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Selling Europe 1

Swiss cosmetics firms have had approaches from Chinese companies to make luxe products that appeal to Chinese women. The key ingredient? No ‘Made in China’ label.

Drive a hard bargain

France

Having teased us locals from behind scaffolding and billboards for two years, Citroën will open its revamped €11m, 1,200 sq m flagship showroom at 42 avenue des Champs-Elysées this spring. With its 25m-high glass “pineapple”, designed by the architect Manuelle Gautrand, the French car-maker will join Peugeot, Mercedes-Benz, Toyota and Renault, all of which have showrooms on Paris’s premier thoroughfare.

At a time when other European cities are discouraging car culture, Paris, which has more than its share of congestion, is celebrating the automobile on its avenue de luxe, where retail rents average €6,775 per sq m (the third highest in the world).

The decision of the street’s guardians, the Comité des Champs-Elysées, to allow Citroën back while rejecting an application from the retailer Hennes & Mauritz (H&M) highlights the issues facing prime retail zones such as Oxford Street in London, Strøget in Copenhagen and Berlin’s Kurfürstendamm.

Like the Champs-Elysées, many of these areas were built when shop window displays were still a novelty. Today, with their clientele turning to internet shopping, they face an identity crisis. If they are not to prise open purses, what are they for? Consultants Clipperton Developpement warned in a report for Paris City Hall last year that, left to market forces, the Champs Elysées could one day resemble – quelle horreur – London’s somewhat shabby Oxford Street.

London’s New West End Company represents the interests of 70 per cent of the retail property owners in Oxford Street, Regent Street and Bond Street. Its chief executive, Gary Reeves, envies the Comité’s power: “If you leave things to market forces, you do get a bad mix,” he says, citing the mobile phone retailers and jeans shops at Oxford Street’s eastern end.

A spokeswoman for Citroën defends its return to Paris’s most prestigious avenue. “It’s important for us to be there. André Citroën himself inaugurated this showroom in 1927.” The existence of the Champs-Elysées’s car showrooms is also explained by the enduring strength of France’s automotive industry and the role the state plays in its ownership. However, Jan Gehl, director of Copenhagen-based Gehl Architects, one of Europe's leading urban design consultants, thinks the Champs-Elysées has got its balance wrong: “I can understand the Comité saying no to a mass Swedish clothing company, because people get bored of chains. But they should refrain from having so many car showrooms.”

Yet the Kubrickian futurism of “Le Toyota”, the ambitious “Atelier Renault” and the Gothic flamboyance of Peugeot’s space, with its outlandish show cars, exhibit more creativity and branding brilliance than all the rest of the street’s banks, airline offices and execrable burger joints put together. Unlikely as it may seem, the deep pockets of the car industry are helping to ensure the future of this grand retail avenue.

Turn up the base

Bulgaria

After lobbying for US bases on its territory and signing an agreement for three, Bulgaria expects troops to start arriving this year.

Bezmer air base, Novo Selo army training range and Graf Ignatievo airfield are where the soldiers will be based for possible missions in third countries, according to the agreement signed on 28 April 2006 by US Secretary of State Condoleezza Rice and the Bulgarian Minister of Foreign Affairs Ivaylo Kalfin. Missions will be held in consultation with the Bulgarian government, but in crisis situations US troops could be deployed without specific permission.

After the shake-up of the US military presence in Western Europe and the decision to withdraw 70,000 overseas troops announced in 2004, the newest member of the European Union has become a strategic centre for dealing with conflict in the Middle East, and potentially the Black Sea and Caucasus too.

The bases, which are set to attract US investment to the country and boost the economy, are to be used jointly with Bulgarian forces. “I believe that investments in security are good for the investment in general as they are a clear sign of the stability of our country,” says Bulgarian Defence Minister Vesselin Bliznakov.

The deal, which covers an initial 10 years, allows for up to 2,500 US troops to be present in the country at any one time. The bases will also be used to train the Bulgarian army.

Bulgaria, which joined Nato in 2004, is buying equipment too. It has signed for five transport aircraft from Alenia Aeronautica, plus 12 Cougar and six Panther helicopters from Eurocopter.

