From 18th to 22nd January this year the delegation of the Estonian Employers’ Confederation was visiting the Kingdom of Spain. The field trip for the leaders of business organisations was carried out as part of the “Programme to improve the capability of Estonian business organisations" funded by the European Social Fund through the Estonian State Chancellery.

As part of the trip, the delegation visited the Spanish Confederation of Employers’ Organisations (Confederación Española de Organizaciones Empresariales, CEOE) and its regional business organisations in Andalusia (The Andalusian Confederation of Businessmen and Women or La Confederación de Empresarios de Andalucía, CEA) and Fomento in Catalonia (Fomento del Trabajo Nacional).

The aim of the visit was to give the leaders of Estonian business organisations an opportunity to establish direct contacts with their counterparts in Madrid, Seville and Barcelona, to share information about services offered to members and map any possible future cooperation. The visit was also an opportunity to get an overview of the impact the economic crisis has had on the Spanish economy.

“I am glad to say that the field trip was very informative and successful in every respect. In the area of engineering and consultancy, for example, we now have a concrete future cooperation plan in place,” concluded happily the Confederation’s director of international relations Eve Päärendson.

The field trip gave the participants an excellent overview of the business sector in Spain and about the country in general. “This was just as important as the professional side of the visit," noted chairman Urmas Sule from the Estonian Hospitals Association. “Without a general overview the specialist contacts are not worth much.”

“The programme was busy, practical, interesting and enjoyable: we visited various leading organisations and met entrepreneurs in Madrid, Seville and Barcelona," commented Mauno Inkinen from the Estonian Association of Architectural and Consulting Engineering Companies, who successfully set up relationships with his Spanish colleagues and made plans for future cooperation. “We may joke about it but the truth is Estonians can make it on almost any market!”

Kristjan Niinemaa from the Estonian Insurance Association shared that the most useful experience of the trip for him was the visit to a local company.

The managing director of the Estonian Security Association, Kaupo Kuusik praised the delegation itself and the meetings with Estonia’s honorary consuls. Both Hallar Meybaum from the Estonian Association of Chemical Industry and Urmas Sule from the Hospitals Association also remembered the trip for its wonderful, down-to-earth and easy-going travelling companions.

The 15-member delegation from Estonian business organisations who visited Spanish business organisations and entrepreneurs comprised:
Tarmo Kriis, chairman of the Employers’ Confederation
Eve Päärendson, director of international relations from the Employers’ Confederation
Piret Salmistu, marketing director of the Chamber of Commerce and Industry
Ann Riisenberg, board member from the Central Union of Farmers
Urmas Sule, chairman of the Hospitals Association
Mauno Inkinen, managing director of the Association of Architectural and Consulting Engineering Companies Enno Rebane, managing director of the Association of Construction Material Producers
Kristiina Reidolv, managing director of the Association of Performing Arts Institutions
Hallar Meybaum, managing director of the Association of Chemical Industry
Kaupo Kuusik, managing director of the Security Association
Kristjan Niinemaa, board member of the Insurance Association
Indrek Peterson, managing director of the Association of Construction Entrepreneurs
Margit Rüütelmann, managing director of the Waste Management Association
Villu Vatsfeld, representative of the Ports’ Association
Liisi Peets, project assistant from the Employers’ Confederation

The trip was organised by the Employers' Confederation as part of the “Programme to improve the capability of Estonian business organisations", which is financed by the European Social Fund. The representatives of eight associations were happy to share their impressions with our newsletter The Factory. For photos of the trip, taken by Liisi Peets, click here>>

Spain is a big country with a population of 40 million, which is something to be borne in mind when planning business relations or even representing Estonia’s interests in Brussels. Spain joined the European Union in 1986 and has been using the euro since 2002.

