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Interview with H.E. Petr Kubernát, Czech Ambassador to Luxembourg

I Would Like to Help Connect Czech Know-how with Luxembourg’s Financial Potency and Experience

In January of 2015, long-time diplomat H.E. Petr Kubernát became an extraordinary and plenipotentiary ambassador of the Czech Republic to Luxembourg. He has plenty of working experience in the state administration, as well as the private sector, where he also held the position of the President of the Netherlands-Czech Chamber of Commerce. What are his goals in the new position, and where does he find opportunities for Czech companies?

Dear Ambassador, you started your diplomatic career in 1992. Why did you not start in 1984, when you completed your studies at Kiev State University, in the Faculty of International Relations and International Law, where you specialized in International Economic Relations?

 In those days, international business seemed more attractive to me than diplomacy. In addition, my internship experience confirmed the fact that, in those days, ministries of foreign affairs and diplomacy in general were rather about shallow political games, behind-the-scenes plays, and the pursuit of personal gain. That was one of the reasons why I decided to work for the foreign trade company Centrotex, where I worked in the export department for 8 years, and gradually worked up to the position of Vice Manager of the trade department. In 1992, I was attracted to the position of Economic Secretary of the then Permanent Mission, awarded by the European Community in Brussels. In competing for that position, I was the favorite of a three-round competition, so in the fall of 1992 I entered the field of diplomatic services.

After becoming ambassador, the first place you served was in the Kingdom of the Netherlands. While you only just recently arrived to Luxembourg, is it possible to compare the two places?

On one hand, Luxembourg and the Netherlands are two very different countries, but on the other hand they also have a lot in common. That must also be the reason for their successful cooperation in Benelux. Let´s look, for example, at the same pragmatic approach the citizens of the two countries take when solving their problems, let’s look at their straightforward manners, their positive attitudes to foreigners, their feelings for business, their skills in navigating the international environment, and their abilities to communicate in multiple languages, and so on. They are similar people indeed.
 
Ok, but was the Netherlands special in any way, in respect to your profession?

In the Netherlands, my bilateral agenda was markedly enhanced by its multilateral dimension, e.g. in the field of international law. At the same time, I was a permanent representative of the Czech Republic in the OPCW (Organization for Prohibition of Chemical Weapons) and as the first Czech, I was elected a chairman of the Executive Board. So, the Czech Republic was actually managing the whole organization for one year. For this agenda, we did a lot of work with my colleagues, and I am glad that the Czech Republic left a very good track record in the Haag. In the Netherlands, the important priorities for me were public diplomacy and support of economic trade relations. And these are the issues I would like to carry on in Luxembourg as well.

Due to cost-saving measures, the Czech Republic closed down its residential embassy in Luxembourg. Do you think this was a good decision in 2012?

I have never considered the decision to close down our embassy in Luxembourg a good step. Unfortunately, the embassy in Luxembourg was among the ten embassies chosen before 2012 to be closed down for financial reasons. Although the Luxembourgers tried to understand our reasons, they were not pleased at all. They left their Prague embassy open anyway. Of course, the fact that our embassy was closed down influenced our bilateral relations. Now, after the re-opening of the embassy, we are able to build on the previous activities in some areas of cooperation. However, elsewhere we are starting again from zero, like in 2002 when our residential embassy was opened in Luxembourg. Besides, the lives of more than 1500 Czechs living in Luxembourg were complicated by this decision, because they had to contact our Brussels embassy 220km away with all of their consular issues (inquiries for birth and marriage certificates, new passports, verifications of documents, criminal record statements, etc.). The other option for them was to solve these issues when visiting Prague. Furthermore, there was the fact that the Czech state kept ownership of the beautiful embassy building in Luxembourg, which previously belonged to the former Luxembourg Prime Minister Pierre Werner. The villa underwent a complete reconstruction and it was necessary to temper it, especially in winter, to provide all year round ventilation, and monitor it with a security agency. All of this cost money too.

