proceedings - aceu ccedep 2019.pdf · 4.2. jelena tomić, zorana georgijev, marina pljakić, branko...

8th INTERNATIONAL SCIENTIFIC CONFERENCE ON CLIMATE CHANGE, ECONOMIC

DEVELOPMENT, ENVIRONMENT AND PEOPLE (CCEDEP 2019) under the title

Economic, Security and Environmental Challenges of Regional Development

Educons University, Novi Sad, Serbia

October 24TH, 2019





October 24TH, 2019

PROCEEDINGS OF

8 th INTERNATIONAL SCIENTIFIC CONFERENCE ON CLIMATE CHANGE,

ECONOMIC DEVELOPMENT, ENVIRONMENT AND PEOPLE

(CCEDEP 2019)Novi Sad, Sremska Kamenica, Serbia,

24th October 2019.

Novi Sad, Sremska Kamenica, 2019.

8 th INTERNATIONAL SCIENTIFIC CONFERENCEON CLIMATE CHANGE, ECONOMIC DEVELOPMENT,

ENVIRONMENT AND PEOPLE(CCEDEP 2019)

Publisher:Educons Universitу

Vojvode Putnika 85-87, Sremska KamenicaTel: +381 21 4893 610

Editor:Prof. Marko Malovic, PhD

Technical editors:Simonida Vukadinović, PhD

Andrea Okanović, PhDJelena Ješić, PhD

Andrea Andrejević Panić, PhD

Press: Tampograf, Novi Sad

Printing: 50 copies

CCEDEP 2019 Conference is supported by The Republic of Serbia, Autonomous Province of Vojvodina, Provincial Secretariat for higher

education and scientific research.

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CONTENTS

1. Economics and Business

1.1. Mustafa Özer Capital Flows and Macroeconomic Dynamics in Balkan Countries ......91.2. Ferenc Szávai Global Trends, Forecasts and Economic Challenges up until 2035 ......271.3. Jelena Ignjatović, Jovana Kisin Summarizing decade behind us - Economic development and transitional reforms in the Western Balkans region ..................................................411.4. Marko Malović The Eurozone Chronicles - Does Fiscal Money Theory support

Monetary Union? ....................................................................................621.5. Jelena Grujić Towards sustainability and improvement of life standards of future generations – public policies and strengthening youth development potentials in Vojvodina region ..........................................701.6. Carmine D’Arconte Evaluating and assessing entrepreneurial competences and managerial skills that impact on companies effectiveness ............861.7. Milena Ilić, Marko Ranković, Tamara Janković, Branislav Radnović Acute crisis and PR Crisis management, impact on the reputation of companies...........................................................1061.8. Jelena Tadić, Zoran Brljak Envirnomental preformances of company ...........................................1231.9. Simonida Vukadinović, Andrea Okanović, Bojana Jokanović EU Integrations of Serbia - Position and Perspective of Chapter .......1331.10. Branislav Radnović, Milena Ilić, Ana Rasinac, Marko Ranković Role and importance of internal communication within organization, increatinggoodclimateandmanagingconflicts.................................1421.11. Jelena Ješić, Simonida Vukadinović, Andrea Andrejević Panić Application of the QH model in the areas of smart cities and smart

regions – excellent examples from The EU .........................................1591.12. Bojana Jokanović, Andrea Okanović, Jelena Ćulibrk Application of Scrum Framework in Teamwork ..................................168

Branislav Radnović, Milena Ilić, Ana Rasinac, Marko Ranković

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2. Applied Security Studies

2.1. Aleksandar Chavleski, Anita Gligorova, Temelko Risteski EU Cyber Defence Policy: Recent Developments ................................179

3. Ecological Agriculture 3.1. Pošiváková T., Hromada R., Korim P., Švajlenka J. Selected aspects of hygiene as a qualitative indicator of animal farming .................................................................................1973.2. Racić Gordana, Vukelić Igor, Radić Danka, Bojović Mirjana, Mrkajić Danica, Jovanović Ljubinko, Panković Dejana.

Transportof copperinsunflowerplants(Helianthus annuus L.) grown in hydroponic system ...........................203

4. Environmental Protection

4.1. Jozef Švajlenka, Mária Kozlovská Energy potential of timber-based buildings in terms of sustainability...213

4.2. Jelena Tomić, Zorana Georgijev, Marina Pljakić, Branko RadičevićSystematic noise monitoring in the territory of Autonomous Province of Vojvodina ..........................................................................221

4.3. Jelena Avdalović, Mila Ilić, Srđan Miletić, Aleksandra Žerađanin, Nikoleta Lugonja, Jelena Milić, Miroslav M. Vrvić

Bioremediation of groundwater contaminated by petroleum hydrocarbons .................................................................231

4.4. Jelena Avdalović, Kristina Joksimović, Biljana Dojčinović, SnežanaZildžović, Vladan Milošević, Gordana Gojgić-Cvijović, Vladimir Beškoski

Bioleaching of metals from electronic waste ....................................2394.5. Temelko Risteski, Aleksandar Chavleski, Anita Gligorova

Ecologic Cadastre: Comparative Overview of the EU and Macedonian Law ............................................................................245

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SCIENTIFIC COMMITTEE:

Prof. Marko Malović, Ph.D, Chairman of the conference scientific committee, Educons University, Serbia

Zoltán Gál, Ph.D, Kaposvár University, Hungary, Senior research fellow, HAS Research Centre for Economic and Regional Studies

Prof. Manuela Epure, Spiru Haret University, Bucharest, RomaniaLadislav Suhányi, PhD, Vice-Rector for International Relations and Marketing,

University of Presov, Slovak RepublicProf. Belov Dimon, Ph.D, Pan European University, Republic of Ukraine

Dorota Kmieć, PhD, Faculty of Economic Sciences, Warsaw University of Life Sciences (WULS- SGGW), Poland

Prof. Eva Taterova, PhD, Vice-Dean for International Affairs, Faculty of Region-al Development and International Studies, Mendel University in Brno

Prof. Nertila Gjini, P.D, University of New York, Tirana, Republic of Albania Mehmet Ali Tekiner, PhD, Turkish Police Academy, Turkey

Metin Toprak, PhD, Istanbul University, Turkey Prof. Fadil Hodza, PhD, Rector, International Vision University, Republic of

North MacedoniaProf. Zoran Filipovski, PhD, Vice-Rector for International Relations,

International Vision University, Republic of North Macedonia Prof. Dejana Panković, PhD, Vice rector for Scientific Work and International

Cooperation, Educons University, Serbia Prof. Nano Ružin, PhD, Rector, FON University, Skopje, Republic of North

Macedonia; Prof. Nikola Popovski, PhD, FON University, Skopje, Republic of North Macedonia

Andrea Andrejević Panić, PhD, Faculty of Business Economy, EduconsUniversity, Serbia

Prof. Goran Anđelić, PhD, Faculty of Applied Security Studies, Educons University, Serbia

Prof. Mirjana Golušin, PhD, Faculty of Applied Security Studies, Educons University, Serbia

Prof. Mira Pucarević, PhD, Faculty of Environmental Protection, Educons University, Serbia

Prof. Ljubinko Jovanović, PhD, Faculty of Ecological Agriculture, Educons Univesity, Serbia

Prof. Miroslava Filipović, PhD, Faculty of Business Economy, Educons University, Serbia

Simonida Vukadinović, PhD, Faculty of Business Economy, Educons University, Serbia

Marija Orlandić, PhD, University of Donja Gorica, Montenegro Mila Ilić, PhD, scientific associate Institute of Chemistry Technology and

Metallurgy, Serbia

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ORGANIZATION COMMITTEE:

Simonida Vukadinović, PhD, Faculty of Business Economy, Educons University, president of the organization committee

Andrea Okanović, PhD, Faculty of Business Economy, Educons University/Fac-ulty of Technical Sciences, University of Novi Sad, Serbia

Zoran Brljak, Ms.C, Faculty of Business Economy, Educons University, Serbia Jelena Jotić, PhD, Faculty of Business Economy, Educons University, Serbia

Milan Mihajlović, PhD, Faculty of Business Economy, Educons University, SerbiaMilena Galetin, Ms.C, Faculty of Business Economy, Educons University, Serbia

Jelena Ješić, PhD, Faculty of Business Economy, Educons University, SerbiaBojana Vasić, Ms.C, Faculty of Applied Security Studies, Educons University,

SerbiaSlađan Rašić, Phd, Faculty of Ecological Agriculture, Educons University, SerbiaDunja Prokić, PhD, Faculty of Environmental Protection, Educons University,

Serbia

1. Economics and Business

9

Capital Flows and Macroeconomic Dynamics in Balkan Countries

Mustafa Özer1

Abstract: One of the main futures of the world economy is the growing process of financial liberalization and integration with countries around the world opening their capital accounts and joining international financial markets and increasing flows of capital during the past 30 years. While there was initially a be-nign view toward openness to international capital flows both in academic and policy circles, there has been a more sceptical approach recently. It is true that there has been benefits of foreign capital flows to the recipient economies, it is also true that the sudden interruption of inflows, or outright outflows of foreign capital, i.e., a sudden stop in the financial account, generally have very adverse consequences for an economy experiencing these phenomena. Thus, understanding the effects capital flows has become an urgent need for policymakers and has attracted considerable academic interest. This paper examines the effects of components of gross capital flows (Portfolio, FDI and Total) on selected macroeconomic indicators of Balkan Economies, such as growth, unemployment, real interest rate, real exchange rate, inflation and current account balances by using Swamy Random coefficients models over the period of 2007 and 2018. The results of the study do not provide enough evidence supporting the view that the capital inflows create clear benefits for recipient economies. Instead, in most of the cases, the findings suggest the effects are not homogeneous across sample economies and across flows. Country-specific financial and macroeconomic characteristics help to explain some of these differences. Thus, based on the findings of the study, it is fair to conclude that capital flows are not thought of as a mixed blessing for these economies and the results of the study are consistent with the idea that the impact of capital flows in these countries has been exaggerated; that is, the benefits of capital flows in Balkans have been overemphasized.

Key words: Balkan Economies, Capital flows, FDI, Portfolio investments, macroeconomic indicators, Swamy Random coefficients model.

1. Introduction

Since late 1970s and early 1980s, the world has witnessed a sustained process of financial liberalization and integration, with countries opening their capital accounts and engaging in international financial markets. As a result of these developments, there has been large increases capital flows in both emerging and developed economies.But, it is fair to conclude that the process has been far from smooth.

1 Professor, Anadolu University, Faculty of Economics Administrative Sciences, Department of Economics, 26470-Eskişehir, Turkey;Cell phone: 00(90) 222 335 0585-3373; Fax: 00 (90) 222 335 0585; [email protected]

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8 th INTERNATIONAL SCIENTIFIC CONFERENCE ON CLIMATE CHANGE, ECONOMIC DEVELOPMENT, ENVIRONMENT AND PEOPLE (CCEDEP 2019)





October 24TH, 2019





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As mentioned in Mendoza (2010),Bordo et al. (2010),Agosinet al., (2019),the countries, particularly emerging economies which are short of capital, benefit from foreign capital flows and access to foreign savings, since they have a capacity to create positive effects on the development process of these countries by augmenting domestic savings and contributing to investment, growth, finan-cial sector development, technology transfer, and poverty reduction. However, these effects of capital flows are differing across various types of capital flows, such as foreign direct investment (FDI), equity portfolio investment, bond fi-nance, and commercial bank lending (Goldin and Reinert, 2005).

On the other hand, in a context of highly liberalized markets, when inflows are strong and volatile, difficulties can emerge to preserving macro-economic stability in the recipient economy. The recipient country can also be severely affected by episodes of disruption in cross-border capital flows, especially the sudden interruption of inflows, or outright outflows of foreign capital, i.e., a sudden stop in the financial account. In fact, strong capital in-flows can lead to exchange rate misalignments, credit and asset price boom-and-bust cycles and currency mismatches, and can also make macroeconomic management more difficult because of the more rapid international transmis-sion of shocks and the increased risks of overheating, are subject to sudden stops. As Jeanne (2010) concludes, these can, in turn, trigger strong exchange rate depreciations and banking crises and have long-lasting effects on GDP growth. Capital flows may reinforce the cyclical behaviour of the economy, reduce the policy space available to governments (Ocampo, 2002), and con-tribute to the accumulation of certain macro prudential risks (Cardarelli et al., 2010). This is particularly true in the case of developing countries, as they have fragile institutions, and less effective monetary and fiscal instruments to implement counter-cyclical macroeconomic policies.

Even though foreign capital has played is significant role in the eco-nomic development of developing countries, the role they played are contro-versial. The debate about the role of capital flows goes back to 1950s when capital deficient countries resorted to capital as a major means to support rapid and sustained economic growth. But, it is hard to argue that they have achieved high growth rates. Instead, have been accumulating large external debts and struggling with debt servicing problems.

There are two waves of large capital inflows sweeping through many emerging market economies in the past two decades. The first wave started in the early 1990s and ended with the Asian crisis in 1997. The second one com-menced in 2003, and lasted in 2008 in the wake of the global financial crisis. The foreign direct investment (FDI) flows around the world approached a record $ 1,833 billion in 2007. According to the annual report of the United

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Mustafa ÖzerCapital Flows and MaCroeConoMiC dynaMiCs in Balkan Countries





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Nations Conference on Trade and Development (Unctad), 38% to $ 1,762 billion, driven primarily by mergers and acquisitions, which jumped 67% to more than $ 700 billion. Globally, the developed countries have won the emerging and developing countries first place in the receiving countries since they have captured together 55% of flows. One thing that has not prevented the FDI to developing countries to establish a new record of 765 billion dol-lars. But, among this last group of countries, everyone has not been in the same boat. Africa, as a whole, saw a 7% decline in its flows to $ 54 billion. Like the South American continent (-6% to 121 billion). A trend related to the decline in commodity prices that affected Nigeria, Congo-Brazzaville, the DRC, Brazil, Chile, Colombia or Peru. The depreciation of prices has led to a decline in investments planned by companies in the primary sector as well as a sharp drop in reinvested earnings, observes the United Nations Conference on Trade and Development (UNCTAD).

In contrast, developing Asia, it received ten times more investments (541 billion) with countries on the rise such as Vietnam, Myanmar (formerly Burma) and especially India which ranks tenth in the world of recipient coun-tries. China alone ranks third with $ 136 billion in FDI received. The United States (380 billion) has won first place. As for Europe, Ireland (101 billion) is ahead of the Netherlands (73), Switzerland (69) and France which has gained 9 places with 43 billion FDI received in front of the United Kingdom (40) and Germany (32). If the year 2015 has been a good year, the current year should be less brilliant. UNCTAD forecasts a decline of between 10 and 15% of flows. The fragility of the global economy, the sluggish demand, the lack of growth in the commodity-exporting countries and the decline in multina-tional profits last year at their lowest level since the crisis are all factors be-hind this forecast. According to the UNCTAD 2017 reports, FDI increased substantially in the former Yugoslav Republic of Macedonia and Albania but decreased in Montenegro and Serbia.

This study examines the differential effects of the various capital flows (foreign direct investment, portfolio investment and total capital flows) on macroeconomic variables of Balkan countries.This paper examines the effects of components of gross capital flows (Portfolio, FDI and Total) on selected macroeconomic indicators of Balkan Economies, such as growth, unemployment, real interest rate, real exchange rate, inflation and current account balances by using Swamy Random coefficients models and Konya Panel causality tests over the period of 2007 and 2018. As is well known, domestic resources are inadequate to fund investments for economic growth in these countries. The large financing gap in Balkan countries hinders pub-lic investment and social service delivery, because of low savings, wide sav-

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ing–investment gaps and chronic budget deficits (Feltenstein and Iwata 2002; Ndikumana2014). Thus, by examining the effects of different types of capi-tal flows across countries will help to develop a more accurate understanding of financial openness and its macroeconomic effects and therefore better informed policy (Pels, 2010).

The results of the study do not provide enough evidence supporting the view that the capital inflows create clear benefits for Balkan economies. Instead, in most of the cases, the findings suggest the effects are not homo-geneous across sample economies, in terms of social, economic, political, and methodological composition and across flows. Country-specific financial and macroeconomic characteristics help to explain some of these differences.

This paper will proceed as follows. Some approaches to capital flows are presented in Section 2.The Capital flows in Balkans’ countriesis presented in Section 3. The methodology of study and data areexplained in Section 4 and the results are presented in Section 5. Finally, Section 6 concludes.

2. Typesof capitalflows

Many low-income countries do not have adequate domestic resourc-es to fund investment for economic development. As is emphasized in Ndi-kumana(2014) orFeltensteinand Iwata (2002),for instance, the importance of foreign capital has been compounded by low savings and chronic budget deficits. Because of the drying-up of commercial bank lending to developing economies in the 1980s, the many countries started to ease restrictions, of-fering tax incentives and subsidies to attract foreign capital [Aitken-Harrison, 1999],[World Bank, 1997]. The result is an increase in the amount capital to the emerging markets.

Capital flows are defined as the movement of money for the pur-poses of investment, trade or commercial production,including capital flows within companies, in the form of investment capital, capital expenditure in operations and research and development (R & D). Individual investors di-rect their savings and investment capital to securities, such as stocks, bonds, and mutual funds. When flows are large scale, government intervention is needed to direct capital flows from tax revenues to programs and operations and through trade with other countries and currencies.

There are three main types of international capital flows: foreign portfolio investment (FPI), foreign direct investment (FDI), and debt. Capi-tal flows that have equity-like characteristics (i.e. FDI and FPIs) are assumed to be more stable and less subject to reversals. When the foreign investment

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is less than 10% of the shares it is, therefore, a portfolio investment (the purpose of the portfolio investments is to diversify the securities worldwide and to spread the risks, it is very often a question of speculative investments), those carried out by internal growth within the same transnational firm be-tween the head office and its various establishments located abroad (subsid-iaries, representative offices, etc.): Creation of new units ex-nihilo; extension of the production capacity of existing units; financial flows between institu-tions (capital increase, loans and advances by the parent company, etc.); lo-cal reinvestment of profits. FDI provides more benefits than other types of financial flows because it allows for more direct control of management. In national and international accounting standards, FDI is defined as involving an equity investment of 10% or more. This threshold is now used interna-tionally to distinguish FDI from “portfolio investment”. The FPI is different from the FDI in that it lacks the element of lasting interest and control. The third type of foreign investment, debt flows, consisting of bank loans and bonds, is considered more volatile.

FDI is supposed to boost employment, exports, and thus be a source of growth and productivity gains. It is also a vector of technology transfer, which is crucial for the take-off and recovery of industries towards produc-tions with higher technological or high-end content. According to Bosworth and Collins (1999), FDI produces a remarkable increase in domestic invest-ment when portfolio inflows appear to have almost no appreciable effect on investment and loans have a mixed impact.

The international crisis of 2008 has brought about very significant changes in the volatility of capital flows to emerging markets. For economic authorities, these have become a challenge because of the negative effects that may affect key macroeconomic variables, such as the exchange rate, mac-roeconomic and financial stability, and growth [Arias, 2013]. Indeed, a slow-down in capital flows could have significant repercussions on the real econ-omy, through financial channels (because of cross-border banking flows)or employment (especially related to foreign direct investment), and how policy can respond more effectively.

3. CapitalflowsinBalkans’countries

It must be said that Eastern Europe in the last 25 years has been marked by profound changes. Indeed, because of the general scarcity of cap-ital, relatively high levels of initial human capital and the institutional anchor-

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ing of potential EU membership, there has been a rapid increase in private capital inflows. This is not without consequence, as in addition to increasing investment and employment and providing financing for external current account imbal-ances, they have also increased countries’ exposure to external shocks.

Between 2000 and 2007, the Western Balkan countries are experienc-ing a period of economic “catch-up”, justified by the increase of the gross domestic product. The growth rate of Albania in 2001 was 7.3%, while in the same year Bosnia recorded a rate of 5% and Croatia 4.4%[Mollet and Richet, 2003]. Rates most enviable for most Western countries: between 2001 and 2008, the average growth rate for Europe at 15, for example, did not exceed 2% (to fall around 1% after the break-up of crisis) [Balcerowicz, 2012]. Domes-tic demand was fueled by this positive economic performance, but especially by a considerable growth in private credit, which justified these high growth rates, but which at the same time fueled the trade deficit.Indeed, the “catch-up” label obscures two fundamental aspects intrinsically linked to this growth: financial dependence and therefore a growing indebtedness towards European banks, as well as the acceleration of economic dependence, already begun during the 1960s, which now was achieved mainly through FDI [Samary, 2009].

Few documents have explicitly addressed capital flows to the Western Balkans. The EU and EFTA countries (European Free Trade Agreement: Ice-land, Liechtenstein, Norway and Switzerland) are the largest investors in the Balkans, accounting for more than 70% of FDI in all countries except Bosnia Herzegovina. According to Hunya and Schwarzhappel (2016), most of the FDI in Western Balkan countries, with the exception of Kosovo, comes from the EU. For example, Serbia (Bosnia and Herzegovina, Montenegro), Turkey (Albania, Kosovo, Macedonia), Canada (Albania), Norway (Serbia), Russia (Montenegro, Bosnia and Herzegovina, Serbia), and Switzerland (entire re-gion). Indeed, after the global financial crisis of 2008-2009, inflows of FDI into Western Balkan countries accelerated. As a result, the cumulative stock of inward FDI relative to GDP exceeds the average of economies in transi-tion. Montenegro is the absolute leader, with FDI stock in 2016 accounting for 113.0% of GDP.

Concern has aroused that international capital mobility may be det-rimental to macroeconomic stability. In particular, high capital inflows can have undesirable macroeconomic effects: rapid monetary expansion, infla-tionary pressures, appreciation of the real exchange rate and rise in current account deficits. Moreover, in the presence of a fixed exchange rate, the loss of competitiveness and external imbalances can alter confidence in the sus-tainability of the exchange rate regime and precipitate a financial crisis. Spec-ulative attacks on exchange rates, instability of financing, increased volatility

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of interest rates, market dictates of economic policies, the free movement of capital around the world seem to bring only misfortunes and constraints. Ac-cording to Calvo et al. (2008), the sudden cessation of capital flows, seen as the starting point for banking crises, is more likely in countries that rely more on short-term bank financing or portfolio investments only on FDI.

Caballero (2010) finds that loan flows followed by portfolio investment flows are strongly associated with the triggering of banking crises. Milesi-Ferretti and Tille (2011) explain that FDI, by its long-term nature, is not very vulnerable to liquidity problems.

Bank flows, on the other hand, are more sensitive to shocks: the prob-lems of maturity imbalance (“Maturity Mismatch”) characterizing the banks ex-pose them to a risk of bank panic (“bank runs”). As for portfolio investments, they represent an intermediate case: although they are more volatile than FDI, they do not have as much systemic implication as to the leakage of bank liquidity. For Artus and Cartapanis (2008), strong international mobility of capital deprives the economy of any possibility of stabilization of production or inflation.

Brewer (1993) has empirically shown that there is a negative corre-lation between economic growth and FDI. Such a correlation is up to the domination exerted by the foreign firm that it can discourage the local firm to develop its own R & D activity, it means that FDI can have a negative ef-fect on economic growth.The experience of some emerging economies has shown that the real appreciation of the exchange rate induced by the influx of capital could not only discourage investment in the sector exposed to in-ternational competition but also destabilize macroeconomic management as a whole [Corden, 1994].

In theory, the free movement of capital does not have only disadvan-tages. It is even supposed to facilitate the smooth running of economies. The first expected benefit is to allow the use of available capital where it is needed most, what economists call the optimal allocation of capital. If the capital can leave their home territory, they have a priori the possibility of financing useful and effective projects all over the world. Thus, countries that can offer good investment projects, but do not have enough domestic capital, can still launch these new investments and support their growth. This investment opportunity at the global level also allows capital holders to diversify their risks by placing their resources in different locations, rather than focusing on one country.

Gabrisch (2015) used Granger causality tests to examine the linkages between changes in the real exchange rate and net capital inflows in the West-ern Balkans and found that changes in net capital flows precede changes in costs. relative units of labor. The injection of capital from abroad (notably via new foreign direct investment) played a key role in the development of new

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businesses, or even new sectors, and the possibility for dismissed workers in declining areas to be absorbed by new economic activities, delayed transition and low FDI have disadvantaged the Western Balkans in their diversification relative to the sectors traditional [Kovtun et al., 2014].

4. Methodology and Data

In this study, the effects of capital different capital flows (FDI, FDI+Portfolio investment (FDIPORT-Total) and Portfolio investment (PORT) on Current Account Balance (CAD), GDP, CPI, GDP Growth Rate (GDPRATE), Per Capita GDP (PERGDP), Real Exchange Rate (REER), Interest rate (RIR) and Unemployment Rate (UNEMOP) by using annual for countries of Serbia (1), Bosnia and Herzegovina (2), Bulgaria (3), Romania (4), Macedonia (5), Croatia (6), Moldovia (7), Montenegro (8), Albania (9) and Turkey (10) over the period of 2007 and 2018. Data is extracted from Datastream.

To obtain the results, two step procedure is adopted. In the first step, the existence of cross sectional dependence is tested in terms of both de-pendent and independent variables. In the second, to estimate the effects across the countries, the Random Coefficients Regression developed by Swa-my (1970) is used. By estimating these Random Coefficients Regression, one can obtain different coefficients for each cross-sectional unit (country) in the sample date. Regression equation is as below:

do not have enough domestic capital, can still launch these new investments and support their growth. This investment opportunity at the global level also allows capital holders to diversify their risks by placing their resources in different locations, rather than focusing on one country. Gabrisch (2015) used Granger causality tests to examine the linkages between changes in the real exchange rate and net capital inflows in the Western Balkans and found that changes in net capital flows precede changes in costs. relative units of labor. The injection of capital from abroad (notably via new foreign direct investment) played a key role in the development of new businesses, or even new sectors, and the possibility for dismissed workers in declining areas to be absorbed by new economic activities, delayed transition and low FDI have disadvantaged the Western Balkans in their diversification relative to the sectors traditional [Kovtun et al., 2014].

1. Methodology and Data In this study, the effects of capital different capital flows (FDI, FDI+Portfolio investment (FDIPORT-Total) and Portfolio investment (PORT) on Current Account Balance (CAD), GDP, CPI, GDP Growth Rate (GDPRATE), Per Capita GDP (PERGDP), Real Exchange Rate (REER), Interest rate (RIR) and Unemployment Rate (UNEMOP) by using annual for countries of Serbia (1), Bosnia and Herzegovina (2), Bulgaria (3), Romania (4), Macedonia (5), Croatia (6), Moldovia (7), Montenegro (8), Albania (9) and Turkey (10) over the period of 2007 and 2018. Data is extracted from Datastream.

To obtain the results, two step procedure is adopted. In the first step, the existence of cross sectional dependence is tested in terms of both dependent and independent variables. In the second, to estimate the effects across the countries, the Random Coefficients Regression developed by Swamy (1970) is used. By estimating these Random Coefficients Regression, one can obtain different coefficients for each cross-sectional unit (country) in the sample date. Regression equation is as below:

(1) Where yirepresents the dependent variable; Xi the independent variable; uiis the model’s error term. βi included in Equation (1) represents the coefficients vector at k × 1 dimension for each cross-section and defined as

(2) Based on the information provided in Equation (2), the equation can be rewritten as below;

(3)

Even though the parameter estimates are important step of estimating above regression, the majos advantage of estimating model is to determine whether or not the coefficients vary across cross-sectional unit. To determine this, the following test statistic developed by the study of Swamy (1970, p. 319) is used:

(4) Hβ test statistic has asymptotic χ2 distribution at k(N-1) degree of freedom. The following hypotheses are tested in order to determine whether or not the Balkan regionhas a single common coefficient.

(1)

Where yirepresents the dependent variable; Xi the independent vari-able; uiis the model’s error term. βi included in Equation (1) represents the coefficients vector at k × 1 dimension for each cross-section and defined as






(3)



(2)Based on the information provided in Equation (2), the equation can

be rewritten as below;






(3)



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(3)Even though the parameter estimates are important step of estimat-

ing above regression, the majos advantage of estimating model is to deter-mine whether or not the coefficients vary across cross-sectional unit. To de-termine this, the following test statistic developed by the study of Swamy (1970, p. 319) is used:






(3)



(4)

Hβ test statistic has asymptotic χ2 distribution at k(N-1) degree of freedom. The following hypotheses are tested in order to determine whether or not the Balkan regionhas a single common coefficient.

H0: (All region has a single common coefficient) H1: (Every country has a different coefficient)

When the calculated value of Hβ statistic is greater than the table critical value of χ2, the null hypothesis is rejected and concluded that eachcountry has different coefficient.

2. Empirical Results

To obtain the country-specific effects, we first determine the existence cross-sectional dependence among the countries in terms of both dependent and independent variables. For this purpose, we cross-sectional dependence tests of Bias Corrected Scaled LM developed by Baltagi, Feng, & Kao, (2012), LM test of Breusch and Pagan (1980); Pesaran (2004) CD test and Pesaran, Ullah and Yamagata (2008) CD-LM. The following hypotheses are tested in these tests:

H0: There exists a cross-sectional dependence. H1: There does not exist a cross-sectional dependence.

Table 1 presents the results of cross-sectional dependence tests for the dependent variables.

Table 1: The results of cross-sectional dependence tests for the dependent variables

Variable Name CAD CPI

Test Statistic

Degree of Freedom Probability Statistic

Degree of Freedom Probability

Breusch-Pagan LM 175.0137 45 0.0000 225.5137 45 0.0000 Paseran CD-LM 12.65055 0.0000 17.97372 0.0000 Bias Corrected scaled LM 12.19600 0.0000 17.51918 0.0000

Paseran CD 9.337278 0.0000 12.95209 0.0000 Variable Name GDP GDPRATE

Test Statistic

Degree of Freedom Probability Statistic



Paseran CD 18.45965 0.0000 13.85819 0.0000 Variable Name PERGDP REER

Test Test statistics


Test statistics



Paseran CD 19.93199 0.0000 4.426197 0.0000 Variable Name RIR UNEMP

When the calculated value of Hβ statistic is greater than the table critical value of χ2, the null hypothesis is rejected and concluded that eachcountry has dif-ferent coefficient.

5. Empirical Results

To obtain the country-specific effects, we first determine the exis-tence cross-sectional dependence among the countries in terms of both de-pendent and independent variables. For this purpose, we cross-sectional de-pendence tests of Bias Corrected Scaled LM developed by Baltagi, Feng, & Kao, (2012), LM test of Breusch and Pagan (1980); Pesaran (2004) CD test and Pesaran, Ullah and Yamagata (2008) CD-LM. The following hypotheses are tested in these tests:

H0: There exists a cross-sectional dependence.H1: There does not exist a cross-sectional dependence.

Table 1 presents the results of cross-sectional dependence tests for the dependent variables.

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Table 1: The results of cross-sectional dependence tests for the dependent variables

Variable Name CAD CPI

Test Statistic Degree of Freedom Probability Statistic Degree of

Freedom Probability

Breusch-Pagan LM 175.0137 45 0.0000 225.5137 45 0.0000

Paseran CD-LM 12.65055 0.0000 17.97372 0.0000Bias Corrected scaled LM 12.19600 0.0000 17.51918 0.0000

Paseran CD 9.337278 0.0000 12.95209 0.0000Variable Name GDP GDPRATE


Freedom Probability

Breusch-Pagan LM 392.8351 45 0.0000 233.8249 45 0.0000


Paseran CD 18.45965 0.0000 13.85819 0.0000Variable Name PERGDP REER

Test Test statistics

Degree of Freedom Probability Test

statisticsDegree of Freedom Probability

Breusch-Pagan LM 419.4996 45 0.0000 110.8751 45 0.0000


Paseran CD 19.93199 0.0000 4.426197 0.0000Variable Name RIR UNEMP


Freedom Probability

Breusch-Pagan LM 169.9584 45 0.0000 180.2774 45 0.0000


Paseran CD 5.031120 0.0000 7.561383 0.0000

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The results in Table 1 indicates the existence of cross-sectional de-pendence in terms of dependent variables among Balkan countries. It is be-cause of close economic ties and strong social and cultural interactions be-tween countries. Table 2 displays the results of cross-sectional dependence tests for the independent variables.

Tablo 2: The results of cross-sectional dependence tests for the independent variables

Variable Name FDI FDIPORT (TOTAL)


Freedom Probability

Breusch-Pagan LM 153.2168 45 0.0000 116.6461 45 0.0000

Paseran CD-LM 10.35296 0.0000 6.498067 0.0000

Bias Cor-rected scaled LM

9.898414 0.0000 6.043522 0.0000

Paseran CD 8.713412 0.0000 7.723785 0.0000

Variable Name PORTFOLIO

Test Statistic Degree of Freedom

Prob-ability

Breusch-Pagan LM 66.07545 45 0.0220

Paseran CD-LM 1.167455 0.2430

Bias Cor-rected scaled LM

0.712910 0.4759

Paseran CD 2.208947 0.0272

The results presented in Table 2 also provide evidences of cross-sectional dependence in independent variables indicating that the any shock affecting a country or originated in one country will affect the region as a whole. Thus, these results should be taken into account of estimating the re-lations between different forms of capital flows and selected macroeconomic variables of region’s countries. In other words, Random Coefficient Regres-sion Model can be used to estimate the coefficients. Following regressions are estimated.

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(5)

(6)

(7)

After estimating the above models, we carry out two different tests: overall significance of model and whether or not coefficients of β, δ and α are varying across countries. Table 3 presents the results of the estimates of FDI on CAD.

Table 3: The resultsof the estimates of FDI on CAD

(5)

(6)

(7)

After estimating the above models, we carry out two different tests: overall significance of model and whether or not coefficients of β, δ and α are varying across countries. Table 3 presents the results of the estimates of FDI on CAD.

Table 3: The resultsof the estimates of FDI on CAD

The results in Table 3 show that the effect of FDI on CAD is statistical significant (Wald Chi(2) test) and the effects are varying country to country in the sample. Thus, Table 4 displays these country varying effects of FDI on CAD.

Table 4: Group-specificcoefficients (CAD,FDI)

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The results in Table 3 show that the effect of FDI on CAD is sta-tistical significant (Wald Chi(2) test) and the effects are varying country to country in the sample. Thus, Table 4 displays these country varying effects of FDI on CAD.

Table 4: Group-specificcoefficients (CAD,FDI)

Serbia

fdi_ -1.067043* .3458167 -3.09 0.002 -1.744831 -.3892549

_cons -7.31e+08 1.04e+09 -0.71 0.481 -2.76e+09 1.30e+09

Bosnia and Herzegovinafdi_ -.6309837* .2883915 -2.19 0.029 -1.196221 -.0657466

_cons -9.09e+08* 1.99e+08 -4.57 0.000 -1.30e+09 -5.19e+08

Bulgariafdi_ -1.136266* .1580843 -7.19 0.000 -1.446105 -.826426

_cons 2.63e+09* 7.76e+08 3.39 0.001 1.11e+09 4.16e+09

Romaniafdi_ -1.589494* .3202661 -4.96 0.000 -2.217204 -.9617842

_cons -1.03e+08 1.99e+09 -0.05 0.958 -4.00e+09 3.79e+09

Macedoniafdi_ -.7756969* .3339956 -2.32 0.020 -1.430316 -.1210776

_cons -1.32e+07 1.46e+08 -0.09 0.928 -3.00e+08 2.74e+08

Croatiafdi_ .1127591 .2327383 0.48 0.628 -.3433996 .5689178

_cons -5.08e+08 5.81e+08 -0.87 0.382 -1.65e+09 6.31e+08

Moldovafdi_ -.7973324* .313252 -2.55 0.011 -1.411295 -.1833697

_cons -3.93e+08* 1.03e+08 -3.82 0.000 -5.95e+08 -1.92e+08

Montenegrofdi_ -.8490781* .31189 -2.72 0.006 -1.460371 -.2377849

_cons -3.25e+08 2.20e+08 -1.48 0.139 -7.56e+08 1.06e+08

Albaniafdi_ -.9162189* .3400483 -2.69 0.007 -1.582701 -.2497364

_cons -3.25e+08 2.99e+08 -1.09 0.278 -9.11e+08 2.62e+08

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Turkeyfdi_ -2.261861* .9896389 -2.29 0.022 -4.201517 -.3222039

_cons 0.0000 1.86e+10 0.00 0.999 -3.64e+10 3.64e+10

* significant at %5.

According to results in Table 4, the effect of FDI on CAD are nega-tive in all countries. The largest negative effect is in Turkey and the smallest effect in Bosnia and Herzegovina. The effect is not statistically significant in Croatia.

The Swamy regressions estimating the effects of FDI on CPI, GDP, GDPrate, PERGDP, REER, RIR and UNEMP do not provide any signifi-cant evidences. Therefore, there is no country–specific estimates.

Table 5: The results of Random Coefficients Regression between FDIPORT and CAD

The results in Table 5 indicate statistically significant effects of FDI-PORT on CAD (Wald chi2 (1)) and the effects differ across the countries (Test of parameter constancy) and Table 6 includes these varying effects.

Table 6: Group-specificcoefficients (CAD, FDIPORT)

Serbiafdiport_ -.3695896 .2854594 -1.29 0.195 -.9290798 .1899006

_cons -2.93e+09* 1.02e+09 -2.88 0.004 -4.92e+09 -9.32e+08

Bosnia and Herzegovinafdiport_ -.5231451* .2646673 -1.98 0.048 -1.041883 -.0044068

_cons -9.28e+08* 2.04e+08 -4.56 0.000 -1.33e+09 -5.29e+08

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Bulgariafdiport_ -.9217284* .1797722 -5.13 0.000 -1.274075 -.5693814

_cons 2.37e+09* 1.04e+09 2.27 0.023 3.26e+08 4.42e+09

Romaniafdiport_ -1.019787* .2550557 -4.00 0.000 -1.519687 -.5198868

_cons -5.56e+09* 1.64e+09 -3.39 0.001 -8.78e+09 -2.34e+09

Macedoniafdiport_ -.4323352** .2369034 -1.82 0.068 -.8966573 .0319869

_cons -2.13e+08** 1.11e+08 -1.92 0.055 -4.32e+08 4867475

Croatiafdiport_ .3757056* .1142338 3.29 0.001 .1518116 .5995997

_cons -1.02e+09 3.16e+08 -3.23 0.001 -1.64e+09 -4.01e+08

Moldovafdiport_ -.6488131* .2695613 -2.41 0.016 -1.177143 -.1204827

_cons -4.41e+08* 9.36e+07 -4.71 0.000 -6.24e+08 -2.57e+08

Montenegrofdiport_ -.68118* .256799 -2.65 0.008 -1.184497 -.1778633

_cons -4.89e+08* 1.83e+08 -2.67 0.008 -8.48e+08 -1.30e+08

Albaniafdiport_ -.4797716** .2731828 -1.76 0.079 -1.0152 .0556568

_cons -8.06e+08* 2.55e+08 -3.16 0.002 -1.31e+09 -3.07e+08

Turkeyfdiport_ -.1159069 .2222759 -0.52 0.602 -.5515597 .3197458

_cons 0.00 4.29e+09 0.00 0.999 -8.40e+09 8.40e+09

*,** significant a %5 and %10 level of significance respectively.

According to results in Table 6, except for Croatia, effects of FDI-PORT on CAD significant and negative. But, these effects are not statisti-cally significant for Serbia and Turkey. But there are no significant relations between FDIPORT and CPI, GDP, GDPrate, PERGDP, REER, RIR and UNEMP. Moreover, there are no country-specific effects of portfolio invest-ment on any of the macroeconomic variables in the region.

The overall empirical results show that except for the FDI, the coun-tries’ macroeconomic variables in the region is not affected by portfolio in-vestments. Also, the effect of FDI is limited. Thus, it is hard to claim that

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different forms of capital flows have affected the dynamics of these regions’ economies. Especially not finding any significant relations between forms of capital flows and economic growth should be read and understood carefully.

6. Conclusion

This study tries to explore the effects of different forms of capital flows into Balkan region on the regions’ economies by employing panel esti-mates of Swamy Random coefficients regression.Even though the results of cross-sectional dependence test indicate regional dependence, most of the results of Swamy regressions fail to provide significant and country specific effects of different forms of capital flows on the countries’ macroeconomic variables, such as current account deficit, real exchange rate, growth rate etc. These results seem to support the view that capital flows to emerging mar-kets are known to be pro-cyclical and volatile and effects are not thought of mixed blessing. It seems that boom and bust financial cycles in these coun-tries have frequently been accompanied by huge inflows of foreign capital and their subsequent leave.

Therefore, understanding the behaviour and effects of capital flows has become an urgent need for the policymakers of this regions’ countries. Also, it should be remembered that while capital inflows often help deliver the economic benefits of increased financial integration, they also create im-portant challenges for policymakers because of their potential to generate over-heating, loss of competitiveness, and increased vulnerability to crisis.Against this background, the challenge for policymakers lies in reaping the benefits of capital flows while managing these risks caused by these flows. If they have to attract the foreign capital flows to region, they have to find ways of encouraging the FDI into their economies. Moreover, they have to adopt capital controlsand some macro prudential policies (other restrictions on credit flows) to prevent negative effects of these flows, particularly during the upswing to prevent credit booms and financial instability, such as accu-mulating foreign reserves by central banks to prevent excessive exchange rate misalignments and build up buffers against eventual sudden stops [Gosh et al., 2012].International capital flows can create significant financial instability in emerging economies.