The US bases will be relatively small but their economic impact could be significant. It is expected that up to to $50m (€38.5m) will be spent on construction work alone.

Tunnel vision

Switzerland

Sedrun is a quiet town of 1,700 inhabitants in the heart of the Swiss Alps. It is a charming, though remote, holiday destination in both winter and summer, but not the first name that comes to mind when planning a trip to Switzerland. All this, however, may be about to change.

The Alps are difficult to cross and for over a century the Swiss have realised that if you cannot go over, then you must tunnel through. The most famous rail tunnel, completed in 1881, dug through the Gotthard Massif and established the crucial north-south axis. The Gotthard Road Tunnel followed 100 years later. But the rail tunnel cannot cope with modern demands for more speed and faster connections, so the plan is to dig deeper and take a bigger shortcut. The new Gotthard Base Tunnel is being dug more than 600m below the old one, through nearly 58km of Massif stone.

The resort of Sedrun lies directly above the new tunnel, albeit through 800m of Alpine rock, at the point considered ideal for one of three vital emergency stops along the route, linked to the surface by the world’s tallest lift. Suddenly Sedrun is to be directly connected to the European high-speed railway network. The idea of upgrading the emergency stop to a full-scale railway station deep within the mountain evolved quickly: Project Porta Alpina was born.

Under the plans, journey time between Sedrun and Switzerland’s financial centre would be cut from 3½ to 2 hours; Milan would be in reach for Christmas shopping; and tourists from north and south would be tempted to visit. The station would be the deepest in the world, and the project would cost no more than €30m, since the emergency stop would have already been built.

Sanctioning Porta Alpina seems an obvious decision, but local support is lacking and strong scepticism remains. Studies have shown that the promised benefits in transport infrastructure and tourism may not be as widespread as at first expected. Some therefore argue that it is nonsense to invest €30 million, half of it financed by the government, in such a localised project. Local authorities, however, seem optimistic that financing will be approved and basic work on the station started in late 2006.

If the project succeeds, it will be fascinating to see what impact it will have on the region and for Switzerland as a whole. If nothing else, it will serve as an advertisement for Swiss innovation and engineering excellence.

Flying Finns

Finland

What to do if you have a country with lots of empty space, both on the ground and in the air? Turn it into a business.

In Kemijärvi, north of the Arctic Circle in Lapland, the Finnish company Robonic has created a test centre for unmanned aerial vehicles (UAVs) – one of the fastest-developing areas in aviation. This year the business is really expected to take off: three of the largest system providers are currently negotiating tests, and France’s Sagem DS, which carried out the centre’s first test last summer, is scheduled for another visit. Juha Moisio, CEO of Robonic, says: “We expect sales to reach €2m to €3m within the next three years.”

UAVs are considered by many to be the future of flying: Nato says 30 per cent of the world’s aviation investment will be in the UAV industry by 2010. Their uses range from dangerous military operations to civilian purposes such as monitoring forest fires. But to test these planes, a section of a country’s airspace has to be closed for security reasons.

Robonic also manufactures UAV launch catapults (the devices that literally catapult planes into the air). It has taken advantage of the vast, virtually unused airspace – a rarity in Europe – above Finnish Lapland to create the only private test centre in the world devoted solely to UAVs.

“The airspace in Europe is completely full. If one starts to close it down to do tests, prices get impossible. We offer a test site in an extremely large area with very little air traffic,” explains Moisio.

Robonic has 11,000 sq km of airspace at its disposal – larger than the airspace of Slovenia. It can be closed for up to two weeks, though most tests take from one to 12 hours. The Finnish state charges only a nominal fee; what costs is the administrative operation (permits, accommodation) that Robonic provides.

Selling Europe 2

Consumers have adapted to eco-values but could they be persuaded to look for products made in Europe? Finance and marketing departments hope so: it helps with logistics.

Blue Danube

Hungary

Of all the Mittel-European capitals along the Danube, none is so defined by its waters as Budapest. Lined by Habsburg-era apartment buildings, spanned by graceful bridges, the river runs through the city’s heart. From the Romans to the Soviets, successive occupiers have left their mark on its banks. Yet despite its architectural heritage, a lack of strategic vision means the Danube is under-used.

