He views literary scenes in Austria and Germany as lively and interesting. He gets inspiration for his work mostly while lying in a bathtub. Inspiration also comes to him during showers, and long walks in the rain. He also sees world literature in the future as progressive. Fhilippe Claudel comes from France,

Rita Monaldi Francesco Sorti

Daniel Kehlmann, photo: Roko Crnić

and his impression is that we are witness of some sort of crisis of imagination. He says that numerous French writers are increasingly starting to write about the topics otherwise covered by biographers, sociologists and journalists. He is inspired by life, other people, the world, history. He would like for literature to teach people again about true political engagement, and how to become (or become again) a weapon in fighting against backwardness, oppression, submission to stupid or misunderstood religions, and economic systems that create new forms of slavery and poverty. Jordi Punti is a Catalan who believes that, after 40 years of democracy in Spain, we now live in a golden age, with a lot of interesting young authors exploring new forms of literature, and with an increasing number of translations. He’d prefer to talk about awareness of what’s happening around him, and how he may be able to translates what he sees and hears into

his writing. In this ecosystem, literature, as we know it, has become a genre in itself, what they call “literary fiction”. Luckily, there are still may literary authors who write without feeling the pressure from these trends, and, as a result, we get to read really good literature from around the world. Morten Strøksnes is from Norway. For such a small country/language, he thinks the literary scene is very broad, with lots of writers, young and old .He is inspired by literature, nature and people. In his opinion, the local dimension of people and cultures is much more interesting than the globalized features. For instance, he doesn’t think a book like «The Bridge on the Drina» would have had the same impact if the title was «The Bridge like, any other bridge, on a river, like any other river». He also does not believe in globalized literature, because literature is about diversity, individually and culturally. Let the thousand flowers blossom.

Morten Strøksnes

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SPIRIT OF GERMANY

IS GERMANY A NEW AMERICA? Come, ye sinners, poor and wretched

Berlin exibition GERMANY 2017

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ome, ye sinners, poor and wretched, weak and wounded, sick and sore... That is how the popular hymn goes. And it was an informal trademark of the United States of America and, before that, the American colonies. But is America sick and tired of immigration? While Germany, in a twist of fate worth noting, is welcoming everyone. Is Germany a New America? America has New England, and it had New France, New Sweden and New Holland. It had numerous “new” versions of “old” European countries, but to have a European version of the New Continent, well that is slightly strange, right? But, as The Trumpet says, “as America unwisely abdicates from leadership” in the world (a bit of new isolationism on the horizon), people have started to talk about Germany and its Chancellor, Angela Merkel, as a “Leader of the Free World”. And, with so many countries turning to so-called “illiberal democracy”, like, arguably, Poland, Hungary, Russia, Turkey, India, and perhaps even America and the ever-closing, brexiting Britain, with elections looming in France and The Netherlands, threatening to undermine the liberal European dream, Germany has become a kind of beacon of the so-called “Free World”. “The Iron Lady of Germany” shows one more characteristic that connects her vision of Germany to the “old” vision of

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America: the desire for immigrants, who are freely accepted, in spite of the AfD movement and Pegida, not to mention some more radical views. It seems that Germany, traditionally sceptical towards immigration, is now the most open of all countries and the least nationalist and/or xenophobic, while it is also the only

GERMANY SUCCEEDED AND MADE ITSELF INTO AN EXAMPLE OF HOW A SOCIETY SHOULD BE MODELLED

country which is (apart from Canada, though Canada is not in Europe) completely open to foreigners of all colours, religions and languages. So Germany is, as we noted a year ago, in the first issue of InFocus, the embodiment of the European Dream. However, now it is turning into a “New America”, a beacon on the horizon for all liberals, all unhappy and displaced people, all Eastern Europeans who want to find a decent job and have a decent life. And a hundred years ago ships full of these same Europeans were heading to Ellis Island, passing the Statue of Liberty. It is somewhat surprising how Germans and Japanese learned their lessons of nationalism in World War II, while others, espe-