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27

Global Trends, Forecasts and Economic Challenges up until 2035

Ferenc Szávai1

Abstract: In his 1931 book, Brave New World, Aldous Huxley depicts the state of humanity in future London as being carefree, healthy and technologically advanced. There are no wars, nor is there poverty, and everyone is happy. It could not have been any farther from reality, though. Several prognostications have been made public in the March 2, 1940 edition of the Külügyi Szemle, according to which the world’s oil reserves would be completely exhausted by the year 2000. As we now know, it has not proved to be the case. We have a similar case with the global trends of 2015, as we could witness the economic acceleration of the Asian region. By 2025 a slow-down of growth, signs of crisis, and a race between population and resources has been prognosticated. The tendency of crisis after crisis will be characteristic, which propels us to act globally for the improvement of future economy. By 2035 the characteristic tendencies involve the scarcity of resources, concerning which there are several scenarios. Our aim is to present and illustrate them. At the same time we should keep in mind that prediction in general is an uncertain matter. Some unexpected and unforseen „black swan” can always happen. Hence, every forecast, which tries to determine the major geopolitical trends shaping the world order in 2035, is subject to a great deal of uncertainty.

Keywords: limits of growth, race between population and resources, crisis after crisis, global scenarios

1. Introduction

Brave New World is Aldous Huxley’s novel which he wrote in 1931 and published a year later. The opus, which is in fact a dystopia (negative utopia), is Huxley’s most famous and lasting creation. The writing was inspired by a curiosity about what the foreseeable and not so foreseeable future may hold for us. The struggle for resources, and their ill-structured distribution raise many questions, that are aptly illustrated in the following picture:

1 Károli Gáspár University of the Reformed Church in Hungary, Budapest. e-mail: [email protected], and Kaposvár University, Hungary. e-mail: [email protected].; pro-fessor

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Figure 1: Atlantic Council: „Global Risks 2035: The Search for a New Normal”. In: Atlantic Council Strategy Papers. 6. old.

In the world of the 26th century London where the story unfolds propagation, genetics and hypnosis is greatly advanced completely changing human society. Interestingly, historical castes show up as well in the story. Hu-manity is carefree, healthy and technologically advanced. There is no war, no poverty and everyone is constantly happy. But their elimination from human existence came at the price of losing much more: family, cultural diversity, arts, literature, science, religion and philosophy. This society is thoroughly he-donistic: it focuses solely on pleasure attained from unlimited sex and drugs. [Aldous Huxley, 1932]

Contrary to many optimistic economic forecasts we believe that eco-nomic growth and the structural change it brings about is indeed the engine and driving force of development which is plainly manifested in structural change. However, besides other factors, economic crisis is also part of the process just as economic boom is. [Moderne Wirtschaftsgeschichte, 2006]

2. The Great Depression

From the viewpoint of crises research, and historical perspective, we can observe a gradually recovering European economy in the 1920s in which U.S. lending undoubtedly played a huge role. Around 1928 American bankers

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began to cancel their European loans, and as a result net capital import fell to one-fifth within a year. [ Berend T. Iván, 2008] These had serious economic impacts: liquidity problems in many areas, business relying on inflating prices running out of money. In the meantime prices fell further, putting many so-cial classes in a difficult position. In an integrated economy where the sectors are closely intertwined these kind of difficulties have a snowball effect on corporate bankruptcies.

On the securities market the signs of economic instability were al-ready present. In the 1920s speculative fever swept through the USA ac-companied by an economic boom: investments increased job opportunities, increased employment and rising wages widened domestic market outlets, which in turn induced recurring investments by equity owners. The main responsibility for the outbreak of the crisis lies with the USA, the explana-tion for its spreading is shared responsibility, its cause was probably the lack of willingness for international cooperation. The crisis erupted following the ’great bull market’ on the New York stock exchange, the panic selling and the falling of stock prices, while at the same time bank credits were frozen. The crisis spread further, in May 1931 the Viennese Creditanstalt stops payments.

Its spreading was facilitated by the following facts: American inves-tors no longer make new investments in Europe, sell previous ones, bank failures, panic spreading further, Great Britain abandons the gold standard, others follow, economic nationalism (restrictions on foreign exchange trad-ing, quotas), decrease in foreign trade, low, depressed prices on the com-modity market, unemployment, reparation, the issue of war loans, Germany, Young and Dawes plans, lack of international cooperation [Berend T. Iván, 1987 and Hansen, E. Damsgaard, 2001]

There is no general consensus on the immediate cause of the out-break. The explanations pointed to monetary causes, drastic decrease in mon-ey supply (first in the USA, later elsewhere as well), and the ’material sector’: decrease in consumption and investment expenditures (multiplicative effect). But the initial agricultural depression, the gold standard system: the scanti-ness of the world’s gold reserve, and its uneven distribution, all had a role in it.

Most scholars, like Rondo Cameron, propose a comprehensive ap-proach to the matter. It is explained by several factors, monetary and non-monetary systems and their effects, such as, the peace treatises of the First World War, the collapse of the gold standard system, the chaos in commerce, or nationalist economic policies.

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In his theory the Russian Kondratiev raises attention to the pecu-liar movements of long economic cycles, and points out that those crises of overproduction are especially dangerous which happen at the bottom of downward going cycles. [Cameron, 1994]

Subsequent and current judgements and assessments of the crisis, however, are formulated on a much wider theoretical and analytic base, such as, researches on international currency movements, process of financial technologies, growth in the previous era, extent of research and develop-ment, complexity of the connections of liquidity, comparisons of different crises.

According to Charles Kindleberger, it is frequently held that the stock market crash had nothing to do with the ensuing severe economic downturn. Mainly because the price decline has spread to the securities markets of other countries, but also because the tightening of bank loans has driven down prices on the commodity exchange as well. Falling prices worldwide quickly spread from the securities to the commodities. [Kaposi, 1998]

Professional accounts of the world economic crisis show great differ-ences, which offer a wide variety of explanations. The most famous econo-mist of his era, Károly Polányi, based his explanation on the institutional transformation of the economic system. In his work, The Great Transformation, he wrote the following:

”The breakdown of the international gold standard was the in-visible link between the disintegration of world economy since the turn of the century and the transformation of a whole civilization in the thirties.” (p.20)

He thought that the First World War has forever shattered the lib-eral institutional system of world trade, and had a detrimental effect in the restoration of old institutions, which were unable to fulfill their role in the new environment. While this system could be stabilized for a short period of time, it „created a monetary system, which through a sequence of currency crises, has ultimately led to the great collapse”. [Kaposi, 1998]

Jenő Varga claimed that the overproduction crisis typical of capital-ism is rooted in monocapitalism which makes it all the more serious.

Regardless of the different explanations, world economy was already an increasingly integrated economy in the 30s, which meant that the econom-ic processes taking place in various parts of the world were immediately felt in other parts as well, although how and with what strength also depended

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on the social and economic structure of the country in question. [Berend T., 1987] Samuelson also spoke of the „whole series of historical coincidences.” [Kaposi, 1998]

John Kenneth Galbraith offered one of the most intriguing explana-tion in his now famous book, The Great Crash 1929, first published in 1954 (on the 25th anniversary of the depression), and republished many times since then. Humour and irony characterize the ’psyche’ behind the specula-tive stock market bubble of 1929. [Galbraith, 1955] During the long and difficult years of the Great Depression, 1929 became a mystical year in the eyes of people. People still believed that they could somehow go back into 1929 when everything was fine. He asks: what caused the ’speculative orgy’ in 1928 and 1929? In his view cheap credit was not that important. What really mattered was the ’mood’: pervasive self-confidence, optimism, the conviction that ordinary people could get rich too, faith in the leaders, and in good inten-tions. It was characterized by large amount of savings and losing ’immunity’ against the consequences of speculation (although there were downturns, they were always followed by upswings)

Galbraith asserted that the American economy had five ’weak points’, which had a prominent role in the prolongation and depth of recession: an imbalance in income distribution, bad corporate structures, bad bank struc-tures, foreign trade imbalance, and poor state of economic intelligence [Gal-braith, 1955]

3. The Financial Crisis of 2008

The 2007 American mortgage market crisis, which spread into the sphere of real economy and went global brought to surface the institutional and functional shortcomings of the Economic and Monetary Union within the European Union. The U. S. overconsumption was financed by China’s savings.

The starting point: the real estate mortgage market, just as Galbraith had previously said. The result: several trillion dollars loss across the world, which not even the market allocation of Chinese savings could have thwarted.

It is still debated what caused this devastating financial crisis. Scholars also debate how far to go back in time in their explanation, or whether past crises have any relevance in understanding present crises. At any rate, the mortgage bond market revealed in Michael Lewis’ Liar’s Poker was a key in-gredient in the 2008 crisis. [Lewis, 2010] On the other hand money was cheap

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(creditability was no longer checked), which has led to a boom in housing demand with rising house prices.

Why is it that the present crisis erupted in the U.S. just as the previous one in 1929? The answer to that is that the US went the farthest in financial innovations which attracted most customers with any measure of creditabil-ity to the market. Yet they were unable to get accurate information on the real creditability of borrowers. With the repeated encumbrance of the mort-gage package very complicated securities appeared on the market. The U.S. shadow banking system (investment funds, hedge funds) may also had a part in it. They relied mainly on the efficient market hypothesis for defence, and applied the modern portfolio theory. Risking good morals and greed have also played a part.

The important moral to be drawn here is that the comparison of the current crisis with the 1929-1933 world crisis may lead to erroneous conclu-sions, especially because the crisis management back then was far less coordi-nated and market friendly as is today.

Nor could the energy price crises of the 1970s be compared to the crisis of 2008. Since the former made it evident that the structural distor-tions could not be mended with the Keynesian toolset. The single effect of expanding aggregate demand is stagflation.

Furthermore, during the 1997-1999 foreign currency crises a new model of monetary crisis has emerged where the fundamentals, that is, the basic growth and balance indicators of the national economy no longer played a significant role.

’Casino Capitalism’ the blind gaming instinct of money dealers is a sentiment widely shared by most analysts. Irresponsible financial policy and banker mentality of seeking high profit. [Sinn, 2010]

In the 2008 financial crisis the loss and depreciation of banks and insurance companies reached the 1,74 trillion dollars or 1,24 trillion euros by the 1st of February 2010, which instantly prompted state funded bail-outs. [Sinn, 2010]

No matter how, but in agreement with the analysts who say that the main cause of the crisis was the immodesty of the economic actors involved, Raghuram Rajan’s prophecy has come true to the letter.

Many points of Galbraith’s crisis analysis underpins Katalin Botos’ assessment of the 2008 crisis that the first major victim was the housing mar-ket. Afterwards the great social systems had to be curtailed: health, education, library, parks, etc. [Botos, 2011]. Crisis management eliminated with a single

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stroke the decade old results of social policy. The third large victim is the re-organization of the financial sector which will cost a lot of money to the tax payers. Its fourth effect is its international consequence. The capital fleeing because of the erosion of trust should evade risky businesses. [Botos, 2011]

4. The Limits of Growth

At the end of the First World War Clemenceau declared that pe-troleum is the black blood of battles which will determine the outcome of the war. This came to be true in the Second World War. In the struggle for resources the adversaries were not on an equal footing.

In a 1940 issue of the Hungarian Foreign Policy Review a scholar made a prophecy that by the year 2000 the world’s oil reserve will be exhausted. [Külügyi Szemle, 1940]. As we now know fossil energy resources are still aplenty on the planet.

Economic growth is an important part of economic history. The con-stant result pressure and the theories of growth have shown an exponential development at one time. Some, however, have rang the alarm bell, and began to speak of the limits of growth. [Cameron, 1994]. More and more organi-zations published their own material on global trends for every ten years, or even five years of the future. 2025 is close to us, its subtitle is crisis after crisis.

Jay Forrester was the first to come up with a new model of growth in his World Dynamics of 1971. One year later Dennis Meadows released his own model in his The Limits of Growth. Unlike Forrester, Meadows did not make public his own model equation. He just spoke of simulation results. The model equation appeared only two years later in a separate book under the title of Dynamics of Growth in a Finite World. Meadows’ model was undoubtedly better than Forrester’s as it could address more scientific questions.

Both books, World Dynamics and The Limits of Growth, were a huge hit. Translated into numerous languages, their copies sold by the millions worldwide. Yet because they depicted a scary outcome they were pilloried at the same time. The authors were deliberately conflated with the early advocates of climate change. The books were dismissed as pseudo-science, their authors ridiculed, their deeds lik-ened to that of the Devil. The smear campaign was very successful. Forrester and Meadows were not taken seriously for decades, their forecasts were rejected out of hand. World modelling did not re-ceive any funding. [Szávai, 2016a]. However, as it became clear that

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what they foretold was true the reception of the books substantially changed for the better.

A new philosophical idea emerged concerning economic growth: sustainability. It is now quite clear that we deplete the re-sources of our planet much faster than we can reproduce them. Cur-rent living standards cannot be sustained for long. In this circum-stance it does not help, if we abolish the barriers, it only makes the situation worse. But it would make things even worse if we had to limit the necessary supplies permanently. The faster we act the better the results will be. Unfortunately, there is no sign that we have done anything, or even that we have thought about doing anything.The five main trends for global concern are the following: accelerated

industrialization, fast population growth, wide spread malnutrition, depletion of non-renewable resources, environmental degradation. However, the race between population and resources raises attention to two further problems: the resources are not evenly used up, and the resources are not evenly distrib-uted. [Kerekes, 2016]

When will the world reach the limits to growth? The differ-ent models’ unanimous answer: we are close to reach the limits of growth. The use of all available fossil propellant, mineral resources, drinking water, food source will peak in just one or two generations. The direct consequences of exponential growth as opposed to the finite resources of our planet.One of the greatest challenge lying before humanity is to make the

transition from an exponentially growing society into a society of sustainable growth. This challenge carries with it many problems for us to be solved. The reduction of energy, global warming are signs of a much deeper problem: permanent exponential growth and limited system resources. This problem has no solution at present.

5. Predicting the Past

In 2000 the American National Intelligence Council has published its forecast for 2015. Since 2015 is now past we are in a good position to assess the reality content of past forecasts for the year 2015. The main areas of the driving forces and trends of economic and social processes and changes were the following: demography, natural resources and environment, science and technology, world economy and globalization, national and international governance, the nature of future conflicts, U.S. role.

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The most significant and biggest growth rates will be in the Asian region. Two demographic trends will be the international migration of work-force and urbanization. In 2015 almost half of the population will live in the city. Food production will be adequate, its distribution will not. Malnutrition will increase with 20% in the Sub-Sahara. There will be conflict zones, fam-ine, ethnic conflicts, repressive regimes (North-Korea). Genetically modified foods and plants will emerge.

State-failure can also bring instability and lead to migration. [Szávai, 2018] If we take a look at the great fault-lines of the 20th century, we can see that there were many state dissolutions, even if we just consider the fate of the biggest integrations. The dissolution of the Turkish Empire and the Austro-Hungarian Monarchy was regulated by the peace treaties ending the First World War. The matter was different with the dissolution of the Soviet Union, Czechoslovakia and Yugoslavia, because in their cases the interna-tional laws of the Vienna Convention provided the legal clinging. [Szávai, 2016bc]

The cases of federal state disintegration do not provide a unified methodological solution to succession. Each case is unique, even if there are common traits. The issue over the distribution of properties (archives) and debt, even in the case of a union (integration), the primary rule is that the parties involved must reach an agreement. The 1983 Vienna Convention is not yet in force, and it is quite unlikely that this will change in the foreseeable future. Despite the fact that the agreement is left to the parties, it would be desirable to regulate the process with legal means as well.

However, economic indicators must have an important role in it as is shown in the presented examples. On the other hand, political decisions are also present in the distribution of property and debt, in many cases at the ex-pense of economic means. The regulation of the matter would be a common task, because it would prevent a series of forced decisions and agreements with uncertain (or even contested) outcomes generating disputes just as we can witness their unsettlement even today.

6. Forecasts for 2025

The NIC (2008) forecast for 2025 projects that we are on the brink of many kinds of shortages, in other words, crisis after crisis will ensue. In-creased limitations of raw-material resources with the emergence of new claimers, the main challenge of the international system will be to deal with

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their impact. Accessibility to safe and clean energy resources and managing chronic food and water shortages will be the key for more and more coun-tries in the next 15 to 20 years. Climate change makes the situation of raw-material resources sector even more complicated – its physical effect will be even more serious.

In the next 15 years the amount of emitted gas responsible for the greenhouse effect will depend on the technological advance-ment and political decisions. The greatest danger is that different hot spots may negatively affect each other and could conserve or even deteriorate the situation.At the dawn of the post-oil age nuclear and solar energy will become

more important. At 2025 the world will be in the middle of energy (usage-production) transition. Production of liquid hydrocarbons (crude oil and liq-uid gas) will not be able to fulfil the ever-increasing demand. The level of production in traditional energy providers such as Yemen, Norway, Oman, Columbia, etc. is already decreasing. The number of countries which could significantly increase production is decreasing.

Timing is most important. Current technologies are not capable of replacing traditional energy resources. The new technologies will probably not be commercially viable and widely available until 2025. The current bio-fuel is too expensive, it would increase the food prices and its production would demand the same energy as it produce. The transformation of non-food-based biomass into fuel has a much more promising potential. The pure coal technology is becoming more relevant. If it becomes cost-effective, it could produce a significant amount of energy by 2025 in a well-controlled environment. The creation of a hydrogen-economy needs vast investments. It is estimated that in the next two decades to meet the basic energy needs it will require 3 trillion dollars’ worth of investment. As it is improbable that new forms of energy would rely on current infrastructure, it is to be expected that the production of any new kind of energy would require significant amount of investment. [NIC , 2008]

7. Productivity and Sustainability

Today the spreading of precision agriculture follows a diffuse pat-tern. The digital transformation of agriculture, the use of precision technolo-gies is now very much in progress, although its pace is slower than in other sectors. The UN estimates that 9,7 billion people will live on Earth by 2050.

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These numbers suggest that in order to keep pace agricultural productivity has to increase 50-100% in the next decades. Yet at the same time the size of cultivatable land decreases. [Bögel, 2018].

The key issue: the sustenance of a growing population, and the amount of available energy. This concerns not only industrial production, but agriculture as well, because the latter provides chemical energy stored in food. [Kerényi, 2003].

Today, as the world changes and the world population grow rapidly, more food is needed. Moreover, this is coupled with a territorial restructur-ing. It would be a big problem, if demand and supply were not in conformity. The solution is to be found in some combination of productivity and sustain-ability. [Bögel, 2018].

But uncontrolled population explosion will exceed available resources and destroy the environment. Humanity needs more resources to produce food, at a time when global warming threatening with ecological catastrophe looms large.

While birth rate is high in underdeveloped countries worldwide, in developed industrial countries the population decreases, which means fewer young workers, coupled with people living longer whose sustenance as pen-sioners is increasingly challenging. These population trends will determine the course of the 21st century. In history waning population equals waning power. For Europe this is already reality. International power derives from how big the population is. [Friedman, 2010].

What kind of scenario should we envision for 2030? The American National Intelligence Council projects four probable but hypothetical sce-narios for the year 2030. First, Stalled Engine scenario in which the US and Europe turn inward and globalization stalls. Second, Fusion scenario in which the US and China cooperate leading to worldwide cooperation on global challenges. Third, Gini-Out-of-the-Bottle scenario in which economic inequali-ties dominate. Four, Nonstate World scenario in which nonstate actors take the lead in solving global challenges. [NIC, 2008]

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Figure 2: Atlantic Council: „Global Risks 2035: The Search for a New Normal”. In: Atlantic Council Strategy Papers. 65. old.

8. Concluding Remarks

It is alleged that Niels Bohr Danish physicist once said: „Its difficult to make predictions, especially about the future”. Any prediction concern-ing the main geopolitical trends of the future is beset with uncertainty. It is not only impossible to consider every factor, but there is a chance for a so-called ’black swan’ event to happen too. A ’black swan’ is an unforesee-able event whose extraordinary consequences annul all relevant predictions. [Szőke, 2018] From this perspective economic crisis is a similar event attested by its sudden and unexpected past outbreaks, and which in all likelihood will reoccur sometime in the future.

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REFERENCES

American National Intelligence Council (NIC) (2000). Global Trends 2015: A Trans-formed World.

American National Intelligence Council (NIC) (2008). Global Trends 2025: A Trans-formed World.

Berend T. Iván (2008), Európa gazdasága a 20. században. História Könyvtár Monográfiák 25. MTA TTI Budapest

Berend T. Iván (1987), Válságos évtizedek. A 20. század első fele közép-és kelet-európai történetének interpretációja. III. bővített kiadás. Magvető Kiadó, Bu-dapest.

Bőgel György (2018), Digitális transzformáció a mezőgazdaságban. Magyar Tudo-mány 179. 5. pp. 693-701.

Botos Katalin (2011), Válságmagyarázatok. In.: Botos Katalin: Pénzügypolitika gaz-daságpolitika. Válogatott tanulmányok. Tarsoly Kiadó, Budapest. pp. 259-265.

Cameron Rondo (1994), A világgazdaság rövid története a kőkorszaktól napjainkig. Maecenas Kiadó.

Friedman George (2010), Next 100 years: A Forecast for the 21st Century, Double-day, New York, London, Toronto, Sydney, Auckland.

Galbraith John Kenneth (1955), The Great Crash. Houghton Mifflon, BostonHansen, E. Damsgaard (2001), European Economic History. From mercantilism to

Maastricht and Beyond; Coppenhagen Business School Press.Huxley Aldous (1932), Brave New World. Chatto & Windus - Penguin Books, Lon-

don.Kaposi Zoltán (1998), A XX. század gazdaságtörténete I. 1918-1945. Dialóg Cam-

pus Kiadó. Budapest-Pécs. Kerekes Sándor (2016), A gazdasági, környezeti és társadalmi fenntarthatóság. 25-

91. old. In.: Pénzügyekről másképpen. Fenntarthatóság és közösségi pénzü-gyek. Szerk.: Kerekes Sándor. Wolters Kluwer, Budapest.

Kerényi Attila (2003), Európa természet- és környezetvédelme. (Budapest: Nemzeti Tankönyvkiadó)

Külügyi Szemle 1940. március 2.Lewis, Michael (2010), Lier’s Poker. London: Norton & Company.Meadows, D. et al (2005), A növekedés határai harminc év múltán. Kossuth Kiadó,

Budapest. Móczár József (2010), A globális pénzügyi válság anatómiája és tanulságai. Pénzügyi

Szemle, 4. 727-743. old.Moderne Wirtschaftsgeschichte (2006), Eine Einführung für Historiker und Öko-

nomen. Hrsg.: Gerold Ambrosius, Dietmar Petzina, Werner Plumpe. Olden-bourg Verlag.

Sinn Hans Werner (2010), Kasino Kapitalismus. Wie es zur Finanzkrise kam, und was jetzt zu tun ist. Ullstein. Berlin.

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Szávai Ferenc (2016a), Growth, Development and Progression Crisis after Crisis? ICESBA. Procedia of Economics and Business Administration 3: (1) pp. 70-78. Bucharest.

Szávai Ferenc (2016b), The Methodology of State Succession in the 20th Century. Prague Papers on the History of International Relations: 2. pp. 139-148.

Szávai Ferenc (2016c), Metodologiă izučeniă gosudarstvennoj pravopriemstven-nosti v Evrope XX veka. In: A Kolontari, M E Kolesnikova, N V Krûčkov, S N Malovičko, L P Repina (szerk.). Regional’nyj narrativ imperskoj provincii: Sovremennye metodologičeskie podhody i issledovatel’skie praktiki: Sbornik naučnyh statej. 196 p. Stavropol: Severo-Kavkazskij Federalnij Universitet, pp. 70-75.

Szávai Ferenc Tibor (2018), The Road to Migration: Civilizational and Supply Based Conflicts pp. 9-21. In.: Vision, Gostivar, Republic of Macedonia December, Volumen 3. Issue 2.

Szőke Diana (2018), A világ 2035-ben: geopolitikai előrejelzés. www.geopolitika.hu › 2018/06/06 › a-vilag-2035-ben-geopolitikai-eloreje.

Letöltés ideje 2019. 08. 15

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Summarizing Decade behind us - Economic Development and Transitional Reforms in the Western Balkan Region

Jelena Ignjatovic1, Jovana Kisin2

Abstract: Economic development is considered to be an improvement of the activity of an economy, which implies progressive changes in the socio-economic structure and an increase in living standards, where the pri-mary goal is to reduce poverty, economic inequality and unemployment. This will lead to the strengthening of economic capacities, which will result in improved quality of life. The Western Balkans countries (Albania, Bosnia and Herzegovina, Northern Macedonia, Montenegro and Serbia) have been in the system of transi-tional reforms for more than twenty years, which imply adapting to neoliberal rules of the free market. In each of the mentioned countries, the transition process had its own dynamic of economic development and a model of systemic reforms, with the goal of a more successful and efficient transition from a planned to a market economy. The main goal of this paper is to summarize the economic results of the Western Balkans countries in the period 2008-2018 by reviewing quantitative data, but also to assess economic development through the implementation of economic and systemic reforms, which was turbulent due to the two waves of the global economic crisis. In addition, changes in the unemployment rate and the level of poverty have been analyzed, with particular reference to economic inequality, as the most important indicators of the negative aspects of the transitional process. At the end of the paper, authors provided concluding observations and recommendations.

Key words: economic development, transitional reforms, Western Balkans

1. Introduction

The term economic development implies a set of economic, social and political goals and as such is considered one of the most complex social categories. Economic development implies a package of changes that adapt the social system to the needs of the citizens of a country, while the main goals are to improve living standards and increase freedom of choice. Ac-cordingly, the basic three goals of social development are to increase the production of goods that are necessary for living, to increase the standard of living, and to expand social choice (Bahtic, 2019). On the other hand, the basic goals of economic development are stable economic growth, in-crease of employment, growth of efficiency, openness of economy, even distribution and increase of standard of living. The 1980s, with the strong support of international financial institutions and the process of globaliza-tion of the world economy, led to the development of a neoliberal concept 1 Mlekara Šabac A.D., Šabac, Serbia, [email protected] Educons University, Faculty of Business Economics Sremska Kamenica, Serbia, [email protected]

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of economics, which was based on three basic principles, which advocate the liberalization, privatization and establishment of macroeconomic stability. This concept has quickly become dominant and applied in many developing and transition countries to which it belongs and the countries of the Western Balkans where its implementation occurred during the 1990s. Then William-son defined ten recommendations for the transition process in an economic program formalized by the Washington Consensus, which was supported by proponents of the neoliberal concept of the economy, and above all by in-ternational financial institutions such as International Monetary Fund (IMF) and World Bank (WB). These recommendations are called economic stabi-lization programs and include the establishment of fiscal discipline; redirec-tion of public expenditures (health, education, infrastructure); tax reform (broadening the tax base with moderate tax rates); competitive exchange rate; protection of property rights; market deregulation; interest rate liberalization; privatization of public companies, encouragement of foreign direct invest-ment and liberalization of foreign trade (Wiliamson, 1990).

2. Economic Development of the Western Balkan Region

The Western Balkans’ development perspectives are one of the main topics of today’s European economy, as all countries in the region have based their future on EU membership. This implies the adoption of European standards as a necessary prerequisite for achieving a better quality of life and increasing living standards. The countries of the Western Balkans are at different stages of EU accession process, and this goal is more difficult, although the Union itself today is struggling with internal tensions. Certainly, it is necessary, before integration itself, to take more intensive measures that will accelerate and improve the economic development of the region. The dynamics of the economic development of the Western Balkan countries are different, where they have not yet reached 40% of European develop-ment on average, although over the last ten years the region has grown at an average rate of 1.4% and the European Union by 1% (PKCG, 2016). This further means that the European level will remain unattainable unless economic growth is accelerated, by increasing investment and strengthening competitiveness, which are progressing at a certain pace but still far from the desired level. Although the unemployment rate is still very high, the recov-ery is reflected in job creation mainly in the private sector. In addition, the high level of public debt in most countries in the region remains one of the

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Jelena Ignjatović, Jovana Kisin Summarizing decade behind uS - economic development and tranSitional reformS...





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biggest problems. It is also seen as a brake on economic development, with foreign trade deficits and growing public debt to GDP a particular challenge for Western Balkan countries. On the other hand, raising the standard of living of developed EU economies is a basic expectation of the citizens of transition countries from the process of transition and accession to the Eu-ropean Union (Stanisic, 2016). As one of the basic indicators of economic growth, we analyze GDP trends. In the period 2008-2018, all the countries of the Western Balkans, except Serbia, have a moderate upward trend in GDP. By contrast, Serbia has had consistently strong changes in GDP growth and decline over the observed period, especially as a result of the global economic crisis (Figure 1).

rate liberalization; privatization of public companies, encouragement of foreign direct investment and liberalization of foreign trade (Wiliamson, 1990). 2. Economic Development of the Western Balkan Region

The Western Balkans' development perspectives are one of the main topics of today's European economy, as all countries in the region have based their future on EU membership. This implies the adoption of European standards as a necessary prerequisite for achieving a better quality of life and increasing living standards. The countries of the Western Balkans are at different stages of EU accession process, and this goal is more difficult, although the Union itself today is struggling with internal tensions. Certainly, it is necessary, before integration itself, to take more intensive measures that will accelerate and improve the economic development of the region. The dynamics of the economic development of the Western Balkan countries are different, where they have not yet reached 40% of European development on average, although over the last ten years the region has grown at an average rate of 1.4% and the European Union by 1% (PKCG, 2016). This further means that the European level will remain unattainable unless economic growth is accelerated, by increasing investment and strengthening competitiveness, which are progressing at a certain pace but still far from the desired level. Although the unemployment rate is still very high, the recovery is reflected in job creation mainly in the private sector. In addition, the high level of public debt in most countries in the region remains one of the biggest problems. It is also seen as a brake on economic development, with foreign trade deficits and growing public debt to GDP a particular challenge for Western Balkan countries. On the other hand, raising the standard of living of developed EU economies is a basic expectation of the citizens of transition countries from the process of transition and accession to the European Union (Stanisic, 2016). As one of the basic indicators of economic growth, we analyze GDP trends. In the period 2008-2018, all the countries of the Western Balkans, except Serbia, have a moderate upward trend in GDP. By contrast, Serbia has had consistently strong changes in GDP growth and decline over the observed period, especially as a result of the global economic crisis (Figure 1).

Figure 1. Western Balkan countries, GDP (billion USD), 2008-2018.

Source: https://data.worldbank.org/indicator/

0

10

20

30

40

50

60

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

ALB BH MAC MNE SRB

Figure 1. Western Balkan countries, GDP (billion USD), 2008-2018.Source: https://data.worldbank.org/indicator/

The following Figure 2 presents the GDP growth achieved by the en-tire Western Balkan region3 over the past ten years. After strong growth, the most dramatic was the negative result in 2009. Subsequently, the WB region experienced both a rise and a fall in order to stabilize the situation, achieving continuous growth over the last four years.

3 Note: According to the World Bank database, Western Balkans region is WB6. WB6, beside Albania, Bosnia and Herzegovina, Northern Macedonia, Montenegro and Serbia, in-clude data for Kosovo in the average calculation. Consequently, in this paper all indicators presented for Western Balkan region include Kosovo.

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The following Figure 2 presents the GDP growth achieved by the entire Western Balkan region3 over the past ten years. After strong growth, the most dramatic was the negative result in 2009. Subsequently, the WB region experienced both a rise and a fall in order to stabilize the situation, achieving continuous growth over the last four years.

Figure 2. Western Balkan region, GDP growth (annual), 2008-2018.

Source: Author calculation according to https://data.worldbank.org/indicator/

According to the World Bank's latest regular economic report for the Western Balkans, which analyzes economic developments, projections and economic policies in the countries of the region, economic growth in the Western Balkans has reached 3.8 percent in 2018, mostly supported by increased public spending and despite slower growth in its main market, the EU area. EU growth accelerated in 2018 was 2.1 percent. Factors common to all countries are the recent fiscal stimuli and favorable external conditions that pushed growth in 2018, beyond its potential in some of them. The waning effects of these factors challenges the medium-term growth outlook in the region. In recent years, inflows of foreign direct investment (FDI) have helped transform industries and increase exports, but FDI is still low as a share of GDP and its growth is slow. In last decade 2008-2018 Western Balkan region achieved average GDP growth rate 2.5 percent (World Bank, 2018).

According to World Bank data, over the last ten years, the average value of GDP per capita in the Western Balkans has been in the middle income countries at around $ 5,000, with less tendencies to rise or fall over the post-war period (Figure 3). An exception is the period from 2015, when it has been growing steadily, ending in 2018 when GDP per capita recorded significant growth, achieving the highest value.

3Note: According to the World Bank database, Western Balkans region is WB6. WB6, beside Albania, Bosnia and Herzegovina, Northern Macedonia, Montenegro and Serbia, include data for Kosovo in the average calculation.Consequently, in this paper all indicators presented for Western Balkan region include Kosovo.

5.7

-0.9

2.5 2.7

-0.1

2.7

1.3

3.1 3.33.0

3.8

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 2. Western Balkan region, GDP growth (annual), 2008-2018.Source: Author calculation according to https://data.worldbank.org/indicator/

According to the World Bank’s latest regular economic report for the Western Balkans, which analyzes economic developments, projections and economic policies in the countries of the region, economic growth in the Western Balkans has reached 3.8 percent in 2018, mostly supported by increased public spending and despite slower growth in its main market, the EU area. EU growth accelerated in 2018 was 2.1 percent. Factors common to all countries are the recent fiscal stimuli and favorable external conditions that pushed growth in 2018, beyond its potential in some of them. The waning ef-fects of these factors challenges the medium-term growth outlook in the re-gion. In recent years, inflows of foreign direct investment (FDI) have helped transform industries and increase exports, but FDI is still low as a share of GDP and its growth is slow. In last decade 2008-2018 Western Balkan region achieved average GDP growth rate 2.5 percent (World Bank, 2018).

According to World Bank data, over the last ten years, the average value of GDP per capita in the Western Balkans has been in the middle income countries at around $ 5,000, with less tendencies to rise or fall over the post-war period (Figure 3). An exception is the period from 2015, when it has been growing steadily, ending in 2018 when GDP per capita recorded significant growth, achieving the highest value.

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Figure 3. Western Balkan region, GDP per capita (current US$), 2008-2018.


Despite stronger growth in 2018, the pace of job creation slowed, reflecting limited private sector dynamism. In 2018, 96,000 jobs were created in the Western Balkans (mostly in industry and services), down considerably from 171,200 jobs created during 2017. Although employment grew, job creation slowed in most of the Western Balkans. While employment rose in all countries, the annual rate of job growth was only 1.6 percent in 2018. The Western Balkans region created only 755,000 additional jobs over the past 4 years. If Western Balkan countries are to achieve the average employment rate of middle-income countries worldwide (about 62 percent), the region would need to create 2.8 million additional jobs. And to achieve the average employment rate of the EU28, the region would need to create 3.7 million additional jobs (World Bank, 2019.) The employment rate in Montenegro reached a historical high of 47.5 percent in 2018. Albania has the highest employment rate in the region at 52.1 percent, and Bosnia and Herzegovina the lowest with 34.3 percent. Average employment rate for Western Balkan region was 45.3 percent in 2018.

Real GDP growth is projected to average 3.7 percent for 2019–2020 in Western Baklans region. Regional growth in 2019 is projected to moderate, as growth slows in Albania, Montenegro, and Serbia, and then recovers gradually in 2020 (Table 1).

Table 1. Growth trajectory, Real GDP growth (%), 2017-2020. 2017 2018 2019 f. 2020 f. Albania 3.8 4.2 3.8 3.6 Bosnia and Herzegovina 3.2 3.0 3.4 3.9 Northern Macedonia 0.2 2.7 2.9 3.2 Montenegro 4.7 4.4 2.9 2.4 Serbia 2.0 4.2 3.5 4.0 WB region 2.6 3.8 3.5 3.8 EU 28 2.6 2.1 1.8 1.7 Central and Eastern Europe 4.9 4.3 3.6 3.2

0

1000

2000

3000

4000

5000

6000

7000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 3. Western Balkan region, GDP per capita (current US$), 2008-2018.Source: https://data.worldbank.org/indicator/

Despite stronger growth in 2018, the pace of job creation slowed, reflecting limited private sector dynamism. In 2018, 96,000 jobs were created in the Western Balkans (mostly in industry and services), down considerably from 171,200 jobs created during 2017. Although employment grew, job cre-ation slowed in most of the Western Balkans. While employment rose in all countries, the annual rate of job growth was only 1.6 percent in 2018. The Western Balkans region created only 755,000 additional jobs over the past 4 years. If Western Balkan countries are to achieve the average employment rate of middle-income countries worldwide (about 62 percent), the region would need to create 2.8 million additional jobs. And to achieve the average employment rate of the EU28, the region would need to create 3.7 million additional jobs (World Bank, 2019.) The employment rate in Montenegro reached a historical high of 47.5 percent in 2018. Albania has the highest employment rate in the region at 52.1 percent, and Bosnia and Herzegovina the lowest with 34.3 percent. Average employment rate for Western Balkan region was 45.3 percent in 2018.

Real GDP growth is projected to average 3.7 percent for 2019–2020 in Western Baklans region. Regional growth in 2019 is projected to moder-ate, as growth slows in Albania, Montenegro, and Serbia, and then recovers gradually in 2020 (Table 1).

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Table 1. Growth trajectory, Real GDP growth (%), 2017-2020.2017 2018 2019 f. 2020 f.

Albania 3.8 4.2 3.8 3.6Bosnia and Herzegovina 3.2 3.0 3.4 3.9Northern Macedonia 0.2 2.7 2.9 3.2Montenegro 4.7 4.4 2.9 2.4Serbia 2.0 4.2 3.5 4.0WB region 2.6 3.8 3.5 3.8EU 28 2.6 2.1 1.8 1.7Central and Eastern Europe 4.9 4.3 3.6 3.2

Source: http://pubdocs.worldbank.org/en/536081538630265238/WBRER14-web-SRB.pdf

The region is expected to grow faster than the EU through 2020, and at a similar pace as the average for Central and Eastern European (CEE) countries. Western Balkan countries are confronted with growing external risks from slower-than-projected growth in the EU, geopolitical and trade disputes, and a possible tightening of financing conditions in international capital markets.

3. Transitional Reforms and the Western Balkan Countries

Economic and systemic reforms in the Western Balkan countries have happened, as in other countries in transition, with the aim of building a mar-ket economy (Tošković, Filipović, 2017). The reform process itself took place in different scenarios according to the specificities of each country. The EBRD monitored transition reforms in all transition countries as well as in the Western Balkans, where the first ten years of transition were analyzed chronologically (Toškovic, 2016):

• Beginning of transition reforms, in the 1990s in the SFRY initiated the adoption of a number of restrictive laws and the privatization of a large number of companies, while Albania based the beginning of reforms on the privatization of small businesses. However, this period was related to political and social unrest in the SFRY, which entailed the secession and gaining of independence of Northern Macedonia4, as well as the beginning of the war on the territory of

4 The Socialist Federal Republic of Yugoslavia (SFRY) consisted of Bosnia and Herzegov-ina, Croatia, Northern Macedonia, Montenegro, Slovenia and Serbia. Slovenia and Croatia

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Bosnia and Herzegovina, which sharpened relations in the Balkans. The overall atmosphere of the region has led to a slowdown in the progress of reforms.

• In 1992, Albania continued the reform process through unifica-tion of convertibility, price liberalization and removal of free trade barriers. Northern Macedonia introduced the new penny currency by gaining independence, while the SFRY encountered the highest inflation ever in the amount of 19,810.2%. In this country, at that moment, the biggest problem was the fear of the outbreak of war, while Bosnia and Herzegovina, though devastated by internal unrest, gained independence.

• The Law on Privatization was adopted in Northern Macedonia in 1993 and the Central Bank (CB) implemented the first credit action. In the same year, the Law on Restitution of Non-Commercial land was adopted in Albania and the Privatization Agency was established, while the SFRY continued to struggle with high inflation.

• In 1994, despite the lack of financial support from banks, the profit-ability of small and medium-sized enterprises was at the forefront. That same year, Northern Macedonia was embargoed by Greece’s side, which slowed down transitional reforms, while Albania contin-ued the reform process through modernization of tax administration and privatization of small businesses.

• Albania introduced the Land Ownership Act in 1995. The war in Bosnia and Herzegovina is over and Greece has lifted the embargo on Northern Macedonia, while privatization in this country is still stalled.

• In 1996, Bosnia and Herzegovina adopted the Law on the Privatiza-tion Agency, while Albania adopted the Law on Independence of the CB and the Law on Value Added Tax (VAT). North Macedonia has introduced tax reforms, implemented privatization of businesses and eliminated import restrictions, and the FRY5 has slowed privatization by fighting internal turmoil.

were the first to leave the SFRY, followed by Northern Macedonia, Bosnia and Herzegovina, and eventually Montenegro in 2006.5 Federal Republic of Yugoslavia (FRY) - a common state of the Republic of Serbia and the Republic of Montenegro

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• One of the measures taken by the Albanian government against the 1997 deficit was to raise VAT, as well as to initiate an emergency IMF assistance package. In the same year, a CB and a currency board were established in Bosnia and Herzegovina. Northern Macedonia has been faced with currency double-currency, and a new Land Law has been adopted, while the FRY has continued the privatization process (the largest privatization was the sale of a part of Telekom Serbia to Italian STET and Greek OTE).

• The following year (1998), Albania agreed on a three-year arrange-ment with the IMF. Bosnia and Herzegovina introduced convert-ible banknotes, while Republic of Srpska (RS) adopted the Law on Privatization of Enterprises and introduced VAT. During this period, North Macedonia entered into a Partnership and Cooperation Agree-ment with the EU. The FRY has seen an increase of $ 14 billion in foreign debt, which initiated an agreement with the Paris Club on debt rescheduling, which depended on the lifting of sanctions by the EU, as well as an agreement with the IMF.