Until recently, Spain was one of the fastest growing economies in the EU but the global economic crisis has hit the country hard, affecting especially its real estate and construction sectors. Estonia and Spain have lots in common, but also many differences: distances, volumes, structure of economic sectors. The phrases that kept repeating in the delegation’s travel impressions were bureaucracy, trade unions, clusters, reforms and representation of interests.

According to Hallar Meybaum, both countries are facing similar problems: highest unemployment in the EU, withering away of the real estate sector, tourism in balance. “At a state level, Spain could learn from Estonia’s favourable investment climate, corporation tax exemptions and the smallest state budget deficit in the EU.”

There are 23 million people unemployed in the EU. Both in Estonia and Spain the unemployment shot up due to the economic crisis. In 2009 the unemployment in Spain was at 18% and at 14.1% in Estonia; in 2010 the Spanish forecast the unemployment to rise to 19.4% and Estonians to 16%. Especially painful are the unemployment levels among young people – 39.6% in Spain and 24.5% in Estonia.

“Spain follows the example of economically stable capitalist countries whose approach is to protect employees. The labour market is very rigid and that has resulted in high unemployment, which has also been compounded with an increased minimum wage,” commented Kristiina Reidolv. “The Spanish acknowledged that flexible regulations would help to reduce the unemployment, which is where Estonia, who amended its employment contracts act to benefit employers, could be an example to Spain.”

Ann Riisenberg observed that in addition to the employment contracts act, Estonia could also be an example on how to carry out reforms. “We could learn from Spain how to stand for ones’ interests when several organisations represent one sector,” she noted. “It was also impressive how well companies were represented in organisations and how active they were (all Spanish companies are members of their regional chambers of commerce and industry). And thirdly, they had successfully launched a cluster programme."

Different sectorial clusters, as well as business incubators linked to universities and the development of knowledge-based economy, were the things that impressed Reidolv most.

Kaupo Kuusik said that Estonia could learn from Spain how to stand for its interests and lobby in the EU, also how short-sighted is an economy aimed at internal consumption.

“It would be useful for Estonia to study the pros and cons of transferring to the euro, which is something that Spain could definitely help us with,” said Reidolv.

“I’m sure at the dawn of the euro many Estonians are keeping a close eye on what’s happening in the euro zone, to see whether Spain would become the next black sheep of the zone,” marked Eve Päärendson. In May Spanish government approved a 15 billion euro austerity measure in order to reduce the 11% budget deficit to 6% by 2011. Ratings agency Fitch downgraded Spain’s credit rating at the end of May commenting that because of the austerity package the recovery of the economy will be more modest than its government predicts, thus driving the stock market down further.

“All these signs are a cause for concern, but we hope that Spain will be able to reduce budget deficit in a well-planned manner," said Päärendson.

Barcelona – the highest level of city planning

Well thought through and skilful city planning in addition to regeneration of industrial areas, as seen in Barcelona, left an impression on Kristiina Reidolv and Enno Rebane.

A new purpose-built settlement near city centre to replace an industrial area is an example of when there is a will a city can create brilliant solutions in terms of purposeful planning and shaping of the urban environment in complex locations, acknowledged Rebane.

Construction – material producers’ disappointment, an opportunity for engineering and consultancy

Managing director of the Association of Construction Material Producers, Enno Rebane admitted that he would have certainly preferred a different destination country: “We are quite far apart from the point of view of building materials and construction – the majority of construction materials do not export well over long distances. Since the construction industry, thus also building materials, are blamed for Spain’s economic difficulties, there’s not much cause for celebration at either side."

At the same time, Rebane believes strongly in the importance of sharing and learning. “I am not too keen on the lifestyle of Southern Europe myself. But that can also be a positive thing since one should always try to expand one’s horizons and contemplate why things are done differently elsewhere. Not to mention the abundance of interesting buildings and beautiful nature over there."

Rebane assessed the cooperation potential as very small though. “I did establish some contacts there, but the building materials people did not, unfortunately, turn up at the meeting. We did have a good chat with construction people, but their main topic was trade unions (differently from us). Also, their organisational structure is very multi-layered and multi-directional, which I find impossible to comprehend as how can they need so many bureaucrats?!”

