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Public relations section
RZB-Austria celebrates 75th anniversary. International conference Europe without Frontiers emphasizes the commitment to Central and Eastern Europe and the EU-enlargement.
Raiffeisen Zentralbank Цsterreich AG (RZB) celebrates its 75th anniversary. On this occasion, RZB has organized the international conference Europe without Frontiers to promote the potential of Central and Eastern Europe (CEE) and the importance of the enlargement of the European Union. The conference took place under the patronage of Gunter Verheugen, Member of the European Commission, and was opened with introductory statements by the Slovenian Prime Minister Janez Drnovsek and the Austrian Federal Chancellor Wolfgang Schussel. Preceding the conference, Walter Rothensteiner and Herbert Stepic, RZB's Chairman and Deputy Chairman of the Managing Board, presented a brief overview over the first 75 years of the bank's operation as well as an overview of the development of the candidate countries in the past decade and a clear pro-enlargement statement.
From the giro centre of the Austrian cooperatives to a leading bank in CEE
RZB was created as the clearing centre for Austria's agricultural and commercial cooperatives on 16 August 1927, roughly four decades after the foundation of the first Austrian savings and loan association along Raiffeisen principles. As in its early days, it still acts as the central institution of the Austrian Raiffeisen Banking Group (RBG), which has an excellent and flawless track record of more than 115 years. Rothensteiner, emphasizing the importance of RBG: "With total assets of roughly 110 billion Euros, RBG is the second largest banking group in Austria with the country's most extensive network (2,342 outlets) and a market share of roughly 25 per cent. The name Raiffeisen and the logo – the Gable Cross – have developed into one of the best-known trade marks in Austria."
RZB began developing and expanding its foreign business operations, which would later form one of the bank's main activities, in the 1950s. Initially, they were limited to documentary business, but were soon followed by the swift development of business links with leading banks in other countries. In the 1970s and 80s, RZB increased the pace of its foreign business development substantially by founding representative offices, branches and in 1986, well before the fall of the Iron Curtain, the first subsidiary bank in Hungary, Unicbank Rt. (today Raiffeisenbank Rt.). This was the first step in building up a banking network that today covers twelve countries of the CEE region (see also the attached overview "RZB at a glance" and the press release summarizing RZB's result for 2001).
Economic development of CEE is characterized by increasing GDP, changing trade structures and boom in FDIs
In order to emphasize the growing importance of the whole CEE region especially for the European Union, Herbert Stepic outlined the developments the countries have made since the political changes that lead to the opening of their markets in 1989. In GDP, trade relations and Foreign Direct Investments (FDI) the progress made was substantial.
Practically all countries of the region showed higher GDP growth rates than the EU, albeit, of course, from a much lower level. Compared with the current per capita EU-average of approximately EUR 21,500, Slovenia shows the highest level with EUR 15,900 or 74 per cent of EU average. The Czech Republic follows with EUR 13,300 (62 per cent); Hungary is third with EUR 11,300 (53 per cent). Stepic, putting the amounts into perspective: "One has to bear in mind that these figures are still higher than the ones shown for Spain, Greece and Portugal, respectively, at the time when they became members of the EU."
Trade flows between the EU and the candidate countries show an impressive improvement in the last decade: Between 1993 and 2001, exports from the EU to the ten candidates more than quadrupled from EUR 30 billion to EUR 125 billion, while imports from the region increased even more from EUR 24.5 billion EUR 110.5 billion in the same time. The EU's export share to the candidates doubled from 6.2 to almost 13 per cent, while imports increased in proportion from five to almost eleven per cent. In the years following the opening, the CEE countries have shifted their trade-focuses from within the COMECON towards the EU. Stepic: "Trade relations have changed significantly since the opening and it is evident that they will improve further with the enlargement of the EU, for the benefit of both old and new members!"
Between 1989 and 2001, altogether more than USD 150 billion was invested in the region from abroad – with steeply climbing amounts per year: 1991, FDIs exceeded USD one billion per year, 1995 ten and 2001 saw the "investometer" climb past the USD 25 billion notch. This development reflects the growing importance of the region for the productive and service industries as well as increased trust into stability, which will of course be even higher after the accession.
Austria, in the vicinity of many of the accession countries and with traditionally close ties has profited over-proportionally from the process of political and economic liberalisation of its neighbours. Also, the countries not scheduled for the first wave of accession, have made considerable progress since 1989. Stepic is confident that their further development will lead to a additional expansion of the Union. The public mood in Bulgaria, Romania and Croatia, for instance, is very much in favour of an accession. The further development of Bosnia-Herzegovina and Yugoslavia would also benefit from the perspective of an EU-membership at a later time.
EU-enlargement is a win-win-situation
Stepic, an ardent supporter of the enlargement, sees it as a win-win-situation for all parties: "Economies in East and West will benefit from the enlargement. You cannot argue that every single country of the current member states and every single sector of their individual economies will be among the 'winners'. However, the economic advantages will be widely spread among the winners, while the disadvantages will be concentrated on a few sectors. The economies in CEE will continue to grow, both due to 'home-made' growth and to effects in connection with the enlargement and its anticipation." Stepic sees the enlargement as a lucrative investment into peace, stability and prosperity. From an economic point of view the enlargement has already happened to a large extent, he says.
The role of RZB in CEE
Beyond the object of operating a profitable banking network throughout the region, which expands organically and reinvests the profits earned locally, Stepic sees a greater role for RZB in the countries of CEE. By investing and building up a network of local outlets in any given country, RZB attracts additional investors from abroad. By providing lending facilities to small and medium sized enterprises (SME) in cooperation with the EU and the European Bank for Reconstruction and Development (EBRD), RZB strengthens the backbone of these countries' industries. By providing state-of-the-art banking products and channels to the international financial markets, RZB helps to further promote the development of the countries' leading corporations. Last, but not least, Stepic says, retail banking turned out to be both enormously profitable for RZB and beneficial for the people. This was proved especially in the previously DEM-oriented countries Croatia, Bosnia-Herzegovina and Yugoslavia, where people used the changeover to the Euro to at open up a new bank account and deposit their currency-savings again, this time at a bank they know they can trust.