• In Serbia, in 1999, the then socialist regime lost support after the wars in Bosnia and Herzegovina and Croatia, the bombing (which oc-curred that year) and the deteriorating relations in Kosovo. As a result, Albania and Northern Macedonia were in a position to receive a large number of refugees from Kosovo who had begun secession from Serbia. Bosnia and Herzegovina used this period to turn the EU around, which led to the acceptance of the convertibility of their currency abroad. The preferential trade regime with Croatia and the FRY has also been abol-ished, and the privatization of small businesses has begun.

• Albania joined the World Trade Organization (WTO) in 2000, and North Macedonia introduced VAT and started negotiations on a sta-bilization agreement with the EU. In the FRY there was a rejection of the socialist regime, which triggered an upheaval on 5 October of the same year, which started the implementation of neoliberal capitalism.

In 1994, the EBRD defined a methodology that measured the prog-ress of transition reforms, through transition indicators that are indicative of structural change. The indicators provide a quantitative basis for analysis transition progress in five core sectors: enterprise, market and trade, financial

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sector and infrastructure (EBRD, 2015), while measuring the progress of transition reforms is based on nine transition indicators (EBRD, 2013):

• Privatization of large enterprises - Indicator of privatization of large enterprises shows progress in the privatization of large enterprises,

• Small business privatization - Indicator of small business privatiza-tion shows progress in small business privatization,

• Enterprise restructuring - The enterprise restructuring indicator mea-sures the success of reforms in the corporate reorganization,

• Price liberalization - The price liberalization indicator measures prog-ress in price liberalization reform,

• Foreign trade liberalization - The foreign trade liberalization indica-tor implies measuring progress in the implementation of new legal regulations in foreign trade,

• Competition policy - The competition policy indicator measures progress in the reform of competition policy.

• Banking sector reform - The banking sector reform indicator involves measuring progress in banking sector reform,

• Reform of non-banking financial institutions - The indicator of re-form of non-banking financial institutions refers to measuring the progress of changing the way non-banking financial institutions function and

• Infrastructure reform (electricity, rail, roads, telecommunications, wa-ter and wastewater) - The infrastructure reform indicator is based on an assessment of the ongoing reform of infrastructure that includes the reform of telecommunications, railways, roads, energy, water and sewerage.

Therefore, the methodology of transition indicators entails a quan-

titative assessment of the reform processes implemented according to the set criteria. In this paper, the process of transition reforms through transition indicators in the Western Balkan countries is analysed in the pe-riod 2002-2014 years6. Below is an analysis of the values in the indicated period (Figure 5, Figure 6).

6 Data for the period after 2014 are not available on the EBRD website

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• Reform of non-banking financial institutions - The indicator of reform of non-banking financial institutions refers to measuring the progress of changing the way non-banking financial institutions function and

• Infrastructure reform (electricity, rail, roads, telecommunications, water and wastewater) - The infrastructure reform indicator is based on an assessment of the ongoing reform of infrastructure that includes the reform of telecommunications, railways, roads, energy, water and sewerage. Therefore, the methodology of transition indicators entails a quantitative assessment of the

reform processes implemented according to the set criteria. In this paper, the process of transition reforms through transition indicators in the Western Balkan countries is analysed in the period 2002-2014 years6. Below is an analysis of the values in the indicated period (Figure 5, Figure 6).

Figure 5. Western Balkan countries, Average transition indicator by country, 2002-2014.

Source: https://www.ebrd.com/

It is concluded that the highest total value of the average transition indicator in the Western Balkan countries in the period 2002-2014 recorded in NorthernMacedonia 3.1, Albania 3.0, Montenegro and Serbia 2.8, while Bosnia and Herzegovina recorded 2.7. Figure 6 represents the value of the average transition indicator of the Western Balkan countries between 2002-2014. Figure 6. Western Balkan region, Average transition indicator, 2002-2014.

6Data for the period after 2014 are not available on the EBRD website

2.4 2.5 2.6 2.7 2.8 2.9 3 3.1 3.2 3.3

ALB

BIH

MAC

MON

SER

Figure 5. Western Balkan countries, Average transition indicator by country, 2002-2014. Source: https://www.ebrd.com/

It is concluded that the highest total value of the average transition indicator in the Western Balkan countries in the period 2002-2014 recorded in Northern Macedonia 3.1, Albania 3.0, Montenegro and Serbia 2.8, while Bos-nia and Herzegovina recorded 2.7. Figure 6 represents the value of the average transition indicator of the Western Balkan countries between 2002-2014.

Source:https://www.ebrd.com/downloads/research/transition/TR02.pdf

Based on the values of the average indicator for each individual country, it can also lead to the values of the total average indicator for all observed countries of the Western Balkans in the period from 2002 to 2014. The value of the overall average indicator for all observed countries would be 2.8 (that is, the mean), which further indicates the average dynamics of progress and the success of transition reforms. In early 2016, regional disparities in the quality of local institutions remained large, particularly in Albania, Bosnia and Herzegovina, while liberalization in Albania had a positive result. However, developments in the corporate sector are mixed compared to earlier years. In Albania, a building permit moratorium has created difficulties in the construction sector, which has been negative for the industry. Also, inequality has had relatively high variations in several Western Balkan countries, where Bosnia and Herzegovina, Montenegro and Serbia have some of the lowest levels (comparable to those in Germany) (EBRD, 2016).After 2018many countries have seen improvements – albeit very modest ones – in their competitiveness scores like Albania, NorthernMacedonia and Serbia, driven by further improvements in the business climate. Modest increases in integration scores have been observed in several countries, the most notably in Montenegro. Those increases have been driven primarily by improvements in the quality of logistics services and infrastructure (particularly transport infrastructure), as well as further increases in net FDI and non-FDI capital inflows as a percentage of GDP (EBRD, 2018). 4. The Western Balkan Region and Consequences of Transition

Quarter of a century divides us from the collapse of socialism and the beginning of the restoration of capitalism in the societies of the former Eastern Bloc and the Socialist Federal Republic of Yugoslavia. Under the “umbrella” of the concept of "transition", which was to mark a period of "structural adjustment" of states and their "inclusion in the regular flows of the global capitalist order", privatization of common assets was carried out and market logic was imposed on all segments of society. Transition processes in the Western Balkans region are associated with a number of negative effects such as an employment fall and a decline in production, with a simultaneous rise in prices, destroyed businesses, unpaid loans and minimal incomes. As a solution to the existing problems, they again impose the same political measures that they produced - further privatization of state-owned enterprises, austerity measures, cuts in public enterprises, reduction of labor and social rights, etc. The Western Balkan countries in the past years achieved progress and a positive economic outlook, but with the current growth rate it will

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3

3.1

3.2

2002 2004 2006 2008 2010 2012 2014

Figure 6. Western Balkan region, Average transition indicator, 2002-2014. Source: https://www.ebrd.com/downloads/research/transition/TR02.pdf

51

Jelena Ignjatović, Jovana Kisin SUMMARIZING DECADE BEHIND US - ECONOMIC DEVELOPMENT AND TRANSITIONAL REFORMS...





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Based on the values of the average indicator for each individual coun-try, it can also lead to the values of the total average indicator for all observed countries of the Western Balkans in the period from 2002 to 2014. The value of the overall average indicator for all observed countries would be 2.8 (that is, the mean), which further indicates the average dynamics of progress and the success of transition reforms. In early 2016, regional disparities in the quality of local institutions remained large, particularly in Albania, Bosnia and Herzegovina, while liberalization in Albania had a positive result. How-ever, developments in the corporate sector are mixed compared to earlier years. In Albania, a building permit moratorium has created diffi culties in the construction sector, which has been negative for the industry. Also, in-equality has had relatively high variations in several Western Balkan countries, where Bosnia and Herzegovina, Montenegro and Serbia have some of the lowest levels (comparable to those in Germany) (EBRD, 2016). After 2018 many countries have seen improvements – albeit very modest ones – in their competitiveness scores like Albania, Northern Macedonia and Serbia, driven by further improvements in the business climate. Modest increases in inte-gration scores have been observed in several countries, the most notably in Montenegro. Those increases have been driven primarily by improvements in the quality of logistics services and infrastructure (particularly transport infrastructure), as well as further increases in net FDI and non-FDI capital infl ows as a percentage of GDP (EBRD, 2018).

4. The Western Balkan Region and Consequences of Transition

Quarter of a century divides us from the collapse of socialism and the beginning of the restoration of capitalism in the societies of the former Eastern Bloc and the Socialist Federal Republic of Yugoslavia. Under the “umbrella” of the concept of “transition”, which was to mark a period of “structural adjustment” of states and their “inclusion in the regular fl ows of the global capitalist order”, privatization of common assets was carried out and market logic was imposed on all segments of society. Transition pro-cesses in the Western Balkans region are associated with a number of nega-tive effects such as an employment fall and a decline in production, with a simultaneous rise in prices, destroyed businesses, unpaid loans and minimal incomes. As a solution to the existing problems, they again impose the same political measures that they produced - further privatization of state-owned enterprises, austerity measures, cuts in public enterprises, reduction of labor

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and social rights, etc. The Western Balkan countries in the past years achieved progress and a positive economic outlook, but with the current growth rate it will take several decades to reach the level of EU countries. Concerns throughout the region continue to be high in unemployment, poverty, and economic inequality, the outflow of highly educated workforce, gender in-equality, youth participation and employment.

GNI per capita based on purchasing power parity, converted to inter-national dollars, and GNI per capita presented in annual growth are signifi-cant macroeconomic indicators for the observed period and show how much progress has been made in terms of revenue. According to available data from the World Bank, individually, the Western Balkans countries, Montene-gro has the highest GNI per capita, while Bosnia and Herzegovina and Alba-nia have the lowest. In the period 2018 to 2017, the GNI per capita has been experiencing continuous growth, especially in the last few years (Figure 7).

take several decades to reach the level of EU countries. Concerns throughout the region continue to be high in unemployment, poverty, and economic inequality, the outflow of highly educated workforce, gender inequality, youth participation and employment.

GNI per capita based on purchasing power parity, converted to international dollars, and GNI per capita presented in annual growth are significant macroeconomic indicators for the observed period and show how much progress has been made in terms of revenue. According to available data from the World Bank, individually, the Western Balkans countries, Montenegro has the highest GNI per capita, while Bosnia and Herzegovina and Albania have the lowest. In the period 2018 to 2017, the GNI per capita has been experiencing continuous growth, especially in the last few years (Figure 7). Figure 7. Western Balkan region, GNI per capita, PPP (current international $), 2008-2017.


In average, the Western Balkans (14580 USD) according to the GNI per capita falls into the middle income countries category, but is still below the world average (17098 USD), and far below the EU average (42412 USD) according to the World Bank for 2017. The GNI per capita shown in percentages as annul growth had a dynamic trend of rising and falling (Figure 8). During the analyzed period, Western GNI per capita growth rates were 2.35 percent. Figure 8. Western Balkan region, GNI per capita growth (annual %), 2008-2017.

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ALB BiH MAC MNE SRB WB EU

Figure 7. Western Balkan region, GNI per capita, PPP (current international $), 2008-2017.


In average, the Western Balkans (14580 USD) according to the GNI per capita falls into the middle income countries category, but is still below the world average (17098 USD), and far below the EU average (42412 USD) according to the World Bank for 2017. The GNI per capita shown in per-centages as annul growth had a dynamic trend of rising and falling (Figure 8). During the analyzed period, Western GNI per capita growth rates were 2.35 percent.

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Source: Author calculation according to https://data.worldbank.org/indicator/

According to the latest World Bank available data, in 2017, the Western Balkans region recorded good GNI per capita growth of 3.11 percent, better than the EU (2.61 percent) as well as the world average (2.11 percent). On the other hand, while this is solid progress, the baseline level of development is much lower compared to the EU, so much better results are needed to bring the average of European countries closer to the GNI per capita.

The Western Balkan region has faced a dramatic rise in unemployment in the aftermath of the global economic crisis, with the situation improving over the next few years, finally stabilizing from 2016. Unemployment rates declined for 1.2 percent in all Western Balkan countries in 2018. In 2018, 1.15 million people in the region were unemployed, that is 7.7 percent less than a year ago. Historical low unemployment rate in Bosnia and Herzegovina was primarily driven by higher inactivity and likely emigration, reducing labor force participation. In contrast, inactivity declined substantially in Albania and Serbia. Albania, Serbia, Montenegro and Northern Macedonia reached historically low unemployment rates in 2018. The lowest unemployment rate in the region is in Serbia and Albania, while it is the highest in Kosovo around 29 percent (Figure 9).

Figure 9. Western Balkan countries, Unemployment rate (%), 2008-2018.

5.86

-1.52

1.93

3.24

0.04

3.16

1.45

3.362.85

3.11

-2

-1

0

1

2

3

4

5

6

7

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Figure 8. Western Balkan region, GNI per capita growth (annual %), 2008-2017. Source: Author calculation according to https://data.worldbank.org/indicator/

According to the latest World Bank available data, in 2017, the West-ern Balkans region recorded good GNI per capita growth of 3.11 percent, better than the EU (2.61 percent) as well as the world average (2.11 percent). On the other hand, while this is solid progress, the baseline level of develop-ment is much lower compared to the EU, so much better results are needed to bring the average of European countries closer to the GNI per capita.

The Western Balkan region has faced a dramatic rise in unemploy-ment in the aftermath of the global economic crisis, with the situation im-proving over the next few years, finally stabilizing from 2016. Unemployment rates declined for 1.2 percent in all Western Balkan countries in 2018. In 2018, 1.15 million people in the region were unemployed, that is 7.7 percent less than a year ago. Historical low unemployment rate in Bosnia and Herze-govina was primarily driven by higher inactivity and likely emigration, reduc-ing labor force participation. In contrast, inactivity declined substantially in Albania and Serbia. Albania, Serbia, Montenegro and Northern Macedonia reached historically low unemployment rates in 2018. The lowest unemploy-ment rate in the region is in Serbia and Albania, while it is the highest in Kosovo around 29 percent (Figure 9).

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Still with 18 percent average rate, the Western Balkans unemployment continues to be a major concern of citizens.Despite the positive developments, the unemployment rate remains double or triple higher that in the EU countries. Roughly 300,000 jobs created since 2010 are not enough. Women continue to be the least represented in the labor markets, but they have been the biggest beneficiaries of nearly half of this increase in employment. Also, young people especially impacted. Average youth unemployment rate in 2016 in Western Balkan region was 45.7 percent (Albania 39%, Bosnia and Herzegovina 52%, Montenegro 37%, Northern Macedonia 49%, and Serbia 40%). In the previous period a trend of improving employment rate of young people has been observed, but regardless of the average 50 percent of young people working on the basis of temporary contracts. Informal employment, also one of the main challenges of the Western Balkans labor market, is still growing in Albania and Northern Macedonia, while it is declining in Serbia.Young people, older women and poorly educated workers perform informal jobs in 2018. Changes in employment rates over the observed period in the Western Balkan countries were mainly due to the manufacturing, construction and education sectors, professional and scientific activities, public administration and agriculture. Most new jobs have been created in industry and services. The structure of employment is dominated by non-productive activities, indicating that the region should increase competitiveness and improve market orientation (World Bank, 2019).

Poverty reduction is still a major issue for many international organizations. According to the definition of the UN, all those whose lifestyle, comfort and dignity are below the standards considered normal in the society in which they live are poor. Some academics argue that neoliberal policies promoted by global financial institutions such as the IMF and the World Bank are actually exacerbating inequality and poverty. Employment, wage growth, and low inflation further reduced poverty in the Western Balkans.In 2018, the average poverty rate for Albania, Montenegro, Northern Macedonia, and Serbia dropped by about 1 percent, producing a regional poverty rate estimated at 21.6 percent(Table 2). Table 2. Western Balkan countries, Poverty rate at US$ 5.5/day, PPP (% of popuation) 2013 2014 2015 2016 2017 2018

0

5

10

15

20

25

30

35

40

ALB BiH MAC MNE SRB

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 9. Western Balkan countries, Unemployment rate (%), 2008-2018. Source: https://data.worldbank.org/indicator/

Still with 18 percent average rate, the Western Balkans unemployment continues to be a major concern of citizens. Despite the positive develop-ments, the unemployment rate remains double or triple higher that in the EU countries. Roughly 300,000 jobs created since 2010 are not enough. Women continue to be the least represented in the labor markets, but they have been the biggest beneficiaries of nearly half of this increase in employment. Also, young people especially impacted. Average youth unemployment rate in 2016 in Western Balkan region was 45.7 percent (Albania 39%, Bosnia and Herze-govina 52%, Montenegro 37%, Northern Macedonia 49%, and Serbia 40%). In the previous period a trend of improving employment rate of young peo-ple has been observed, but regardless of the average 50 percent of young people working on the basis of temporary contracts. Informal employment, also one of the main challenges of the Western Balkans labor market, is still growing in Albania and Northern Macedonia, while it is declining in Serbia. Young people, older women and poorly educated workers perform informal jobs in 2018. Changes in employment rates over the observed period in the Western Balkan countries were mainly due to the manufacturing, construc-tion and education sectors, professional and scientific activities, public ad-ministration and agriculture. Most new jobs have been created in industry and services. The structure of employment is dominated by non-productive

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activities, indicating that the region should increase competitiveness and im-prove market orientation (World Bank, 2019).

Poverty reduction is still a major issue for many international organi-zations. According to the definition of the UN, all those whose lifestyle, com-fort and dignity are below the standards considered normal in the society in which they live are poor. Some academics argue that neoliberal policies pro-moted by global financial institutions such as the IMF and the World Bank are actually exacerbating inequality and poverty. Employment, wage growth, and low inflation further reduced poverty in the Western Balkans. In 2018, the average poverty rate for Albania, Montenegro, Northern Macedonia, and Serbia dropped by about 1 percent, producing a regional poverty rate esti-mated at 21.6 percent (Table 2).

Table 2. Western Balkan countries, Poverty rate at US$ 5.5/day, PPP (% of popuation)

2013 2014 2015 2016 2017 2018ALB 37.7 35.9 37.4 36.7 35.9 35.2BiH n.a. n.a. n.a. n.a. n.a. n.a.MAC n.a. 24.8 23.2 21.9 21.0 20.7MNE 9.9 4.8 4.6 4.2 4.4 4.8SRB 27.6 24.1 24.0 23.1 22.4 21.7


In other words, about 114,000 people escaped poverty in the past year. In Albania, rising wages in the private sector indicate strong growth of about 13 percent in real terms. The average wage in Serbia went up by 4.2 percent in real terms. Led by wage growth in mining, ICT, tourism, manufac-turing, and the public sector, real wage growth in North Macedonia was 4.4 percent in 2018, compared to 1.2 percent in 2017.

Economic inequality and poverty are among the most significant socio-economic issues at the top of the global agenda. Economic inequality is an inherent feature of neoliberal capitalism, that is, a model of economic, economic and state reform in countries in transition from state-socialist to market economies. The consequences of economic inequality for society and the state are devastating: there is no economic growth and development, lack of development of democracy and healthy social relations, political instabil-ity, lack of development of system institutions, discretionary rights instead of rules in economic policy and predictable business conditions. Although income inequality in the Western Balkans region is “moderate” by interna-

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tional standards, wealth in transition countries is even more concentrated among the rich than in developed economies in the world. There are numer-ous causes of economic inequality, among which the most important factors are education, level of education, as an important element of the price of labor, structure of the employed labor force by qualification level, marital status, specificities of the labor market, economic development, global eco-nomic crisis, global growth, movement of the nominal average wage, the movement of the nominal minimum wage, etc. As for financial inequality, there are three key measures: income, consumption and wealth. With certain limitation due to different sources of data, it can be concluded that inequality has been rising for the last 18 years, the fact that GDP has been increasing, thus increasing the overall economic cake, does not mean that this growth will be distributed equally. Also, newcomers are mainly in the low productiv-ity and low wage sectors. It is important to emphasize that economic inequal-ity is not the same as poverty. Poverty implies the existence of economic inequalities between those who are and those who are not poor, regardless of how poverty is defined (as cash below a certain line, a standard of living below the minimum, etc.). However, economic inequalities mean inequalities in income, and other economic resources, within the overall population. On the other hand, measuring inequality does not depend on where the income limit is set (median, average wage, consumer basket, absolute poverty line, etc.) or on the percentage of the poor. In conditions of “bad” inequality, income inequality is a consequence of the lack of equal chances for everyone in society to reach their full potential, which diminishes the ability of society to generate high national income.

There are several methods for measuring economic inequality but The Gini coefficient is the most widely used measure of inequality. In economics, the Gini coefficient measures the inequality among values of a frequency dis-tribution (for example, levels of income or wealth distribution of a nation’s residents). A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income). A Gini coefficient of 1 (or 100%) expresses maximal inequality among values (e.g., for a large number of people, where only one person has all the income or consumption, and all others have none, the Gini coefficient will be very nearly one). The more nearly equal a country’s income distribution, the lower its Gini index, e.g., a Scandinavian country with an index of 25. Inequality measurement proposed by UNDP are Human Development Index (HDI) and Inequality-adjusted human development index (IHDI). The HDI rep-

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resents a national average of human development achievements in the three basic dimensions making up the HDI: health, education and income. Like all averages, it conceals disparities in human development across the population within the same country. The IHDI takes into account not only the average achievements of a country in health, education and income, but also how those achievements are distributed among its population by “discounting” each dimension’s average value according to its level of inequality. The dif-ference between the IHDI and HDI is the human development cost of in-equality, also termed – the loss to human development due to inequality. The IHDI allows a direct link to inequalities in dimensions, it can inform policies towards inequality reduction, and leads to better understanding of inequali-ties across population and their contribution to the overall human develop-ment cost (UNPD, 2018). In following table are presented values and rank for HDI and IHDI, as well Gini coefficient for Western Balkan countries. There measures presents coefficient of human inequality based on inequality in life expectancy, inequality in education and inequality in income for 189 coun-tries that are in four human development groups. As results shows, all WB countries have similar inequality grade and they are on same level of human development, according to this indexes (Table 3).

Table 3. Western Balkan countries, Human Development Index 2018, Inequality-adjusted HDI 2018, Gini coefficient 2010-2017.

Albania Bosnia and Herzegovina

North Macedonia

Monte-negro

Serbia

Human Develop-ment Index HDI 0.785 0.768 0.757 0.814 0.787

HDI rank 68 77 80 50 67Inequality-adjust-ed HDI IHDI

0.706 0.649 0.661 0.741 0.667

IHDI rank 61 79 77 47 70Gini coefficient2010-2017 29.0 32.7 35.6 31.9 28.5

Source: http://hdr.undp.org/en/composite/IHDI

Montenegro is the best ranked and the only one in the very high hu-man development countries group, while the other countries in Serbia, Alba-nia, Bosnia and Herzegovina and Northern Macedonia are in the high human

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development countries group, with slightly worse HDI and IHDI rank. The countries of Central, Eastern and South-Eastern Europe, as well as the West-ern Balkans region, could face a sharp decline in the workforce in the next 30 years, the International Monetary Fund warned. Population in countries in the region, including Turkey, will face a 12 percent drop in population by 2050 due to aging and migration. The working population has to support more than twice as many elderly people as it currently does. Nevertheless, the IMF suggests that, as a result of migration and an aging population, retire-ment should be postponed beyond the age of 65, retirees and others inactive should be encouraged to work. It does not propose the only possible solu-tion: to increase employees’ salaries so that they do not leave their country, and to think about forming a family, thus preventing a demographic break-down. Demographic challenges could slow economic growth significantly. Decreasing labor supply and lower productivity of older workers, coupled with greater pressure on public finances, could cost countries about one per-cent of GDP annually.

5. Conclusion

EU today is facing major challenges, but the perspective of enlargement is still considered the most successful policy, which is most important for the Western Balkans. The integration of the Western Balkans into the European Union is essential for the stabilization and economic progress of the region, while the continuity of integration processes remains the most effective catalyst for reform. Nevertheless, it is essential that, before integration itself, more intensive measures be taken to accelerate and enhance the economic development of the Western Balkans. The dynamics of the economic development of the region are different, where on average the level of European development has not been reached, although over the last ten years the region has grown. Unless economic growth is accelerated, by increasing investment and boosting competitiveness, advancing at a certain pace, the European level will remain elusive.

The economic outlook for the countries of the Western Balkans is subject to increasing external and domestic risks, including geopolitical and trade disputes, and at a slower-than-expected pace of structural reforms, and therefore requires accelerated reforms. Despite stronger growth in 2018, fewer jobs have been created in the region, reflecting the limited dynamics of the private sector. Western Balkans unemployment continues to be a major

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concern for citizens. Labour market performance in the Western Balkans has continued to improve, but at a slower pace than in the previous year and despite strong economic growth in the region. Informal employment and long-term unemployment have been a challenge for the region for years. Labour costs in the Western Balkan region are low in absolute terms compared to the EU, given that wages are low but, when compared to GDP per capita, they are very high. Social security contributions are high in the region, even higher than in the EU, as well as income taxation for low-income and subsistence workers. Additional challenges that are evident in the Western Balkans region are also the unfavourable demographic situation (negative natural increase, negative or zero migration rate, demographic aging), various social problems such as widespread poverty, high unemployment and changes in the labour market, changes in the structure of households, insufficient quality of education and health, adverse assessments of the efficiency and effectiveness of government and the public sector, globalization and integration, etc.

Consequently, comprehensive reforms are needed to improve the situation especially in the labour market. Improvements in labour market performance are encouraging, but the slowdown trend gives cause for concern. A stronger private sector that creates adequate jobs, as well as public policies that improve employment, is needed to sustain the success of the labour market in the future. Policy makers in the region need to implement reforms that can lead to a sustainable economic growth boom that creates jobs. Removing barriers that make it difficult for small businesses to compete in the market and grow would open up new opportunities for people, encourage entrepreneurship and innovation, increase employment and unleash the human capital potential of this dynamic region. The Western Balkans need to increase competitiveness and improve market orientation in order to combat unemployment. A number of issues remain, such as the high proportion of informal employment and high youth unemployment rates, suggesting untapped human potential that could spur economic growth. The Western Balkan countries need to be more involved in strengthening regional co-operation. It is the responsibility of the Western Balkan economies to be active participants in planning Europe’s common future in the region. The institutional capacities of national administrations, workers ‘and employers’ organizations need to be strengthened and enabled to prepare and effectively implement social and employment policy reforms in the process of accession to the European Union. In addition, the recommendation is to create and implement an economic policy that can play a significant role in equalizing

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opportunities, for example by improving access to higher education, better linking secondary education and employment, improving infrastructure links. An inclusive financial system can reduce inequality in both opportunity and income. Although the Western Balkan countries are firmly on the path of European integration, it is also necessary for the EU itself to support the development of the region through funds and other forms of investment in infrastructure projects. Only by acting together and accepting the fact that the Western Balkans market is more attractive as regional and not closed to national borders, is the first step towards successful realization of investments. Inter-state co-operation, political stability and economic reform are the basic preconditions for investment growth in the Western Balkans region, where an economic model based on export and investment growth is needed.

6. Literature

1. Bahtic S. (2019), Economic development, http://fmpe.edu.ba/images/nas-tava/933/ Ekonomski_razvoj/Ekonomski_razvoj__predavanje_2.pdf

2. EBRD, Transition report (2002),https://www.ebrd.com/downloads/research/transition/TR02.pdf

3. EBRD, Transition report (2008), https://www.ebrd.com/downloads/research/transition/TR08.pdf

4. EBRD (2013), http://www.ebrd.com/pages/research/economics/data/macro.shtml

5. EBRD (2015), http://www.ebrd.com/what-we-do/economic-research-and-data/data/ forecasts -macro-data-transition-indicators.html

6. EBRD, Transition Report (2016), https://www.ebrd.com/transition-report7. EBRD, Transition report (2018), https://www.ebrd.com/transition-report8. EBRD (2019), https://www.ebrd.com9. Privredna Komora Crne Gore, PKC (2016),

http://www.privrednakomora.me/announcements/razvojne-pers-pektive-zapadnog-balkana

10. Matković, G., Država blagostanja u zemljama Zapadnog Balkana – izazovi i opcije, Centar za socijalnu politiku, Beograd 2017.

http://csp.org.rs/sr/assets/publications/fi les/Drzava_blagostanja_u_zemljama_Zapadnog_Balkana_Programsko_stanoviste.pdf

11. Stanišić N. (2016), Dohodovna konvegencija u procesu pridruživanja ze-malja Zapadnog Balkana Evropskoj Uniji, Ekonomski horizonti, Vol. 18, Sveska 1, pp. 3 - 14

12. Toskovic J. (2016), Review of the neo-liberal concept of economics in the countries of the Western Balkans, doctoral dissertation, Educons University

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13. Toskovic J., Filipovic S. (2017), Neoliberal Business Concept in the Western Balkan Countries, Economic Institute, Belgrade, Serbia.

14. UNPD, Human Development Report (2018), http://hdr.undp.org/en/2018-update

15. Williamson, J. (1990), What Washington means by policy reform, Latin American Adjustment. How much has happened? Washington, Institute for International Economics.

16. World Bank, Western Balkans Regular Economic Report (2018),http://pubdocs.worldbank.org/en/536081538630265238/

WBRER14-web-SRB.pdf17. World Bank (2019), https://data.worldbank.org/indicator/18. World Bank, Western Balkans Regular Economic Report (2019), http://

documents.worldbank.org/curated/en/219231554130333324/pdf/Re-form-Momentum-Needed.pdf

19. World Bank, Western Balkans Labor Market Trends (2019),https://www.worldbank.org/en/region/eca/publication/labor-

trends-in-wb

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The Eurozone Chronicles - Does Fiscal Money Theory support Monetary Union?

Marko Malovic1

“We all know what to do, we just don’t know how to get re-elected after we’ve done it.”Jean-Claude Juncker

Abstract: In this paper, we go on to evaluate the potential and appropriateness of the so-called fiscal money theory as the macroeconomic response to the protracted Eurozone crisis. Fiscal money theory encompasses issuance of tax credit certificates (TCC) and/or tax-backed bonds (TBB) by the national governments of crisis-stricken Eurozone members, which are then bought and sold as financial assets by companies and households alike and serve as quasi-money of sorts. After reviewing the mechanism, likely merits and prob-able drawbacks of fiscal money theory in its own right, we compare it to the Eurozone version of the QE, but also to the Friedman’s helicopter money proposals adjusted by the likes of Martin Wolf and Eric Lo-nergan. Finally, expected efficiency and effectiveness of the fiscal money theory is confronted with pseudo-fiscal federalism strategy that inter alia involves creation of Eurozone’s “Brady bonds” and manipulation with credit-derivatives. In conclusion, fiscal money theories circulating as of late range from potentially fruitful and interesting to speculative or likely disastrous even, yet they remain perhaps a portion of desired solution pack-age if political resistance to Eurobonds and pseudo-fiscal federalism policies doesn’t subside any time soon.

Keywords: Fiscal money theory, Eurozone crisis, QE, helicopter money, pseudo-fiscal federalism

1. Introduction

The Eurozone crisis formally crack-opened back in 2009 when sev-eral, mostly ‘peripheral’, EMU members experienced unsustainably high gov-ernment debt, budget deficits of well over 10% of their respective GDP, with fast rising bond yield spreads, external indebtedness and near collapse of their financial institutions. Naturally, The Eurozone crisis came about only gradually far earlier, because something has been very wrong with the EMU’s Core, while proverbially imperfect and technologically inferior Periphery merely fell victim of it. That something is obviously the euro itself and the way too rushed and superficial design of the monetary union within which it was supposed to smoothly operate. The single European currency system apparently keeps dividing the Eurozone members, because relatively strong currency absent a regional fiscal policy as well as automatic stabilizers to mop

1 Full Professor, Department of Economics and Finance, Faculty of Business Economics, Educons University, Novi Sad, Serbia, [email protected] and Faculty of Busi-ness Economics, University of East Sarajevo, Bosnia and Hercegovina

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up idiosyncratic or asymmetrically spreading shocks, euro has proved utterly inappropriate for economic growth and employment needs of most GIIPS countries [Bossone et alia, 2015].

On the one hand, reevaluation, critique and much needed reconstruc-tion of the outdated and biased Maastricht criteria for qualifying into the Eurozone are given inter alia in Malovic, Djukic and Redzepagic (2011).

On the other hand, fallacies and flaws which led to the buildup of the Greek drama and manifold manifestation of the Eurozone crisis, are described in the Malovic and Marinkovic (2013) and Malovic (2017). In all honesty, however, Eurozone’s tumbling currency reveals but only one layer of the crisis at hand. Excessive borrowing in a currency you cannot print on your own is a consequence, not a cause, of the Eurozone crisis. As a matter of fact, EMU members are deeply plunged into the crisis of trust: no one wants to give in, much less pay for other people’s profligacies, but in fact all have been throwing money at the problem in a too little too late and incomplete fashion. Hence, sunk costs in the Periphery (not quite without handsome return for the Core’s banks and export-oriented manufacturing industries) have already been dwarfed by rising marginal cost of hesitation [Malovic, 2015]. In addition, Eu-rozone crisis begs for temporary fiscal expansion too, in order to complement or rather make up for the fading efforts of Draghi’s ECB. Since full-fledged fiscal federalism does not seem to be politically feasible nor entirely advisable policy, for that matter, the question is what in fact is left on the table and what should Eurozone ideally opt for? Precisely that is the topic of this short paper.

The rest of it is organized as follows: part 2 addresses the fiscal mon-ey theory and its intellectual antecedents and evaluates the nature and likely impact of tax-backed assets. After reviewing the mechanism, potential merits and probable drawbacks of fiscal money theory in its own right, in part 3 we compare it to the Eurozone version of the QE, but also to the Friedman’s helicopter money proposals adjusted by the likes of Martin Wolf and Eric Lonergan. Finally, expected efficiency and effectiveness of the fiscal money theory is confronted with pseudo-fiscal federalism strategy that inter alia in-volves creation of Eurozone’s “Brady bonds” of sorts, which gives the basis for our concluding remarks.

2. Fiscal Money Theory

Even though it intellectually draws from the well-known if underap-preciated fiscal theory of price level and a paradigm of fiscal dominance, modern fiscal money theory is essentially based upon the idea of establishing

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voluntary tax-backed digital payment system to make fiscal room for Euro-zone members in dire straits, particularly Italy and Greece. In other worlds, fiscal money is being born in the guise of inter-bank short-term loans typical-ly backed by government securities, so that growing inter-bank money supply raises appetite for more and more government debt which in turn compli-cates and increases relative importance of fiscal policy in monetary stability matters [Varoufakis, 2017]. Fiscal money’s most vocal promoter Yanis Varou-fakis argues that each tax file number, including firms and individuals, should be assigned a treasury account and a pin password so to enable the transfer of funds from one treasury account to another. Treasury accounts, of course, could be initially credited either by the state paying electronically its tax return arrears into them, or by properly discounted advancement of everyone’s tax liabilities to the state, both of which considerably improve financial liquid-ity across the national economies and consequently entire monetary union [Varoufakis, 2019].

Proponents of tax-based securities, which -once in circulation- could then be used as non-compulsory means of payment, see them as a source of additional liquidity without increasing budget deficits or the level of public indebtedness. Tax credit certificates ought to be used to settle any financial liabilities to national or local public administration in a year or in two years’ time, but immediately convertible to euros. Free fiscal money thus created in turn should be capable of exiting austerity without breaking up the euro.

However, advancing notoriously slow tax return arrears to the firms and households and offering tax discounts for forward tax payments to the state, might easily create a negative mismatch between public revenues and government spending, thereby worsening budget deficits and public debt statistics of crisis-stricken EMU members. Put simply, since tax credit cer-tificates practically offer tax rebates, they could be expected to lower tax rev-enues upon their successful exercise [Chaney, 2018]. Now, there still isn’t much empirical experience with the workings of fiscal multipliers on the revenue side, hence, it is difficult to say offhand whether increased liquidity across the economy and tax discounts provided could decrease demand for public spending or even increase tax income and end up being fiscally neutral cum positive in the aggregate.

In addition, a non-sustainable portion of the public debt could be swapped for newly issued tax-backed bonds which are envisaged to be of longer maturity than the original paper, accepted by the state for tax pay-ments, yet bearing the same interest rate (premium shouldn’t be necessary because no default risk compensates for the longer tenor). Thus, issuance of TCCs as zero-coupon instrument would hopefully prevent market turbu-

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lence ill-affecting their price, while both TCCs and TBBs should reduce the level of „real“ public debt – its portion that would have to be repaid in euros [Bossone et alia, 2015].

Be that as it may, recent Italian plan for introducing mini BOTs (mini treasury bills, ital. Buoni Ordinari del Tesoro), diverges from tax-backed as-sets as proposed above in at least two important respects: a) Italians are con-templating printing them in amount up to 11% of GDP, whereas it would be wiser to stop at healthy monetary shock of 2-3% of GDP pre-tapped in digi-tal format and regulated by cryptocurrency ledger in order to eliminate coun-terfeiting or hyperinflation; b) Italians are suggesting zero-coupon perpetual bonds which wouldn’t support future tax discounts [Varoufakis, 2019]. Some latest versions of the proposal mention interest bearing BOTs where in spite of them being denominated in euros there is independent interest rate determina-tion by the Italian government. In any case, criticizers of the idea, first of all ECB’s president M. Draghi, maintained that mini Bots in its advertised shape and form are either money, which is illegal within the Eurozone where euro represents the only legal tender, or debt instruments, which eo ipso increases the level of public debt quite against the fiscal regulations of the E(M)U.

3. How it stands in Comparison

After reviewing the mechanism, likely merits and probable drawbacks of fiscal money theory in its own right, we compare it to the Eurozone ver-sion of the QE, but also to the Friedman’s helicopter money proposals ad-justed by the likes of Martin Wolf and Eric Lonergan. Helicopter money as the ironic monetarist paradigm boils down to direct and instant injection of liquidity into the entire economy on a pro rata basis [Malović, 2014]. Not-withstanding it was originally attributed to M. Friedman, helicopter money – that involves central bank dropping free money straight into population’s pockets- has been advocated for a while already by E. Lonergan and M. Wolf as the most superior solution of last resort for reviving demand and grow-ing out of yet another recession on the EMU’s horizon [Grazzini, 2016, p.1]. Obviously, their idea is to circumvent the banks and similar financial interme-diaries who sucked in all the additional liquidity provided by QE in as much as it went into excess reserves rather than into rising credit potential available to the economy and households alike. As to the European style QE, despite its formal closure in December 2018 announced by M. Draghi himself, Eu-rozone’s “whatever it takes” LTRO issues -cheap long term bond loans for banks have proven inadequate for restoring growth yet there are indications

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from March this year that in slightly altered version QE is likely to resume. With such a policy, sadly, EMU shall endure but cannot prosper [Ryan, 2018]. However, when it comes to Friedman-Lonergan-Wolf proposal, if we set aside certain technical complications with carrying it out, helicopter money is well-meant and theoretically correct monetary policy tactics, the only prob-lem being that there is no political will in the ECB whatsoever to execute it. Unlike helicopter money which is by definition printed in the central bank and depends on its willingness, fiscal money can always be freely issued by each and every national government since fiscal policy in the EMU remains a matter of national sovereignty [Grazzini, 2016, p.3]. Alas, the trouble remains in agreeing to the volumes of fiscal money emission in the Eurozone fora, rules versus discretion debate in fiscal money context and not least latent grey market developments if tax-backed assets were to be actually printed. Finally, it is fair to notice that all versions of fiscal money come just one step away from being proclaimed a new (or even sole) legal tender [Varoufakis, 2019].

Nevertheless, in our opinion by far the most superior crisis resolu-tion package remains the earliest of them all, the one involving the combina-tion of Eurozone Brady bonds, national bonds guaranteed by the EIB and a topping made of credit derivatives aimed at dealing with the most junior tranches of EMU members’ public debt. The hour is getting late whereas insurmountable problems are gathering just around the bend. Eurozone is at the verge of heavy recession, ESM’s insufficient funds have been used more to plug the holes in banks’ finances than to help the EMU’s sovereigns and recreated volley of ECB’s expansionary reaction is simply not big enough or credible enough to do the trick for the second time. The package mentioned was championed by Holland and Varoufakis (2011) and only slightly modi-fied by Malovic and Marinkovic (2013).

First of all, an inevitable ECB’s emission of European a la Brady bonds, up to the 60% of the battered countries’ pre-crisis GDPs, in accor-dance with the habitual (if not entirely theoretically founded) Maastricht cri-terion. Akin to Holland’s and Varoufakis’s (2011) idea, I underscore that this IOU launch wouldn’t amount to any kind of international fiscal transfer, because every country remains liable for their own portion of debt, only the interest rate would be unified and -needless to say- considerably lowered. This simple measure alone, involving ECB’s Brady bonds issuance to cover 60% of EMU’s public liabilities, if introduced credibly, could on its own reduce default risks of all member states (apart from Greece, which would undoubtedly still be some 25-35% over the threshold) to loosely manageable levels [Malovic-Marinkovic, 2013].

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The second measure, in terms of public liabilities exceeding the Maastricht 60% threshold up to 100% of the sovereign debt, asks for non-trivial fiscal or quasi-fiscal transfers distributed against top quality collateral (gold bullion, SDR, non-Euro foreign exchange reserves). Classical fiscal transfers would require collecting some percentage of national fiscal revenue into the common purse to be disbursed to solvent but momentarily illiquid member countries. However, bearing in mind that newly created Eurozone budget is insignificantly small, quasi-fiscal transfer is a clearly more promis-ing solution: it lies in the ability of the ECB to utilize those repurchased sovereign bonds for further credit securitisation: by enabling EFSF/ESM to issue European CDO derivatives (collateralised debt obligation) and (re)sell those loans back to private investors and financial intermediaries! The beauty of such an expansion of the ECB’s balance sheet would be in the fact that it would finally be achieving quantitative easing rather than credit easing, but at the expense of the global financial market, rather than the EMU’s taxpayer [Ibidem]. European CDOs would consist of the super-safe ESB (European Safety Bond) tranche guaranteed by the ECB and meant for banks primarily and junior risky tranche presumably desired by hedge funds, vulture funds, country funds and alike. The early proponents of this daring idea (although in a much more ambitious and unrealistic scope) are Prof. Harald Uhlig and sev-eral academics from the LSE (so-called Euro-nomics group) [Uhlig, 2011].