The managing director of the Association of Architectural and Consulting Engineering Companies Mauno Inkinen at the same time is full of positive feedback: “Spanish engineering and consultancy companies are ready to cooperate with us!" According to him the Spanish were most interested in consultancy and cooperation in that area.

Representatives of Catalonia Association of Architectural and Consulting Engineering Companies, from companies Search&Drive, BIS and area5

“Both Estonian and Spanish consultants are interested in export and in the exploitation of EU funds for designing infrastructure projects either in Estonia, Spain or third countries," commented Inkinen. “They are able to communicate with all of South America, and we can do it with Russia and other close by countries!”

In Madrid the Spanish Association of Architectural and Consulting Engineering Companies TECNIBERIA (Asociación Española de Empresas de Ingeniería, Consultoría y Servicios Tecnológicos) expressed great interest in cooperating with Estonian engineers, and so did engineering and consultancy companies AYESA and AUDING in Seville. At a meeting in Barcelona, an extraordinary interest in cooperation was shown by the Catalonia association (Association Consultancy Estructure, ACE) and Cambra Oficial de Contractistes d’Obres de Catalunya (CCOC). “I met the representatives of the Catalonia association twice (from companies Search&Drive, BIS, area5 and others), they also presented a formal enquiry to prove that they are seriously interested,” revealed Inkinen.

He said that first of all they wanted to know what companies are interested in cooperation with Spain and which projects are of interest to Estonian companies. Some members of the Estonian association have already informed Inkinen of their interest: such as EA Reng, Projektkeskus, Maru Ehitus and Stuudio Gadis.

Similar situation and problems in agriculture

Board member from the Central Union of Farmers Ann Riisenberg found that agriculture is in a very similar situation in both countries, including the problems - current issues revolve around CAP 2013+ (Common Agricultural Policy), creation of price transparency models, environmental pollution etc. She believes it may be possible to develop Estonian and Spanish joint views on CAP policy and use the Best Practice model, we can also learn from practices of Spanish agricultural cooperatives (“from field to table” chain).

“Since Spanish agriculture includes many areas of produce not available in Estonia some of the problems raised were alien to us (irrigation, use of water). It felt that Estonian agriculture is a tad more efficient and competitive, plus farmers more motivated (not farming for subsidies),” noted Riisenberg.

She got some good ideas for the working of her own organisation: “We desperately need to hire more specialists (for environmental issues, and a lawyer). But we cannot afford it within our budget. We may have observed a suitable solution in Spain, where the local farmers’ organisation was using the services of experts employed by the Association of Catalonian Employers. We could solve our problem by joining an association (eg Employers’ Confederation) where we could use such a service without devastating our financial resources.”

Chemical industry – different volumes, same direction

Spanish chemical industry is the 4th biggest in the EU, Estonia’s only 21st. The economic crisis has not affected their chemical sector as mush an in Estonia, where the drop in production has been twice as much as in Spain, commented Hallar Meybaum, managing director of the Association of Chemical Industry.

About the cooperation potential he said: “Unfortunately none that I can see as Spain is logistically distant and our production volumes too small to be able to market over there. Spanish chemical sector did not show much interest in the Estonian market, but did not exclude future cooperation either.”

According to Maybaum, it was very useful to discuss with Spanish colleagues the economic and organisational activities of their associations, to find common issues and hear how colleagues solve them. “It was useful to find out that the organisations of Spanish chemical sector deal with similar EU problems, thus, even though incomparably bigger, they work in the same direction as us.”

Health care is of interest despite differences

Urmas Sule from the Hospitals Association visited two trade associations in Spain:
• in Madrid, the Association of Medical Equipment Producers, a good contact for exchange of information primarily on market monitoring, and
• one of the two Catalonia hospitals’ associations, sharing experiences on the functioning of health care systems in times of economic downturn and structuring principles for hospitals network, as well as on health care sector pinch points and short-term development prospects.