More than €40bn in foreign investment has poured into Budapest since 1989, yet a walk on the Pest side means dodging traffic and risking sore feet from bumpy cobblestones. Giant barges carry coal and steel down to the Black Sea, but there is no riverbus. Nor is the Danube blue – it’s a muddy grey-brown, thanks in part to the sewage gushing out underneath Elizabeth Bridge.

All that is set to change, promises Budapest’s mayor Gábor Demszky. Demszky, an ex-dissident, first took office in 1990 and last year won his fifth term in office. But he barely beat Istvan Tarlos, supported by the Fidesz party. Demszky’s narrow margin of victory signalled a weariness with his administration and he has pledged not to stand again. He promises to make revitalising the Danube the priority of his last term.

“We plan to transform the relationship between the city, its inhabitants, and the Danube. We want to make it the centrepiece of Budapest, a living, working and recreational space,” says Demszky.

The run-down District IX, on the Pest side, is set to become the city’s newest cultural oasis. Demszky wants to turn its dark and crumbling riverside warehouses into galleries, theatres, design and dance studios: the kind of urban regeneration that transformed London’s Docklands. “We will safeguard the warehouses’ architectural uniqueness, and ensure they are a community space and still an organic part of Budapest’s cityscape.”

The warehouse district plan is part of a project that includes regenerating the City Hall area and Budapest’s historic Jewish quarter in District VII.

Votes please

Estonia & Finland

Estonia, 4 March

Who’s in power?
Estonia is run by a coalition of the centre-right Reform Party, the leftist Centre Party and the centre-left People’s Union. Reform Party leader Andrus Ansip is the Prime Minister. Last year he oversaw a 7.8 per cent rise in GDP. Ansip shares President George W Bush’s penchant for jogging and dispatching troops to Afghanistan and Iraq.

Who are the challengers?
This year will see the first-ever online national election in Estonia with Ansip in battle with his current partners, the Centre Party, led by Edgar Savisaar. The recently merged Conservative-nationalist Res Publica and Pro Patria Union, has the largest number of MPs in parliament with 32 of 101 seats. Other contenders are the Social Democratic Party and Green Party.

Finland, 18 March

Who’s in power?
Finland is governed by a coalition of the left-wing Social Democratic Party, the minority Swedish People’s Party and the right-wing Centre Party headed by Prime Minister Matti Vanhanen, the “sexiest man in Finland”, who in 2006, steered the country to a 2.7 per cent rise in its economy.

Who are the challengers?
The opposition National Coalition party is a strong contender. Its leader, 35-year-old Jyrki Katainen, wants the nation to be a major global force.

Poles apart

Poland

In a year in which own-brand Polish ready-meals are expected to appear in British supermarkets, the mother country will be extending its diplomatic arms ever further in 2007 to support its armies of émigrés – not least in Britain. Since Poland’s EU accession on May Day 2004, an estimated 1.2 million young Poles have left a homeland beset with unemployment for the promise of jobs in member nations and cash to send home: including 100,000 to Ireland, 260,000 to the UK and more than 530,000 to Germany.

As a result of this exodus, several new Polish consulates are expected to open this year: Manchester will acquire one, as will Reykjavik, Thessaloniki, Catania and Almaty. Janusz Vach, Consul General of Poland in Great Britain, says, “The consulate in Manchester will be the first to open in the UK for years. There is a need for a consulate in Reykjavik to serve the more than 10,000 Polish fishermen now working in Iceland.”

Tomasz Szeratics, from the Polish Ministry for Foreign Affairs, says the new mission in Kazakhstan was desirable, “because of the large number of Polish expatriates there who were forced to emigrate after the Second World War.”

For the most part, expatriate Poles are not yet working in white-collar employment although, Vach says, “You may be surprised to hear that 6 per cent of all accountants in London are Polish.” But with almost 4 zloty to €1, even the menial jobs can be profitable despite higher living costs. “Poland plans to open employment centres throughout Europe to protect Polish workers abroad.”

Not all of Poland’s diplomatic expansion is for pastoral reasons. “We want Poland’s image to become the foreign ministry’s priority,” Anna Fotyga, Polish Minister of Foreign Affairs said last summer. To this end, missions are also set to open in Calcutta, Dubai and Kabul in 2007.

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