The third slot of this rescue policy package deals with managing public debts over 100% of EMU members’ GDP. Although those ‘red bond’ por-tions formally remain the sole responsibility of the debtor countries, follow-ing Holland and Varoufakis (2011), I support growth-oriented supranational financing mechanism orchestrated by the EIB bond issues (in accordance to its mandate), that could implicitly vouch for GIIPS’s future repayment capac-ity. After all, there shouldn’t be very many members deep in the red, especially after beneficial effects of the first two package components are to be felt.

Sadly enough, deep crisis of trust among the Eurozone members (even the leading ones) still prevents this proposal from being implemented, pre-cisely along the lines of the Mr. Juncker’s famous statement at the beginning of this essay. For as long as Eurozone’s leaders resist debt mutualisation and at least pseudo-fiscal transfers, fiscal money alternatives may well develop to be the second-best solution.

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4. Concluding Remarks

In this paper, we went on to evaluate the potential and appropri-ateness of the so-called fiscal money theory as the macroeconomic solu-tion for the Eurozone crisis. Fiscal money theory encompasses issuance of tax credit certificates (TCC) and/or tax-backed bonds (TBB) by the national governments of crisis-stricken Eurozone members, which are then bought and sold as financial assets by companies and households alike and serve as quasi-money of sorts. Likely merits of fiscal money are that it’s a digital, ledger managed, pre-capped tax-backed debt securities payment system with tax discounts, with neutral or overall positive fiscal impact (although this is not a given). Probable drawbacks of fiscal money were found to be arbitrary and non-consensual securities volume determination on a national level, grey market and inflation if securities are physically printed, parallel currency risk that could trigger a bank run and capital flight as well as end the rule of euro as the single legal tender. If we compare it to the Eurozone version of the QE, fiscal money is potentially cheaper and evidently more effective, while in comparison to the Friedman’s helicopter money proposal adjusted by the likes of Martin Wolf and Eric Lonergan, fiscal money is inferior but infinitely more feasible to be deployed.

Finally, expected efficiency and effectiveness of the fiscal money the-ory was also confronted with pseudo-fiscal federalism strategy that inter alia involves creation of Eurozone’s “Brady bonds” and manipulation with ECB-issued credit-derivatives. Even the most thought-through versions of fiscal money lose out big time when evaluated side by side opposite pseudo-fiscal federalism policy. Nevertheless, there’s no trace of political will for applying the tripartite policy package sketched above, which substantially draws from the seminal ‘modest proposal’ initially put forward by Stuart Holland and Yanis Varoufakis.

In conclusion, fiscal money theories circulating as of late range from potentially fruitful and interesting disintermediated public debt market to speculative or likely disastrous even for the troubled Eurozone, yet they re-main perhaps at least the second-best solution if political resistance to Euro-bonds and pseudo-fiscal federalism policy package doesn’t subside any time soon.

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References

• Bossone, B. et alia (2015), “Free Fiscal Money: Exiting Austerity with-out breaking up the Euro”, Moneta Fiscale, mimeo.

• Chaney, E. (2018) “Fiscal Money is an Illusion, not a Solution”, Telos-EU, May 23rd, mimeo.

• Grazzini, E. (2016), “Why Fiscal Money is better than Helicopter Mon-ey and QEP”, Social Europe, 8th of November, mimeo.

• Holland, S.-Varoufakis, Y. (2011), “A Modest Proposal for Overcoming the Euro Crisis”, mimeo.

• Malovic, M. (2014), “Money Theory and Monetary Policy for a Small Open Economy”, Institute of Economic Sciences, Belgrade (in Ser-bian).

• Malovic, M. (2015), „The Eurozone Conundrum: Inability to discern Sunk Costs from Marginal Cost of Hesitation?”, in X.Richet et alia (eds.), New Economic Policy Reforms, BBA&IES, Belgrade, New Economic Policy Reforms. Belgrade: Belgrade Banking Academy, ISBN 978-86-7852-036-5, pp. 169-181.

• Malovic, M. (2017), ”Clinical Picture of the Eurozone Crisis: Is there Grounds for Optimism?”, Culture of the Polis, Institute for European Studies,Vol. XIV, pp. 113 – 122 (in Serbian).

• Malovic, M.-Djukic, M.-Redzepagic, S. (2011), “Maastricht Criteria at the Age of 18: Are they even converging, which party and to what end?”, in Andrade, S. J. et alia (eds) Serbia and European Union: Economic Lessons from the New Member States, University of Coimbra Press, Coim-bra.

• Malovic, M.-Marinkovic, S. (2013), “Get Over or Game Over-The Rise and Fall of the European Monetary Union”, Economic Themes 51(1), pp. 59-83.

• Malovic, M-Bodroza, D. (2014), „Verdades y Conceptos erroneos acer-ca de la Atraccion, el Papel y el “Genotipo” de la Inversion directa Extranjera: El Caso de la Republica de Serbia”, Balkania-Revista de Es-tudios Balcanicos, ISSN 2172-5535, pp. 90-99.

• Ryan, J. (2018), “Is the European Central Bank ‘too Big to succeed’?”, in The Future of the European Central Bank, LSE Ideas, London School of Economics, London, pp. 3-9.

• Varoufakis, Y. (2017) “The Promise of Fiscal Money”, Social Europe, 6th of September, mimeo.

• Varoufakis, Y. (2019) “Fiscal Money can make or break the Euro”, Proj-ect Syndicate, Jun 17th, mimeo.

• Uhlig, H. (2011), “European safe Bonds are Answer to Euro-Area Cri-sis”, Bloomberg Business Class, October 21st, mimeo.

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Towards Sustainability and Improvement of Life standards of future Generations- Public policies and strengthening the Youth development potentials in Vojvodina Region

JelenaGrujić1

Abstract: The principle of sustainability and improvement of living standards is one of the fourteen prin-ciples for encouraging regional development contained in the Law on Regional Development in the Republic of Serbia. It involves increase the living standards of the present generations as well as all developmental poten-tials of future generations. Modernized Serbian society has brought a number of documents in the form of strategies and plans at all levels with the help of a large number of actors (state authorities, as well as citizens, groups of citizens, NGOs, etc.) for this purpose, on its way to European integration. Due to the percentage of the elderly in total population and the dual transition that young people pass, they represent a rare and significant resource that leads social development and social changes. For the purpose of social development of the Vojvodina region, as one of the five Serbian regions, public policy is grounded on the Youth Policy Action Plan of the Autonomous Province of Vojvodina - institutional framework that enables a systematic ap-proach in creating conditions for a better social position and quality of life for young generations in each local government. The subject of this paper is the methodology used in the process of creating and developing this document, with special emphasis on the mechanisms for participation of the civil sector in this process. Also, the methodology for creating and developing the Local Action Plan for Youth Policy of the City of Novi Sad for the period 2019-2022 will be presented as an example of one of the local governments’ instrument in this region. The method that will be used in this paper is the case study. The aim of the paper is to present the process and mechanisms for creating youth policy documents in order to develop the Vojvodina region, as well as to point out further direction and possible recommendations for their improvement.

Keywords: sustainability, regional development, public policies, youth policy…

1. INTRODUCTION

One of the most important criteria for measuring the legitimacy of political order is the ability to pursue the interests of an ordinary citizens. The governments’ resolution of collective problems, that we call public pol-icy, can be defined as ‘deliberate action of the institutions of power, which changes society and the economy and affect them’ (Analiza i zagovaranje

1 Educons University, Novi Sad, Serbia, [email protected]

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javnih politika, 2014: 8). An important element in the definition of public policy is a subject, so it could also be defined as ‘everything that government decides to do or not to do’. Public policies therefore include different gov-ernment interventions to achieve public defined goals. Other also important elements of public policy are goals and instruments so the policy is aimed at achieving the goals for the benefit of the community and making the best de-cisions to satisfy the collective needs. Classical governments’ responsibilities include sectors such as the foreign affairs policies, penal policies, or economic policies such as industrial and investment policies. The governments’ role is important in the area of social policies- pension, health, housing and fam-ily policy. A separate group consists of specific sectoral policies, which are specialized sectors such as traffic, agriculture or media. But government has not got all the financial resources, time, money and people to be able to deal with all possible problems. Apart from the members and bodies of the gov-ernment, all state administration bodies are extremely important, especially central bodies - ministries. The key is how the government manages with them because they are the link between the political decision of the officials and the effects that public policies have on citizens. Therefore, public poli-cies assume determination of community priorities and participation of non-state actors (stakeholders), including experts and civil society. Every democ-racy, regardless of the type of political order, is expected to have interaction with citizens and to recognize them as actors of public policies- informing them and creating an environment in which they will both individually and collectively show an interest to become involved. Involving citizens in the decision-making process and regional development fosters both individual and collective action, emancipates and strengthens individual and collective awareness as well as awareness of the common good, strengthens confidence in institutions and actors, reduces apathy from one election process to anoth-er, and reduces feelings of alienation from the state as a center of power. This model, despite its different socio-economic formations and transformations, has maintained its continuity since the ancient polis. Although public life was taking place in the square at the time, it was not locally connected because the public, in the form of public opinion, ‘’ was constructed in a conversa-tion that took the form of counseling or judgment ‘’ (Habermas, 1969: 9). According to Habermas, the model of Hellenic public “found real legal and technical application only in the modern state and in the separate spheres of civil society” (Habermas, 1969: 10) in which it served to build political self-awareness and institutionalize what is called ‘civil public’. Public discussion, public reporting, negotiation and the public as a political actor with a political

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function with a key importance in policymaking. In the Kantian tradition, it is commonly held that there is some contradiction in defending personal in-terests through the public mind (Milanović, 2016: 177). Establishing dialogue between citizens and local authorities through the consultation process opens up the opportunity for citizens to become policymakers and the border be-tween personal, group and general interest tends to be completely erased. The process of public consultation is most often determined and managed by local governments, asking questions and offering citizens, in various ways, the opportunity to give their opinions. Some of the functions that political parties have assumed are taken over by other social actors (civic associations, informal groups, pressure and advocacy groups, organizations dedicated to specific topics) which make the means and ways of solving problems more accessible and the groups exercise more control over public authorities more flexibly and with greater confidence. In a model of deliberative democracy, membership in Facebook’s social networking group, support for vulnerable citizens, signing a petition to ban tree felling on a street, participating in a focus group for policy-making normative documents, or online public debate are manifestations of the highest civic virtues, and political functions of the civic public through the supervision, criticism and control of state bodies and public policy in modern political arenas. Public policy actors are individu-als, groups (formal or informal) or organizations that based on their formal competencies, but also interests and values, they participate in the creation process public policies, that is, tend to influence the design and implementa-tion of solutions to public problems of target group which necessary doesn’t have to take an active role in it. Participation of civil society organizations becomes important because they possess the necessary expertise, knowledge, and as a non-state actor they provide valuable data. Non-state actors become crucial actors (usually as members of working groups, various advisory coun-cils and monitors) because they give contribution to the legitimacy of public policy making in all phases except the decision phase. The analysis of public policies and public debates process, as a separate field, is based mainly on the quantification of the success of their creation and implementation on the basis of recommendations and ‘recipes’ made by international actors, which reproduces already existing and creates new relations of power where ‘learn-ing democracy’ in the process of social transition, sounds like a repetition and mantra of new ideological dogmas. From the point of view of sociologi-cal science and general sociology, the problem of public policy arises in the context of the social changes that Serbian society has been going through for over twenty years. Contrary to the traditional one, contemporary sociologi-

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cal theory does not separate social change from social structure because it considers to be its characteristics, and ‘the sociological study of this topic will encompass structures and actors’ (Antonić, 2009: 11).

Institutional infrastructure and actors in youth public policies in Serbia and Vojvodina Region

The principle of sustainability and improvement of living standards is one of the fourteen principles for encouraging regional development con-tained in the Law on Regional Development in the Republic of Serbia. It involves increase the living standards of the present generations as well as all developmental potentials of future generations. Modernized Serbian society has brought a number of documents in the form of strategies and plans at all levels with the help of a large number of both foreign and domestic so-cial actors for this purpose on its way to European integration. This type of modernization represents ‘the fourth attempt of modernization in the past two hundred years’ (Antonić, 2009: 11). Due to the percentage of the elderly in total population and the dual transition that young people pass, they rep-resent a rare and significant resource that leads social development and social changes. In the more developed countries of the world, young people are being promoted to an increasingly important social resource, especially due to the fact of a decades-long trend of population aging and unequal regional development. They are segment of the population that represents one of the most sensitive group to social changes and the strategy of social integration of youth into society in social transition must be subtle. Beside European docu-ments on youth, Law on Youth of the Republic of Serbia defines as ‘young persons are considered to be persons between the ages of fifteen and thirty’ (Zakon o mladima, 2011.). All subjects (groups, non-governmental organiza-tions and citizens) involved in youth public policies are all gathered under the umbrella organization ‘Krovna organizacija mladih Srbije’ that together with Ministry of youth and sports of the Republic of Serbia lead and analyse the process. In 2017. Vojvodina region with a population of 1,871,515 the young people aged 15-30 was 20%. There are two viewpoints of youth: 1. youth as a human resource where supporting their potentials need to be activated by providing optimal social conditions for development, and 2. the viewpoint in which youth is a problem that implies that they are in sensitive period that includes deviant and risky behaviors and need protection and better inte-gration. Recognized as partners to a government bodies, they are involved

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in creating conditions for their-own development where they can suggest, implement and monitor youth policies. What is specifi c in Vojvodina’s region youth policy is the fact that it was institutionally recognized in 2002. with the establishment of the Provincial Secretariat for Sport and Youth. Systematic access was ensured through the implementation of three Youth Policy Ac-tion Plans so far (for the periods 2005-2008, 2011-2014 and 2015-2020.). A few years later, with the formation of the Ministry of Youth and Sports in 2008, social and regional development began with institutional framework for youth policy at all levels, when adopted National Youth Strategy for the period 2009-2014. and 2015-2025. accompanied with the Youth Act in 2011. Particular emphasis is put on active involvement of young people in the Eu-ropean integration. The fi rst Youth Policy Action Plan for Vojvodina region for the period 2011 – 2014 was adopted on 25 November 2010 in the Autono-mous Province of Vojvodina. Since the Youth Act have not existed yet, this plan was based on National Youth Strategy, European Youth on Action, Eu-ropean Union Strategy ‘Youth: Investment and Empowerment’ (2010-2018), Declaration ‘Future of Youth Policy of the Council Europe: Agenda 2020’. For four years, as part of the Call for Proposals for the Youth Policy Action Plan, Autonomous Province of Vojvodina supported a total of 393 projects implemented by youth organizations and for youth, youth institutions and youth offi ces for each city and municipality.

ensured through the implementation of three Youth Policy Action Plans so far (for the periods

2005-2008, 2011-2014 and 2015-2020.). A few years later, with the formation of the Ministry of

Youth and Sports in 2008, social and regional development began with institutional framework for

youth policy at all levels, when adopted National Youth Strategy for the period 2009-2014. and

2015-2025. accompanied with the Youth Act in 2011. Particular emphasis is put on active

involvement of young people in the European integration.The first Youth Policy Action Plan for

Vojvodina region for the period 2011 – 2014 was adopted on 25 November 2010 in the

Autonomous Province of Vojvodina. Since the Youth Act have not existed yet, this plan was based

on National Youth Strategy, European Youth on Action,European Union Strategy ‘Youth:

Investment and Empowerment’(2010-2018), Declaration ‘Future of Youth Policy of the Council

Europe: Agenda 2020’. For four years, as part of the Call for Proposals for the Youth Policy Action

Plan, Autonomous Province of Vojvodina supported a total of 393 projects implemented by youth

organizations and for youth, youth institutions and youth offices for each city and municipality.

Graphic 1: The share of public interest projects areas in youth sector in the territory of Vojvodina region in 2014, as a part of the preparation of Youth Policy Action Plan for the period 2015 – 2020. (Akcioni plan politike za mlade u AP Vojvodini 2015 – 2020, 2015: 5)

Youth social policy projects Mobility and

public informing

[CATEGORY NAME]

Culture and leisure projects

Education projects

Enviromental protection projects

Youth public health projects

Youth safety

Volunteerism

Graphic 1: The share of public interest projects areas in youth sector in the territory of Vojvodina region in 2014, as a part of the preparation of Youth Policy Action Plan for the period 2015 – 2020. (Akcioni plan politike za mlade u AP Vojvodini 2015 – 2020, 2015: 5)

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Jelena GrujićTOWARDS SUSTAINABILITY AND IMPROVEMENT OF LIFE STANDARDS OF FUTURE GENERATIONS...





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Public interest project areas in youth sector Number of projects 2011-2014. (%)

1.environmental protection 60 (15%)2.culture and leisure of young people 58 (15%)3.youth education 55 (15%)4.youth health 52 (13%)5.youth safety 39 (10%)6.youth employment 36 (10%)7.active inclusion of young people in society, civil society building, volunteerism 34 (9%)

8. mobility and youth information 31 (8%)9. social policy for youth 28 (7%)Total 393

The projects were implemented in the following areas: 1. environ-mental protection (60 projects), 2. culture and leisure of young people (58 projects), 3. youth education: 55 projects, 4. youth health (52 projects), 5. youth safety (39 projects), 6. youth employment (36 projects), 7. active inclu-sion of young people in society, civil society building, volunteerism (34 proj-ect), 8. mobility and youth information (31 projects), 9. social policy for youth (28 projects). For a period of four years (2011-2014) youth associations, as-sociations for youth, institutions and other units implemented 509 projects supported by local governments in following parts of the Plan: implementa-tion of the Action Plan on Drugs, prevention of violence and discrimina-tion, and reproductive health education (Akcioni plan politike za mlade u AP Vojvodini 2015 – 2020., 2015: 6). Most of these projects were done in the territory of Novi Sad and Sombor. Also large number of activities were implemented in rural areas environments or activities involving youth from rural areas, such as in municipalities in Alibunar, Plandište, Bela Crkva, Nova Crnja, Titel and Beočin. The stakeholders who carried out these projects were associations, followed by the Youth Offi ces and local government, and also education, health and other institutions. One of the most important re-sults were large number of partnerships that have been established, opening the Vojvodina Youth Center and covered 66.66% activities on the territory of Vojvodina region. Youth Policy Action Plan for the period 2015 – 2020 was the second instrument in the fi eld of regional youth public policy. Based on the Youth Act of Republic of Serbia, this Plan was the result of cooperation

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of non- governmental sector and provincial secretariats, guided by recom-mendations and performance indicators arised from evaluations of previous plan by Vojvodina Youth Forum. Various forms of public hearings and public debates were organized. Youth associations and youth representatives, local self-governments, youth offi ces, educational, health and social representa-tives and other institutions, students, student parliaments and all interested youth were included in consultation process with suggestions and public de-bate was held on the portal Omladina.info and internet page of Provincial Secretariat for sports and youth. Key elements and goals of the Plan are: 1. youth education (effective education adapted to all young people along with european trends, as well the needs of young people), 2. youth employment (support programs for young people in overcoming problems when choosing a job, entry and survival in the job market), 3. youth health and youth social policy (supported and promoted existing and innovative activities, programs and services in the area health promotion and disease prevention targeted at all young people, with an emphasis on the young from marginalized groups, 4. youth culture and information (increased availability and supply, improved quality of cultural consumption of young people and young people, as well as empowered young people to participate in creating cultural offerings; qual-ity of provided information), 5. youth activism and leisure (developed youth activism in all segments of society and improved opportunities for quality leisure time for young people), 6. youth volunteerism and mobility (raised awareness of local community members and decision makers and impor-tance of developing volunteerism; increased participation of young people in the mobility process), 7. youth safety (improved conditions and empowered young people to develop a safety culture), 8. environmental protection and sustainable development (improved attitude of young people towards envi-ronmental protection and sustainable development)2.

Creating and developing local youth public policy in the capital of youth- case study of Novi Sad

Novi Sad is the administrative, economic, cultural, scientifi c and tourist center of Autonomous Province of Vojvodina, the second largest city in Serbia and the fi rst in Vojvodina region. With a very good geographical position, it is located on the most important international traffi c corridors

2 Akcioni plan politike za mlade u AP Vojvodini 2015 – 2020, 2015:8

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and connects Northern, Central and Eastern Europe. With four hundred thousand inhabitants, Novi Sad is a multinational, multicultural and multi-confessional urban area where differences are perceived as a comparative asset. It is the most perspective city in modern Serbia, with huge social, economic and cultural potential because of well-placed development projects. An urban environment with picturesque population of young people (56,153 or about 18% inhabitants aged 15 by 30 years), a city has both permanent and temporary inflow of population so far, and that is what makes social dynamics of both urban and rural area so vivid. It is a place with one of the richest social, economic, cultural, regional and local offers, and it is known as a city with well-developed social activism of citizens, as European institutions recognized. Inhabitants in Novi Sad over the years of social transition express their interests through various activities in more than a thousand civil society organizations. Around 10% of these organizations are youth-led and Novi Sad is seen in Western Balkan region as both creative and innovative space for youth subcultures, culture and artistic movements and sports clubs. That is the reason why it has been recognized as representative youth and culture center. This year in 2019., Novi Sad is the European youth capital and it will be European capital of culture in 2021. Approval of public interest projects in the field of the youth sector on the city territory provides implementation, monitoring and evaluation of programs and projects and achievements objectives and measures defined by Local Action Plan for Youth Policy for the periods of 2010-2014., and further on 2015-2018 and 2019-2022. as a part of implementation of the ongoing regional Youth Policy Action Plan for the period 2015 – 2020. Local Action Plan for Youth Policy is a document that on the proposal of the City Administration for Sport and Youth and Office for Youth adopts the Assembly of the City of Novi Sad, and it is governed in particular: active participation of young people in social life, ensuring the realization of youth rights equal opportunities, informing young people, fostering and evaluating tolerance, democracy, outstanding achievements of young people, encouraging and developing formal and non-formal education, encouraging and stimulating employment and self-employment of young people and youth entrepreneurship, improving youth safety, sustainable development and a healthy environment, promotion of youth health and other activities and areas of importance to young people. The Plan sets out specific measures and activities that provide support for 1. encouraging young people to actively participate in social movements through affirmation and support youth activities, youth work and non-formal education in the

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City, 2. encouraging youth associations, youth associations and associations to participate in implementation youth policies, including capacity building of youth associations, in the City, 3. for the establishment and operation of youth clubs, youth centers, 4. creating conditions for active and quality spending of young people’s leisure time, dealing with sports, fostering healthy and safe lifestyles, conducting volunteer activities, 5. organization of trainings, seminars and events of importance for employment and training youth, as well as for the needs of young people in the fi eld of culture, and 6. activities and projects that promote sustainable development and environmental protection (Lokalni akcioni plan politike za mlade, 2019: 14.). One of the results of these plans on a local level was establishing the Novi Sad Youth Forum, that gathered over 200 young people from over 80 youth organizations from Novi Sad who have signed a memorandum of cooperation and participation with the City’s Administration for Sports and Youth. As part of good cooperation with the City Administration for Sport and Youth, Offi ce for Youth, University of Novi Sad and Provincial Secretariat for Sport and Youth, the establishing of Novi Sad Youth Forum was approved on the suggestion for the City Administration. Forum has so far supported by the Government of the Republic of Serbia, the Ministry of Youth and Sport, Provincial Secretariat for Sport and Youth, Assembly of Vojvodina, University of Novi Sad, Organization for Security and Cooperation in Europe, Serbian Conference of Towns and Municipalities, Umbrella Organization for Youth of Serbia, National Association of Youth Work Practitioners, and over 20 other organizations from Europe and collected signatures for candidacy for European Youth Capital in Varna in November 2016. After European Youth Forum3 announced Novi Sad as youth capital, work to create more opportunities for youth, including Forum, which will ‘enable youth civil society to input on youth policies and to further empower young people to become proactive initiators of positive change, introducing innovative ideas not only in Novi Sad, but also at the national and international level’ (European Youth Forum, 2016.). Making the Youth Creative Polis, the Forum offers a space for creative expression of young people, youth organizations, informal groups, individuals and anyone directly involved with youth. Also,

3 The European Youth Forum is the platform of youth organizations in Europe. Indepen-dent, democratic, youth-led, it over 100 National Youth Councils and international youth organizations from across the continent. The Forum works to empower young people to participate actively in society to improve their own lives, by representing and advocating their needs and interests and those of their organizations towards the European Union, the Council of Europe and the United Nations. www.youthforum.org

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as a part of strategy Novi Sad 2021. City Administration in a cooperation with civil organizations offer so called ‘cultural stations’ as a part of a larger Novi Sad 2021’s project called ‘Kaleidoscope’, builted or renovated urban spaces and facilities for cultural content. Youth organizations also use that facilities because cultural strategy maps youth as one of the most numerous publics for cultural content and the most active social actors in creating, organizing and realization of cultural events. In the research of needs of Novi Sad youth in 2018. that was organized for the purpose of making Local Action Plan for Youth Policy 2019-2022.on the sample of 1000 respondents with the age 15-30 years, the largest number of respondents said that social work, education and ecology are the key areas for the project activities. They were ‘mainly satisfi ed with the quality of life in Novi Sad and since the reason for not attending and participating in cultural and social events is the lack of fi nances’ (Istraživanje položaja i potreba mladih za potrebe Lokalnog akcionog plana, 2018: 70), the Plan anticipated projects and urban public spaces where young people can satisfy their cultural and social needs for free.

of needs of Novi Sad youthin 2018. that was organized for the purpose of making Local Action Plan

for Youth Policy 2019-2022.onthe sample of 1000respondents with the age 15-30 years, the largest

number of respondents said that social work, education and ecology are the key areas for the project

activities. They were ‘mainly satisfied with the quality of life in Novi Sad and since the reason for not

attending and participating in cultural and social events is the lack of

finances’(Istraživanjepoložajaipotrebamladih za potrebeLokalnogakcionog plana, 2018: 70), the Plan

anticipated projects and urban public spaces where young people can satisfy their cultural and social

needs for free.

Graphic 1: The share of public interest projects areas in youth sector in the territory of Novi Sad in 2017, which provides implementation , monitoring and evaluation of programs and projects and achievement’s objectives and measures defined by Local Actions Policy Plan for Youth of the City of Novi Sad for the period 2015 – 2018.( (Informator o raduGradskeuprave za sport iomladinu, 2019: 53-59) Public interest project areas in youth sector Number of projects in 2017. (%) Youth social policy projects 10 (9%) Public informing projects 7 (6%) Youth employment projects 17 (15%) Culture and leisure projects 18 (16%) Education projects 7 (6%) Environmental protection projects 11 (10%) Youth public health projects 18 (16%) Youth safety 10 (9%) Volunteerism 12 (11%) Monitoring and evaluation of projects 1

Youth social policy projects

Public informing projects

[CATEGORY NAME]

Culture and leisure

projectsEducation projects

Enviromental protection

projects

Youth public health

projects

Youth safety

Volunteerism

Graphic 2: The share of public interest projects areas in youth sector in the territory of Novi Sad in 2017, which provides implementation , monitoring and evaluation of programs and projects and achievement’s objectives and measures defi ned by Local Actions Policy Plan for Youth of the City of

Novi Sad for the period 2015 – 2018.( (Informator o radu Gradske uprave za sport i omladinu, 2019: 53-59)

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Public interest project areas in youth sector Number of projects in 2017. (%)

Youth social policy projects 10 (9%)Public informing projects 7 (6%)Youth employment projects 17 (15%)Culture and leisure projects 18 (16%)Education projects 7 (6%)Environmental protection projects 11 (10%)Youth public health projects 18 (16%)Youth safety 10 (9%)Volunteerism 12 (11%)Monitoring and evaluation of projects 1Total 111

As can be seen from the graphics and table, the largest number of projects in 2017. were coming from the culture and leisure and public health area. Public health area has always been key area for project activities because the first civil society organizations came from the public health area. It has a special place in development strategies towards youth in Vojvodina region, and it was first began with JAZAS (Yugoslav Youth Association Against AIDS) activities.

.

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Total 111 As can be seen from the graphics and table, the largest number of projects in 2017. were coming

from the culture and leisure and public health area. Public health area has always been key area for

project activities because the first civil society organizations came from the public health area. It has

a special place in development strategies towards youth in Vojvodina region, and it was first began

with JAZAS (Yugoslav Youth Association Against AIDS)activities.

Graphic 2: The share of public interest projects areas in youth sector in the territory of Novi Sad in 2018, which provides implementation , monitoring and evaluation of programs and projects and achievement’s objectives and measures defined by Local Actions Policy Plan for Youth of the City of Novi Sad for the period 2015 – 2018. (Informator o raduGradskeuprave za sport iomladinu, 2019: 80-84) Public interest project areas in youth sector Number of projects in 2018. (%) Youth social policy projects 11 (10%) Public informing projects 6 (6%) Youth employment projects 12 (11%) Culture and leisure projects 21 (20%) Education projects 6 (6%) Environmental protection projects 11 (10%) Youth public health projects 15 (14%) Youth safety 14 (13%)

Youth social policy projectsPublic

informing projects

[CATEGORY NAME]

Culture and leisure

projectsEducation projects

Enviromental protection

projects

Youth public health projects

Youth safety

Volunteerism

Graphic 3: The share of public interest projects areas in youth sector in the territory of Novi Sad in 2018, which provides implementation , monitoring and evaluation of programs and projects and achievement’s objectives and measures defi ned by Local Actions Policy Plan for Youth of the City of Novi Sad for the period 2015 – 2018. (Informator o radu Gradske uprave za sport i omladinu, 2019: 80-84)

Public interest project areas in youth sector Number of projects in 2018. (%)

Youth social policy projects 11 (10%)Public informing projects 6 (6%)Youth employment projects 12 (11%)Culture and leisure projects 21 (20%)Education projects 6 (6%)Environmental protection projects 11 (10%)Youth public health projects 15 (14%)Youth safety 14 (13%)Volunteerism 9 (9%)Monitoring and evaluation of projects 1Sum 106

As can be seen from the graphics and table 2, the largest number of projects in 2018. were coming from the culture and leisure area. Since Novi

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Sad has been nominated for the European youth capital and the European capital of culture, the city government is obliged to support culture and lei-sure projects for young people and civil society organizations by increasing its budget intended for these activities. During the preparation of the Local Action Plan for Youth Policy 2019-2022 the methodology covered several stages with actions: 1. appointment of a Working group for development the Plan,2. data collecting, data analysis and preparation of reports based on the col-lected data, 3. drafting the Plan based on the results and recommendations obtained, 4. submission of the Plan draft to the Novi Sad City Council, and 5. submitting the Plan to the Assembly for adoption. The research, as an integral part of the design process, included collecting qualitative and quantitative data on young people, their status, needs, opinions and views on the life of young people in the City and suburban areas. The survey was methodologi-cally set up as a combination of several techniques and instruments to collect relevant data that provided guidance for further document production.

Graphic 3: Methodology of making Local Action Plan for Youth Policy 2019-2022.(Lokalniakcioni plan politike za

mladegradaNovogSada, 2019:13)

The Working Group determinates three priority objectives such as establishing youth centers and

clubs, establishing youth info centers, and alsoestablishing City volunteer centers and services. The

Plan recognized sensitive youth groups: 1. youth at risk of poverty 2. young Roma 3. youth with

disabilities 4. young people living in refugee and displaced persons 5. young returnees in the

readmission process 6. sensitive groups of young people with regard to gender 7. young parents 8.

youth without parental care and 9. young people living on the streets(Lokalniakcioni plan politike za

mladegradaNovogSada 2019-2022, 2019: 55). Also, public debates were made on the proposal of the

Plan, which leads to the conclusion that this represents one of the best examples of citizen’s

participation in government through participation in creating public policies.

YOUTH STATUS, NEEDS, OPINIONS

AND VIEWS ON LIFE SURVEY- 1000 participants age 15-30 in October and November 2018.- open-ended and closed-ended questions- three reference points: level of youth awareness, youth participation and youth coverage in youth programs-projects, activities, and elements and subjects of youth policy- analyzing the capacities and resources of organizations and institutions in the City

27 FOCUS GROUPS- representatives of organizations, - institutions dealing with young people- individuals from different sectors- focus groups maderecommendations and conclusions for 9 priority areas

THE DESK ANALYSIS- various local, provincial, national and international documents, action and strategic plans, research and recommendations-results of the implementation of the Plan in the previous period

Graphic 4: Methodology of making Local Action Plan for Youth Policy 2019-2022. (Lokalni akcioni plan politike za mlade grada Novog Sada, 2019:13)

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The Working Group determinates three priority objectives such as establishing youth centers and clubs, establishing youth info centers, and also establishing City volunteer centers and services. The Plan recognized sensitive youth groups: 1. youth at risk of poverty 2. young Roma 3. youth with disabilities 4. young people living in refugee and displaced persons 5. young returnees in the readmission process 6. sensitive groups of young people with regard to gender 7. young parents 8. youth without parental care and 9. young people living on the streets (Lokalni akcioni plan politike za mlade grada Novog Sada 2019-2022, 2019: 55). Also, public debates were made on the proposal of the Plan, which leads to the conclusion that this represents one of the best examples of citizen’s participation in government through participation in creating public policies.

CONCLUSION

The Partnership for Open Government in the Republic of Serbia for 2016 and 2017 provides a series of measures whose implementation would enhance public participation, but the most of the measures have not been fully implemented. Many laws and documents have been made without citi-zen’s deliberation are followed by violations of procedures, which affects the quality of the regulations and hinders their implementation. Also, due to the lack of clear reporting rules, the public remains left without information and report to which suggestions and comments they have affected the final ap-pearance and content of the regulations. That diminishes citizen’s confidence in institutions and slows down the development of participatory democracy. Other similar forms of consultation, such as public hearings, roundtables, ex-pert meetings with representatives of institutions, thematic discussions with representatives of non-governmental organizations, citizens’ associations, the private sector, the media and citizens, then open door policy, citizen re-ception, polls, organizing working teams to talk to citizens or seminars and workshops are also mandatory. According to research conducted so far by so-called foreign process evaluators in the form of reports, there is no par-ticular interest in Serbian citizenship for active and regular participation in the consultation process. The exception that can be listed is creating documents in the field of youth public policies. Recognized as most active and compe-tent in the field of citizen’s culture and values, and good partners to a gov-ernment bodies, young people are involved in creating conditions for their-

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own development where they can suggest, implement and monitor their own public policies. Institutionally recognized in 2002. with the establishment of the Provincial Secretariat for Sport and Youth, systematic access and demo-cratic participation of young people in governmental activities was ensured through the implementation of three Youth Policy Action Plans. A few years later, with the formation of the Ministry of Youth and Sports in 2008, so-cial and regional development began with institutional framework for youth policy at all levels, when adopted National Youth Strategy for the period 2009-2014. and 2015-2025. accompanied with the Youth Act in 2011. Par-ticular emphasis is put on active involvement of young people in the Euro-pean integration and Autonomous Province of Vojvodina supports projects implemented by youth organizations and for youth, youth institutions and youth offices for each city and municipality. The projects are implemented in the following areas: environmental protection, culture and leisure of young people, youth education, youth health, youth safety, youth employment, ac-tive inclusion of young people in society, civil society building, volunteerism, mobility and youth information, and youth social policy. Youth associations, associations for youth, institutions and other units implement projects sup-ported by Youth Offices, local governments, education, health institutions also in rural areas. One of the most important results were large number of partnerships that have been established, opening the Vojvodina Youth Center and covered 66.66% activities on the territory of Vojvodina region. Over the years of social transition Novi Sad as the capital of Vojvodina region express their interests through various activities in more than a thousand civil society organizations. Around 10% of these organizations are youth-led and Novi Sad is seen in Western Balkan region as both creative and innovative space for youth subcultures, artistic movements and civil society organizations. That is the reason why it has been recognized as representative youth and culture center. Approval of public interest projects in the field of the youth sector on the city both urban and rural territory provides implementation, monitoring and evaluation of programs, projects, achievements objectives and measures defined by Local Action Plans for Youth Policy that represent key document that is made and the best example of how both formal and non-formal forms of citizen’s participation with the public deliberation can be achieved. In this example of public policy, social power is given to citizens through citizen’s control, delegation and partnership with government.

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REFERENCES:

Antonić, Slobodan, Elita, građanstvo i slaba država, Službeni glasnik, Beo-grad, 2009.

Analiza i zagovaranje javnih politika, Centar za celoživotno obrazovan-je Fakulteta političkih znanosti Sveučilišta u Zagrebu, Nacionalna i sveučilišna knjižnica, Zagreb, 2014.

Habermas, Jirgen, Javno mnjenje- istraživanje u oblasti jedne kategorije građanskog društva, Kultura, Beograd, 1969.

Мilanović Branko, Globalna nejednakost, Akademska knjiga, Beograd, 2016.

Zakon o mladima, Službeni glasnik Republike Srbije, br.50/2011. https://www.paragraf.rs/propisi/zakon_o_mladima.html

Akcioni plan politike za mlade u AP Vojvodini 2015 – 2020 https://www.sio.vojvodina.gov.rs/index.php/omladina/akcioni-plan-politike-za-mlade

Istraživanje položaja i potreba mladih za potrebe Lokalnog akcionog plana- terensko istraživanje, https://www.kzm.novisad.rs/wp-content/up-loads/2019/02/31.10.2018.pdf

Lokalni akcioni plan politike za mlade grada Novog Sada, 2019 http://www.novisad.rs/lat/lokalni-akcioni-plan-politike-za-mlade-grada-novog-sada-za-period-2019-2022-godine

Informator o radu Gradske uprave za sport i omladinu, 2019 http://www.novisad.rs/lat/informator-o-radu-gradske-uprave-za-sport-i-omladinu-0

Resolution EU strategy, 2016 https://www.youthforum.org/sites/default/files/publication-pdfs/Resolution_EU_Youth_Strategy_FINAL%281%29.pdf

86

Evaluating and assessing entrepreneurial Competences andmanagerialSkillsthatimpactonCompaniesfinancial

Outcomes

ByCarmineD’Arconte1

Abstract: To evaluate the potentiality of someone who wishes to become an entrepreneur is definitely a major issue especially nowadays, considering the persistent economic crisis and the high level of unemployment that we have in most European countries. In such a situation to start a business of one’s own seems to be the only way out but for sure it remains a highly risky decision to be taken with the utmost care. To measure this potentiality we have many tests that, nevertheless, are generally focusing on psychological aspects and in particular on personality traits, which are definitely important, but in no way sufficient to evaluate whether someone may become a successful entrepreneur. In fact, general entrepreneurial competences and managerial skills are needed, namely those that are a common denominator for all companies, independently from the specific business, such as evaluating costs, making and adapting prices, communicating with customers and so on. In this paper, we first propose and integrated approach that seems to cover rather well all aspects related to entrepreneurship and then we describe our research on the topic, based on face-to face interviews to entrepreneurs and business administration students. The results show a rather critical situation in terms of entrepreneurial competences and managerial skills, which may raise the issue of a possible serious negative impact on companies’ financial outcomes as well as on the effectiveness of the educational system in this specific field. Finally, we draw some conclusions and we focus on the possible suggestions to improve the present situation.

Key words: Personality traits. Entrepreneurial competences and managerial skills. Evaluation tests. Educational system.

1. Introduction and theoretical review

In the relevant extremely wide literature on the topic we generally find a fragmented approach, as we pointed out in one of our previous con-tributions (D’Arconte, 2016); in fact the focus seems to be only on a limited part of a much more complicated item considering that authors generally concentrate on a few aspects rather than on the whole of the key elements involved that, on the other hand, should be investigated in their reciprocal relationships and influence rather than as single items.

Substantially, most scholars approach this aspect mainly considering psychological traits and, in this regard, the impression is of even too many

1 Università di Roma Tre, Faculty of Economics. Rome. ITALY. [email protected]

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Carmine D’ArconteEvaluating and assEssing EntrEprEnEurial compEtEncEs and managErial skills ...





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contributions. There is actually a proliferation of models, interesting on the theoretical level but rather complicated and quite honestly not so useful in practice; we refer for instance to the Theory-Driven model of intention, in line with Ajzen's theory of planned behaviour, or the Shapero's model of the entrepreneurial event (Norris, 2000) or other models such as Scott and Twomey's, Bird's and Boyd and Vozikis' models (Battistelli, 2001). These models, according to the authors, are supposed to provide practical insight in order that entrepreneurship educators can use them with their students and trainees in order to help them understand their own motivations and intentions. Though remarkable and useful at a theoretical level, we have to point out that these models focus mainly on intentions that really are a little part of all the aspects involved and, we have to add, not at all the most impor-tant, because everyone may have the intention to start a business but, what is important, is to understand what is necessary to be successful.

In this regard a fundamental step forward is due to Chandler and Jan-sen (1992) who not only have understood how entrepreneurial and manage-rial competences cannot be limited to personality traits, but have also extend-ed the analysis coming to the conclusion that business founders must assume in their businesses three predominant roles and these are entrepreneurial, managerial and technical-functional roles. Capitalizing on their contribution, we believe that we can go a little further by saying that – apart from personal-ity traits - we have to make a fundamental distinction between specific and general competences.