You say that we can build on our relationship with Luxembourg. Luxembourg Minister of Foreign Affairs Jean Asselborn said that with the re-opening of the Czech embassy at the beginning of this year, a new chapter on mutual relations was opened. What did you manage to write for this new chapter during the last six months?

Within the scope of diplomatic activities in a foreign country, six months is too short of a time. Moreover, every new ambassador has to get to know the country of his assignment first, undergo a series of protocol and courtesy meetings, and establish important contacts throughout all areas of public life.

Since July 1st, Luxembourg has been the presidential country of the European Union…

Yes, this situation may often keep us fully occupied. However, we aren’t wasting any time, and we have already organized several cultural events, or cooperated as event co-organizers. Until the end of the year we will be preparing a seminar on economic opportunities in the Czech Republic, together with the Luxembourg Chamber of Commerce. The main speaker will be the Minister of Industry and Trade Jan Mládek. At the same time, the seminar will mark the beginning of the preparations of the Luxembourg business mission to the Czech Republic, planned for the second half of 2016. In cooperation with the importer of Škoda cars to Luxembourg, we are working on the introduction of the new Škoda Superb model, and we are preparing the audiovisual presentation of the projects connected to this year’s anniversary of Mister Jan Hus’ death. For the end of the year, we want to arrange one more classical music concert. Also, we are diligently preparing for the upcoming year, which will mark the 700th birthday of King Charles IV. With selected Luxembourg partners, we are discussing the arrangement of a series of conferences on the topic, exhibitions, and a medieval music concert. We would like to enhance awareness and deepen the knowledge of Luxembourgers, especially the young generation, on the personality of King Charles IV.

Let´s talk some numbers now – Luxembourg is the fourth biggest foreign investor in the Czech Republic. Regarding the trade of goods, it is the 45th most important export partner of the Czech Republic, and 38th regarding imports. For Luxembourg, the Czech Republic is the 19th most important supplier and 16th  most important purchaser. These are interesting numbers.

Yes, you are right; these are interesting numbers, especially if we count per citizen (when possible). Otherwise, the Luxembourg market is small, not only in area but in the number of people as well. And so no dramatic increase of export or import may be expected. On the other hand, if you consider the so-called Great Region, consisting of Luxembourg, Belgian Wallonia, French Lorraine, and German Saarland and Rhineland-Palatinate, you have a market which represents an area of more than 65 thousand km2 with 11.3 million inhabitants. At the same time, it is a reference market, where you can test potential interest in your products or services in four countries at one go.

What are the benefits of having permanent representation in the country?

Besides the traditional role of all our representative offices abroad, which is to protect the Czech Republic abroad and Czech peoples’ interests, and to promote our country, I think every embassy should be helpful in establishing contacts between individual business subjects of both countries, i.e. opening the right doors, and in creating a positive environment for business. Searching for potential business opportunities for Czech subjects, and support of the development of economic diplomacy, will surely be among my priorities in Luxembourg. What I mean by that is searching for more sophisticated forms of trade and economic cooperation, for example through the connection of Czech know-how with Luxembourg´s financial potency and experience, rather than just the simple support of our export growth. That is because I can see some logical limitations here in the local market’s limited capacity for absorption.

However, Czech representation in Luxembourg is quite small.

I think the size of our team is quite sufficient and corresponds with the tasks we are supposed to follow, as well as the priorities we set ourselves. A higher number of employees does not necessarily equate to better performance. Unlike the big embassies, we have to communicate more with each other, perform cumulative functions, participate on the fulfillment of tasks, and rely on colleagues to dutifully complete their tasks. Moreover, we are in a certain trial period here, shortly after the re-opening of the embassy, so we need some more time to be able to evaluate the efficiency of our activities, and decide if the number of personnel and their portfolios are sufficient.

What are the concrete opportunities that Luxembourg is offering to Czech companies right now? What are they focused on?