From the professional point of view the most valuable for Sule was the meeting of the management of Catalonia hospitals’ association. “We agreed that we'll try to plan a business trip to Estonia for their management and board members in order for them to learn about our health care model.”

“Our country is more compact and social rigidity is very low, which has resulted in a more comprehensive reform process with lots of quasi-market elements,” concluded Sule. “Spanish health care system is structurally more inflexible in alignment with the country’s general social policy. For a citizen, the social guarantee package – especially the rate and volume of unemployment insurance – is very broad.”

Insurance shares some common points

Kristjan Niinemaa from the Insurance Association said when comparing the countries: “The insurance sectors of Estonia and Spain are similar in that new EU regulations may clear the market quite significantly." As to cooperation opportunities, he commented: “Spain may offer insurance against particular risks that our local business units do not want to risk with due to the lack of volume economics.”

Security organisation − zero common points

Managing director of the Security Association Kaupo Kuusik did not meet any Spanish colleagues as there are no cooperation possibilities at all – security services in Spain are regulated by the state. Kuusik had already met the person in charge in Stockholm shortly before the trip.

In Estonia, the regulation of the security sector is more liberal and innovative, and bureaucracy compared to Spain minimal, noted Kuusik. He cannot see any future cooperation because: “Our understanding of the service is different, like that of the Nordic states and Britain.

Many thanks to organisers and supporters!

The Spanish Confederation of Employers’ Organisations (CEOE) with its regional member associations in Andalusia (CEA) and Catalonia (Foment) were of great help preparing and hosting the trip. The Employers’ Confederation would like to thank the CEOE’s representative in Brussels José Isaias Rodriguez and his most helpful colleagues in Madrid head quarters, in regional member associations in Seville, Andalusia (CEA) and in Barcelona, Catalonia (Foment), who all contributed to the success of the visit. We are also grateful for the opportunity to meet the industry and trade chambers in these regions.

The Confederation would also like to thank the Estonian ambassador in the Kingdom of Spain Toomas Kahur, economic adviser Kirsti Anipai-Peinar and the embassy’s secretary Pille Rojo, whose professional efforts resulted in a fruitful trip. Our thanks go also to the Estonian honorary consuls Fernando Franco Fernandez in Seville, Andalusia and Josep Lluis Roveira in Barcelona, Catalonia.

Many thanks to the Spanish ambassador in Estonia Eduardo Ibáñez López-Dóriga, who met the delegation shortly before the trip and gave them an overview of Spain’s economy and its priorities as one of the EU's presiding countries. See press release of the meeting >>

Next destination country?

The representatives of business organisations named several different parts of the world for the next potential field trip. The biggest interest was in newer EU countries (incl. the Balkans). After that came big countries like Germany and France but also the Benelux countries, and then Japan, China, Brazil, the US and Canada. Hallar Meybaum from the Association of Chemical Industry said he’d be happy to go anywhere with the same group of people.

Urmas Sule wished “to visit the countries that influence the world economy as the new developing economies. Brazil has been on my mind for some time.”

Kristjan Niinemaa would prefer France: “We definitely need to find some contacts there, plus the European Commission’s insurance portfolio is held by a Frenchman.” He would also suggest preparatory research into best eateries. “And if possible, arrange meetings with people from different backgrounds – the messages may differ dramatically.”

Mauno Inkinen’s interest in Germany was due to its big market and capable businesses. “German engineers are yet to make a significant impact in Estonia and vice versa.”

On his opinion, the field trips to the UK and Spain as part of the project have been very interesting and useful. “For an Estonian company to Enter the UK market is much harder than it may initially appear, whereas entering Spanish or South-American market may not be unattainable if you can speak Spanish. It’s one of the easiest languages in the world!” shared Inkinen optimistically.