Specific competences refer to Chandler and Jansen technical-func-tional role, namely the particular skills and technical competences that are required for every craft and profession; it goes without saying that these should be the exclusive domain of experts and that any effort for improve-ment should be done in their restricted circles where they may find particular occasions to meet, for instance in specific fairs and exhibitions, exchanging their experiences and know-how in line with benchmarking principles.

In contrast with the first class, general competences are supposed to be a kind of common denominator for all companies, irrespectively of the particular kind of sector and work, something that therefore may be analyzed in a systematic way, generalized and applied in all companies, which is, sub-stantially, the foundation of Business Administration. Chandler and Jansen divide them in two different kind of competences, entrepreneurial and mana-gerial ones, and in a similar way we have another important contribution that comes from Penchev (2011) who makes an important distinction between competences "needed all the time" and competences "more needed for run-ning the established company".

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The first class is predominantly related to creativeness and plays a fundamental role in making business creative decisions; they may be defined (in the strict sense of the word) entrepreneurial competences. The second one is, on the contrary, more in connection with technical and quite often recurring aspects and, in this case, we can speak more correctly about mana-gerial skills.

The division should not be considered a net one but only an effort to distinguish two extremes along a line, from pure creativity to technical rou-tine where we find aspects that often overlap.

This distinction allows us to understand how entrepreneurs and managers may be - and actually are - rather different, though definitely with some traits in common. In fact one thing is to have a good business idea and being able to start a company, and another one to run it in a successful and profitable way. Greatly simplifying, we could say that in entrepreneurs, creativity is the predominant quality while in managers we can find much more technicalities though, according to the specific problem to face, the two aspects may often overlap.

With Chandler, Jansen and Penchev we definitely have a great qualita-tive progress toward a more complete and integrated approach but, never-theless, we have to say that their list of competences - especially regarding managerial skills - is really far from being complete.

Apart from trying to outline entrepreneurial and managerial compe-tences in a better way, we also investigated what kind of tests are available to evaluate them and, as we expected, we found out how many of them, even very reliable and qualified, unfortunately focus nearly only on person-ality traits, going quite often even too much in-depth, with an unnecessary quantity of traits.

For instance the Commision of the Filipinos Overseas in their official site named Balinkbayan, shows a test where are listed up to 30 items, while eLearn Connection Service, that introduces the stimulating idea of an entre-preneurial I. Q., proposes a test with around 20 items and, in both , most of them are on personality traits.

In this regard, a very good, more science-based test, comes from an interesting research (Egbert, 2014), confirming the possibility to use in practice psychometric tests and in particular F-DUPn to measure personality traits considered to be important for entrepreneurial potential. Nevertheless also this test, though very qualified, mainly investigates personality traits.

What about tests that also focus on the general competences we have already mentioned? There are some tests - still mainly based on personality traits - that starts considering also general competences such as the PACE

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test (Schillaci, 2017) where, nevertheless, out of 37 items taken into consider-ation, only 3 regard general competences; a better one is the test proposed by the Research and Training Center on Disabilities in Rural Communities (2004) where personality traits are as usual considered in an excessive and also in a not well outlined way (more than 30 items) but generic compe-tences are also investigated more in-depth (14 items all together). We can find also diametrically opposed situations such as, for instance, the BDC test that completely ignores personality traits and set a path that potential entrepre-neurs should follow, only based on managerial skills. An interesting though exaggerated attempt to cover all aspects comes from Canty (2012), with the Grasshopper test, with 9 professional tools to try and assess the entrepre-neurial potential; this last test, on one hand, demonstrates how complex the topic may be if we want to tackle it in-depth but, on the other hand, it seems to be the result of a too much encyclopedic approach which, nevertheless, may be not so useful in pratice.

We believe that the main underlying problem is that it is fundamental to have an approach based at the same time on Business Psychology as well as on Business Administration principles, giving entirely to both of them all the importance they deserve, because every one-sided outlook on the topic is inevitably bound to be insufficient.

2. Objectives and methodology of the study and the research

Objectives

The main goals of this paper are to highlight the following items:a) What exactly are entrepreneurial competences and managerial skills?b) What is the present situation regarding entrepreneurial competences and managerial skills among entrepreneurs?b) What’s the present situation regarding Business Administration students?

Methodology

To depict a faithful picture regarding the above mentioned items, the first step was to make a long and in-depth desk analysis and study of the huge available literature, trying to work out a more reliable and complete outline of the entrepreneurial competences and managerial skills that play a fundamental role in starting and running successfully a business.

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Secondly we worked out a specific tool, namely a questionnaire, to measure, on the basis of a precise and well specified metric, the level of the same entrepreneurial competences and managerial skills.

Thirdly, on the basis of the questionnaire, we carried out face-to-face interviews on a sample of entrepreneurs and students.

3. Toward a more complete outline of entrepreneurial and managerial competences

We started from the three classes of competences we have men-tioned, namely personality traits, entrepreneurial competences and manage-rial skills and after a long work, capitalizing on the huge contributions from literature on Business Psychology and Business Administration, we were able to identify 44 fundamental aspects, subdivided in three classes that we believe cover substantially all aspects of entrepreneurship and management.

We will list them hereafter, quoting for each of them only the main literature contributions we refer to:

• 8 personality traits: 1) Need of achievement (McLelland, 1985), 2) Propensity to risk

and 3) Readiness to take up reasonable challenges (Schillace, 2017, Baum, 2012, Schumpeter, 1936), 4) Auto efficacy (Branden, 1988, Bandura 1982) Self monitoring (Ktreitner and Kinichi, 2004, Snyder, 1979) 6) Self-trust and self-esteem (Gecas, 1982) 7) Being able to make decisions even in uncertainty conditions (Patriotta, 2019) 8) Locus of control (Rotter, 1966)

5 entrepreneurial competences related to the approach to business, namely:

1) Evaluating a business idea (Donneley, 2017, Fillon, 1990) 2) Market approach (Valdani 2013, Norman, 1984) 3) Approach to Custom-ers (D’Arconte 2017, Constabile 2001) 4) Evaluating customer satisfaction (D’Arconte 2017, Zeithamal, 2002 5) Selecting a business idea (Schillaci 2017, Fillon, 1990)

31 Managerial skills related to how to manage an established busi-ness, subdivided in 8 critical areas with several specific items for every one of them:

1) Organization two items (Mintzberg, 1993, Greenberg 2002) 2) Human resources management, five items (Costas, 2017, McLelland, 2013, Schein 2010, Sackman 2002) 3) Technology, Innovation and processes, five items (Sciarelli 2014, Di bernardo 1990, Chase 2008) 4) Interpersonal and Corporate Communication, six items (Pastore 2008, Watzlawick, 1966) 5)

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Pricing, five items (D’Arconte 2017, Hermann 2006, Ohmae 1982) 7) Mana-gerial Accountancy (Anthony, 2005, Bartoli 2006, Brusa, 1983) 8) Basic Fi-nance, four items (Brealey, 2007, Modigliani & Miller, 1958, Metallo 1995)

All the items that we have listed are fundamental for every company, independently from their size, and it’s not difficult to see how if only one of them were overlooked, it might entail serious problems; it’s easy therefore to imagine how devastating it might be, in case many of them (not to say all!) were neglected, not correctly known and not put in practice in the right way.

While we are aware that still a lot of work and research should be done, we believe that we were able to shed a significant light on a basic fundamental point, namely what really are entrepreneurial competences and managerial skills. In fact, apart from confirming that it’s definitely a mistake to consider only personality traits and that we have absolutely to consider general com-petences, we went a little further distinguishing them in two categories; the first kind are what we could define, in the truest sense of the word, general entrepreneurial competences mainly needed when pre-eminently creativity is necessary and the second one, namely managerial skills that are necessary to run successfully an established business when technicalities play a major role.

As it is important for some further considerations in the conclusion, we would like also to highlight how especially personality traits - but to a cer-tain extent also the first class of generic competences - are mainly innate and rather difficult to learn while, on the contrary, the second are more technical and definitely can be learned more easily.

After this, the next step was to start working out a tool, the questionnaire, that could allow us to measure the level of these entrepreneurial and managerial competences among entrepreneurs and students of Business Administration.

4. Building up the questionnaire

For the questionnaire, as we said, we first started with more than 70 items and, working constantly on this, we were able to reduce them to 44 that, as we believe, cover rather well all fundamental aspects of entrepreneurship. Nevertheless, the questionnaire still remains rather long and complex and it was not an easy task to persuade both entrepreneurs and students to fill it up.

Once the questionnaire was ready, we used a google model not only to give the possibility to fill it up on-line in all cases a direct interview was not possible, but also to have available, in an automatic way, an excel file with all data.

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Regarding the questionnaire itself, we first of all decided to avoid ques-tions and to replace them with statements on which the person interviewed could only agree or not; this was done to avoid open or closed questions with multiple answers which would be more difficult to input and process.

Consequently, on every one of the 44 items we prepared a statement worded in a way that there may be only one possible correct answer between “I agree” or “I do not agree”; the basic idea was to try and understand in this way, how the interviewed person would behave to handle the specific problem related to the same statement.

As for measuring the answers, we avoided a simple dichotomic approach based on “right” or “wrong” and we decided to use a classic Likert scale with 7 scores altogether, from 1 to 7, where from 1 to 3 we have a decreasing level of disagreement (1 = maximum disagreement; 3 = minimum disagreement), 4 = indifference as well as “doesn’t know or no answer; from 5 to 7, an increasing level of agreement (5 = minimum, 7 maximum level).

Actually for all items not only there is only one possible correct answer as we already indicated but all statements were worded in a way that there may be either maximum disagreement, namely 1, or maximum agreement, namely 7; in other words all statements may only be fully correct or fully wrong and therefore in practice the scale was not necessary but it was adopted mainly to give the interviewed person the impression of a wider choice and also to have the possibility to make later a more complete data processing.

In line with this, when evaluating the answers we considered the fol-lowing criteria:

• 1 full point only in case the answer was 1 or 7, according to the case• 0,80 or 0,60 in case the answer was respectively 2 or 3, when the

correct answer was 1• 0,60 or 0,80 in case the answer was respectively 5 or 6 when the

correct answer was 7• 0 in all other cases including the case when the answer was 4

On these criteria it was possible to give a mark to every answer that was later added by hand to the original excel file generated by the google model: we then added all the marks of every interview so to have for every interviewed person the total relevant score to be compared to 44, the maxi-mum possible value.

As for the way the interviews was carried out, most of them took place during official occasions; as for entrepreneurs in seminars and courses, while for students during lessons in University courses.

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In the remaining cases we had to look for reliable available compa-nies and students; as for companies we focused on individual and very little companies as they are the overwhelming majority in Italy as well as in most European countries (more than 90% in Italy in 2012, Sorsoli 2013), while for students – with a very few exceptions - we interviewed students of Business Administration and Economics.

Both entrepreneurs and students were asked in most cases to fill the questionnaire in an assisted way, namely they could ask questions just to be sure they understood the spirit of the statements they were called to com-ment. In most cases, there was also a discussion on the most important items.

Only a very few questionnaires were filled up on-line, as in the case of most Chineese entrepreneurs, and some students from Malta.

In total we interviewed 93 entrepreneurs and 156 students, definitely a limited number of interviews and, on top of this, due to the way we se-lected our target, the sample of our research is a convenience one and we are aware therefore that the results cannot be extended, scientifically speaking, to the overall population.

Nevertheless, we wish to highlight that, as for entrepreneurs, we ex-tended the research to more than one country, mainly Italy (73%) and Bul-garia (17%) but we also had some interviews (10%) with entrepreneurs from other countries (China, Germany, Brasil and India); as far as students are con-cerned, to have a better idea of the educational system situation, we carried out interviews in four countries, namely Italy (40%), Bulgaria 30%, Serbia (15%) and Malta (15%) and, on top of this, in all countries, we had students studying abroad so that, in practice, our investigation was extended beyond the four mentioned countries.

5. Measuring the validity of the questionnaire

We obviously checked the consistency of the questionnaire with SPS, using the classical Cronbach’s alpha, but we decided also to introduce a specific control question only in case of entrepreneurs.

5.1Cronbach’salpha

As well known, the resulting α coefficient of reliability ranges from 0 to 1 in providing this overall assessment of a measure’s reliability. If all of the scale items are entirely independent from one another (i.e., are not correlated or share no covariance), then α = 0; if all of the items have high covariances,

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then α will approach 1, as the number of items in the scale approaches infinity. In our case, the alpha for entrepreneurs is 0,788 as we can see in the table 1

Table 1. Chronbach’s alpha for entrepreneurs

Reliability statistics

Cronbach’ alphaCronbach’s alpha based on standardized elements

Number of elements

,788 ,783 44

We tested this separately also for students and we a similar value,

namely 0,783 and these results already show a good consistency of the ques-tionnaire; anyway we considered this only a preliminary pre-requisite and we decided to find a specific factor to assess the reliability of the questionnaire to evaluate entrepreneurial competences and managerial skills.

In fact Cronbach’s alpha, according to the Statistical Consulting As-sociate (2015) of the University of Virginia, is not a measure of validity, or of the extent to which a scale records the “true” value or score of the concept we’re trying to measure without capturing any unintended characteristics. For example, word problems in an algebra class may indeed capture a student’s math ability, but they may also capture verbal abilities or even test anxiety, which, when factored into a test score, may not provide the best measure of their true math ability.

A reliable measure is one that contains zero or very little random measurement error—i.e., anything that might introduce arbitrary or haphazard distortion into the measurement process, resulting in inconsistent measurements. However, it need not be free of systematic error—anything that might introduce consistent and chronic distortion in measuring the underlying concept of interest—in order to be reliable; it only needs to be consistent. For example, if we try to measure egalitarianism through a precise recording of a(n adult) person’s height, the measure may be highly reliable, but also wildly invalid as a measure of the underlying concept.

In short, we need more than a simple test of reliability to fully assess how “good” a scale is at measuring a concept. To assess the scale’s face valid-ity we have to refer to theoretical and substantial knowledge as we already did in the first part. Even bette r,we can address construct validity by examining whether or not there exist empirical relationships between the measure of the underlying concept of interest and another concept to which it should be theoretically related.

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In our case, we can address construct validity by examining whether or not there exist empirical relationships between the measure of the under-lying concept of interest and another concept to which it should be theoreti-cally related.

In line with this last approach and capitalizing on the fact that every questionnaire was given a score, we introduced after the 44 statements, a question to be addressed to entrepreneurs only, asking whether their com-pany was successful or not, relating the success to 3 well defined and objec-tive drivers, namely a steady increase in sales, in revenues and in profit, which without any possible doubt are three fundamental indicators of a for-profit company's success.

If the questionnaire really is a reliable measure of entrepreneurial competences and managerial skills, it's obvious that there must be an evident correlation between high scores obtained in the questionnaire and success in managing one's own business.

5.2Thefinalquestiontoentrepreneursregardingthesuccessof their companies

It was clear to us how to ask entrepreneurs whether their business was successful or not, was a delicate question to be put with care in the best possible context: in fact, having to admit that their business is not doing all that well, is in no case self gratifying and this especially after a kind of exam on entrepreneurial competences and managerial skills with our questionnaire, when most entrepreneurs - at least the smartest among them - perfectly real-ized that they are not prepared adequately to run their business. Under such circumstances, it’s more than understandable how it would be rather em-barassing for them to declare a total or partial failures especially in front of other people.

For this reason, in most cases we put personally the question to them, one by one, and we stressed that the answer should be related to objective cri-teria and in particular to a steady increase over time of profit, first of all, and then of revenues and market share. We specified that a full positive answer (7) should correspond to being successful in all the three already mentioned aspects, giving them the possibility to graduate their answers according to their specific situation.

In other words, we did not simply accept their first answer, but we investigated whether this corresponded or not to the specified criteria and in many cases, with their agreement, we changed, nearly always for the worse, what they declared initially, so to be absolutely sure to have the correct answer.

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This question was obviously fundamental because, apart from the thorough research we made regarding all aspects of entrepreneurship and the good alpha values, we wished to have an emoirical evidence that in prac-tice the questionnaire is really suitable to measure entrepreneurial compe-tences and skills.

In fact the score totaled in the interviews, to be significant, must have an evident correlation to company’s success, in the obvious sense that a high scores must correspond to a high level of success that persists over time.

We can have sometimes success predominantly because of luck and of good opportunities that arise unexpectedly, a kind of windfall that arrive without any effort on our side, but it may be just once and for sure it won’t last forever. In business, a steady success over the course of time, is without any possible doubt due to good entrepreneurial competences and managerial skills that are necessary not only to take advantage of opportunities but also to create them when they are not evidently available.

This specific control was succesfull because measuring with excel the correlation between the score totaled with the questionnaire and the com-pany’s success, we found a very positive result, namely approximately 76%.

Apart from this, in Figure 1 below, we also enclose a graphic repre-sentation that shows a clear linear relationship between the two variables.

y = 3,1731x + 12,39R² = 0,5864

-1,00

4,00

9,00

14,00

19,00

24,00

29,00

34,00

39,00

44,00

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0

TOTA

L S

CORE

SUCCESS

TOTAL SCORE AND SUCCESS

Figure 1. Correlation between the score totaled in the questionnaire and the company’ssuccess

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5. Results

Our research on entrepreneurship is still going on first of all because we would like to interview more entrepreneurs and students so that the re-sults may be more significant statistically speaking, but also because, once we will have a suffcient number of interviews, we wish to carry out an in-depth data processing that may fully describe all aspects related to entrepreneurial competences and managerial skills.

Here we will have to limit ourselves to show the most elementary though also the most important general results.

As we said we interviewed 249 people altogether, 93 entrepreneurs and 156 students and the fundamental results are summarized in the three following tables:

Table 2: Entrepreneurs and students: total results

Entrepreneurs. Students Total Total number 93 156 249

44 44 44Average score 26,31 24,45 25,14Percentage of right answers 0,60 0,59 0,57

Table 3. Entrepreneurs and students: results for the three different areas of the questionnaire

Entrepreneurs Students Total number 93 156 249Area 1 Maximum score 8 8 8 Average score 5,1 4,9 4,97 Percentage of right answers 0,64 0,61 0,62Area 2 Maximum score 5 5 5 Average score 2,7 2,6 2,63 Percentage of right answers 0,54 0,52 0,53Area 3 Maximum score 31 31 31 Average score 18,5 16,9 17,49 Percentage of right answers 0,6 0,55 0,57

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Table 4: Entrepreneurs and students: comparison between Italy and Bulgaria for the 3 areas of the questionnaire

I t a l y O t h e r c o u n t r i e s Entrepreneurs Students Total Entrepr. Students Total

Total number 68 51 119 25 105 130

Area 1 Maximum score 8 8 8 8

Average score 5,2 4,6 4,8 5

Percentage of right answers

0,65 0,58 0,62 0,60 0,63 0,62

Area 2 Maximum score 5 5 5 5

Average score 2,7 2,6 2,7 2,6

Percentage ofright answers

0,54 0,52 0,53 0,54 0,52 0,52

Area 3 Maximum score 31 31 31 31 31

Average score 18,03 17 19 16,8

Percentage of right answers

0,58 0,55 0,57 0,61 0,54 0,55

The rather impressing results are:a) As we can see in table 2, the level of entrepreneurial competences

and managerial skills of entrepreneurs and students is definitely very low as we have an average of 43% of wrong answers and this is a constant result in all the three areas of the questionnaire as indicated in the table 3. In a pro-vocative though effective way, this can be summarized stating that – in case we had a representative sample and a sufficient numeber of interviews – we could expect that nearly half of managerial decisions might be taken in the wrong way, both by entrepreneurs and students.

b) Against our expectations, students are performing a little worse than entrepreneurs in all the areas of the questionnaire – as we can see in table 3 - even in the third one which is definitely the most technical when

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students should be expected to perform definitely better than people who – in most cases - did not have the possibility to study Economics or, above all, Business Administration.

c) The negative results regarding students are confirmed also in case we split the total population in two, namely Italy and other countries, with the exception of “other countries students” in area 1 where – as we can see in table 4 - they seem to perform a little better than entrepreneurs though actually, to look it well, 4,8 and 5 are so near that we can say that in practice they are at the same level.

On top of this, we have to consider that in many cases we asked to explain in a few lines the reasons of the answer and, unfortunately, in most cases there was no such explanation and in the few cases we found it, it was incomplete, not to the point or definitely wrong; in other words some right answers may have been simply guessed right so that in many cases a correct answer does not allow us to be sure that the entrepreneur, in practice, would be able to handle the topic in a correct way.

Finally we wish to point out that substantially the approach we adopt-ed to measure entrepreneurial competences and managerial skills very much resembles the way we normally evaluate a student’s exam when, as a general rule, we consider his preparation “sufficient” and we let him pass the exam, providing that at least a little more than the half of his answers are correct. Unfortunately, considering entrepreneurs, the situation is quite different, be-cause it is obvious that even one wrong answer corresponds inevitably to a mistake that may have important negative consequences for companies’ out-comes, especially if we consider that the mistake will be most likely repeated in the future. In other words, a “sufficient” starting result that allows us to state that an entrepreneur is able to run in an adequate way his own business without making serious mistakes and losing money, should be in case he were able to give a correct answer to nearly all - if not all - the 44 statements.

Summarizing we have all reasons to believe that the scores we have shown are for sure overestimated and that the situation of entrepreneurial competences and managerial skills is in reality definitely worse.

6. Conclusions and future outlook

What about these results and what consequences can we foresee? As for entrepreneurs, our research shows how not only most of

them started their activities without a precise business idea and without even an embryonic business plan, but that they also have difficulty in fundamental

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issues such as the methodology for preparing an estimate, fixing a price and adapting it, costs assessing and control, balance sheet and managerial accoun-tancy, finance and so on.

To tell the truth this should not be a surprise if we consider that the overwhelming majority of entrepreneurs did not have the possibility to study Economics or Business Administration, nor did they have the possibility to attend regularly training courses.

Beyond this, in 2012, in Italy very small companies were more than 99% of the total number; 59,4% individual companies, 35,1% micro compa-nies with an average of 3,6 employees and 4,8% what are properly identified as “small” companies with around 18/19 workers. So individual, micro and small companies total alone 99,3% (Sorsoli, 2013).

We believe that the situation in other European countries is rather similar with a high predominance of individual and very little companies and this means that in most cases the entrepreneur is a kind of factotum who has to take care of everything and cannot afford to engage professionals with specific competences in different fields such as Marketing, Communication, IT, Finance, Accountancy, HR and so on; therefore it’s absolutely normal that we cannot expect high performances from them.

What about students’ results? A partial reason for the disappointing result may be that in many

cases filling up the questionnaire was considered only an annoying extra task that they had to do during a lesson or a course so that they may have done it without engaging themselves too much. Anyway, also taking this in due consideration, we believe that the main reason may stay with the educational system.

In fact - especially if we consider Business Administration - there is for sure a substantial gap between theory and practice, between what we study at Universities and what companies do in practice, thus producing a reciprocal lack of confidence, if not mistrust, between these two fundamen-tal players, Universities and companies, that, on the contrary, should work together in full integration for the benefit of our society.

Professors of Business Administration, as a general rule, lack practi-cal experience and it seems an exception to find among them people who has spent a significant period of time in companies; therefore they tend too often to concentrate on complicated theoretic items without giving adequate consideration to practical aspects that may be by far more important in deter-mining the success or the failure of a for-profit organization.

In this regard, just to make an example, one recurrent mistake is the excessive focus on big companies that, as we have already seen, are absolutely

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a scanty minority - ignoring systematically the importance of individual and small companies that, on the contrary, are the real backbone of most eco-nomic systems; this, inevitably leads to serious mistakes in teaching and, in this regard, an enlightening example may be the way generally Finance is taught; in fact what’s the use of proposing to students bulky volumes on Finance with 90% of the teaching dedicated to Limited Companies if they are just an extremely limited quantity (in Italy they represent less than 0,1%)? Why not concentrate on the elementary Finance that may be usefully applied in every small company?

Substantially, we believe that students study too many things in an inevitably superficial way without being helped to concentrate on what really may be important to start and run successfully a business.

In case the picture we presented were correct, it-s not difficult to foresee what consequences this may have on our economic system and, in practice, on everyone’s everyday life. In fact, in an economic system, there are three main categories of players: entrepreneurs, workers and the state; entrepreneurs, unlike workers and the state, are surely the most important and truly proactive players because they take on great risks, namely invest-ing their money with the possibility of losing it completely, and also create labour, offering work to the people they need, paying them a salary with their own money.

Therefore entrepreneurs really are the engine and the driving force, actually the conditio sine qua non of our economic system (D’Arconte, 2017) but, unfortunately, their level of competences is very low so that – as our research shows - when taking managerial decision they may make many mis-takes and this has for sure a very serious impact on companies’ outcomes especially if we consider that mistakes – as we already said - will be auto-matically repeated all the times that on a certain topic will be taken the same decision (in other words in case an entrepreneur is no good at fixing the price of his products or services, he will continue systematically to make mistakes until he learns how to do it better).

It’s obviously extremely difficult to evaluate the impact on a com-pany’s outcomes and most likely impossible even to make a rough estimate of how much this may affect the global economic system but for sure there are all reasons to believe that this may be extremely important. In this regard, to have a better idea, we can consider the case of a company shutting down; we may think that this will be a serious problem only for the owner and his employees but it’s actually a little social catastrophe, because some people will lose their job and, apart from the problems they will personally have, they will not be able to spend their salary and give in this way their contribution to

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prompt the economic cycle. Beyond this the State will also have an immedi-ate damage as the entrepreneur will not pay taxes any more. In Italy, since the first of January to the end of June 2017, 6,188 companies shut down with an average of 35 companies per day, actually a real tragedy!

Did we paint a black picture regarding entrepreneurial competences and managerial skills? Definitely yes, we did! Anyway, maybe we also let fore-see the way we could improve – if not finally overcome - the never ending economic and financial crisis; for this it’s not only a matter to have better eco-nomic policies and especially soften if not change the myopic financial policy of the European Union but we have primarily to invest on human resources and culture in general and on entrepreneurship in particular.

The state rather than chocking down entrepreneurial spirit with a lot of bureaucracy and taxes - in Italy companies may arrive to pay taxes up to 70% - should help entrepreneurs to start and run their business and be ready to invest, offering courses and training; similarly it should work with Universities in order that courses on Business Administration may be simple, clear, to the point and, above all, extremely practical and useful. Apart from this, special initiatives could be fostered, such as the SEBRAE in Brazil, a private but state-run institution which supports for free individual and smaller companies to start and run their businesses and which systematically organizes courses at all levels.

To go a little further, we would like to refer again to Egbert’s (2014) contribution on this topic who apart from his already mentioned F-DUPn test for determining entrepreneurial potential, furthermore suggests not only a systematic orientation for students, but he also recommends that the state should use the test in order to identify those individuals who may be endowed with entrepreneurial potential and who would benefit from public funds or other particular support, proposal that really makes sense and that really could make the difference in the next future.

As we see, there is a lot we can do to improve the present situation and we do believe that with a limited investment in this direction, we can have an exponential positive effect that not only may save many companies but also entail significant economic benefits for our society.

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Acute crisis and PR Crisis management, impact on the reputation of companies

MilenaIlić1,MarkoRanković2,TamaraJanković3,BranislavRadnović4

Abstract: Strategic communication becomes a key function of managing all companies and organizations. Since reputation is a fragile wealth, it needs to be carefully managed. If a company is not prepared for a crisis situation, and especially the communication in it, they can ruin its reputation within a few minutes. It is therefore better that companies are prepared for communication in a possible crisis. This is especially important for perceived companies that by losing reputation lose everything. Companies of perceptional nature are the ones whose main aspiration is to reach the desired reputation and knowledge of the company with key public companies.Public relations are an important business segment of each company. Special importance is given to public relations in crisis situations, or PR crisis management, where companies, if their reputation is threatened, are pressured by media, social groups and citizens. In the information gap, new, often unreliable sources emerge, and the public quickly polarizes, often changing the roles of victims and guilty ones.With the help of available secondary sources and data after the review of the literature, with the help of analysis of the content, analysis of the individual crisis of the world companies was carried out and conclu-sions on crisis relations and the strategies used were made, especially in the case of acute crises, for which case study methods was helpful.

Keywords: companies, crises, PR crises management

1. Introduction

The main subject of this work are public relations in crisis by pre-senting a theoretical concept. Shortlist subject of research is related to public relations crisis, through the analysis of the best national and international practices. Methodological work will be prepared through secondary research methods of content analysis and case studies, primary research and through observation and interviewing techniques.

In times of crisis public relations is an important strategic commu-nication - communication with internal and external target audiences. Stra-tegic communication is a key function of leadership and management of companies and organizations. Since the reputation fragile and easy perishable wealth it should be carefully managed. If the top people at companies are

1 Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, Serbia2 Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, Serbia3 Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, Serbia4 Fakultet poslovne ekonomije, Univerzitet Educons, Sremska Kamenica, Serbia

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not prepared for the crisis situation and in particular to communicate in it, can destroy a reputation in a few minutes. Therefore it is better to thoroughly prepare for possible crisis communication. This is especially important for companies that perceptual loss of reputation lose everything. Businesses and organizations perception of nature are those whose main priority is to reach the desired reputation and opinions about the company at key public companies.

The crisis may come in different forms, so there is no single universally accepted definition of it. The crisis for the organization of the circumstance in which they can no longer operate normally. It threatens the organizational viability, prevents the attainment of the objectives and the very survival of the organization. Although it may at first glance, the crisis has such a dramatic situation and its negative impact on the image of the organization can be very large and threaten the long-term survival of the organization.

2. CRISIS IN THE ORGANIZATION AND CRISIS COMMUNICATION

1.1. Concept and types of crisis in organization

The London School of Public Relations crisis defined as a serious incident affecting the man’s safety, the environment, products and reputation of the organization. Usually for such an incident inherent hostility toward the media organization. Similarly, the definition of the notion of crisis as well as the circumstances in which they threatened the safety, life or even the survival of the individual or organization.

For the crisis is inherent in the pressure caused by the lack of time, which means that those who have resolved to make decisions quickly and to overcome the stress of all the participants in the crisis. A crisis can be defined as an unplanned and unwanted process that takes some time, and on which can be only partially affected and can be completed in various ways.

Crisis communication, as part of the methodology of accessing the activities in the field of public relations relating to the operation of the orga-nization in times of crisis. Practice points to an interesting fact that among the best-known strategic communicators most have some military experi-ence. They know how to win the conflict, crisis, war. Later this experience enriched the knowledge of economics, sociology, psychology and commu-nication studies course (negotiations, performance, response ...). The best defenders of the reputation of the company are managers who know how to communicate effectively with groups of companies and are therefore indis-pensable for perceptual companies. [1]

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Most often crisis is: [7] The financial crisis; Technological crisis; Crisis due to unethical and evil, Natural crises; Crisis due to fraud; Violence in the workplace; Crisis management; Crisis of creative management; The financial crisis; The social crisis; Organizational crises; Crisis promotion and distri-bution (placement); The crisis of business cycle; Institutional caused crisis; General economic and / or social crisis (the crisis of global character).

Crisis types are: [7] Crises that approaching seamlessly; Crises that are slower burning; Suddenly crisis.

Crises are manifested as follows: [7]•possible manifestations of crises - crises caused by inadequate technology;

•evoked criticism of individuals or groups (cross managerial failure, fire, explosion, flooding);

•strike or sudden and mass resignations;

• malfeasance, fraud, deception ...;

•the launch of gossip about the organization and falsehoods;

• counterfeit goods and plagiarized products.

The main characteristics of crisis situations are: [7]• appears a negative event, which effect is enormous and it leads to the

existence of a risk of the organization; [12]• appears shock, disbelief, danger, narrowing room for reactions and

decision making;• managers and executives feel that they are not sufficiently able to cope

with the crisis;• the changes are great, but their influence is good or bad for the

organization;• the crisis is characterized by high dynamics and instability.

The stages of the crisis are: [2]:

• potential crisis - a crisis situation where it is not possible to establish even conclude that it exists.

• latent stage - the crisis manifests itself, but it is not possible to identify quantitative measurement.

• acute phase of the crisis - and the noticeable effects of the organization tends to suppress them.

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1.2. Crisis situations

In the acute phase of the crisis decision-maker is forced to under-take short-term immediate measures such as organizing press conferences, telephone communications with the media, parties or individuals who are affected by the crisis. When acute crisis again becomes latent, can be changed strategy and this view will be able to shorten the time of reaction and increase the chance to beat the weather crisis. Every day, crises, accidents and disasters are mentioned on the news. Many crises have a high level of tension. Some-times reminiscent of a thriller movie. However, this is not a detective story, they emerged from the creative spirit of Arthur Doyle or Agatha Christie. This is a harsh reality. [9]

Name of the game as they say theorists and practitioners of public relations crisis is control. Proactive communication plan in a crisis has de-veloped to protect the organization’s reputation by making the right time to transfer the right message to the right people. If public relations cannot take control of the situation, there will be a vacuum of information that will be filled by the media as they feel appropriate - often at the expense of the or-ganization, which has a crisis.

First you need to choose the right crisis response team. There must be the mouth, hands and brains of the team, allowing the director of organiza-tion and shareholders to think clearly, communicate effectively and respond quickly. Next, it is necessary to determine the rules of internal communica-tion - this is how the organization will communicate during a crisis. Crisis directory is set, the flow of communication defined by the template and em-phasize in the recording and monitoring of media queries. Then prepare to proactive communication plan in crisis with four different areas. You should define the different goals that must be kept in mind when the organization communicates. Relations have developed a ready-made tool that are easy to use in a crisis situation. Possible messages that are pre-approved for use in crisis communication should be considered, developed and approved. Finally, one must take into account how quickly the organization can move in a crisis situation and continue to develop a plan to help the organization could move as quickly as possible.

Turning the image as part of corporate strategy and investment in reputation management requires diligent, strategic approach. Access must be creative, consistent, targeted and factual and must support long-term busi-ness and a marketing plan. Investing in high-quality picture and taking the steps needed to get there it has been proven to provide a steady return that organization can be measured in various ways, from the inner pride to the

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limit, while also providing a positive side to mitigate any negative side, if there to the crisis. [9]

Crisis or other problems that lead to negative news about the organi-zation affected by the crisis can be a painful experience. However, many cred-ible companies have recovered and continued to grow again after seemingly catastrophic floods of negative news. An organization’s ability to recover is directly related to its ability to plan and communicate proactively or condi-tioned by the same. Each organization can make mistakes or undergo the test. But ultimately, the lessons of business are reflected in life. That’s not what happens the organization, this is the way the organization carries with it, it makes a difference. [9]

1.3. Models of crisis management in the organization

The crisis is often associated with bad publicity because negative re-porting can ruin the reputation of the company, and further increase the damage the crisis has done. Some experts in the field of crisis public relations go a step further and find the real crisis comes when thus appointed media groups of influence or even state institutions. Therefore, it is very important how to conduct communications with internal and external audiences, and how to communicate with the media.

Crises are a problem of the organization, but also the problem of in-dividuals in organization. It is a change in the functioning of the organization but not necessarily a bad thing but sometimes can present an opportunity to provide a better reputation. This is a good opportunity to make changes in the corporate culture at the same time that may change in structure raises conduct organizations rethink the role of leader, manager, redefines the rela-tionship with stakeholders. [9]

Crisis management is defined as a set of functions or processes which aim to identify, study and predict potential crises and ways to establish a spe-cial organization to enable effective crisis prevention or response, and suc-cessful resolution while minimizing the result and a speedy return to normal. The organization in different ways can manage crises. First of all, you must have a crisis management plan, which will be renewed, if necessary, at least once in a year. Within this contingency plan needs to include contact info to, information about what is important to do when it comes to the crunch, the models for the documentation crisis response. In addition, it is necessary to determine the organization of the crisis team formed by members from the field of human resources, finance, law, public relations and the like. It is es-

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sential that members of the team participate in training to tomorrow when a crisis can quickly respond. [9]

It is essential that organizations have more posts crisis management, and solutions. It is necessary to create the website for this situation and de-termine the part of the existing site for crisis communications. Of course, the crisis site or part of the site devoted to the crisis it is necessary to prepare itself before a crisis occurs. [7]

The challenges posed by the crisis will affect people differently and perhaps unpredictable ways. What is certain is that the pressures on indi-viduals to be huge. Requirements management imposed by all participating seniors likely to be materially different from routine operations at a high level.

Executives and managers who have systematically engaged in crisis management reporting on interesting and very positive side effect. This is in order to improve their computing performance. The goal is to quickly iden-tify and control the crisis. The main areas to address are: tools for strategic assessment, including risk assessment, emergency organization, information management crisis, relationships with key stakeholders.

Reputation management

Reputation must be based on the essence and core values of the or-ganization. Presentation to the press illustrating the leading organization in connection with integrity is therefore vital. This certainly does not require a complete openness to the media and other audiences, but includes respect for fundamental human values and cognitive reactions. If you look at the traditional, pre-Internet model of communication, especially during a corpo-rate crisis, reveals the classic one-way communication model. The message is sent, people receive, listen (watch), evaluated and returning through the linear feedback. [10] Work on the crisis in the age of digitization is more an effort to connect a series of points. This new dynamic demands of corporations to locate, engage and share ideas with driven by foreigners. Some are friends, some are enemies, but most of the actors who are trying to figure out which side of the road to go.

Professionals who create corporate communications have a unique opportunity to draw up a new program in which will go to the organization, and also to reach out and ask for instructions from different social groups, who are in the midst of the crisis strengthened the network of those who support them to help the company get back on the right path. In traditional crisis communication, corporate react and present information and ideas,

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seek solutions to the crisis. On the Internet, interested parties seeking infor-mation, ideas and important information exchange. Corporations must face this challenge so as to respond and engage in new ways. What would be the communication should be: listening and sharing; not only testimony. The most important for the organization at all, especially in times of crisis is to have the right information at the right time [11]

1.4. The risks and the impact of the crisis on the reputation of the organization

Prediction of risk reputation and the ability to assess how it can af-fect the organization, is the first part of the decision, which aims to reduce risks to the organization’s reputation. The function of communication has an important coordinating and leading role in predicting and evaluating the potential impact of reputation risk during and after the crisis. [4] Large orga-nizations have many internal and external sources to obtain good information. It having the ability to utilize this information to assess and analyze risks to reputation. In order to rehabilitate the effect of the crisis on the reputation it is necessary primarily Partnership with stakeholders through their involvement.

Stakeholder engagement refers primarily to listen and understand the views of interested parties as a precondition for good scanning prob-lems. It is better to organizations and their crisis teams directly engage in dialogue stakeholders, not just to read about their views in the media.[4] In addition to external radar risk to reputation, organizations should have a radar for internal risk assessment to identify and evaluate the possible consequences of the decision, the launch promotion, strategy and other ac-tions. Within this scenario planning helps in the development of risk identi-fication, reputation, whether it is internal or external to the problem and the source of the crisis.

A complete risk assessment of reputation ensures that the reputation of objectivity applied to of identified risks. Organizations should develop recommended strategies reputation in order to eliminate the identified and assessed risks. The risks are high, but can still be controlled by a competent team that delivers strategy, reputation, may still be worth taking. Since the rare reputation risks are brand new and the organization must learn lessons from the past - and of their organization and of their competitors.

Reputation risk prevention focuses on internal issues - eliminating or at least minimizing poor performance and bad decisions. Risk prevention reputation requires serious intervention - structural and process - as well as

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light intervention - increasing awareness and training - to encourage good reputation conduct. Corporate social responsibility can be considered part of reputation risk, not because it buys external support but because it helps the growth of goodwill and commitment of stakeholders to assist the organiza-tion to understand its value for the community value and reputation.

Prevention of risks of reputation may lead to mitigation and to avoid risks. The company, which usually gives up the business opportunity as soon as it is discovered that there is a risk to reputation, probably will not grow and prosper long term, and indeed will gain a reputation among some key stakeholders that are too cautious and driven by fear of failure rather than a desire for success. [4] What is more likely is that the risk of reputation that is designed and assessed considered risk that must be managed, or that are preferably to be removed or resolved in a way that does not jeopardize the commercial imperatives and opportunities of the company.

Most of the activities crisis management in organizations is actually prepared to crisis. Preparing the organization to face the worst and most difficult, the provision of guarantees to management and shareholders. The decision as to which sector or service “placed” on the preparation of the cri-sis within the organization should be pragmatic. But, if all other factors are known, it should be in corporate affairs, because most feel that the crisis with the support of the sector for public relations. Crisis management is focused strategic management, operational impacts rather than solving problems.

All organizations should have a policy that the crisis provides a clear definition of what is a crisis and who has the authority to declare a crisis. Crisis policies that would be adopted, it should explain how it fits into the crisis management business functions and operations. Leadership is what solved the crisis, namely there is no one right style of leadership, but leaders throughout the organization should be aware of their strengths and weak-nesses and give them the opportunity to practice solving the crisis. The crisis structure defines the roles and responsibilities of various teams or levels of crisis management. Many organizations reduce the complexity of its struc-ture in order to react fast when there is a crisis. Crisis procedures should constitute a simple set of rules within is properly designed a way to help people trained to make good decisions. Procedures should not be complex documents such as those seen in the business for a simple and understand-able. People not a procedure governed by the crisis and therefore training and practice give people a chance to practice how to respond in a crisis. The good will and relations are a vital asset in the crisis. Organizations should invest the time to build a good relationship, just as investing time in other aspects of the preparation for the crisis.