Luxembourg is especially interested in information and communication technologies, biotechnologies, renewable energy sources, enviromentaly friendly technologies, and everything connected to transport infrastructure. It seems that we can be successful in the construction industry here too. The thing is, Luxembourg has a somewhat neglected housing sector, and now they are trying to catch up. There is a lack of flats as well as residential houses, and if you find some, they are really expensive to buy or rent. I can actually speak from my own personal experience, since I was looking for a suitable accommodation for six months. The construction of transport infrastructure could be another field where Czech companies may be successful. However, it is necessary to prepare for serious competition, especially from Luxembourg’s neighboring countries, which are desperately trying to catch up in the Luxembourg market.

As we already mentioned above, Luxembourg currently holds the presidency of the European Council. Does this mean more duties for an ambassador in Luxembourg?

Definitely so. Basically it represents an extra agenda for the six-month presidency. But I am not alone here. Our small team was strengthened by a colleague from headquarters, who is primarily responsible for any issues connected with the presidency. A lot of these responsibilities are matters of coordination and logistics. For me it means more meetings and discussions, while on the other hand the presidency brings me the opportunity to meet most members of the Czech government or their deputies, chairmen of some parliamentary committees of the Chamber of Deputies and Senate, and colleagues from other ministries who come for informal and formal meetings connected to the Luxembourg presidency.

Luxembourg is the country with the highest nominal GDP per capita worldwide. Is this visible in everyday life?

The benefits for Luxembourg’s citizens arising from this fact are probably not so visible at first sight, but of course they are benefiting. I can mention for example some general social benefits, targeted direct contributions for specific groups of citizens, and also the level of the state support for culture. Statisticians often discuss the possible misrepresentation of Luxembourg’s GDP per capita, based on the 180 thousand so-called peddlers who are not true citizens of Luxembourg. The Grand Duchy of Luxembourg is the richest country of the EU, and the standard of living is high here, but prices are high too. You can see that practically everywhere. A certain role is also definitely played by the fact that Luxembourg has a high concentration of banks. The country hosts the seats or branches of more than 140 banks. For foreign banks it is a matter of prestige to have representation in Luxembourg. Many of them truly directly operate in Luxembourg, and serve their clients in the west, as well as southern Europe. Luxembourg is also the seat of several important Union institutions like the European Investment Bank, the Court of Justice of the EU, Eurostat, and parts of some Directorates-General of the European Commission. Here, you can also find the seats of big international companies like Amazon, PricewaterhouseCoopers, the satellite company SES, Goodyear, DuPont and more. And you can also add the companies which chose Luxembourg as their seat due to tax optimization.  

Can you describe Luxembourg’s business environment?

It is very transparent and quite often predictable. This is a very important attribute for companies and firms operating here. Here you do not often see changes in the national economy. Future changes are always discussed with all interested subjects, including businesses. All possible impacts of potential legislative changes, or the introduction of brand new legislative standards, are evaluated in detail. It is not unusual that research and independent institutional studies of possible impacts are arranged. The overall tax burden of companies is low. Luxembourg state administration is, considering the number of employees, small but quite efficient. The size of the country does not require a high number of state sector employees anyway. Often, the functions are cumulative, while on the other hand you can also find part-time employment, especially for working mothers. Many ministries are located at one place, in a so-called government quarter near the historical center of the capital city, so even the often tiring office commute has been reduced.

Being so busy, do you have any free time at all? And how do you use it?

I always try to save some free time to be able to compensate demanding working days with necessary relaxation; however, I am not always successful. This presidential year appears quite difficult for me. But when I do have some free time, I go biking. I have been enjoying that since the time of my appointment in the Netherlands. However, the truth is they don´t have a complex system of bike trails here, and terrain is much more difficult. Besides this, I also like in-line skating, and in winter we “obligatorily” go skiing for at least a week. Usually I prefer downhill skiing, but lately I have again acquired a taste for country skiing too. In summer, it is another obligatory week of swimming and seaside relaxation. I can also relax at a good movie, but recently I have no time for reading books and listening to classical music.


By: Jaroslav Kramer

PragueConnect.cz in cooperation with Czech Leaders Magazine