PETER THE GREAT COMBINED THE RUSSIAN AND GERMAN SPIRITS, AND SUCCEEDED. NOW THE GERMANS ARE COMBINING THE BEST FROM THE WORLD WITH THEIR SPIRIT, AND THEY SEEM TO BE SUCCEEDING

cially the victorious nations, perhaps failed to do so. So Germany succeeded and made itself into an example of how a society should be modelled. It was followed by Italy and Spain and, later, by Poland, Hungary and Turkey. He we are talking about infrastructure, about the wellbeing of citizens; about the dream of a calm and secure life. While Americans were preoccupied intervening in other countries, forgetting about their crumbling infrastructure and decaying urban landscapes, while they were removing streetcars and railways, while Detroit suffered from a depression and a deprived economy, and while the Rust Belt was in pain, Germany did all the opposite. Germans actually rebuilt their society on American-inspired infrastructure building, but... the Old America: the one with streetcars, preserved urban landscapes and old buildings, carefully incorporating the new into the old, not losing the spirit; building railways and preventing cities from experiencing urban decay. Actually, America forgot who it was decades ago, while Germany just took the idea and made it more... precise. And what is more interesting is that Germany has become a hub for modern art and culture. Berlin is the most sophisticated city in the world when it comes to art and music. Maybe decades ago people were heading to London or New York, but for the last ten years my friends have been heading to Berlin and Hamburg. Bands are mushrooming in Berlin; Germany has great gigs and exhibitions. It is a peaceful country that seems to protect the needy and punish the greedy. No wild capitalism is allowed in Germany. Since Bismarck, strong protection for workers has been provided by the state, with state pensions, protection for people living with disabilities, medical care and health security. Everything that made America great once upon a time, and that has been forgotten since Reagan's neo-

liberalism, is alive and kicking in Germany. And there is no wonder. America was built on the stern Protestant spirit of hard work and ambition, austerity and modesty. Now it has changed into splendour, consumerism and dreams of easy money. And it is no wonder why it has gradually lost its appeal: the disciplined Germany took its place; the modest Canada took its place. And, funnily enough, America is aspiring to return to building itself and making new infrastructure under a president who is ethnically of German origin. And he represents showbiz, which is such an un-German and immodest property. But perhaps America can make itself great again by borrowing some German features and experiences. Maybe it should

get back to its original roots, largely based on the fact that the majority of Americans are in fact from the German national body. Maybe we should all learn from Germany about how to overcome a troubled past; how to look to the future with hard work and modesty, how to avoid get-rich-quick solutions and supress the desire for splendour; to learn how to be decent, to learn how to leave our cars park when weâ€™re trying to navigate the city and only using them on the motorways; to use more bicycles and trams; and to make ourselves great againâ€Ś the German way. It doesn't seem too hard. Peter the Great combined the Russian and German spirits, and succeeded. Now the Germans are combining the best from the world with their spirit, and they seem to be succeeding. Welcome to New Germany. It is not a new America, but it is now a leader.

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TOURISM

THE HEART OF EUROPE — Text —

Nikica Miloš

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Germany was for decades considered a good place to go for work, business or to attend a trade fair. Good infrastructure, clean environment and… well... nothing more than that

owever, in time Germany has regained its fame as a major tourist destination, lost its links to the infamous World War II period, and become a hub for culture, design, art, music and, of course, all other “old” attractions, like castles, spas, wineries, ancient cities... just like in the times of Dostoyevsky and Turgenev, who described German cities and spas as beautiful lively tourist attractions.

FACTS AND FIGURES – GIVEN THAT WE ARE IN GERMANY As for facts and figures, they are such a German characteristic that we mustn’t avoid mentioning the pure figures. And they tell us that Germany is the world’s seventh most visited country, with a total of 407.26 million overnight stays during 2012. That number includes 68.83 million overnight stays by foreign visitors. In 2009 the majority of foreign tourists came from the Netherlands, the United States and Switzerland. Additionally, more than 30% of Germans spend their holiday in their home country. According to Travel and Tourism Competitiveness Reports, Germany is rated one of the safest travel destinations worldwide, despite the unfortunate and tragic Berlin attack. Surveys

by the GNTB include perceptions and reasons for holidaying in Germany, which are as follows: culture (75%), outdoors/ countryside (59%), cities (59%), cleanliness (47%), security (41%), modernity (36%), good hotels (35%), good gastronomy/cuisine (34%), good accessibility (30%), cosmopolitanism / hospitality (27%), good shopping opportunities (21%), exciting nightlife (17%) and good price / performance ratio (10%) (multiple