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The willingness of the crisis does not stop at the corporate boundaries. Coordination is needed throughout the entire value chain, although large com-panies should be aware that a crisis can never switch to suppliers and partners. Organizations hope that all the work and all efforts to prepare for a crisis to take, never to use or that a crisis will not happen. However, most organizations see the value in what they are prepared for any possible crisis scenarios. [4]

1.5.Themedia’sroleincrisismanagement

In order for a message in a public performance was well transferred and well understood, it must be true, because it is a basic postulate of the es-sence of a PR. Once pronounced lie in public relations can be fatal for the or-ganization. Therefore, it is better not to say anything, but express untruth. [5]

In situations when the message has a positive impression of the or-ganization do not need to react to it, but they desire that such information is more. Otherwise, when a message on the crisis in an organization leaves a negative impression on the public, on crisis management has to decide whether such a message be refuted or not. With transparent operation, un-ambiguous messages and clear argumentation of their actions organization successfully managed the crisis. Public Relations, as part of the management functions of modern organizations, have a major task to protect the so-called in crisis soft capital or reputation of the organization that represents the most sensitive category susceptible to negative influences a lot also depends on the way in which the organization will resolve the crisis, and of the ways to communicate.

Solutions for successful training in crisis media are: 1) the preparation and 2) practice and this should be kept in mind when the organization finds himself in a crisis. [5] When it comes to media training, it is important to ensure that the appropriate team trained so that there is full coverage in case of crisis. While there are resources available on the Internet and in printed format, is likely to organizations unless they have their own, look for an ex-perienced PR agency for external assistance. The media can help in finding a solution to the crisis but the crisis may deepen, providing inaccurate and unverified information, polarization or standing on the side of one of the participants in the crisis, and the like. It is important that the organization has good communication with the media before the crisis, in order to ensure visibility and objectivity.

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1.6. The role of public relations in crisis situations

Public relations are a process that involves subtle and far-reaching aspects, research, analysis, policy formulation, programming, communication and feedback. [2]

The practitioners of public relations advisors to the highest levels of management and clients and technicians who produce and promote sent through the media. Public Relations represent the management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and plan and implement program activities aimed at gaining public understanding and patience.

Katlip, Senter & Brum, “PR considered to be” public relations man-agement function that identifies, establishes and maintains the mutual benefi-cial relationship between the organization and different groups of the general public which determine its success or failure. “[4]

Long & Hazleton, public relations defined as “communication man-agement function through which organizations adjust, change or maintain their environment in order to achieve their goals.” The recent theory says that public relations is more than persuasion, encourage communication and un-derstanding, organizations are changing behavior rather than only audience.[4] Service public relations can play an important role in crisis situations, depending on how its role planned crisis policies and strategies. Department of Public Relations, depending on the type and stage of the crisis provides the necessary information for decision making, communicating with the media, preparing press releases, organizing press conferences. Also service public relations can obtain the opinions of experts in order to find the best solution for the crisis or reduce its intensity and duration.

Some of the basic rules of conduct service public relations crisis is: [3]− Never answer on question by saying: “No comment”− The maximum helpfulness. Too many excuses and confused

response can lead to missed opportunities for placing emphasis on what is important to say. Developing and maintaining good relations with the media and journalists (especially before the crisis).

− To be determined man who believes the media and who is authorized to speak on behalf of the organization.

− It is necessary to ensure a constant flow of information, even when the situation is unchanged or moving in an undesirable direction.

− Honest attitude towards the media and their representatives (not exaggerate, do not soften and do not conceal information).

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Analysis of the global crisis and acute crisis of public relations

2.1.Anexampleof thefirstcrisisandinterpretationcrisissituationfrom PR

Case airline company Jet Blue who was forced to cancel 1,000 flights even in just 5 days after the ice storm of 2007 hit the eastern coast of the United States, entered the annals of marketing as one of the best examples of the anti-crisis PR. [6] It was February 2007, a low-budget carrier is faced with the crisis of public relations that seemed unlikely to quickly explode. On Valentine’s Day, freezing rain hit the northeast, overshadowing most Jet Blue aircrafts. The passengers were trapped for hours in their seats at JFK International Airport in New York, is not going anywhere and increasingly irritating. In some cases, the delays have stretched into days, and more than 1,000 flights were canceled at the end. [6]

Jet Blue crisis named Valentine’s day crisis has made national head-lines, a brand which is placed as it leads humanity in air traffic was in chaos. [8] And social media is still in its infancy. Brands are not routinely used social media to interact with customers and manage crises. However, Jet Blue hired YouTube as part of the great pressure to stop the situation, founder and former CEO issued a heartfelt apology the day after the problem began. The three-minute video, Jet Blue apologized for the failure of service and explain how it plans to improve.

This early use of social media, along with a general openness and willingness to take responsibility Jet Blue, helped to rise above the media circus and continue with constant exchange rates as a consumer favorite. Despite weeks of negative reporting of news and consumer protests, the carrier has kept its place in the JD Power customer satisfaction study, North America airlines to low prices. [8].

Managing Director of Jet Blue, David Nilman, not for a single mo-ment, “blamed” on time and tried to use it as an excuse for the company he leads. Instead, he wrote a public letter of apology to passengers Jet Blue’s where he met them with a charter of consumer rights and presented to them a detailed list of actions that the company will undertake to help all passen-gers affected by this disposal, which, among other things, included a financial compensation. Nilman then appeared in all current programs on national television and advertise on YouTube, but not in order to justify his com-pany, but in order to apologize on her behalf. However, reputation Jet Blue a sustained some damage, given the fact that they are portrayed in the media; picture crowd of exhausted travelers who have spent almost a week at the air-

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port and reached a boiling point in time when the Nilman come forward with an apology. In any case, the damage was not nearly as extensive as one might expect in such a situation, precisely because the company has implemented Jet Blue good crisis communication strategy.

2.2. An example of the second crisis and interpretation crisis situation from PR

In San Bernardino, Center for persons with special needs, took place the day 2.12.2015, terrorist attacks. The epilogue of this event were 14 people were killed and 22 seriously injured. Guilty of assault has taken the Islamic State of Iraq and the Levant (ISIL), and the perpetrators were Rizwan Syed Farook and Tashfeen Malik married couple. [7]

FBI asked the court to order Apple to create an alternative version iPhone operating system that would allow the introduction of an unlimited number of encrypted code in order to unlock the iPhone, which was owned Rozvana Faruk, a suspect in the terrorist attack in San Bernardino. [7]

The Ministry of Justice ordered the Apple company to develop soft-ware that will bypass element built into the latest iPhone operating system that erases stored data after 10 unsuccessful attempts at entering the code which would enable investigators to try to codes while they fail to reveal the law.

Apple fought against it in court: An alternative version of iOS could jeopardize the privacy and safety of all users of the iPhone. All this caused a great deal of discussion about the digital rights to privacy and the preserva-tion of national security. Apple has rejected the court’s decision to decrypt mobile phone murderers and allow the FBI access to the stored data on the grounds that this procedure the government could threaten the security of personal data of all other users.

The Ministry of Justice received the support of security agencies and six relatives of the victims of San Bernardino. FBI withdrew from the case in March announced that it managed to enter the phone, with the help of a third party. The FBI was then announced that Apple impedes the investigation, a technology giant has responded by saying that the ‘’back door’’; the device compromised the security of all devices and users.

How did Apple manage the crisis [7]: Immediately inform stakehold-ers and the general public through the mass media about the issue and their views and then condemned the crime. Apple contacted the FBI publicly, and provide them help as far as possible without compromising the privacy rights of its users.

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Apple has included sympathizers and obtained support (Google, Facebook and Microsoft), and then include the public in solving the problem. Increased their awareness through an open letter to consumers and through constant press releases. Apple has educated the public about the importance of encryption and threats to data security and above all protect the constitutional rights of citizens. A crisis team of the company is always ready to make a statement. Tim Cook, CEO of Apple, has sent to customers of Apple service call to open discussion, “the US government has sent Apple’s previously unprec-edented request that endangers the safety of their users’’. Apple is resisting this demand which, apart from the default legal complications, has many far-reaching implications, backdoor access systems for encryption involves keys to decrypt all the software and access to all data stored on the smartphone.

The effect of good crisis management was as follows:

• tech industry creates new security barrier against government intru-sion

• public condemnation and a call for a boycott of Apple products by Donald Trump in the campaign slightly decreased sales

• the image is not too damaged because Americans love their privacy

3. An interview with an expert of public relations in crisis

Within the primary part of the survey, effected by an interview with an expert of public relations in crisis. The interview is aimed to bring knowl-edge about important aspects of the crisis, the impact of the crisis on the reputation of the organization and the like. The interview was conceived through nine research questions. The interview was conducted 05/13/2019. in Belgrade. Nine research questions elicited responses presented in below.

1. What is the best answer to the condemnation of the media in the context of crisis situations, where we experience the media as the culprits?First of all, it is necessary to keep an open and honest dialogue with

the media now. Initiate meetings and meetings and present the media re-source information and show genuine empathy and willingness to solve the problem arose in the interest of the public and above all the victims.

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2. How crisis management PR department like before the crisis (in your opinion are the most important activities)? The Company will, within its strategy of struggle and commitment to

crisis management will bring a set of planning documents primarily a strategy for managing the crisis and the necessary policy. Within these policies change the role of sector or department for public relations before, during and after the crisis.

3. What PR crisis management - sector work for the duration of the crisis (according to you which are the most important activities)?As stated in the previous answer company (Board of Directors, Gen-

eral Director) the planning document is within which are defined by the pre-ferred conditions and activities, as well as the bearers of the same. During the crisis, the most common sector for public relations solves operations and activities in consultation with the Crisis Staff and management, and act in accordance with the adopted scenarios.

4. What are the sources of important topics for crisis scenarios before the crisis?Before the crisis, it is important that the sector or public service mon-

itors corporate reports, internal documents, critical events that are familiar with the conclusions of the collegium and the like. Also, they must follow current events, statistical sources, guild associations, national legislation and the like.

5. To whom directed messages during and after a crisis event?Oral and written messages during and after a crisis event addressed

to the general public and target audiences, the vulnerable and disadvantaged families and those who are directly and indirectly threatened a crisis. Since the target audiences are important existing customers, employees, members of the media, stakeholders.

6. What are the potential errors during crisis situations (errors you see as the biggest)? We believe that the company must always be available to the media

and that it should never be a shield around you so you will say “No com-ment!”. This would only narrow the already narrow space for maneuver op-eration.

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7. How companies can systematically improve the image after a crisis situation?The company can do business in a transparent open style in accordance

with ethical and legal regulations. And more companies need to embrace the concept of corporate social responsibility (standard and all he wears). The company can do business in a transparent, open style in accordance with ethi-cal and legal regulations. And more companies need to embrace the concept of corporate social responsibility (standard and all he wears). Furthermore, it is necessary to demonstrate a sense of sincere regret and empathy and a will-ingness to work on its development and the development of its employees through change procedures, training and the like. Of course, the actions that will promote disadvantaged social groups may be helpful.

8. How is in the crisis important that the company has accumulated a good image?A good image is very important. If the company believes the general

public, if she believes will help media to form public opinion in a way that this company is in favor. The general public will be more difficult to polarize or harder to blame the company for the current crisis and the more they will trust her. Companies that have accumulated a good image, the easier it passed through the crisis and are easier to recover from them.

9. What advice would you give to companies in crisis management process?Companies must be prepared for any crisis, must have developed the

script, created a crisis team and practice as it will surely crises happen tomor-row in the hope that it will not happen ever.

3. CONCLUSION

The cause of most crises is a combination of individual errors, omis-sions, together with organizational and environmental influences or environ-mental factors. Director of the company, therefore, must have ability analyt-ics and special attention to timely influence on the symptoms of the crisis. Ideally the existence of the service or sector of human resources and team for crisis. In the fight of companies in crisis situations ranging from the study of the characteristics of the crisis that affects the organization and taking into account the positive possibilities of anti-crisis action, as well as measures to maintain their organization in crisis conditions. It is of great importance as well as ethical strengthen the capital and make good reputation.

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Characteristic of the company in crisis is the existence of low profits, losses and reputation crisis. If the management company does not make ap-propriate actions in resolving that crisis management will certainly fail. Re-covery company depends entirely on the ability of appropriate election crisis public relations strategy that will solve the problems with synchronous ad-dressing the causes of the crisis.

The organization in a crisis becomes the object under public scrutiny. What the organization says in a crisis and offices is seen with much greater care than usual, which is why its response must be well thought out. This is precisely the most difficult task, because when a crisis occurs, verified infor-mation is not enough, and the need for them is growing exponentially. Al-though the information is in crisis largely beyond the speed of light, it takes a lot of effort to adequately fill the information gap in order to have room for speculation and rumors.

Relations make up a significant segment of each company, whose special role is important in crisis situations where companies are under public scrutiny, or in cases where organizations compromised reputation accom-panied by significant pressure from the media, but not only the media but significant social groups and individuals. In a kind of self-information are always new sources, most often unreliable and release quickly polarized, but sometimes you can get to rotate the roles of victims and perpetrators.

In the framework for managing of crisis communication, it is important what kind of relationship the organization has nurtured with the media. The crisis is not a good time to start relations with the media, but to maintain the selection of media that is due to the existence of a good relationship from the previous period to help the organization to present their own information and the interpretation of events without any bad interpretation by friendly media. In terms of good communication with the media in so-called “Peaceful condi-tions” and conditions before the crisis, it is important to invite representatives of the media and formal events but also in less formal or organize meetings with them, working breakfast and the like. In this way, at times when the orga-nization they need all the friends that may occur, media she can be a significant partner in crisis management. At least if the media will not be partners with organizations that are struggling with the crisis, will be loyal enough to at least be objective and properly report the resulting crisis without additional interpre-tation of events malicious access. Truth and objectivity are the most important partners of organizations that find themselves in crisis. An important effect makes time which is never enough when the crisis comes. Everything that hap-pens too fast in a crisis, reduce the space for maneuver and the time actually is available to organizations is even shorter to function well.

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REFERENCES

1. Rujan Z, (2010). Delovanje menadžmenta u kriznim situacijama, Međunarodna naučna konferencija Menadžment 2010, Kruševac.

2. Dobrijević, G. (2017). Poslovno komuniciranje i pregovaranje, Univerzitet Singidunum, Beograd.

3. Mirosavljević, M. (2008). Odnosi s javnošću, Banja Luka Colledge, Banja Luka

4. Vilkoks, D. Kameron G, Olt. H, Ejdži, V. (2016). Odnosi s javnošću, strategije i taktike, Centar za izdavačku delatnost, Ekonomski fakultet u Beogradu

5. Griffin A, (2014). Crisis Issue and Reputation Management a Handbook PR and Communications Professionals-Kogan.

6. Anthonissen, P. (2008) Crisis Communication Practical Strategies for Reputation Management and Company, Cogan Page.

7. CNBC U.S. NEWS JetBlue Weathers the Storm, Oliver Quillia, Published 10:19 AM ET Tue, 20 Feb 2007 Updated 4:20 PM ET Thu, 5 Aug 2010 (pristupljeno 28.04.2019.)

8. Atweek http://www.atweek.org/ (pristupljeno 9.2.2019.)9. JetBlue https://www.jetblue.com/ (pristupljeno 9.2.2019.)10. Radnović, B. (2013). Marketing usluga, Fakultet poslovne ekonomije,

Univerzitet Educons11. Radnović, B. (2014). Marketing istraživanje, Fakultet poslovne ekonomije,

Univerzitet Educons12. Ilić, M, Osnove ekonomije finansija i računovodstva, Visoka škola strukovnih

studija za informacione tehnologije, ITS- Beograd, 2017

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Envirnomental preformances of company

JelenaTadić1, Zoran Brljak2

Abstract: Recently, there has been observed an increasing awareness within business communities on the sig-nificance of going green and adopting various environment management techniques. As the corporate world is going global, the business is experiencing a shift from a conventional financial structure to a modern capacity-based economy which is ready to explore green economic facets of business. Green Performance Management (GPM), as one of the processes of Green Human Resource Management (GHRM), is a whole process of dynamic management system which can guarantee enterprises’ comprehensive benefits, including greater effi-ciencies and better Environmental Performance (EP). The research presented in this paper was conducted on a sample of one hundred companies in the food industry from Serbia. The aim of the research is whether and to what extent there is a link between the using green performance management and environmental performance. Based on techniques of correlation, the analysis confirmed that there is a statistically positive and significant relationship between the GPM and EP.

Key words: green performance management, environmental performance, food industry, Serbia.

1. Introduction

In today’s business environment, green or environmentally friendly practices are very popular. It has been observed that business practices around the world are beginning to introduce some kind of environmentally sensitive activities in business management (Gast et al, 2017; Sharma et al, 2017). In addition to focusing on financial profits, organizations have realized that they must consider all social and environmental impacts for their long term sustainability, especially their responsibility towards social and environmental risks and opportunities for all business decisions taken by them (Vani, G., 2017, p. 114). In the past two decades, a worldwide consensus has emerged around the need for proactive environmental management. According to Ahmah (2015, p. 2) “Human Resource Management (HRM) is an important faction of management that deals with the most valuable assets of an organization which is human resources. The whole context of HRM is currently being considered in the light of sustainability all over. Expanding the statement, Green Human Resource Management is the most significant element of sustainability”.

1 Tadex Advisory, Novi Sad, Serbia, [email protected] Educons - Faculty of Business Economy, Novi Sad, Serbia, [email protected]

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“The term Green HRM has become the buzz word within the business field at present and its significance is increasing manifold with the passage of time. This term is a hot topic in recent research works since the awareness on environmental management and sustainable development has been increasingly rising day by day all around the globe” (Vani, G., 2017, p. 115). Today the topic Green HRM not only includes awareness toward environmental affairs, but also stands for the social as well as economical well-being of both the organization and the employees within a broader prospect. Green Human Resource Management (GHRM) as a business approach is emerging strongly within the green movement alongside other developments such as green finance, green banking and green spaces. It has gained popularity due to its impact on business sustainability (Chan, 2017). Today, GHRM has become a key business strategy for the significant organizations where human resource departments play an active part in going green at the office.

With the environmental management affecting global business strat-egy, performance management is also being influenced by the green wave in a possible positive manner. The recognition of the corporate strategy culmi-nates into the performance management (2015, p. 6). Green performance management (GPM) consists of issues related to environmental concerns and policies of the company. It also concentrates on use of environmental responsibilities. Epstein and Roy (1997) in their study concluded that when HR managers integrate environmental performance into performance man-agement systems they safeguard environment management against any dam-age. The value of this paper is identification of GPM practices, and their re-lationship with environmental performances (EP) in food industry of Serbia.

The paper is organised in five sections. The introductory section presents the nature of the idea of green performance management and en-vironmental performance. The second section is based on an overview of previous studies and clarification of basic concepts from a wide range of authors. It focuses on defining the term green human resource management, green performance management and environmental performances. Third section describes the research methodology. Four section present results and discussions of empirical research. Finally, the fifth section contains the main conclusions.

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2. Literature review

The substantial extent of existing literature deals with the topic of Green HRM. Green Human Resources Management (GHRM) can be de-fined as the set of policies, practices, and systems that stimulate a green behaviour of a company’s employees in order to create an environmentally sensitive, resource efficient and socially responsible workplace and overall or-ganization (E-CSR). Mandip (2012, str. 244) explains green human resource management as “the use of human resource policies to promote sustain-able use of resources within business organizations and, more generally to promote the cause of environmental sustainability”. Others describe Green HRM as the use of HRM policies, philosophies, and practices to promote sustainable use of business resources and thwart any untoward harm arising from environmental concerns in organizations (Zoogah, 2011). It is the com-bination of environmental management and human resource management practices (Vani, G., 2017, p. 115). Despite the various definitions of the term GHRM, most studies consider that GHRM practices include the following activities: green recruitment and selection, green performance management, green training and development, green compensation and reward, green em-ployee relations (Jabbour, C. J. C., Santos, F. C. A., & Nagano, M. S., 2010; Zibarras, L.D. and Coan, P., 2015).

Performance management is the process by which employees are prompted to enhance their professional skills that help to achieve the or-ganizational goals and objectives in a better way. Developed performance management systems should include “green” targets in the key performance areas (KPA). There should be green performance standards and green behav-ior indicators which should serve as yardsticks in performance appraisal of employees and managers at all levels (Vani, G., 2017, p. 117).

Green performance management (GPM) is a whole process of dy-namic management system, including the performance plan, implementation, evaluation and feedback (Liu, T., Xie, P., 2013, p. 89). Green performance management (GPM) refers to a system of evaluating activities of employees’ performance in the process of environmental management (Jabbour, C.J.C., Santos, F.C.A, and Nagano, M.S., 2008).

According to Chan (2017, p. 8), processes of green performance management include: incorporating environmental performance indicators in performance management systems; conducting dialogues on environmental matters; incorporating environmental targets, goals and responsibilities into performance management; assessing environmental initiatives in appraisals;

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clear communication of environmental policy. Tang et. al (2018) suggest that successful green performance management should contain the following ac-tivities: setting green targets for all members, creating green performance in-dicators, evaluating employees’ green outcomes, and using dis-benefits (Milli-man, J. and Clair, J., 1996; Renwick, DWS., Redman, T. and Maguire, S., 2013). Setting green targets for all members implies translating environmental ob-jectives into action plans for all staff. Creating green performance indicators implies establishing a series of green criteria for all members in performance appraisals. Evaluating employees’ green outcomes implies identifying green outcomes and encouraging managers to be accountable for environmental management performance. Dis-benefits may push employees to behave more environmentally and strive for green goals in their future work.

Liu and Xie (2013, p. 89) introduce dynamism in the whole story of this issue, in the sense that green performance management is a whole process of dynamic management system, including the performance plan, implementation and appropriate assesment system to motivate employees to value the environmental responsibility. First activity of green performance management is setting quantitative green indicators, such as the fulfillment of environmental responsibility, the energy conservation and emission reduction quantity. Second activity of green performance management include moni-toring stage, in which it is important to communicate with all level employees on the green performance plan so as to make them understand their green responsibility. Third activity of green performance management includes an appropriate assessment system to motivate employees to value the environ-mental responsibility. Managers should assess employees’ performance based on their green indicators, simultaneously giving feedback to help them un-derstand their achievements and shortcomings in the performance evaluation stage. On the fourth activity, the use of appraisal results must be combined with the decision-making of human resource management.

3. Methodology

The aim of this study was to examine the relationship between Green Performance Management (GPM) and environmental performance (EP). For this purpose, we undertook an empirical study that included a sample of 100 companies from food industry in Serbia. The survey was conducted from October to December 2018. Survey instrument was send to HR managers of the companies. To assess GPM practices in food industry in Serbia, respon-

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dents were requested to rate each item of the survey under a five-point Likert scale (1 – Not at all, 2 – To a slight extent, 3 – To a moderate extent, 4 – To a large extent, 5 – To a very large extent). The application degree of each practice was identified by classifying the response means of respondents into five degrees3. Table 1 present demonstrates the application degree for GPM practices. Results show that the total implementation degree of GPM is 2.83, which is considered as a moderate level.

Table 1: Application degree of Green Performance Management practices

N Mean Std. Deviation Application Degree

Green Performance Management 100 2.83 .730 Moderate

Source: Author’s calculation, SPSS Output Table

Table 2 outlines the descriptive analysis of GPM items. Based on Table 2, the results show that the top two most prevalent GPM items are: “Employees know their specific green targets, goals and responsibilities” with a score of 3.09 and “Environmental behavior/targets and contributions to en-vironmental management are assessed and include in performance indicators” with a score of 3.02. The least prevalent GPM item is “The company frequent revise of environmental performance standards” with a score of 2.44.

Table 2: Descriptive statistics for items under GPM practices

N Mean Std. De-viation

Employees know their specific green targets, goals and responsibilities 100 3.09 .321

Environmental behavior/targets and contributions toenvironmental management are assessed and include in performance indicators

100 3.02 1.477

Top management is fully committed to the successful implementation of green outcomes and performances 100 2.95 .609

Top management is responsible for fostering an orga-nizational culture focused on improving the green en-vironmental performances

100 2.94 .814

3 1 - 1.80: Very Low; >1,80-2,60: Low; >2,60-3,40: Moderate; >3,40-4,20: High; >4,20-5,00: Very High.

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There is transparent communication between manage-ment and employees about the value and purpose of green performance management

100 2.70 1.453

The company provide useful feedback to employees and support continuous improvements in the firm’s en-vironmental outcomes

100 2.70 1.000

The company frequent revise environmental perfor-mance standards 100 2.44 1.520


To measure current status of food industry’s environmental perfor-mance (EP), respondents were asked to rate eight EP affirmative outcomes, based on their commitment to the environmental sustainability, on a five-point Likert scale, with 5 being “Much better” and 1 being “Much worse” (Masri, H.A., Jaaron, A.A.M., 2017). Table 3 presents the mean ratings of potential EP outcomes as a result of implementing GPM practices.

Table 3: Descriptive statistics for items under environmental performance

N Mean Std. Devia-tion

Improvement of corporate reputation 100 4.04 1.145Improved product quality 100 3.98 1.206Improved plant performance 100 3.93 .293Reduced waste and recycling of the materials during the production process 100 3.88 1.335

Reduce emissions of toxic chemicals in air and water 100 3.78 .484

Reductions in the consumption of electric en-ergy 100 3.68 .601

Increased use of renewable energy and sustain-able fuels 100 3.52 .858


Based on the analysis of the data presented in Table 3, it is evident that “Improvement of corporate reputation” is a top environmental perfor-mance affirmative outcome in food industry with a mean of 4.04, whereas “Increased use of renewable energy and sustainable fuels” was the lowest environmental performance affirmative outcome with a mean of 3.68.

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Overall environmental performance was obtained as the sum of 7 items under environmental performance and the total score was divided by 7. This additional step made it easier to interpret the results, since the individual items were rated on a scale from 1 to 5. Descriptive statistical analysis for overall environmental performance is shown in table 4.

Table 4: Descriptive statistics for overall environmental performance

N Mini-mum

Maxi-mum Mean

Std. Devia-

tion

Vari-ance

Kol-mogorov-Smirnov

Shapiro-Wilk

Overall environ-mental perfor-mance

100 2.3 4.7 3.85 .633 .401 0.000 0.000


Overall environmental performance has a mean of 3.85, with mini-mum and maximum values ranging from 2.3 to 4.7. Testing normality of dis-tribution has been based on Kolmogorov-Smirnov and Shapiro-Wilk’s test. The normality is shown to be statistically insignificant (accidental) deviation from the normality if the Sig. > 0.05. In this cases, the significance is less than 0.05. which shows that the assumption of the normal distribution is not confirmed. This also means that non-parametric statistical techniques related to this variable will be used below.

Starting from the basic subject and issues as well as the research goal of this research, and taking into account recent scientific research on this topic, hypothesis that will be subject to testing is: H1: There is statistically posi-tive and significant relationship between green performance management and environmental performance.

In accordance with the defined hypothesis, statistical test of Pearson correlation was used. Statistical package SPSS IBM Statistics Version 23 was used for the execution of selected statistical test.

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4. Results and discussion

The question of whether there is a correlation and what is the rela-tionship between green performance management practices and overall en-vironmental performance was investigated using the Spearman rank correla-tion coefficient (rho) (table 5).

Table 5: CorrelationGreen perfor-

mance manage-ment practice

Overall en-vironmental performance

Spearman’s rho

Green performance management practice

Pearson Correlation 1.000 .723**

Sig. (2-tailed) . .000N 100 100

Overall environmental performance

Pearson Correlation .723** 1.000

Sig. (2-tailed) .000 .N 100 100


Between green performance management and overall environmen-tal performance, a mean strong positive correlation was calculated (Cohen, 1988, pp. 79-81), (r = 0.723) n = 100, p <0.01. It is concluded that growth of green performance management practice leads to an increase in overall environmental performance. . In order to perform the model evaluation, a coefficient of determination is determined, which indicates how much of the variance of one variable is explained by the variance of the other, ie. how much of the variance of the two variables is common. So green performance management explains 52.27% of the variance of overall performance man-agement. Therefore, it can be concluded that the hypothesis H1 is accepted: there is statistically positive and significant relationship between green performance manage-ment and environmental performance.

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Conclusions

The main objective of this research was to theoretically investigate and test the relationship between GPM practices in food companies in Ser-bia and EP. Although the results revealed that the total implementation of GPM practices is at a moderate level, the analysis confirmed that there is a statistically positive and significant relationship between GPM practices and EP. The presented results offers useful insights on how food organizations should strategically link their GPM activities to support their EP necessary for competitive advantage.

This study has a significant contribution for EP researchers and prac-titioners. It adds a relationship that is little explored and evolved in a manu-facturing setup of developing countries by linking GPM practices and EP and discusses how GPM activieties can provide more sustainable manufac-turing organizations. Also, study can guide managers at manufacturing or-ganizations to link environmental strategic goals with specific practices of GPM. This linking can generate the deep engagement of employees in shap-ing environmental practices for a stronger EP. In addition, adopting the full set of GPM activities according to priorities explored in this research helps manufacturing organizations to build an eco-advantage culture; going beyond the basics of cutting waste and operating efficiently to enclose environmental considerations into all aspects of their employees’ behavior, through defining green values, practices, initiatives, and rules.

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• Sharma, V.K., Chandna, P., Bhardwaj, A.,. (2017). Green supply chain man-agement related performance indicators in agro industry: a review. Journal of Cleaner Production, 141(10), 1194-1208.

• Tang, G., Chen, Y., Jiang, Y., Paillé, P., Jia, J. (2018). Green human resource management practices: scale development and validity. Asia Pacifi c Journal of Human Resources, 53(1), 31-55.

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• Zibarras, L.D. and Coan, P. (2015). HRM practices used to promote pro-environmental behavior: a UK survey. The International Journal of Human Re-source Management, 26(16), 2121-2142.

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133

EU Integrations of Serbia - Position and Perspective of Chapter 27

SimonidaVukadinović1,AndreaOkanović2,BojanaJokanović3

Abstract: To preserve the environment for future generations the EU is trying to promote sustainable development. The benefits of such policy are multiple: preservation of natural resources, better health of the population, better quality of life and the growth of the economy. On its EU integration course Serbia still has a lot of obligations, so is concerning to the Chapter 27: Environment. The EU environmental regulations are extremely extensive and account for about one third of the total number of EU regulations. These regulations cover the area of environmental protection horizontally across sectors: air quality, waste management, water quality, nature protection, industrial pollution control and risk management, chemicals, climate change, noise protection and civil protection. Paper will present situation of Serbia in the line with environmental policy, progress report as well as some of stakeholders and benefits of harmonization in the country.

Keywords: EU integrations, Serbia, environment, Chapter 27, green jobs

1. INTRODUCTION

Entered into force on 1 September 2013, the Stabilization and Asso-ciation Agreement (SAA) presents a plan of international treaty, which thus granting the Republic of Serbia the status of an associated country to the European Union. There are two most significant commitments that Serbia has taken over with the signing of this Agreement: establishment of free trade zone and align domestic legislation with the EU [Government of the Republic of Serbia, 2019]. The 35 negotiating chapters for Serbia’s accession to the EU, represent the harmonization of Serbian system with the achieve-ments of EU. Sixteen chapters have been opened so far and two of them are successfully closed.

One of the most important chapter is precisely Chapter 27 which is focus on environment and climate change problems. Observation of Chap-ter 27 for Serbia started on the September the 14th 2014, and it was fin-ished on November 21st 2014 [Government of the Republic of Serbia, 2016]. However, observation for this chapter has found that there is complete non-

1 Educons University, Sremska Kamenica2 Faculty of Technical Sciences, University of Novi Sad3 Faculty of Technical Sciences, University of Novi Sad

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compliance with EU legislation. The goal of EU environmental policy is to promote sustainable development and preserve the environment for future generations. The most important benefi ts such policy are better quality of life, better population health, conservation of natural resources and competi-tive economy [EU Info center, et al., 2015].

2. ENVIRONMENT AND CLIMATE CHANGE - CHAPTER 27

EU environmental policy is based on the principles of preventive action, the ‘polluter pays’ principle, preventing environmental damage at the very source of pollution, the shared responsibility between the EU and the Member States and the integration of environmental protection into other EU policies.

EU environmental regulations are extremely extensive and account for approximately 1/3 of the total number of EU regulations. Transposing EU legislation into the national legal system is only the fi rst step in the pro-cess of adapting to EU standards.

What EU environmental policy also implies, is the adequate imple-mentation and enforcement of regulations – not only at national, but local level as well. Signifi cant investment is needed due to administrative costs, infrastructure investment, and plant maintenance. A notable part of the cost of reaching EU standards will be fi nanced through EU funds.

The goal is establishing a sustainable environmental protection sys-tem in Serbia, as well as a signifi cant involvement of environmental policy in other sectors. In this way, preconditions for better health, better quality of life of citizens and a competitive economy will be provided. At the same time, negotiations should ensure a suffi ciently long transition period in order to adapt Serbia’s infrastructure and facilities to high EU standards.

3. GREEN HUMAN RESOURCE MANAGEMENT AND GREEN INNOVATIONS

The report of Bruntland Commission in 1987, entitled “Our com-mon future” was the fi rst major step forward in striking a balance between ecology, economy and community (World Commission on Environment and Development, 1987). This report pointed out that there were interactions between the economic, social and environmental dimensions of sustainable development. All dimensions overlap in some spheres of infl uence, which

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implies that these aspects cannot be analyzed separately when it comes to sustainable development issues (fi gure 1).

What EU environmental policy also implies,is the adequate implementation and enforcement of regulations –not only at national, but local level as well. Significant investment is needed due to administrative costs, infrastructure investment, and plant maintenance. A notable part of the cost of reaching EU standards will be financed through EU funds. The goal is establishing a sustainable environmental protection system in Serbia, as well as a significant involvement of environmental policy in other sectors. In this way, preconditions for better health, better quality of life of citizens and a competitive economy will be provided. At the same time, negotiations should ensure a sufficiently long transition period in order to adapt Serbia's infrastructure and facilities to high EU standards.

3. GREEN HUMAN RESOURCE MANAGEMENT AND GREEN INNOVATIONS The report of Bruntland Commission in 1987, entitled "Our common future" was the first major step forward in striking a balance between ecology, economy and community (World Commission on Environment and Development, 1987). This report pointed out that there were interactions between the economic, social and environmental dimensions of sustainable development. All dimensions overlap in some spheres of influence, which implies that these aspects cannot be analyzed separately when it comes to sustainable development issues (figure 1).

Figure 1: Concept of Sustainable Development As an answer to the growing public awareness on the importance of organizational contributions to sustainable development, there is an increased incentive for companies to release their sustainability activities. Thus involved the development of sustainable human resources management. Garg (2014) pointed out that human resource plays anecessary role in promoting a corporate culture that is attentive to sustainable business practices leading to economic, social and environmental sustainability. According to Jabbour and De Sousa Jabbour (2016) green human resource management (GHRM) requires some of traditional human resource practices such as recruitment, selection, performance evaluation, training, reward system supported with strategic environmental goals, organizational culture, teamwork, and employee empowerment.

Community

EconomyEnvironment

Figure 1: Concept of Sustainable Development

As an answer to the growing public awareness on the importance of organizational contributions to sustainable development, there is an increased incentive for companies to release their sustainability activities. Thus involved the development of sustainable human resources management. Garg (2014) pointed out that human resource plays a necessary role in promoting a cor-porate culture that is attentive to sustainable business practices leading to economic, social and environmental sustainability.

According to Jabbour and De Sousa Jabbour (2016) green human resource management (GHRM) requires some of traditional human resource practices such as recruitment, selection, performance evaluation, training, reward system supported with strategic environmental goals, organizational culture, teamwork, and employee empowerment.

Green innovation is presently acquiring increased international atten-tion as a result of the growing concern on natural resource degradation and environmental contamination among consumers, governments, and commu-nities in general. Although many studies have indicated the positive effects of green innovation on the performance of manufacturing fi rms, initiation of green innovation could be in confl ict with job satisfaction, which in turn could negatively impact the performance of companies [Iranmanesh, Zailani, Moeinzadeh & Nikbin, 2017].

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On the other hand, Renwick, Redman and Maguire (2013) suggest that Green human resource management influence employee motivation to become involved in environmental activities. Organizations develop Green abilities and provide employees with opportunities to be involved in environ-mental management organizational efforts. Organizations that not use the GHRM practices may limit their effectiveness in efforts to improve environ-mental management.

4. THE NATIONAL ENVIRONMENTAL APPROXIMATION STRATEGY - CIRCULAR ECONOMY

Circular economy is directly connected with the chapter 27. “Circular economy represents a chance for accelerated development of the Republic of Serbia, greater competitiveness of the economy and job creation. Circular economy will be contribution to less pollution of the environment and pres-ervation of natural resources, enabling a better quality of life and a safer fu-ture for the nation. There is great opportunity for green jobs, but they will be achieved only with sustainable and massive investments in the public and pri-vate sectors. Governments and all the stakeholders have to make a framework for greening economy adoption” [Vukadinovic & Jesic, p. no.116, 2019].

The use of recycled materials and recycling rates in the EU are con-stantly growing. In 2016 EU recycled around 55% of all waste (without major mineral waste) and the rate for construction and demolition waste reached 89% while the rate of plastic packaging was over 42%, compared with 24% in 2005 Penen R., 2019]. (figure 2). The National Environmental Approxima-tion Strategy foresees that no transitional period will be left at the end of the accession negotiations to reconcile individual recycling segments. According to Serbia’s Environmental Approximation Strategy, in the process of adapt-ing to EU standards, Serbia should establish organized waste collection for more than 90% of the population by year of 2020 and reach EU targets for reuse and recycling by year of 2025 [Recyclers Association of Serbia, 2019].

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Figure 2: Recycling rates of different waste in EU in 2016 [Penen R., p.no. 1, 2019].

The Law on Waste Management in Serbia stipulates that waste should be landfilled only if there is no other solution for its treatment. Waste must be sorted and separated before it is disposed of, and all components that have a usable value must be sorted out, while only non-reusable waste is landfilled. The Waste Management Act and the Packaging Waste Act and the by-laws resulting from them prescribe European standards, that is, the reduction of biodegradable waste at landfills by 25 percent by 2016, by 50% by 2019 and by 65% by 2026. The law also stipulates that what is charged have to go back to the recycling industry. Serbia plans to reach the target of 50% recycling (556,233 tons) [National Convention on the European Union, 2015] of total municipal waste by 2030. The high share of biodegradable waste, especially in rural and suburban areas in Serbia, is considered to be an additional challenge to achieving targeted recycling rates.

The share of maximum household contribution to price afford-ability, which should absorb operating costs in the waste sector, is defined at 1.5%[National Convention on the European Union, 2015] of average household income, according to the National Environmental Approximation Strategy (2011). Analyzes show the need for an intensive increase in utility tariffs from the now estimated 20% (low cost but also improper service) to the highest rate of 82% in 2029. The pronounced growth between 2017 and 2029 is also an indicator of the likely impact this plan will entail. These values should be assessed in the implementation plans for specific directives - and before the full definition of transitional periods - at the level of each regional waste management system, as regional variations will occur, which in some cases require a more lenient individual approach.

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Recycling is the youngest industry branch in Serbia and the only one that, according to official data, grows during the global economic crisis. This is best illustrated by the fact that over 10,000 people have been employed in the industry in the last three years. There are 2,200 waste collection and recycling companies in Serbia, which is a huge growth from 2009 when there were 200 of them. In addition to professionals, engineers and environmentalists, the recycling industry also employs secondary raw material collectors across the country, often from marginalized social groups, providing them with social protection and including them in labor market [Recyclers Association of Serbia, 2019].

5. THE PROGRESS REPORT OF CHAPTER 27 IN SERBIA

In 2014, Coalition 27 was established by civil society organizations, primarily to monitor and contribute to the negotiations in Chapter 27. 11 member organizations of Coalition 27 (Belgrade Open School, The Bird Study and Protection Society of Serbia, Centre for Ecology and Sustainable Development, Climate Action Network Europe, Environment Engineering Group, Environment Improvement Centre, GM Optimist, One Degree Ser-bia, Safer Chemicals Alternative, Young Researchers of Serbia and the World Organization for Nature (WWF) ) prepared report, and 10 thematic areas are covered: horizontal legislation, air quality, waste management, water quality, nature protection, industrial pollution and risk management, chemicals man-agement, noise and climate change.

The latest report of Chapter 27 in Serbia with the title No-Progress Report, is published in 2018. The 5th annual Report of Chapter 27, follows the publication of the annual report of the European Commission. The most significant change in the previous period was the establishment of the Minis-try of Environmental Protection [Belgrade Open School, et al., 2018].

The second big event is the adoption of the EU Enlargement Strate-gy for the Western Balkans(The official title: A credible enlargement perspec-tive for and enhanced EU engagement with the Western Balkans). However, Chapter 27 has not been mentioned in the Strategy at all, while the environ-ment has been mentioned in several places. For this reason, the duty of civil society organizations is to make additional efforts in order to position this area as one of most important. The process of preparing the negotiating position of Chapter 27 of the Republic of Serbia is taking place with the limited stakeholders’ participation (civil society organizations, academic and professional community).

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Financially, Chapter 27 is the most demanding chapter, so the ques-tion of financing this area and alignment with the EU acquis by 2030 is one of the most important issues our country faces. According to the National Environmental Approximation Strategy (2010), the full harmonization costs were calculated and estimated at EUR 10.6 billion by 2030. The Law on En-vironmental Protection points out that, the financing of environmental pro-tection is done by the principle “user pays” principle, the “polluter pays” principle, and the “liability” principle, and funds for financing environmental protection are provided by the budget of the Republic of Serbia, the bud-get of the autonomous province, local government funds, funds from other states, international organizations, financial institutions and bodies, as well as domestic and foreign business entities and individuals, EU funds and other international funds, donations, gifts, contributions, assistance, etc.

