Gerd Bommer
Commercial Counselor
Advantage Austria

12 August 2019

Advantage Austria is the country’s official trade promotion agency, part of the Austrian Federal Economic Chamber. Its role is to help Austrian businesses internationalize, by assisting them with marketing efforts, identifying partners and dealing with local authorities. Romania has received the biggest investments from Austria of all the countries in Central and Eastern Europe.

 

Can you briefly introduce the trade relationship between Romania and Austria, highlighting their collaboration in the energy industry?

In the 1990s and 2000s there was a big run in Romania from Austrian companies, up to the economic crisis when the numbers grew at a lower pace. Presently there are more than 3,500 Romanian companies with Austrian share capital, and we are market leaders in several business sectors, be it oil and gas, banking, insurance, logistics, or construction.

This period of run in coincided with the Austrian company OMV taking over 51% of Petrom - a big step at the time, that set the foundations for the company to become the largest mineral oil and gas company in Central and Eastern Europe. We also had a lot of investments in hydro-energy and generally the renewables sector, a natural evolution given that Austria has both used and developed relevant technologies in this field. In fact, around 72% of Austria’s energy production comes from renewable sources, one of the highest shares in the world.

 

Romania is presently going through a transition process towards clean energy. What are some best practices you can share with us based on Austria’s experience?

Romania entered the renewable energy space by sparking off very big projects, stimulated by the generous support scheme implemented in 2008. By comparison, Austria started with smaller but more stable steps - for instance, in Vienna there are hotels that are partially powered by renewable energy produced on top of the hotel roof by wind and solar power, and the same is valid for many residences and commercial entities. This means that the move was not driven primarily by profits, rather by the desire to protect the environment. There is a very strong environmental consciousness in Austria, influenced also by the fact that 16 - 17 % of our GDP comes directly or indirectly from tourism, a sector that is very dependent on a beautiful environment.

If Romania manages to find a better balance, where it offers some subsidies but not overly generous ones, then it will be possible to strengthen the renewable sector. In terms of public consciousness, in Austria we also place great emphasis on technologies, for instance low or zero energy houses; I do not see this happening as much in Romania as of yet. The individual approach mattered greatly in Austria and could be a solution for Romania as well.

 

There are many efforts being made to increase regional interconnectivity, for instance BRUA is currently under construction. How do you expect this to influence the trade relationship and what does it bring for Austria itself?

BRUA will likely be a game changer for Romania because it will allow the country to export more. Presently the country’s trade balance is negative, and this is a great opportunity to turn things around and strengthen the local currency. 

Another thing to consider is the supply of international gas from outside the European Union, where we do have reliable supply partners, but diversifying the sources would be beneficial for Romania, for us Austrians and for Europe overall in terms of stability and security of supply. Romania has the great opportunity to become self sufficient in oil and gas and also add to the stability in the region, especially if we consider the Neptun Deep project. Time is critical, however, so Romania needs to move a little faster. The back and forth that we have been witnessing in terms of legislation is counter productive and is decreasing the chances of achieving this desired outcome.

 

What is your assessment regarding the ease of doing business in Romania?

Doing business in Romania is not particularly more difficult than in other countries, when a company enters a new market it is normal that they will need to adapt to local norms and culture. However, this process of adapting becomes much more difficult when these norms change too often, as it tends to be the case in Romania. Predictability, transparency and stability are therefore key areas on which the country should focus on.

Through the nature of my job I have experienced many business environments around the world, and have rarely come across situations like the one in Romania where the political and the economic aspects are kept so separate. They are not working with each other, rather the political sets out the framework without consulting with the industry and this often results in misalignments. This is where the solution may reside, a better understanding of the actual needs of the industry and more communication between stakeholders. There is so much knowledge available and it is a shame not to use it for the country’s advantage.

 

Going forward, what business sectors will Advantage Austria prioritize in Romania?

We want to become more involved in sectors like health and education, because we believe there is a need and demand here. We are exploring options to bring in Austrian companies with expertise in these fields. 

Another area that we see as a great opportunity in Romania but is still underdeveloped is tourism. Everybody that comes here loves the country and its people, the borders are becoming more and more open, so this sector can greatly contribute to making Romania more known and respected in the world.

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