THE THREE MOST VISITED ATTRACTIONS ARE IN MAJOR CITIES AND ARE INEXTRICABLY CONNECTED WITH POLITICS

lowing with half that many. Hamburg, the Hanseatic town and home of the early Beatles, is the third most popular city, with slightly over 10 million visitors. It is interesting that many smaller places attract over a million visitors annually, like the charming Lubeck, with its Gothic centre in the Old Town, and the North Sea resort of Cuxhaven, where a cold breeze merges with the warm waters of the Gulf Stream and long sandy beaches are alluring. Interestingly enough, the three most visited attractions are in major cities and are inextricably connected with politics. With an average of over six million visitors entering Cologne Cathedral per year, the cathedral is Germany's most visited landmark. Second and third places go to the Reichstag building in Berlin and the Hofbräuhaus in Munich.

LUTHERLAND answers were possible). In terms of the numbers of overnight stays, travel to Germany’s twelve biggest cities more than doubled between 1995 and 2005, marking the largest increase of any travel destination. This increase mainly arose as a result of the growth of cultural tourism, often in conjunction with educational or business travel. Berlin alone receives some 25 million tourists per year, with Munich fol-

This year is extremely important for both Germany and Protestants, given that it marks half a millennium since one of the first Protestant thinkers and leaders did what he did in 1517. Of course, we all know who and what that was: Martin Luther, a rebellious priest who was disgusted with the way the Catholic Church enjoyed splendour and sold valuables to finance the completion of St Peter’s Church in GERMANY 2017

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Rome, decided to say something in opposition. His “rage against the machine” led to the nailing of a copy of his famous 95 Theses to the door of the church in Wittenberg. The years leading up to this date have been declared the Luther Decade, which includes many special events and observances. And although the majority of tourists who will visit East Germany and picturesque cities like Wittemberg will be Protestants from all over the world, you don’t have to be a Lutheran to appreciate the fiery passion and courageous idealism of Martin Luther, the Father of the Reformation. This German theologian and former monk led an effort to reform the Church of his day, but in the end began a new branch of Christianity. A journey through the sites connected to this famous reformer includes some of Germany’s most charming medieval cities and towns, like Wittenberg, Eisenach, Erfurt and Luther’s birthplace, Eisleben. Two of these towns proudly bear the name Lutherstadt: Lutherstadt Eisleben and Lutherstadt. Leningrad and Titograd might have been consigned to history, but “Luthergrad” is here to stay… twice.

THE NORTHERNMOST WINE REGION IN THE WORLD Apart from Martin Luther and his legacy that spread throughout the world, in October last year the German Tourist Board decided to promote, the story of the world’s Northernmost wine region, which

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YOU CANNOT MISS NAUMBURG AND ITS CATHEDRAL, WITH SPLENDID GOTHIC ART, WITH QUEEN UTA BEING ARGUABLY THE MOST BEAUTIFUL WOMEN PORTRAYED IN THE ART HISTORY is located north in East Germany and is known as Saale-Unstrut. The entire region is named after two rivers, the Saale and the Unstrut, while the most important towns there are Halle, Freyburg and Naumburg. The Saale-Unstrut wine route leads through the winegrowing region of Saale-Unstrut. The “Weinstraße” was inaugurated in 1993 as the 13th German Wine Route. It is the northernmost wine road in Germany and Europe. It is not warm enough to produce red wine, but there are white wines, like Müller-Thurgau, Weißburgunder and Grauburgunder, Bacchus, Riesling, Silvaner, Gutedel and Kerner. About 24% of the wines produced there are rosé wines, like Dornfelder, Portugieser, Spätburgunder and Blaue Zweigelt. The idyllic landscapes full of vineyards are dotted with beautiful castles and towns, and Querfurt is one of the most interesting among them – as a site where many films depicting the