6. CONCLUSION

The goal of EU environmental policies is preserving the environment future generations. Direct benefits from adaption of EU environmental laws and requirements from Chapter 27, in Serbia, are sustainable environmental protection system, cleaner air and water, protection of flora and fauna and waste management, by implementation standards. By fulfilling prerequisites and implementation of appropriate standards, Serbia will ensure high envi-ronmental standards, higher air and water quality, biodiversity conservation and an integrated waste management system. Making investments in environ-mental protection, Serbia will also improve its position as a tourist destina-tion, which will contribute to the development of tourism.

At the time of the greatest economic crisis, when classical industries were in financial trouble, recycling came as a branch of industry that contributed to the development of the municipalities in which it operates, and was largely oriented toward the export of raw materials. In addition, recycling has an impact on improving the quality of life and health of the population, and is significant in terms of conserving resources, saving energy and reducing pollution.

The new Environmental Law regulates the integral system of envi-ronmental protection, which ensures the realization of the human right to life and development in a healthy environment and a balanced relationship between economic development and the environment in the Republic of Serbia.

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REFERENCES

• Belgrade Open School, et al. (2018) Chapter 27 in Serbia: No-Progress Re-port, Young researchers of Serbia, Belgrade, pg. 8-13.

https://rs.boell.org/sites/default/files/izvestaj_k27_2018_eng_web.pdf

• EU Info center, et al. (2015) Negotiation chapters - 35 steps towards the EU, II Edition, EU Info center, Belgrade, https://euinfo.rs/files/Publikaci-je-srp/35_koraka_za_web.pdf pg.33,34

• Garg, B. (2014). Human resource-driving force of sustainable business practices. International Journal of Innovative Research & Development, Forthcoming.

• Government of the Republic of Serbia (2019) Ministry of Europeam In-tegratio, pg.1 http://www.mei.gov.rs/eng/serbia-and-eu/stabilisation-and-association-agreement/[July 2019].

• Government of the Republic of Serbia (2016) The Commission work-ing document Enlargement + Negotiating countries accession to EU MD 114/16 08.06.2016 pg.1 http://www.pregovarackagrupa27.gov.rs/?wpfb_dl=132 [July 2019].

• Iranmanesh, M., Zailani, S., Moeinzadeh, S., & Nikbin, D. (2017). Effect of green innovation on job satisfaction of electronic and electrical manufac-turers’ employees through job intensity: personal innovativeness as modera-tor. Review of Managerial Science, 11(2), 299-313.

• Jabbour, C. J. C., & de Sousa Jabbour, A. B. L. (2016) Green human resource management and green supply chain management: Linking two emerging agendas. Journal of Cleaner Production, 112: 1824-1833.

• National Convention on the European Union (2015) Status and trans-fer plans EU Enforcement For Chapter 27 - The Environment I Cli-mate Changes, , National Convention on the European Union, Belgrad, pg.275,276.

http://eukonvent.org/wp-content/uploads/2015/07/Status-i-planovi-preno%C5%A1enja-i-sprovo%C4%91enja-pravnih-tekovina-EU-za-poglavlje-27-%C5%BDivotna-sredina-i-klimatske-promene.pdf

• Penen R.(2019) Circular economy in the EU Record recycling rates and use of recycled materials in the EU, Eurostat Press Office,pg.1

https://ec.europa.eu/eurostat/documents/2995521/9629294/8-04032019-BP-EN.pdf/295c2302-4ed1-45b9-af86-96d1bbb7acb1

• Recyclers Association of Serbia (2019) https://reciklerisrbije.com/[July 2019].

• Renwick, D. W., Redman, T., & Maguire, S. (2013). Green human resource management: A review and research agenda. International Journal of Manage-ment Reviews, 15(1), 1-14.

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• Vukadinović, S., Ješić, J. (2019) Green jobs – potential for employment in Republic of Serbia, Anali ekonomskog fakulteta u Subotici, Univerzitet u Novom Sadu, Ekonomski Fakultet u Subotici, vol. 55, pg. 116, (ISSN 0350-2120, UDK 330)

• World Commission on Environment and Development (1987) Our Com-mon Future. Oxford: Oxford University Press. p. 27

ACKNOWLEDGEMENT

The publication of this scientific work was developed within the proj-ects “Improving the Competitiveness of Serbia in the Light of EU Accession Process”, Ministry of Science, Education and Technological Development, no. 47028, for the period year 2011-2019. This research is supported by the Ministry of Science and Technological Development of Serbia, as part of the projects: Interdisciplinary Research European integration and social and economic changes in Serbian economy on the way to EU [No. III 47009] and Basic Research Challenges and Prospects of structural changes in Serbia: strategic directions for economic development and harmonization with EU requirements [No. OI 179015].

142

Role and importance of internal communication within organization, in creating good climate and managing

conflicts

BranislavRadnović1, MilenaIlić2, Ana Rasinac3,MarkoRanković4

Abstract The basic definition of communication indicates that communication is the process of transfering messages between people, and is only realized when the message has arrived from the sender to the recipi-ent. From this basic information, it can be concluded that communication is important for all participants. Equally important is the choice of channels, and through deduction, to understand that for the transmission and understanding of the message, very important are the ability to describe the message correctly of those who send the message, then the recipient, the messages and other elements of communication and communica-tion process. A good organizational climate based on positive values, fostering internal communication, zero tolerance towards violence, occasional stimulation of conflicts in controlled conditions, is the key to the success of many organizations. Within a healthy organizational culture, good communication is responsible for creating satisfac-tion of employees, who will be productive, avoid absenteeism and wont` leave the organization as a willing option. Whether there will be conflicts in such an organization, it arises as a logical question. The aim of the research is, among other things, determining the legality of the occurrence of a particular types of conflict in organizations, but also analyzing communication, through concepts and types, as well as conflicts, organizations and other related concepts.

Key words: organization, communication, conflicts, organizational culture

1. Introduction

The subject of this research paper is to analyze the concept of in-ternal communication, interpersonal communication, inter-sectoral commu-nication and conflict management in organizations. In the first chapter we talk about communication in the organization in a broader context. Looking into internal communication through the concept of communication, but also through growing role of the importance of internal communication in achieving the competitive advantage. Also, to achieve a good organizational culture, through properly setup and managed internal relations or internal

1 Fakultet poslovne ekonomije, Univerzitet Educons, Sremska Kamenica, Serbia2 Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, Serbia3 Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, Serbia4 Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, Serbia

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communications. In the second chapter we are researching the conflict man-agement in the organization. Also, we mention the sources of conflicts and conflict management models, as well as the connection between quality of the communication and organizational climate.

The main hypothesis of the research is: Efective internal communication plays a major role in creating a good climate and management of conflicts in the organization. The hypothesis will be tested on the basis of secondary research, and available literature from the fields of business administration, communication, organization and management.

2. INTERNAL COMMUNICATIONS

2.1. Communications in organization

The objectives of the process of communication can be defined as: information, motivation, persuasion and mutual understanding. In order for a person to be able to say that he or she is a good communicator, we have to observe certain characteristics of that person. For example, a good com-municator must have a basic knowledge of how people process informa-tion and how to change a perspective of the person, when he/she consumes the information. Also, what kind of media and communication instruments should be used to convey the information in a best way. All these features mean that the communicator can always control the outcome of a message, but it is considered that a successful ransfer of information decides whether employees will change their mind and accept a product or service. Therefore, we should pay attention to the characteristics of the communication process.

The communication is a process of transferring messages between people. It was achieved only when the message reach people – perceived re-ceivers. Elements of communication are: (Petković, 2015)

• Cognitive (the ability to perceive, interpreting messages, provoking emotions and reactions)

• Semantic: (reflected in the use of spoken and written language, terms and jargon)

• Symbolic (using gestures, facial expressions, body movements, dress style, etc.).

The most common division of communication is verbal and nonver-bal communication. In the context of verbal communication, the exchange

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of information, thoughts and ideas - between people who are communicat-ing - is achieved through words. In the case of non-verbal communication is performed to transmit messages without using words, non-verbal symbols such as smiles, eyes, body movements, intonation. (Ilić, 2018)

Тhere are four directions by which communication is to be carried (Ilić, 2018):

1. from top to bottom – in this system to communicate messages ranging from higher to lower organizational levels.

2. from the bottom to top - the message goes from lower to higher organizational levels.

3. horizontal communication - provides management of successful co-ordination and integration of various functions (marketing, manufacturing, accounting, finance, etc.,)

4. diagonal communication - it is rarely, but is used when the other channels cannot efficiently be used.

Interpersonal communication, a system of communications between individuals in the organization. The manager is tasked to receive and transmit messages and connects individuals in accordance with the needs and defined tasks. (Stefanović, 2009)

Blind spot occurs when some bit of information known to others but not to us. Others have an advantage because they have information. When the situation is reversed, the information is not known to us or others, then it is called a facade. It gives priority to the individual who has information that may affect adversely the efficiency of communication.

During the process of transferring information, certain actions occur that affect the transmission of messages, as well as its understand-ing. Robinson represents the basic model of communication is composed of seven components (Petković, M, 2008): uploader as a source of com-munication, message, encoding, media, decoding, recipient and feedback. Process of communication begins with an individual called a sender or source of communication. He has a message which he wants to convey to one man or more number of people. The message that the individual transfers his idea or an idea, and it is a collection of information that he wants to convey. To make the message conveyed, the sender uses a variety of symbols, or coding. These symbols represent speech, writing, hand gestures, facial expressions, etc. They must have the same meaning for the sender and the recipient of the message, to a message which is transmitted was clear and understandable.

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Recipient of a message can be one person or several people. When it comes to decoding or receiving the message, the recipient will need to fully understand the message, and this affected equally culture, attitudes, knowl-edge of both sides, as well as the symbols used. Given that all people are dif-ferent, some are more advanced than others, all these listed items are equally limiting both sides.

Messages are sent by the channel or medium, depending on the con-tent of the message and which aim to choose the way in which we send. The organizations can choose between formal and informal ways of send-ing messages. Formal way of communications is between employees, which has to do with work, and informal way of communications regard to some personal and social information. In order to verify that the communication was successful, the receiver sends feedback or information that the message is understood. Finally, we come to the noise, which does not have to be just an unpleasant sound, but anything that interferes with communication. When we transmit any information, idea or attitude to communication can occur if both parties understand on the same way that message.

Communication is the transmission of information, ideas and opin-ions from one person to another. However, communication exists only if both people (the recipient and sender) in the same manner understand used symbols. Words are the most widely used symbols, and therefore it is essential that people in touch are familiar with the same symbols, otherwise it will be a low level of understanding. This usually happens when we travel to another country that speaks a different language than ours. When the signs are trans-lated into English it happens that these messages are confusing. However, in poor understanding of one another can occur when you are from the same country and speak the same language. In this case, the effectiveness of their communication influenced by factors such as education, social class, regional differences, nationality and cultural background.

The message will be much clearer and easier if we used symbols, acro-nyms and slogans. Some of the symbols that are recognized around the world as David’s star, the Christian cross. There are also corporate symbols as Audi, Apple, Adidas. Symbols must be unique, recognizable and appropriate. Or-ganizations invest a lot of time and money to find a unique symbol that will convey the essence of what the company is and what actually works. Acronyms are abbreviations which transmit information, while slogans condense a con-cept. Acronyms frequently replacing common name because of its brevity and simplicity for example as: UNESCO, UNICEF, AIDS. Examples of slogans can be JUST DO IT (Nike), DO NOT LEAVE HOME without IT (American Express), THE PAUSE THAT refreshes (Coca Cola), Think Different (Apple).

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Nowadays, the successful organization requires the establishment of an integrated marketing communications. (Radnović, 2013)

The success of integrated marketing communications observed through the triangle marketing services depends on (Radnović, 2013):

− internal marketing communication - internal marketing - within the organization, horizontal and vertical communication

− external marketing communication - external marketing - between service organizations and consumers (through advertising, business publicity, sales promotion, public relations …)

− interactive marketing communication - interactive marketing - between employees (the first line) and consumers (through personal sales)

Communication is essential in an organization and it must exist be-tween each individual in the same or different groups, so that the organiza-tion was successful. How much communication is important in the organiza-tion can be seen in four areas of management, such as control, motivation, interpersonal relationships and information.

Communication control greatly affects the relationship manager with employees how good he can to organize them, but also what impact it has on them. Coordination within the organization can be aligned with the norms and standards that must be respected, as well as verbal and non-verbal com-munication between employees.

Motivation of staff would not be possible if there is no communica-tion within the organization, with the help it can express all the joy and frus-tration of employees and themselves managers, but what is most important communication to convey messages that will encourage people to thrive in business and establishing goals. Also communication between the people of an organization helps to build good relationships between employees, team spirit, mutual trust and making friendships.

In every organization, one of the most important process is decision-making process, and that process would not be possible if there is no com-munication, because it provides the necessary information. Managers are the ones who are required to achieve good communication in order to be effec-tive organization. He must have some kind of control over the employees and take into account that each of them fulfills its tasks, but also to encourage employees to work on their improvement.

In order to make appropriate decisions necessary are information. Marketing managers make decisions based on information, and the quality

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of marketing management decisions depends on the quality of available in-formation. (Radnović, 2014)

It is very important that the communication that exists in the orga-nization is efficient because ineffective communication can be much more dangerous by the organization itself but that it does not exist.

Another reason for which the communication is very important in the organization is to manage achieve good relations with its customers. The power of communication is reflected in how much customers will appreci-ate the organization, will continue to cooperate with each other but also how much the value of the organization. Also, if a strong communication with the employees, they will do their job the best way they can, which means that the reputation of the organization to be a “good voice”; organization will be located at the very top of the market. (Petković, 2015)

2.2. The concept of internal communication in the organization

Communication plays a central role in business organizations, regard-less of their industry. Communication involves various relationships between people and organizations that people create. For any business process, it is necessary to enter into different relationships with others. In addition to the organization to function effectively there must be dispersed internal com-munication channels. Dobrijević believes that good internal communica-tion is increasingly becoming a significant source of competitive advantage. (Dobrijević, 2008)

Around bet for any organization that employees are the most im-portant segment of the public whose attitude towards others - colleagues, customers, competitors, the media and other audiences, depending on the reputation and achieving business goals, agree on a number of authors. In the context of internal relations is an important part of internal communication as a strategic function which aims to develop two-way trust relationship with the internal public.

Aleksic, Manic, Tankosić believe that with the help of two-way sym-metrical communication create happy and motivated employees, as well as an organizational culture that is worthy of respect, which contributes to improv-ing the efficiency of the organization. (Aleksic, M., Manic, L., and Tankosić, 2014) As a final result of the internal communication to the association in the formation of a corporate or organizational culture through a process of social interaction of members themselves of the organization.

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2.3. The importance of internal communication in an organization

Communication with employees is the most important type of com-munication activities in which the company can turn. At the present time as there is a high possibly constant reorganization of managers at all levels understand the need to communicate with employees, but are not sure how to organize and implement. Therefore, there is a need to consider this issue and the engagement of all available resources in an organization to organize (improve) and implement internal communications or for it to be more ef-ficient, simpler, more rational and more cost effective. (Vukoje Bobar, 2015)

Today, globalization is a phenomenon that has marked the end and the beginning of this century, bringing many changes and the need to adapt the internal organization in all systems, regardless of industry organizations, or whether they are private or public or private property. These are the fol-lowing changes, person respectively their characteristics: the depth and com-plexity, speed and coverage. Coverage, which is great and has an impact on changes of Internal relations in the organization, which includes reduced the importance of relations leader and a follower. The leader is not a leader who followed his vision and led by followers, but is now well-established leader-ship role that is integrated into the team as ‘’the first among equals’’.

The former management models (traditional) based on a strict hier-archy issuing commands, achieving tensions are no longer acceptable because it is considered to have a negative impact on employee motivation. Today’s practice shows many of the challenges of globalization and traditional mod-els of leadership not give answer, but more teamwork, teams of highly moti-vated and highly professional teams.

Therefore, managers and executives need to build confidence and motivate employees, and it is assisted by three main traits: character, compe-tence and ability to conduct internal communications. In many organizations in the world and in our country we see that the focus of the center of gravity of the competitive struggle is transferred to an internal marketing, in order to put into operation the most important resource of any organization - em-ployees. (Panic, Andrejić, and Stanković, 2015)

The main personality of individual organizations continues to be a manager, but one that shows the employees’ respect, empathy and openness to communication. Panic Andrejić and Stankovic believe that close commu-nication manager should have the ability to quick reactions, and distinguish-ing important from unimportant and precise combination of sharpness and tolerance and indulgence and determination.

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Successful business communication in the organization as it consid-ers these authors involves a lot of experience and knowledge in working with people, and above all, “knowledge of the law of motivation, recognition de-motivation, knowledge of the mechanisms to motivate individuals and teams and purposeful implementation of criticism, so she became a motivating”. (Panic, Andrejić and Stanković, 2015)

3.Conflictmanagementintheorganization

3.1. Organization, concept and importance

Company form of organization, which is also called the organiza-tional design is a model that shows the status of elements in organization, the role of employees in executive and management processes, as well as forms of interaction. Organizational design shows the anatomy of (num-ber of elements) and pphysiology (forms of interaction) the organization of the company, that is, the appearance and characteristics of his organizational structure. The organizational structure of the company is defined as a system of connections and relationships between elements in the organization that are designed for a relatively long period of time and formally sanctioned acts of the company. Formally recognized model is relatively durable, and are therefore referred to as the basic model of the organizational structure. This model has features which may have a behavior of enterprises, enterprise organizational culture and management style of the company.

The company is open and dynamic business system that every day suffer internal and external environmental effects and must react.

Designing organizational structure or process of organizing is the process of its formation, and is an integral part of management processes in the company. This is a management activity from the resulting decisions on defining elements of the structure, the allocation of tasks these elements and how they connect into a whole.

The organizational structure of the company is the basic factor of organizational and economic performance of enterprises. The modern com-pany is testing the quality of the organizational structure by satisfying the following requirements: (Petković, 2008)

- In order to enable the company to respond quickly to opportunities and threats in the region,

- To train company to effectively coordinate their activities due effective business

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- To enable the company to operate effectively to achieve optimal ratio between inputs and outputs.

Organizational structure should enable the company to behave ra-tionally, a prerequisite for such behavior are a flexible organization, expertise and motivation of employees, and a free and independent leadership.

Organizational structure is formed within the organization of the company, which is the stage of the management process. The company is formed by establishing, in order to survive and function, it should be or-ganized. Organizing company is a process in which the activities are car-ried divide (differentiation) and connectivity (integration). Activities division formed by a number of organizational units that are assigned to tasks in the executive and management process. While, networking activities are designed to ensure that the company operates as under one operating system.

Organization of a complex process consisting of the two sub-pro-cesses. Activities of division, or differentiation, consists of division of labor and specialization, division of responsibilities and competences. As for the sub-process integration and networking activities, the elements that comprise it are: the grouping unit (departmentalization) and the establishment of a co-ordination mechanism. Term organization denotes a specific type of group, as well as to highlight certain characteristics of the group and its organiza-tion. Some authors, when it comes to defining the organization, starting from the properties that organization differs from other types of groups, while another group of authors, the basic functions of the company as well as the type of organization. (Franceško, M., Mirković, 2008)

One of the unique characteristics of the organization is the way in which each develop their own perspective, operational policies and proce-dures, forms, opinions, attitudes, and norms of behavior. These character-istics are often unique as a fingerprint or signature of a DNA; in the same way, the two organizations, no matter how they are similar in size, products, operating environment and profitability, are the same. Each of them has de-veloped their own unique method for indoctrinating its employees, respond-ing to the threats and opportunities for the environment and supporting or discouraging operational behavior. (Pinto, 2013)

People’s needs are the main reason for the interest of the organization and the organization. Specifically, in order to meet their own needs, people need to organize production, consumption, distribution and exchange. The fact is that human civilization ceased to exist if there were no production, but would only burn supplies. People would not be able to meet their subsistence needs. The product evolution is the fact that human needs are unlimited. (Ilic, M. 2017)

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The company is a form of organization that performs a specific eco-nomic activity, production, transport, provision of services in the market. The company has a legal status, and the entrepreneur is a natural person. The efficiency of the business of each company is assessed based on its ability to achieve its objectives. The most successful companies meet the requirements of strategic management.(Nikolić and others, 2012)

The purpose of the company concerned is required to obtain the resources necessary for organizing the production process or the process of providing services to consumers or customers. Selling products or services is carried out on the market, thus achieving the primary goal of doing business – profit. (Milicevic, Ilić, 2005)

The purpose of the company lies in the rationalization of costs, and the fact that the cost of doing business is lower than market mechanisms. (Vidovic, 2015)

The organization was formed when it is incurred and human labor, because it is impossible that two men or more of them perform a useful and efficient work without organization. In any transaction in which it would not be established organization, people would consist of a collection in which each of them represented a separate entity and a job to perform according to their own discretion. (Greenberg, Baron, 1998)

3.2.Thesourcesof conflictsinorganization

Any disagreement of ideas, attitudes, values, goals and interests be-tween the employees called the conflict. Conflicts can be of different intensity, for example opposed ideas or attitudes, or may cause physical or verbal violence. When it comes to interpreting the conflict, there are many different interpreta-tions. Authors are divided, some believe that conflicts affect poor productivity and lead to destructive working atmosphere. While another group of authors are of the opinion that the conflicts are good, as there are different ideas and attitudes that lead to new creative ideas that can improve the company.

Conflicts are good if you include the exchange of opinions and at-titudes, however, if it comes to verbal or physical violence or abuse of an employee, it is not only a violation of labor discipline, but also directly affects the legal regulations that guarantee the employee a healthy work environment.

Conflicts can occur in any organization, which is not related to its size, activity, number of employees, the management company. The reason occurring conflict situations is that each individual is driven by his motives, interests and goals, and tends to affective response in some situations.

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Basically there are four basic preconditions for the emergence of conflict situations: (Janićijević, 2008): environment favorable for the develop-ment of conflicts, the character of the individual, threatened the interests of the individual and concrete action.

Differences in language, social behavior, family organization, and even religious beliefs clearly show cultural differences. Even within one coun-try, cultural attitudes and values differs dramatically. One of the key elements of courses on international business identify cultural differences as unique patterns of behavior, so that business travelers or those who live in other countries can recognize ‘’appropriate’’ standards of behavior and cultural at-titudes, although these cultural forms may be very different from those in the country or origin of passengers. Values and attitudes are expressed these various cultures are potent regulators of individual behavior. They define our belief systems and dedication to work and their ability to work in cross-cultural environment.

There are several ways in which conflicts may arise in the organiza-tion. All sources of conflict are divided into two groups: (Janićijević, 2008)

• Interpersonal - the difference between personal beliefs, preferences, inter-ests and level of education stimulate and create the basis for conflict.

• Organizational - these sources of conflict are certain characteristics of or-ganizational structures and systems that create favorable conditions to reach the conflict between employees.

Various studies have been actively investigating the impact of culture in the workplace have on the organization’s performance and the way in which individual members to decide whether or not to strive for their goals. Culture can be a cause of conflict in the organization. Culture refers to the unwritten rules of conduct or standards used for the design and conduct of conduct, we share a subset of the members of the organization, and that teach new mem-bers of the company. This definition has some important elements:

• unwritten - cultural norms lead behavior of each member of the organization, but often not written. In this way there can be a big difference between the slogan and inspirational posters on the walls of the company and in fact, clearly understandable culture that establishes standards of conduct and applies them to all new members of the company.

• code of conduct - cultural norms direct behavior so that provide a common language for understanding, defining and explaining the phenomenon, then us provide guidance on how best to respond to these

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events. These rules of conduct can be very powerful and commonly held. It is equally applicable to top management and ordinary workers. However, because they are undocumented, they can learn the hard way.

• held by some subset of organizations - cultural norms may or may not be distributed to all parts of the company. In fact, very often find cultural attitudes vary widely within the organization. For example, blue collar workers (accountants, administration) may have a very high antagonistic attitude management; members of the finance department can look at the marketing function to the hostilities and vice versa. These ‘’subcultures’’ reflect the fact that the organization may comprise a number of different cultures, which operate at different locations or at different levels.

Lectures all new members - Cultural attitudes, because they are often unwritten, must not be transferred to the new members in a formal way. The new members of the organization accepted behavior after watching others who engage in them. In some organizations, however, all new employees are immersed in a formal program of indoctrination in order to ensure that they understand and appreciate the culture of the organization. (Janićijević, 2008)

Depending on what is the focus of a conflict, there are two types:

- Constructive - occurs when the conflict based conflict of opinions, argu-ments, opinions or ideas. It leads to a constructive debate between employ-ees, between some topics that are related to the business of their organization (to improve relations with the public, in order to increase profits, etc.). In this way, each employee is encouraged to have a creative idea, build a culture in which it is understood that the confrontation of ideas and opinions is not opposition figures also employees accept constructive criticism.

- Socio-emotional - are aimed directly at people and not to ideas, attitudes, etc. Their negative effects are: disturbance of interpersonal relations in the organization, reducing the communication, reducing productivity of work.

No matter how hard you try to reduce conflicts in an organization, it is not possible, because it is almost impossible to avoid them. Conflicts arise because of differences of opinions, ideas, attitudes. For the management of the company is a major challenge to reduce conflicts among employees, ie. to manage them. The conflict can be resolved if both parties are satisfied or both sides are dissatisfied.

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There are times where he has to get involved third parties in order to resolve the conflict. The three most common ways of resolving conflict when the third party involved: (Janićijević, 2008)

1.Arbitration - the two sides determine clear rules for resolving the dispute, ordered the independent arbitrator (judge), whose decision is final and both parties must accept

2.Investigation - investigators themselves choose the information that they think are important,

3.Mediation - a third party only mediate between the parties, decisions conflicting sides.

The reasons to which employees enter the conflict may be different. Employees may conflict with each other or with their superiors. Business secrets today have greater significance and often disclosing business secrets subject of various court cases. Many laws in their legal protection blame placed just in two areas. When the practice in question, and then in the court proceedings, it is difficult sometimes it is difficult to determine “whether the information which protection is sought shall be eligible to be a business secret, and whether the holder has taken reasonable measures to ensure the confidentiality of this information. The problem is that “to determine’’ the boundary between business secrets and knowledge and skills of employees.” (Jovičić, 2018) We must distinguish between personal and professional se-crecy, and there are certain similarities and differences between the disclosure of professional and business secrecy. In the Republic of Serbia in the sphere of information policy, which on the one hand are the personal, the other professional secret, enjoy good legal protection. (Milošević, 2010)

3.3.Modelsof conflictmanagement

From individual depends how will behave in conflict, and how much he wants to take into account the interests of others, and to what extent their interests. If an individual or group of respecting other people’s interests, but not their own, they adapt. If the situation is reversed, and respect only their own interests, not someone else’s, then this is a competition, and thus creat-ing competition. When we appreciate own and others’ interests, then it means cooperation, while the lack of interest manifested by the fact that we do not accept no its not someone else’s interests. Compromise happens when both things and respect their own and others’ interests, and it is the second best solution in an organization, if cooperation is not possible.

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When high levels of conflict or where conflict are not functional, the one who controls or manages the organization needs to know how to reduce them, or save. The most commonly used methods to formulate a superior end; strengthening social contacts and exchange of information; coercion; negotiation; smoothing conflicts; avoiding conflicts; formalization and stan-dardization; voting and interactive troubleshooting.

Sometimes you need to cause conflicts, but the manager has to know when and how it should do so. Some of the ways provoking conflicts: (Janićijević, 2008) The inclusion of a new member; encouraging competition; restructuring; the manipulation of information and reduction of formalization.

2.4. Connection quality of communication, organizational climate and organizational culture

When defining the organizational culture, it is important to note that it is the normative expectations of behavior in organizations, and the context within which individuals and work teams. (Mumford, 2011)

Organizational culture is a system of assumptions, beliefs, values and norms that are members of organizations have adopted or developed through joint problem solving and which significantly affect their thinking and behavior. It is a very powerful tool for shaping the behavior of members of the organization and is therefore often subject to organizational changes. Content organizational culture consists of cognitive and symbolic elements. (Janićijević, 2007)

Cognitive content of culture refers to certain assumptions, values and attitudes. Values represent situations that are optimal or state organizations pursued by employees.

Perceptions of organizational culture as a collection of different beliefs regarding the life and work of the company. Each value carries the views and attitudes of the procedures and employee behavior and decisions. (Stevanović, 2017)

The values represent the belief that a “certain behavior or the existential state of personal or social preferable to an opposite behav-ior or condition.” These are ideal conditions or behaviors that we want for yourself, your organization, society as a whole. (Janicijević, 2008) The fact is that people differ in opinion on one and the same thing due to the differences in their personalities, perceptions, differences in values and attitudes.(Francesco, 2008)

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If the value of one’s development and learning, it means that he be-lieves that for him personally very well and is very important to constantly learn and improve. (Francesco, 2008)

The views are relatively stable set of feelings, beliefs and behavioral predisposition such as the intention of a particular object. (Greenberg, 1998)

Different models of organizational behavior are actually perceptions of the work environment, or even the organizational climate. (West, 2009) Subjective perception of the work environment is a psychological climate. If we are talking about a group or organizational level it is the organizational climate.

Organizations composed of creative and satisfied employees which respect their colleagues and the environment, represent the places where parts of the belief among members of attractive vision that the organiza-tion is trying to reach. In them there is a high level of interaction, discussion and constructive debate. Confidence, cooperation and a sense of security is characterized by interpersonal relationships within them. (Stevanovic, 2017)

The problems of external adaptation and internal integration prob-lems are problems that every organization needs to be resolved. The first problem is one that affects the exterior environment, in order to solve it you need to find a place or role groups / organizations in their midst. While, the other problem is focused on finding the rules and principles that affect inter-personal relationships within the company, as well as the communication that is essential to well-functioning organization. Companies that have an initial pe-riod of development, solve the current problem by using different solutions. She solutions that bring positive effects, or negative enable avoiding repeated whenever the company comes into a similar situation. By constant repetition, these solutions become rules that employees adhere. (Janićijević, 2008)

3. CONCLUSION

The subject of this paper work was internal communication, and how it affects at the creation of a good climate and how can affect on the con-flicts within the organization. Good communication among employees is ex-tremely important because it affects the formation of a good organizational climate, and with the help of other factors and the organizational culture.

The paper emphasizes the role of communication in organizations, regardless of the activity of the same. It was concluded that communication even has a central role in business organization, as involves different relation-ships between people and organizations. In fact, as found in the work, for

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any business process, it is necessary to enter into different relationships with others and therefore developed good channels of internal and external com-munication. Some authors even believe that good internal communication creates a source of competitive advantage.

Hypothesis: Good internal communication plays a major role in cre-ating a good climate and good conflict management in the organization, were tested, based on secondary research which suggests that the hypothesis is verified, and that good internal communication plays a major role in creating a good climate and conflict management in the organization.

REFERENCES

1. Aleksić, M., Manić, L., & Tankosić, M. [2014]. Strateška uloga interne komunikacije u stvaranju organizacione kulture i reputacije. Godišnjak Fakulteta za kulturu i medije: komunikacije, mediji, kultura, 6(6), 201-213.

2. Bogićević Milikić, B., 2015, Menadžment ljudskih resursa, Ekonomski fakultet Beograd.

3. Dobrijević, G. [2008]. Rastući značaj interne komunikacije za poslovni uspeh kompanija. Journal of Applied Engineering Science, 6(19), 33-40.

4. Džamić, V., Organizaciono ponašanje i korparativna kultura, Univerzitet singidunum, Beograd, 2016.

5. Frančesko, M., Mirović, B. 2008. Organizaciono ponašanje - moć poznavanja organizacionog ponašanja. Novi Sad: Fakultet za pravne i poslovne studije.

6. Grinberg, Dž., Baron, R., 1998, Ponašanje u organizacijama, razumevanje i upravljanje ljudskom stranom rada, Želnid, Beograd.

7. Ilć M, Menadžment ljudskih resursa, udžbenik, Visoka škola strukovnih studija za informacione tehnologije, ITS – Beograd, 2018

8. Ilić M, Menadžment ljudskih resursa praktikum, Visoka škola strukovnih studija za informacione tehnologije, ITS – Beograd, 2018

9. Ilić, M, Osnove ekonomije finansija i računovodstva, Visoka škola strukovnih studija za informacione tehnologije, ITS- Beograd, 2017

10. Janićijević, N. (2007). Upravljanje organizacionim promenama. Beograd: Centar za izdavačku delatnost Ekonomskog fakulteta.

11. Janićijević, N., (2008), Organizaciono ponašanje, Beograd: Datastatus.12. Jovičić, K. [2018]. Poslovne tajne - određenje i osnovi zaštite. Strani pravni

život, (1), 7-19.13. Milićević, V., Ilić, B., Ekonomika, preduzeća, fokus na savremeno poslovanje,

Fakultet organizacionih nauka, Beograd, 2005.14. Milošević, M. [2010]. Neovlašćeno otkrivanje tajne. Nauka, bezbednost,

policija, 15(2), 1-11.15. Mumford, M. D. (2011.) Handbook of organizational creativity. Academic

Press.

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16. Nikolić, M., Malenković, N., Pokrajčić, D., Paunović, B., Ekonomika preduzeća, Ekonomski fakultet u Beogradu, Beograd, 2012.

17. Panić, S., Andrejić, M. D., & Stanković, V. [2015]. Uloga interne komunikacije u motivisanju zaposlenih. Vojno delo, 67(5), 384-400.

18. Petković M, Organizaciono ponašanje sa menadžmentom ljudskih resursa, CID Ekonomskog fakulteta u Beogradu, Beograd 2015

19. Pinto, J. (2013). Project Management Achieving Competitive Advantage. Third Edition. Pearson.

20. Radnović, B. (2013), Marketing usluga, Fakultet poslovne ekonomije, Univerzitet Educons, Novi Sad – Sremska Kamenica

21. Radnović, B. (2014), Marketing istraživanje, Fakultet poslovne ekonomije, Univerzitet Educons, Novi Sad – Sremska Kamenica

22. Stefanović, Ž., (2009). Menadžment – Ekonomski fakultet Univerziteta u Kragujevcu - Kragujevac

23. Stevanović, A. G. [2017]. Organizaciona kultura i klima kao preduslovi inovacije u organizacijama. Škola biznisa, (2), 107-120.

24. Vidović, A. B., 2015, “Rast i razvoj preduzeća u funkciji fuzije i akvizicije”, Tehnika, vol. 70, no. 5, pp. 866-869.

25. Vukoje, B., & Bobar, V. [2015]. Uloga i značaj interne komunikacije u povećanju efikasnosti i efektivnosti poslovanja kompanije. Info M, 14(56), 37-43.

26. West, M. A., & Richter, A. (2009). Climates and cultures for innovation and creativity at work. In Handbook of organizational creativity (211-236). Lawrence Erlbaum Associates, Taylor & Francis Group

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Application of the QH model in the areas of smart cities and smart regions – excellent examples from EU

Jelena Jesic, Simonida Vukadinovic, Andrea Andrejevic Panic1

Abstract: The aim of this paper is to investigate the innovation-generating processes in theory - so called ‘helices models’ where the main actors are industry, university, government, and, at a later stage, civil society and it’s implementation in the areas of smart cities and smart regions. Operationalizing the smart city – initializing it`s characteristics, factors and indicators of development is real challenge and it must include all it`s stakeholders in smart urbanization process. As a very usefull and implementable model for building a smart city concept we elaborate the quadruple helix innovation model (synergy of government, universities, industry and the civil society), based on excellent examples from EU countries.

Key words: innovation, smart city, quadruple helix model, ICT, knowledge economy, green employment

INTRODUCTION

In the developing era of universal connecting world, the concept of smart urbanism has been in use since the 1990s, initially to enhance the use of information and communication technology (ICT) in advancement exist-ing urban infrastructures. In real world, this implies incorporating techni-cal interventions in a city’s core systems such as transport, business, energy, housing, education, environment or communication in order to facilitate op-timal resource management and sustainable growth [Hollands 2008; Buck and White 2015; Luque Ayala and Marvin 2015; Albino et al. 2016; Ho 2016, Borkowska, K., Osborne, M., 2018]. If smart urbanism concept tends to signifincately contribute to urban growth, economic development, well-being and not disturb the environment and sustainability, we can’t avoid the fact that civil society is a key role player in this urban/regional development pro-cess.

As authors already mentioned [Hollands 2008; Luque-Ayala et al., 2014], the smart city has the potential to dramatically improve local develop-ment as long as the vision is not disconnected from citizens and communi-ties. In this view, the human element plays a key role in ensuring that ICT can meaningfully contribute to urban growth. This bottom-up approach, which derives from New Urbanism, implies that citizens must be involved in devel-oping, promoting and utilising smart solutions [Grant, 2005]. The integration

1 Educons University, Sremska Kamenica

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of smart city interventions into existing urban structures should not neglect the social dimension [Borkowska, K., Osborne, M., 2018]

In theory, the innovation-generating processes - so called ‘helices models’ where the main actors are industry, university, government, and, at a later stage, civil society is the main basis, on different levels (urban, regional, national), for operationalization and implementation the smart urbanisation concept.

Suitability of this theoretical approach is in its adaptability and flex-ibility (for different levels of operationalisation) and, at the same time, in its integration potential for all actors (industry, university, government, civil society) to accelerate the mutual influence for development of new intelligent living human-eco-systems.

In this article, the focus of our analysis is to investigate whether the quadruple helix innovation model (synergy of government, universities, in-dustry and the civil society) is a very usefull and implementable theoretical model for operationalization a smart city concept and to elaborate some ex-cellent examples of smart cities/regions from EU countries.

1. INTERACTIVE AND ADJUSTABLE ABILITY OF QUADRUPLE HELIX MODEL

The concept of the knowledge society has been increasingly recog-nised as a crucial element of technological innovation [Carayannis and Camp-bell 2006]. Consequently, an additional helix, represented by civil society, may be added to government, academia and industry, to highlight the importance of a social dimension in the innovation-generating process.

By facilitating the strengthening of complementary links on the uni-versity-economy-state-society relationship, and clearly defined functions in the Quadruple helix model, we enable: (1) facilitated cooperation between universities and businesses for better satisfaction of mutual needs and greater contribution to state support for a stronger knowledge economy; (2) devel-oping a suitable environment for the development of academic entrepre-neurship, the use of knowledge, innovation and achievement in all areas of science, research and application of knowledge; (3) Encouraging and apply-ing the experience of good practice in this type of compatible cooperation between knowledge institutions, economic structures, state institutions and society. The concept of an innovative knowledge society requires a more in-tensive approach of science to market needs, as well as a kind of “mixing” of the market into the world of science through the necessity of systemic com-

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mercialization of knowledge through innovation. Such organized synergy and synergy between state institutions, scientific and research organizations (universities and R&D institutes), economies and societies, in an institutional and functional sense, is at the heart of building efficient and sustainable na-tional/regional innovation systems, that is stimulation of innovative activity and application results of this activity in practice [Jesic, J., Quadruple helix model as a basis of national innovation system, doctoral thesis, p.36].

The quadruple helix (QH) model combines top-down and bottom-up approaches to innovation by recognising that civil society plays an active part in the innovation system. This fourth helix may be a driving force with the capacity to move innovation from a narrow technological focus towards becoming a tool for addressing urban challenges in a sustainable manner [Borkowska, K., Osborne, M. 2018, p. 359]. As implemented in many EU public policies and proven in many projects (eg. Using the Quadruple Helix Approach to Accelerate the Transfer of Research and Innovation Results to Regional Growth, Glasgow’s Future City Demonstrator, The Smart Cities and Communities lighthouse, etc), the adjustability, interactivity and overarching goals and the role of users in the process of innovation are already very highlighted in many scientific papers. For example, Robert Arnkil et al. (2010) distinguished between four different models of QH: (1) the TH + user model; (2) the enterprise-centred living lab model; (3) the public-sector-centred living lab QH model; and (4) the citizencentred QH model.

2. CLASSIFICATION AND FACTORS OF A SMART CITY AND SMART REGIONS

In association with economy or jobs Smart City is used to describe a city with a “smart” industry. That implies especially industries in the fields of information and communication technologies (ICT) as well as other in-dustries implying ICT in their production processes. Also for business parks or own districts comprising of companies within this field the name Smart City is used. The term Smart City is also used regarding the education of its inhabitants. A Smart City has therefore smart inhabitants in terms of their educational grade. In other literature the term Smart City is referred to the relation between the city government resp. administration and its citizen. Good governance as an aspect of a smart administration often also referred to the usage of new channels of communication for the citizens, e.g. “e-governance” or “e-democracy”. Smart City is furthermore used to discuss

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the use of modern technology in everyday urban life. This includes not only ICT but also, and especially, modern transport technologies. Logistics as well as new transport systems as “smart” systems which improve the urban traffic and the inhabitants’ mobility. Moreover various other aspects referring to life in a city are mentioned in connection to the term Smart City like security/safe, green, efficient & sustainable, energy etc.

In publication Smart cities - Ranking of European medium-sized cities, there are several fields of activity which are described according to literature in relation to the term Smart City: industry, education, participation, technical infrastructure, various ‘soft factors’. In Figure 1, we can identify six charac-teristics as a roof for the further elaboration of smart cities’ characteristics.

According to mentioned project Smart cities - Ranking of European medium-sized cities, after defining the characteristics of a smart city, we can structure the findings as the following: “A Smart City is a city well perform-ing in a forward-looking way in these six characteristics, built on the ‘smart’ combination of endowments and activities of self-decisive, independent and aware citizens. Furthermore, it should be emphasized that we are currently only able to draw a picture of the present state of a city. Still, the path of development is decisive for a smart city and should be considered in further research that builds on time-series data.”

