CRANE President Davorin Štetner: Brexit can be a chance, and London will always be the top center

Davorin Štetner, President of the Croatian Business Angels Network (CRANE) and Member of the Council for Economic Issues of the President of the Republic of Croatia Kolinda Grabar Kitarović, recently participated in the Wilton Park forum, with the main topic being the United Kingdom leaving the European Union.

Wilton Park is the executive agency of the British government, namely the Office for International Relations and the Commonwealth, gathering world leaders from politics, business, academia, civil society diplomacy, and the media.

President of Croatian Network of Business Angels (CRANE) Davorin Štetner presented his impressions of the conference and thoughts about Brexit for Index.hr. There is a lot of uncertainty, especially for the business community, and everyone is waiting for the conditions to go out because money does not like insecurity.

“The United Kingdom has so far been seen as an extremely stable country with centuries-old law and a positive business environment. With Brexit, all this has unfortunately changed, and there has been a rather uncertain situation because no one knows what rules of business will be present after Brexit. For the EU as a whole, the key is a fast-paced bilateral agreement after Brexit because the UK’s exit without contracts and defined rules will be extremely bad for them, but also for other 27 countries. For investors, the most important is predictability and system stability in which they invest, and I think that due to this uncertainty business environment is suffering. Namely, a lot of investors I’ve been talking to are waiting to get to know the conditions, but a lot of big companies are likely to move their headquarters from London to cities like Paris and Frankfurt. For example, Deutsche Bank, Barclays, Diageo, Goldman Sachs, Lloyds, Microsoft – all of them announced, and some have already reacted with the relocation of headquarters or production to the EU. Of course, such action is a key uncertainty because these giants cannot afford potential losses because they have not reacted in time”, said Davorin Štetner, President of the Croatian Network of Business Angels (CRANE).

Croatia can use Brexit to strengthen relations between the two countries.

However, CRANE President Davorin Štetner believes that Brexit can also be a kind of opportunity for improving co-operation between Croatia and the UK. A lot of startups from Croatia are working in London, which Štetner believes will continue to be one of the world’s leading business centers.

“If the UK continues with constructive talks with EU members and offers good conditions for continuing co-operation, Croatia can use it for better co-operation. Any failure is also a chance for a new beginning, so I absolutely support the idea that this can be a long-term positive thing for our relationships.

London will, regardless of Brexit, always be one of the top five world centers, so I’m not afraid of attractiveness. We have a lot of startups in London, but I know at least five companies that were founded in the US instead of in London because the founders just did not want to be in uncertainty until rules are cleared out between UK and EU after Brexit. London has so far been one of the most desirable places to open startups, and I hope it will remain after Brexit. Today, most of them are on hold, said Štetner.

Wilton Park launched at the Winston Churchill initiative

President of the Croatian Network of Business Angels Davorin Štetner visited Wilton Park which was launched in an initiative of Winston Church in 1946. Seventy years since its inception, Wilton Park has become one of the leading forums for discussion and policy-making. It is held at Wiston House, a 16th-century castle, about an hour’s drive away from London.

“The British government, the Ministry of Foreign Affairs and Commonwealth, has organized a strategic forum to gather tips to have the best results with Brexit. It was a closed conference attended by the highest ministers and British government officials plus selected thirty guests from the EU. It is, by me, the top and most important event that should serve as a direct source of information to the highest authorities of the UK executive. I was invited by the British Government, the Ministry of Foreign Affairs and the Commonwealth.

The fact that the event was held in a beautiful 16th-century mansion and a 25-hectare estate is fascinating. Even more interesting is the fact that the UK-owned castle serves as a place for strategic talks. Miro Kovačić, one of our well-known consultants, was there when they were talking about the independence of the Croatian nineties. The British government uses this place to bring important people, close them in the castle, and catch information from official and unofficial talks. I remember immediately a large number of our castles that are mostly ruined and could be used for such purposes. It is interesting that Wiston House can also be rented for private events (but for the richest) so that the state and thus covers part of the maintenance costs.

Wiston House

The atmosphere was casual since there is no media, and photography is only possible if you have the permission of everyone from the photo. Part of the people was located in the surrounding buildings, and part in the castle itself. I was placed in a castle in a beautiful room of about 30 m2 with a view of the beautiful surrounding estate and numerous sheep that eat on the pastures. The organization was great, I met the driver at Heathrow, and after an hour of driving we were in the castle”, said Davorin Štetner.

Regarding the Croatian startup scene, the president of the Croatian Business Angels Network (CRANE) Davorin Štetner says that CRANE members have invested in 15 projects in the last six months, but warns that stronger economic development would require a stronger business relief. He says that lower taxes would bring higher revenue to the budget, due to increased business activity.

We need to cut taxes on labor

“CRANE members have invested in the last six months in 15 projects, mostly ICOs, which I consider to be a very good number. There is a trend of investments in which members want to be anonymous, so I cannot speak about the names of investors and startups, but that’s their right. Croatia is still lagging behind for Slovenia, but it is understandable because in spite of the good direction we still have not made significant cutbacks for attractive business conditions.

First of all, here, I am thinking of a high degree of bureaucracy and a very expensive state device. In the country, we have around 1.260.000 retired people, of which about 350,000 are in regular retirement. There are about a million and a half workers. Imagine what this means for the state budget. We need to find room for more serious cuts in salaries and wages, as it will automatically increase net wages, and hence budget spending and revenue. When we are already in the UK – they have the highest contribution rate and wage tax, if I am not mistaken, about 43% and in Croatia is 100%. Just look at the example of profit tax – it’s reduced, and the state has made more money! That is the right path”, concludes CRANE President Davorin Štetner.