Middle Ages were shot. On the other hand, you cannot miss Naumburg and its cathedral, with its splendid Gothic art and Queen Uta – arguably the most beautiful women portrayed in the history of art. It is strange how the Gothic art period was the last period when the ideal of beauty was exactly the same as today: thin women, with full lips and big eyes. You can imagine Uta walking down the catwalk or streets of any modern city today, which cannot be said for later Renaissance fatties, not to mention baroque beauties, with their small mouths, small eyes and … big bodies. The cities and towns in this part of Germany, and in Germany generally, all remind us of Hesse’s “Narcissus and Goldmund”, while we are enchanted by the spirit of bygone times fused carefully with modernity and high-tech. Greenery and technology married, that could be the best explanation of Germany, as it perfectly applies here.

BADEN BADEN

There are many baths in Europe, and there are certainly a lot in Germany, but only one of them is called “Bathing-Bathing”. Of course, it is the rhythmically named Baden-Baden. Thanks to its mild climate and hot springs, Baden-Baden is one of the world's best-known spa towns. Baden-Baden - once known as Aquae Aureliae - has been a popular spa destination for more than 2,000 years, and much evidence of the Roman presence can still be seen at the well-preserved Roman Bath Ruins. The best example is the Soldiers’ Bath under the present day Friedrichsbad spa, with its ancient floor and wall heating systems. Another highlight is the two-metre-high Roman wall. Well, if Romans knew it, there’s no reason why we should not know it … and sample it. No trip to beautiful Baden-Baden would be complete without taking in its wonderful spas, a tradition that has existed since Roman times. It's also a popular destination for sports enthusiasts, with many golf and tennis clubs, as well as equestrian sports like horse racing. In summer it’s a haven for

hiking, while in winter it attracts both Nordic and downhill skiers. The Schwarzwald-Hochstrasse tourist route encompasses the extensive forests located within the municipal boundaries, making Baden-Baden a perfect base from which to explore the beautiful Black Forest. If you are in Baden-Baden, and whatever your reason for visiting Baden-Baden whether for its sporting facilities, lovely scenery or splendid spas - a good place to begin your adventure is in the trendy Kur-

Kurpark are also worth a visit and include interesting buildings, such as the Trinkhalle or Pump Room and the Greek-Romanian Chapel, built 1863-66, with its interesting tombs. The lovely Lichtentaler Allee, a park and arboretum in the heart of BadenBaden, is one of the prettiest places in this very pretty city. The densely packed BadenBaden old town also has many worthwhile sites. Wandering the town’s quaint alleys and lanes is a perfect way to explore its Baroque-influenced architecture.

EPILOGUE

THERE ARE MANY BATHS IN EUROPE AND SURELY THERE ARE QUITE MANY IN GERMANY, BUT JUST ONE OF THEM IS CALLED “BATHINGBATHING”. OF COURSE, IT IS RHYTHMICALLY SOUNDING BADEN-BADEN garten or Spa Garden. The hub of the town's cultural life, Kurgarten is surrounded by many of Baden-Baden’s best attractions and is where you’ll find numerous boutiques, galleries, cafés and restaurants. It's also the venue for many events and festivals, including concerts in the Bandshell, as well as pop festivals and a Christmas Market. This is also the site of the spectacular Kurhaus, Baden-Baden's oldest and best-known resort establishment, built between 1821 and 1824 in the style of a French chateau. The pleasant gardens in

From the late 18th century onwards, cities like Dresden, Munich, Weimar and Berlin were major stops on any grand European tour. Nowadays Germany is the fastest growing tourist destination in the world, in terms of overnight stays and total visitors annually. It is no wonder in today’s world – filled with uncertainty, terrorism, illiberal tendencies, lost destinations caused by danger and destruction – that Germany, as a country “on the road” in the middle of Europe, situated along the way wherever you are going, attracts visitors with its security, beauty, infrastructure, gently preserved nature and carefully and impeccably preserved and restored Mediaeval towns. Germany is on the tourist map once again, and it is there to stay. Or rather, it is there to climb ever higher in the rankings. Germany first became a leader of the economy, then the leader of the European Union, and then the leader of the so-called Free World. It is time for it to become the leader in tourism and travel, as it was before the atrocious 20th century. The 21st century is one for Germany, in every way.

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