Figure 1. Characteristics and factors of a smart city

SMART ECONOMY(Competitiveness)

SMART PEOPLE(Social and Human Capital)

• Innovative spirit• Entrepreneurship• Economic image & trademarks• Productivity• Flexibility of labour market• International embeddedness• Ability to transform

• Level of qualification• Affinity to life long learning• Social and ethnic plurality• Flexibility• Creativity• Cosmopolitanism/Openmindedness• Participation in public life

SMART GOVERNANCE(Participation)

SMART MOBILITY(Transport and ICT)

Participation in decision-making• Public and social services• Transparent governance• Political strategies &perspectives

• Local accessibility• (Inter-)national accessibility• Availability of ICT-infrastructure• Sustainable, innovative and safetransport systems

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SMART ENVIRONMENT(Natural resources)

SMART LIVING(Quality of life)

Attractivity of naturalconditions• Pollution• Environmental protection• Sustainable resourcemanagement

• Cultural facilities• Health conditions• Individual safety• Housing quality• Education facilities• Touristic attractivity• Social cohesion

Source: Smart cities - Ranking of European medium-sized cities, Centre of Regional Sci-ence, Vienna UT, October 2007, p. 12.

3. EXCELLENT EXAMPLES FROM EU

Since industrialisation process and urbanisation period in Europe, all cities in their own categorise face the challenge of economic growth – com-petitiveness, simultaneously with ecological sustainability in urban develop-ment. All cities want to be or become eco-innovative systems and societies. ”This challenge is likely to have an impact on issues of Urban Quality such as housing, economy, culture, social and environmental conditions changing a city’s profile and urban quality in its composition of factors and characteristics.”

In EU, many very ambitious projects and action plans are on-going and supporting the development of the shared ecological and innovative consciousness. The Smart Cities and Communities lighthouse projects are funded by the European Commission through the Horizon 2020 research and in-novation programme, with the aim of bringing together cities, industry and citizens to demonstrate solutions and business models that can be scaled up and replicated, and that lead to measurable benefits in energy and resource efficiency, new markets and new jobs.

Since 2014, a total of 12 projects have been funded and are cur-rently on-going from 3 different calls, being all them driven by the same challenges that EU cities are facing to ensure secure, affordable and clean energy, smart electro-mobility and smart tools and services, always show-casing their economic viability towards ensuring their replication poten-tial in other cities. RUGGEDISED is part of these 12 projects that repre-sent together a total of 27 lighthouse cities and 30 follower cities, working to demonstrate these processes, technologies and business models to transform their ecosystems into smarter and more sustainable places.2

2 https://www.smarter-together.eu/eu-smart-cities-and-communities (19.8.2019.)

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Together, Lyon, Munich and Vienna aim to adopt a pioneering role for many critical issues relating to the future of cities – by implementing urban labs as testing grounds to think about how technological innovation should be managed for the benefit of the citizen and with the citizens.3As some authors alert that current European legislation makes the future progress of smart cities critically dependent on the advancement of the green economy and consequently on the further development of energy efficiency and of renewable energy sources [Ferrara, R., 2015] According to these critics, “the concepts of “smart city” and “green economy”, as delineated in European regulations and directives, may sometimes appear to be rather cursory and are sometimes regarded as little more than simple slogans born in the shadow of the economic crisis and destined to disappear, almost without a trace, by the time the crisis is over.”4 Green jobs as a term is not generally defined. Very a few economic sub-sectors (e.g. wind turbines production or solar panels production, can shortly be defined as green industries). ILO defines that green jobs includes those jobs in sectors producing green goods and services and on same time occupations environmentally favorable green processes (ILO, 2017). What the term green jobs present is a subset of the employment effects arising in a green transition process (Vukadinović, Jesic, 2019). “Recycling and remanufacturing jobs worldwide number many millions, but incompatible definitions and a lack of data gathering make a global tally impossible. China alone is thought to have some 10 million jobs in this sector, and the United States has more than 1 million. In developing countries, recycling is often done by informal networks of scavengers.” (Renner M.,et al., 2008). It is very important to be aware of growing need for environmental protection, the development of renewable energy sources and the necessity of increasing the overall quality and sustainability of urban landscapes including a dynamic social and cultural environment, capable of attracting a well-educated and skilled workforce in eco-innovation industry.

3 https://www.smarter-together.eu/about/expected-results (19.8.2019)4 For more detailes please look: Ferrara, R., The Smart City and the Green Economy in Eu-rope: A Critical Approach, Energies 2015, 8, 4724-4734..

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4. CONCLUSION

The cities are not well prepared for so much population growth. This is the main reason why “smart cities” are becoming increasingly important. Today, new ways are being sought to use technology to solve the problems facing cities of the modern age. On the other hand, while technology is a key instrument for smart cities every day, cities of the future are focused on people, sustainable development and quality of life [Kisin, J., Okanovic, A., Jotanovic Raletic, S., 2018]. According to well-done project Smart cities - Rank-ing of European medium-sized cities, the smart cities ranking, based on a com-prehensive catalogue of indicators, offers a new view on medium-sized cities in Europe and their respective differences and comparative (dis-)advantages towards each other and allows to: illustrate differences in the respective char-acteristics and factors, elaborate specific perspectives for development and positioning and to identify strenghts and weaknesses for the considered cities in a comparative way.5 EU-funded programmes allowing interaction aimed at directly creating innovation through research exploitation (e.g. H2020) or at reinforcing the innovation potential through best practice transferability (e.g. Interreg programme) represent suitable opportunities for enlarging the scope of interventions in terms of both type and number of activities implemented and actors involved [Cavallini, S., Soldi, R., Friedl, J., Volpe, M. (consortium Progress Consulting S.r.l. & Fondazione FORMIT), 2016] .

Analysing theoretical approach in the quadruple helix innovation model (synergy of government, universities, industry and the civil society and crossing it with practical usage at different levels of human society sys-tems - it is evident that interaction have a accelerative key role and generate a multiplier effect of the eco-innovation outcomes in smart city urbanisation.

REFERENCES

• Albino, V., Berardi, U., & Dangelico, R. M. (2016). Smart cities: Definitions, dimensions, performance, and initiatives. Journal of Urban Technology, 22(1), 3–21.

• Arnkil, R., Ja¨rvensivu, A., Koski, P., & Piirainen, T. (2010). Exploring qua-druple helix: Outlining useroriented innovation models. Tyo¨raportteja 85/2010 Working Papers. Tampere: University of Tampere, Insti-

5 Smart cities - Ranking of European medium-sized cities, Centre of Regional Science, Vi-enna UT, October 2007.

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tute for Social Research. http://uta32kk.lib.helsinki. fi/bitstream/han-dle/10024/65758/978-951-44-8209 0.pdf?sequence=1

• Borkowska, K., Osborne, M. (2018), Locating the fourth helix: Rethinking the role of civil society in developing smart learning cities, Int Rev Educ, 64:355–372.

• Buck, N. T., & White, A. (2015). Competitive urbanism and the limits to smart city innovation: The UK Future Cities initiative. Urban Studies, 54(2), 501–519.

• Carayannis, E. G., & Campbell, D. F. J. (2006). ‘‘Mode 3’’: meaning and implications from a knowledge systems perspective. In G. C. Elias & D. F. J. Campbell (Eds.), Knowledge creation, diffusion, and use in innovation networks and knowledge clusters. A Comparative systems approach across the United States, Europe and Asia (pp. 1–25). Westport, CT: Praeger

• Cavallini, S., Soldi, R., Friedl, J., Volpe, M. (consortium Progress Consult-ing S.r.l. & Fondazione FORMIT), (2016) Using the Quadruple Helix Ap-proach to Accelerate the Transfer of Research and Innovation Results to Regional Growth, European Union.

• Ferrara, R., The Smart City and the Green Economy in Europe: A Critical Approach, Energies 2015, 8, 4724-4734.

• Grant, J. (2005). Planning the good community: New urbanism in theory and practice. London: Routledge.

• Ho, E. (2016). Smart subject for a smart nation? Governing (smart)mentali-ties in Singapore. Urban Studies, 54(13), 1–17.

• Hollands, R. G. (2008). Will the real smart city please stand up? City, 12(3), 303–320.

• International Labour Office. (2017). Green industrial policy: concept, poli-cies, country experiences, Brussels, pg.52, 53.

• Jesic, J. (2016), Quadruple helix model as a basis of national innovation system, doctoral thesis, Educons University, Sremska Kamenica.

• Kisin, J., Okanović, A., Raletić-Jotanović, S. (2018), Smart City – the Future of Sustainable Urban Development (original in Serbian), Ecologica, 25 (92), , Belgrade, 2018., pp. 799-804

• Luque-Ayala, A., & Marvin, S. (2015). Developing a critical understanding of smart urbanism? Urban Studies, 52(12), 2105–2116.

• Luque-Ayala, A., McFarlane, C., & Marvin, S. (2014). Smart urbanism: Cit-ies, grids and alternatives? In M. Hodson & S. Marvin (Eds.), After sustain-able cities? (pp. 74–90). London: Routledge

• Renner, M., Sweeney, S., Kubit, J. (2008). Green Jobs: Working for People and the Environment, Worldwatch Institute; Washington DC, pp. 5-6, 41. Retrieved from http://www.worldwatch.org/bookstore/publication/worldwatch-report-177-green-jobs-working-people-and-environment

• Smart cities - Ranking of European medium-sized cities, Centre of Re-gional Science, Vienna UT, October 2007.

• Vukadinović, S., Ješić, J. (2019) Green jobs – potential for employment in

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Republic of Serbia, Anali ekonomskog fakulteta u Subotici, Univerzitet u Novom Sadu, Ekonomski Fakultet u Subotici, vol. 55, pg. 116, (ISSN 0350-2120, UDK 330)

• https://www.smarter-together.eu/eu-smart-cities-and-communities (19.8.2019.)

• https://www.smarter-together.eu/about/expected-results (19.8.2019)

ACKNOWLEDGEMENT

This research is supported by the Ministry of Science and Techno-logical Development of Serbia, as part of the projects: Interdisciplinary Re-search European integration and social and economic changes in Serbian economy on the way to EU [No. III 47009] and Basic Research Challenges and Prospects of struc-tural changes in Serbia: strategic directions for economic development and harmonization with EU requirements [No. OI 179015].

168

Application of Scrum Framework in Teamwork

BojanaJokanović1,AndreaOkanović2, Jelena Ćulibrk3

Abstract: This paper seeks to define and describe the influence of agile software development method in team work. Also, this paper provides a general overview regarding the Scrum methodology. Based on the review of the past literature the purpose of this study is to obtain a realistic picture of team functionality in the conditions of using the Scrum approach. This method is based on the basic principles which characterized by agile approach and is suitable in practice because it is very easy to use. Using the scrum methodology, it is possible to organize more people on a particular project, in order to increase the efficiency of their work. The advantage of this framework is in the development process itself, which easily and quickly adapts to the new changes in the environment.

Keywords: agile software development, Scrum, framework, team.

1. Introduction

Since employees are the key resource of organizations, the organiza-tion of work of employees is gaining importance nowadays. Each company, regardless of size, needs to find an adequate combination of material and immaterial incentives in order to motivate employees in the best way to di-rect their knowledge, skills, competencies to the realization of set goals. A significant influence of employee satisfaction and motivation is precisely the organization of work itself.

Team work is generally accepted as the best way of organizing people in today’s turbulent conditions, when certain projects and tasks need to be done in a shorter period of time.

Employees who are satisfied with their work are dedicated to the or-ganization in which they work and identify with it. In such circumstances, employees look for the best possible ways to solve organizational tasks, they are interested in development and performance, the quality of products and services provided by the organization, but also contribute to the greater per-formance of the entire organization.

1 Faculty of Technical Sciences, University of Novi Sad, Novi Sad, Serbia, e-mail: [email protected] Faculty of Technical Sciences, University of Novi Sad, Novi Sad, Serbia, e-mail: [email protected] Faculty of Technical Sciences, University of Novi Sad, Novi Sad, Serbia, e-mail: [email protected].

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In this paper we will focus on the Scrum approach. Our objective is thus to provide a better understanding of the nature of self-managing agile teams.

2. Teamwork

According to The Oxford Dictionary of English Etymology (1966), teamwork mean, ‘work done with a team of beasts’ and only emerged in the 19th century in the form in which it is known today, where it means ‘people working in concert’. Dictionary definitions of teamwork include:

• work done by persons working as a team, i.e. with concerted effort [The Oxford English Dictionary 1989];

• the combined action of a group, especially when effective and effi-cient [Oxford Dictionary of English 2005];

• cooperation between those who are working together as a team [Chambers 21st Century Dictionary 1996].Growing competition in the global market has been challenged by

Western companies such as General Motors, IBM, General Electric and others to look for strategies for continuous improvement of quality [Garvin, 1987]. Along with the ever-increasing changes in the world, there has been an increas-ing interest in the performance of work teams [Arnold et al., 1992]. Success-ful companies have discovered the potential and contribution of teamwork to reduce costs, better quality products and higher productivity [Parker, 1991]. Teamwork promotes creativity and originality, because the best way to get a good idea is to have a lot of ideas. The performance of the teams has become the main focal point for new managerial approaches, such as autonomous work units and total quality management (TQM). Another factor that created the need for teamwork is the sudden increase in newly emerging information and the need for problem-solving and tasks that are increasingly complex and mul-tidisciplinary. The fact that professionals focus on specific areas increases the need for expert cooperation in different areas, and thus take advantage of all relevant information necessary to solve the problem. Interpersonal/collabora-tive skills such as negotiation, organizational efficiency, leadership and social skills are recognized as essential skills for working in modern organizations.

As teamwork causes major changes in the company’s business sys-tems by changing their appearance the value system of forming an internal and external image of culture, etc., there is a significant existence of a high level of communication among team members. Mutual interaction monitor-ing of individual and group work also becomes an important guide for the development of these aspects.

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3. Agile Methodologies in Software Development

Growing and merciless competition, faster technological improve-ments and structural changes created the need for adapted frameworks. Thus, the rise of the digital era involved the creation of suitable methodologies such as the agile software development methods.

There are several types of different agile methods studied over the years by various theorists and practitioners in this field. The most famous methods of agile software development are: Agile Scrum Methodology, Lean Software Development, Kanban, Exreme Programming (XP), Crystal, Dy-namic Systems Development Method (DSDM), Rapid Application Devel-opment (RAD), Feature Driven Development (FDD). In Table 1 is given a review of some of the main agile development methods with key references.

Table 1: Main agile methods [Dybå & Dingsøyr, 2008]

Agile method Description Reference

Cry

stal

met

h-od

olog

ies

A family of methods for co-located teams of different sizes and criticality: Clear, Yellow, Orange, Red, Blue. The most ag-ile method, Crystal Clear, focuses on communication in small teams developing software that is not life-critical.

Coc

kbur

n, 2

004

Dyn

amic

softw

are

deve

lopm

ent

met

hod

(DSD

M) Divides projects in three phases: pre-project, project life-cycle,

and post project. St

aple

ton,

200

3

Feat

ure-

driv

en

deve

lopm

ent Combines model-driven and agile development with emphasis

on initial object model, division of work in features, and itera-tive design for each feature. Claims to be suitable for the devel-opment of critical systems. An iteration of a feature consists of two phases: design and development Pa

lmer

&

Felsi

ng, 2

002

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Lean

softw

are

deve

lopm

ent

An adaptation of principles from lean production and, in par-ticular, the Toyota production system to software development.

Popp

endi

eck

&

Popp

endi

eck,

200

3

Scru

m

Focuses on project management in situations where it is dif-ficult to plan ahead. Software is developed by a self-organizing team in increments (called ‘‘sprints”), starting with planning and ending with a review. Features to be implemented in the system are registered in a backlog. Then, the product owner decides which backlog items should be developed in the fol-lowing sprint. Team members coordinate their work in a daily stand-up meeting. One team member, the scrum master, is in charge of solving problems that stop the team from working effectively Sc

hwab

er &

Bee

dle,

2002

Ext

rem

e pr

ogra

mm

ing

(XP;

X

P2)

Focuses on best practice for development.

Beck

, 200

0

Agile methodologies differ from traditional ones by shorter development cycles of software products. The basic principles of the methodology lie in continuous cooperation with the client, introduction of changes, self-orga-nizing teams. In self-organizing teams, the atmosphere is informal, tasks clear and understandable, there is communication with trust and respect, decisions are made by consensus.

4. Scrum

Scrum represents a management, enhancement and maintenance method-ology for an existing system or production prototype. It assumes existing de-sign and code which is virtually always the case in object-oriented development due to the presence of class libraries. Scrum is engaged in the development of completely new or reorganization of existing systems [Schwaber, 1997].

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Scrum as project-management-oriented agile development method, was inspired by a range of applied areas, such as complexity theory, sys-tem dynamics, and theory of knowledge creation developed by Nonaka and Takeuchi. In a software team, the members are jointly responsible for the end product and must develop shared mental models by negotiating shared understandings about both the teamwork and the task [Levesque, Wilson & Wholey, 2001].

In respect of monitoring and adjustment, we distinguish four formal events: (Figure 1)

• Sprint Planning• Daily Scrum• Sprint Review and• Sprint Retrospective

Figure 1: Scrum events (https://leadagile.in/2017/12/18/5-scrum-events/)

Different scrum roles are there like Product owner, Scrum master, Scrum team.

Product owner is customer representative, works with the team, in-terface between the team and the business, defi ne the features of the product, be responsible for the profi t, responsible for fi nal approval, accept or reject work result.

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Scrum master helps the team members and responsible for removing obstacles, has a leadership role over team members, is responsible for manag-ing the process, is responsible to run the daily scrum, sprint, planning meet-ings, protect the team from external interferences.

Scrum team includes usually 5-10 people who develops product. Each team member is responsible for their work. There are two kind of teams, like self-organizing and cross-functional team. Scrum team is responsible for failure or success [Mahalakshmi & Sundararajan, 2013].

Central focus of scrum framework is sprint. In the process of cre-ating product development increments, the development team as the main guideline serves to implement Product Backlog items and determine what will be done at the time required for implementation, which together de-termines the target of the Sprint. Increment represents a set of all Product Backlog items completed during a single Sprint, including increment values from each previous Sprint.

Each Sprint contains the following events: [Diebold, Wagner & Zendler, 2015]

• The Sprint Planning defines the aim of the Sprint. The Product Owner presents the Backlog items with the highest priority, and the Team estimates how many of them can be accomplished in the next Sprint. This results in the Sprint Backlog containing all requirements the team committed to accomplish.

• During the Sprint, the Development Team holds a Daily Scrum of 15 minutes maximum managed by the Scrum Master. In this event three questions are answered: What have I accomplished yesterday to fulfil the Sprint aim? What will I do today to approach the Sprint aim? Did I encounter a problem which could interfere with the progress?

• Sprint Review, this event is held at the end of each sprint to view increments, and in case of need for product backblog corrections at the end of each Sprint. The Sprint results are presented to the stake-holders and accepted based on a common definition of “Done”. The stakeholders give feedback about the new increment and further progress is discussed.

• In the Sprint Retrospective, the Development Team reflects about the Sprint to detect problems and develop solutions. It is held during each Sprint Review meeting, but before planning the next Sprint.

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5. Conclusion

Although in theory and practice there is a significant number of agile methodologies, the simplest and most applied scrum methodology has been shown. The scrum framework enables a good organization of the team on a particular project, as well as a development process that can quickly adapt to new changes in the environment.

Scrum methodology in today’s modern age is a very effective approach to the development of complex products. By the fact that in short time-frames, functional increments of a product are created and they can also be delivered to the end users. Since development is conceived for fewer iteration of parts product development, the whole process can easily be adapted to the market in the shortest possible time with ease.

The focus is also on teamwork that forms one of the basics of the meth-odology. Team spirit is a very important factor that makes the team stronger than a simple set of individuals. High productivity is the result of a good direction of the team towards the goal, with constant adjustment through retrospectives.

Acknowledgement

The publication of this scientific work was developed within the proj-ect “Improving the Competitiveness of Serbia in the Light of EU Accession Process”, Ministry of Science, Education and Technological Development, no. 47028, for the period year 2011-2019.

References

• Arnold, J.H.-Feldman, D.C.-Hunt, G. (1992), “Organizational Behaviour: A Canadian Perspective”, McGraw-Hill Ryerson, Toronto.

• Beck, K. (2000), “Extreme Programming Explained: Embrace Change”, Addison-Wesley. ISBN: 0-201-61641-6.

• Chambers 21st Century Dictionary (1996), Chambers, London.• Cockburn, A. (2004), “Crystal clear: A human-powered methodology for

small teams: A human-powered methodology for small teams”, Addison-Wesley. ISBN: 0-201-69947-8.

• Diebold, P.-Ostberg, J.P.-Wagner, S.-Zendler, U. (2015, May), “What do practitioners vary in using scrum?”, In International Conference on Agile Software Development (pp. 40-51), Springer, Cham.

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• Dybå, T.-Dingsøyr, T. (2008), “Empirical studies of agile software develop-ment: A systematic review”, Information and software technology, #50, pp. 833-859.

• Levesque, L.L.-Wilson, J.M.-Wholey, D.R. (2001), “Cognitive divergence and shared mental models in software development project teams”, Journal of Organizational Behavior: The International Journal of Industrial, Oc-cupational and Organizational Psychology and Behavior, #22, pp. 135-144.

• Mahalakshmi, M.-Sundararajan, M. (2013), “Traditional SDLC Vs Scrum Methodology–A Comparative Study”, International Journal of Emerging Technology and Advanced Engineering, #3, pp. 192-196.

• Oxford Dictionary of English (2005), 2nd edn. Oxford University Press, Oxford.

• Palmer, S.R.-Felsing, M. (2002), “A practical guide to feature-driven devel-opment”, Prentice Hall Upper Saddle River, NJ. ISBN: 0- 13-067615-2.

• Poppendieck, M.-Poppendieck, T. (2003), “Lean Software Development: An Agile Toolkit: An Agile Toolkit”, Addison-Wesley, Boston. ISBN: 0-321-15078-3.

• Schwaber, K. (1997), “Scrum development process”, In: Business object design and implementation (pp. 117-134), Springer, London.

• Schwaber, K.-Beedle, M. (2002), “Agile software development with Scrum” (Vol. 1), Upper Saddle River: Prentice Hall.

• Stapleton, J. (Ed.). (2003), “DSDM: Business focused development”, Pear-son Education. ISBN: 978-0321112248.

• The Oxford Dictionary of English Etymology (1966), Clarendon Press, Oxford.

• The Oxford English Dictionary (1989), 2nd edn. Clarendon Press, Oxford.

2. Applied Security Studies

179

EU Cyber Defence Policy: Recent Developments

Aleksandar Chavleski, PhD,1 Anita Gligorova, PhD,2 Temelko Risteski, PhD3

Abstract. As a major economic and political actor on the world stage, EU has become extremely prone to cyberattacks. For instance, since 2004 total of 17 EU Member States have been a target of election interfer-ence; in 2016, nearly one million customers of Deutsche Telekom were rendered without service; in the same year 9,000 clients of Tesco Bank lost agregately £2.5 million; in 2017 one third of all appointments and operations were cancelled in the system of NHS in the UK; also in 2017, Danish company Maersk lost approximately $200 - $300 million as a consequence of a single cyberattack etc. The development of cyber atack capabilities not only by terrorist groups but by individual states raised many concerns particularly due to the fact that EU cyber defency capacity at the moment lies with a fragmented structure of differenct institutions, agencies and initiatives. The development of cyber defence capabilities and the protection of CSDP communication and information networks are set as top priorities of the updated Cyber Defence Policy Network (2018). These particular article aims to give overview of the recent developments of this increasingly im-portant EU policy and offer insight in the future developments.

Key words: European Union, cyber security

1. Introduction

The first trigger for EU reaction to cyber threats came in 2007, when Estonia was hit by a series of cyberattacks. The urgency for boosting cyber defence capabilities was even more stepped up with the Russian annexation of Crimea and semi-clandestine military actions in Donbass, which included targeted cyber - attacks (LÉTÉ, 2018).

In the recent period, the spectre of cyber threats has broadened and intensified drastically. Cybercrime business models have evolved and new threats related to Internet-of-Things are emerging. Cyber threats have mul-tiplied over recent years and can pose serious threats to the EU, its Member States and citizens. Already in 2012, an Eurobarometer survey showed that 38 % of Internet users in EU have changed their behavior due to increased risks of cyber attacks: 18 % said that they will probably not shop online for

1 Faculty of Law and Political Science, FON University, Skopje, MACEDONIA, aleksan-dar_chavleski @yahoo.com.2 Faculty of Law and Political Science FON University, Skopje, MACEDONIA, [email protected] Faculty of Law and Political Science FON University, Skopje, MACEDONIA, [email protected].

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goods, while 15 % are less likely to use online banking. 74% of the respon-dents said that there is increased risk of becoming a victim of cyberattack/cy-ber crime, 12% experienced fraud on the Internet, and 89% avoid disclosing personal information online (IPB, 2014: 62). In addition to being a threat to security, cyber-attacks cost annually the world economy approximately €400 billion. EU response was taking support measures, stronger coordination and new structures for effective and rapid counter-measures in case of an attack (https://eeas.europa.eu/topics/eu-international-cyberspace-policy/47525/new-tool-address-cyber-threats-eus-rapid-response-force_en.).

The success of conventional military operations in the other do-mains is enabled by, and dependent on the assured availability of, and access to, cyberspace (Röhrig and Smeaton, 2014). By its nature, the cyber domain is not limited to national borders or physical presence, a fact that calls for a Eu-ropean perspective and collaborative activities (European Defence Agency, n.d: 5).

2. Building up EU Cyber Defences: Early Stages

In November 2012 the EU defence ministers agreed to put Cyber Defence on the Pooling & Sharing agenda. With the principle of Pooling and Sharing the EDA has established a framework for achieving more together without losing sovereignty over assets and resources. Projects in the areas of cyber defence training and exercise ranges and cyber situational awareness packages for headquarters have been initiated.

Later that year, the “EU Concept for Cyber Defence for EU-led Mili-tary Operations” was agreed and represents military policy and guidance for operational commanders in order to secure cyber situational awareness. The Concept outlines the need to adopt a risk based threat assessment meth-odology and to create coordinating structures to ensure that national cyber defence capabilities work coherently to protect the Force. This concept was broadened in March 2013 with the “EU Cyber Defence Capability Require-ments Statement”. (Röhrig and Smeaton, 2014)

For the first time in 2013, snapshot of Member States’ cyber-defenc-es was published (Robinson, 2014:1). After that, the EU’s focus shifted to human factors in cyber defence, since every cyber-attack is carried out by hu-mans. Both the attackers and defenders use technology to achieve their aims. That is why, there is no difference between the cyber domain and the physical ones. (Smeaton and Roerhig, 2014: 27)

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The EU Cyber Security Strategy 2013 recognizes Cyber Defence as one of the strategic priorities of the EU and the Heads of State and Govern-ments decided in December 2013 that Cyber Defence should be one of four key areas for capability development. The Strategy stipulates that in order to “…: increase the resilience of the communication and information systems supporting Member States’ defence and national security interests, cyber de-fence capability development should concentrate on detection, response and recovery from sophisticated cyber threats”. Prima facie it can be argued that this a call for building ЕU cyberware capabilities, but on closer look this is not the case, since the Strategy does not refer to any legislative instruments in this regard nor cooperation (Dewar, 2017: 194-5).

The Strategy advocates multifaceted approach, cutting across net-work and information security, Common Security and Defence Policy, crimi-nal law measures, and Common Foreign and Security Policy (CFSP). Such ap-proach could be facilitated by a homogenous set of policy instruments. This will require intensive cooperation between CSDP actors and the European Cybercrime Centre (EC3) or ENISA (Robinson, 2014: 4).

At the European Council in December 2013 HR/VP Catherine Ash-ton, in cooperation with the European Commission and the EDA was tasked to prepare an EU Cyber Defence Policy Framework during 2014. The Coun-cil of EU adopted the EU Cyber Defence Policy Framework in November 2014 setting five priorities:

1) Supporting the development of Member States cyber defence ca-pabilities related to CSDP; 2) Enhancing the protection of CSDP communi-cation networks used by EU entities; 3) Promotion of civil-military coop-eration and synergies with wider EU cyber policies, relevant EU institutions and agencies as well as with the private sector; 4) Improve training, education and exercises opportunities; 5. Enhancing cooperation with relevant interna-tional partners (Council of EU, Conclusions, 2014).

The EU for its part made the fight against cybercrime one of the three pillars of the European Agenda on Security, and recognised cyberse-curity as a priority for the 2016 Global Strategy for the European Union’s Foreign and Security Policy (European Union: 2016).

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3. Building up EU Cyber Defences: Advanced Stages

The Annual Report on the Implementation of the Cyber Defence Policy Framework in 2017 asked EEAS and the EDA to present proposals in order to update EU Cyber Defence Policy Framework by mid-2018 (Council of EU, 2017:21).

InMay 2017, theProjectArrangement (PA) for the first everCyber Defence Pooling & Sharing Project was signed by all eleven con-tributing Member States. EDA initiated this project is being executed via EU pooling & sharing agenda. Some of the goals to be achieved are: 1) augmentation of the access to existing and future cyber range facilities;increaseduseof therateandefficiencyof cyberrangesandplatforms; advanced cyber defence training, exercises and testing at European level. (European Defence Agency, 2017).

In September 2017, the European Commission and the High Rep-resentative of the Union for Foreign Affairs and Security Policy, reaffirmed with a Јoint Communication (introducing a multi-element cybersecurity ef-fort referred to as the 2017 Cybersecurity Package) to the European Par-liament and the Council, the commitment to cyber defence, strengthening EU-NATO cooperation in countering hybrid threats and improving com-munications between all relevant institutions including EU Agency for Cy-bersecurity (ENISA). Also, since civil and defence cybersecurity face simi-lar challenges and dual-use technology that call for close collaboration in critical areas, a second phase of the network and its European Cybersecurity Research and Competence Centre could be further developed with a cyber defence dimension. The defence dimension can trigger greater cooperation in the area of cyber defence, like sharing of information, situational aware-ness, building expertise and coordinated reactions, and supporting Member States’ development of common capabilities (European Commission: 2017).

On 13 November 2017, Ministers signed a common notification on the Permanent Structured Cooperation (PESCO) and handed it over to the High Representative and the Council. The Council formally adopted the De-cision establishing PESCO on 11 December 2017. Total of 25 Member States committed their resources and identified 17 initial projects in order to step up capability development and operational dimension (https://eeas.europa.eu/sites/eeas/files/pesco_factsheet_22-06-2018_2.pdf.). Cyber Rapid Re-sponse Teams will be on stand-by and reinforce neutralisation and investiga-tion efforts if a major cyber incident occurs (https://eeas.europa.eu/topics/eu-international-cyberspace-policy/47525/new-tool-address-cyber-threats-eus-rapid-response-force_en.). and Mutual Assistance in Cyber Security are

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among the most important. This ambitious, binding and inclusive European framework established between Member States also includes a commitment to increase efforts in the cooperation on cyber defence, as well as related projects (https://pesco.europa.eu/). The number of cyber defence projects is increasing like: 1) European Secure Software defined Radio (ESSOR); 2) Strategic Command and Control (C2) System for CSDP Missions and Opera-tions; 3) European High Atmosphere Airship Platform (EHAAP) – Persis-tent Intelligence, Surveillance and Reconnaissance (ISR) Capability; 4) One Deployable Special Operations Forces (SOF) Tactical Command and Control (C2) Command Post (CP) for Small Joint Operations (SJO) – (SOCC) for SJO; 5) Electronic Warfare Capability and Interoperability Programme for Future Joint Intelligence, Surveillance and Reconnaissance (JISR) Coopera-tion. Definitely, most important are: the Cyber Rapid Response Teams and Mutual Assistance in Cyber Security and Cyber Threats and Incident Re-sponse Information Sharing Platform. The former will have deployable cyber toolkits for detection, recognition and mitigation of cyber threats and will be able to assist with training, vulnerability assessments and other requested support (https://pesco.europa.eu/project/cyber-rapid-response-teams-and-mutual-assistance-in-cyber-security/), while the latter aims reducing the risks via sharing of cyber threat intelligence through a networked platform.

It is also important to mention the recent motion from the European Parliament on Cyber Defence approved on 25 May 2018. It emphasizes that “while cyber defence remains a core competence of member states, the EU has a vital role to play in providing a platform for European Cooperation […] and that whereas current vulnerability is due mainly to the fragmentation of European defence strategies and capabilities, […] much more needs to be done as it is becoming more and more difficult to counter cyber-attack at member states level, […] whereas cyber defence and deterrence are activities that can best be tackled cooperatively at European level”.

In June 2018 the EU Capability Development Plan (CDP) was up-dated and stressed that cyber defence is a priority. EU should be capable for defensive cyber operations in any operational context, based on sophisticated current and predictive cyberspace situational awareness. Later that year, the Council of EU updated the EU cyber defence policy framework (CDPF) focusing primarily on the development of cyber defence capabilities. The lat-ter should encompass all aspects of capability development. Also, constant review of the vulnerabilities of the information infrastructures that support CSDP missions and operations is needed, and the perpetrators of malicious cyber activities should be held accountable (Council of EU, 2018).

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EDA is currently also working on cyber defence situation awareness for CSDP operations and on integrating cyber defence therein. Together with the EU Military Staff, the Agency actively contributes to the cyber defence focus area of the US-led Multinational Capability Development Campaign. The new Cyber Situation Awareness Package (CySAP) for headquarters proj-ect should provide a cyber defence planning and management platform, en-abling the military to fulfill cyber defence related tasks on daily basis (Euro-pean Defence Agency, 2018).

In April 2019 work has begun on Cyber Defence Situation Aware-ness Package Rapid Research Prototype (CySAP-RRP) project, which aims at addressing essential research challenges to assist military decision-makers in cyberspace and to set the basis for a fully-fledged Command and Con-trol (C2) system for cyber operations (EDA, 2019). The research challenges should address the cyber defence elements in the planning and conduct phase of military operations. This is due to the fact that cyberspace is treated as the fifth domain of warfare equally critical to military operations as land, sea, air, and space.(EDA, 2018).

On 25 June, six EU countries signed a Declaration of Intent for the development of an EU Cyber Rapid Response Force, which more countries are expected to soon join. The initiative on a cyber response force and mutual assistance in cyber security is led by Lithuania.

EU Cyber Rapid Response Force teams will be bring together spe-cialists from the participating countries. These will be on stand-by and re-inforce neutralisation and investigation efforts in the event of a significant cyber incident. (EEAS, 2018). In the context of reinforcing cybersecurity technological capacity, it is also helpful to note the recent proposal from the European Commission for a Regulation of the European Parliament and the Council establishing the European Cybersecurity Industrial, Technology and Research Competence Centre and the Network of National Coordination Centres (European Commission, 2018). The aim of the Regulation is to: “…establish the European Cybersecurity Industrial, Technology and Research Competence Centre (the ‘Competence Centre’), as well as the Network of National Coordination Centres, and to lay down rules for the nomination of National Coordination Centres as well as for the establishment of the Cybersecurity Competence Community.” The proposed Competence Centre enhance cooperation between the civil and defence spheres with regard to dual use technologies and applications in cybersecurity, by carrying out the following tasks: (a) supporting Member States and industrial and research stakeholders with regard to research, development and deployment; (b) con-tributing to cooperation between Member States by supporting education,

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training and exercises; (c) bringing together stakeholders, to foster synergies between civil and defence cyber security research and markets;

Also, the Competence Centre will enhance synergies between the civil and defence dimensions of cybersecurity in relation to the European Defence Fund by carrying out the following tasks: (a) providing advice, shar-ing expertise and facilitating collaboration among relevant stakeholders; (b) managing multinational cyber defence projects, when requested by Member States, and thus acting as a project manager within the meaning of Regula-tion XXX [Regulation establishing the European Defence Fund]. (European Commisssion, 2018 (Art.7-8).

The Heads of State and Government at the Tallinn Digital Summit, in September 2017, were focused on the further plans for digital innovation with the aim of keeping Europe ahead of the technological curve while be-coming a digital leader, globally, in the years to come (https://www.eu2017.ee/node/2598.html.).

The Council Conclusions adopted in November 2017, called on the Commission to provide rapidly an impact assessment on the possible options and propose by mid-2018 the relevant legal instrument for the implementation of the initiative.

On the international scene, EU is advocating the concept of use the international law to the cyber dimension, and in particular the cyberwarfare (Odermatt, 2018:371). The EU Cyber Security Strategy stipulates that par-ticularly serious cyber incidents or attacks can constituge ground for invoking the EU solidarity clause (Art.222 (TFEU). It could be argued that in some sit-uations such serious cyber attacks could amount to the definition of “armed attack” or agression under international public law and that could be ground for implementing the so called “mutual defence clause” (Art.42(7)TFEU). Still, this is debatable, since the application of public international law to cyberspace and particularly cyberwarfare is developing on international level. For instance, the Tallin Manual 2.0, examines how the traditional internation-al law could be applied to cyberspace. The 2004 UN Group of Government Experts on Developments in the Field of Information and Telecomunica-tions in the Context of International Security (GGE) made a major break-through with the outlining the global agenda and introducing the principle that international law applies to the digital space (https://www.eu2017.ee/node/2598.html.). In addition, UN General Assembly in 2018 established an Open - Ended Working Group (OEWP) tasked inter alia “to further develop the rules, norms and principles of responsible behaviour of States” and “ex-isting and potential threats in the sphere of information security and possible cooperative measures to address them and how international law applies to

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the use of information and communications technologies by States” (United Nations, 2018).

In most cases it can be assumed that in a event of major cyber at-tacks, EU disaster response mechanism under Art. 222 TFEU will be applied. In fact, this is evident from the European Commission’ s Cyber Security Package (2017). On the other hand, Art.42 (7) only foresees action by Mem-ber States individually, and the form of assistance is tailored specifically be-tween the country in need and each fellow Member State. Institutions of the EU have no stake in the decision-making whatsoever (Raik and Järvenpää). Still, some authors have argued that it is theoretically possible to trigger both clauses together (Myrdal and Rhinard, 2010).

In May 2019, EU High Representative Mogherini expressed concern “…by the rise in malicious behavior in cyberspace that aim at undermining the EU’s integrity, security and economic competitiveness, including increas-ing acts of cyber-enabled theft of intellectual property”. Also, she called for increasing “…the efforts to tackle malicious cyber activities, and guide its own use of ICTs by the application of existing international law in cyber-space, as well as through the adherence to the norms, rules and principles of responsible state behavior as articulated in the cumulative reports from the UNGGE.” The states should not knowingly allow cyber attacks to be carried out from their territory (EU High Representative, 2019).

In order to thwart and respond to cyber attacks, a new sanctions regime was introduced on 17 May 2019, thus boosting the Cyber Diplomacy Toolbox - the framework for a joint EU diplomatic response to malicious cyber activities. The response can involve statements by the High Representa-tive, diplomatic demarches and, if necessary, restrictive measures (European Commission, 2019). The new regime applies to all cyber-attacks that can have significant effect, including attempted cyber-attacks, which constitute an ex-ternal threat to the Union or its Member States. The latter include those: (a) originating, or are carried out, from outside the Union; (b) use infrastructure outside the Union; (c) are carried out by any natural or legal person, entity or body established or operating outside the Union; or (d) are carried out with the support, at the direction or under the control of any natural or legal person, entity or body operating outside the Union. Cyber-attacks include all attacks involving (a) access to information systems; (b) information system interference; (c) data interference; or (d) data interception (Council of EU, 2019a).

Cyber-attacks constituting a threat to the Union include those carried out against its institutions, bodies, offices and agencies, its delegations to third countries or to international organisations, its common security and defence

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policy (CSDP) operations and missions and its special representatives (Ibid).The sanctions foreseen can be directed primarily towards natural per-

sons or legal entites responsible for carrying out cyber – attacks or attempted cyber – attacks, but also towards third states or international organizations. Besides the direct perpetrators of the cyber attacks or attempted cyber at-tacks, sanctions can be introduced towards any natural or legal persons, en-tities or bodies providing financial, technical or material support or in any other way are involved in the alleged cyberattacks or attempted cyberattacks, regardless whether by commission or by ommission. Sanctions can be di-rected towards any natural or legal person associated with the direct perpetra-tors of the cyberattacks or attempted cyber attacks. No funds or economic resources shall be made available directly or indirectly to or for the benefit of the natural or legal persons, entities or bodies listed in the Annex (Council of EU, 2019b). Sanctions towards natural persons can include travel bans and freezing of assets, and for legal persons only freezing of assets.

In addition, the Council adopted the Regulation on restrictive measures against cyber-attacks threatening the Union or its Member States which applies: 1) within the territory of the Union, including its airspace; 2) on board any aircraft or vessel under the jurisdiction of a Member State; 3) to any natural person inside or outside the territory of the Union who is a na-tional of a Member State; 4) to any legal person, entity or body, inside or out-side the territory of the Union, which is incorporated or constituted under the law of a Member State; 5) to any legal person, entity or body in respect of any business done in whole or in part within the Union. There is an obliga-tion for all entities to: 1) supply immediately any information which would fa-cilitate compliance with this Regulation, such as information on accounts and amounts frozen in accordance with Article 3(1), to the competent authority of the Member State where they are resident or located, and transmit such information, directly or through the Member State, to the Commission; and

(b) 2) cooperate with the competent authority in any verification of the information referred to in point (a) (OJEU, LI 129/1, 17.5.2019).

the names and other relevant data concerning natural and legal persons, en-tities and bodies whose funds and economic resources are to be frozen in accordance with this Regulation should be made public (Ibid). The Council adopts the Annex I by unanimity listing the natural or legal person, entities or bodies subject to restrictive measures; this list is reviewed regularly every 12 months and on ad hoc basis when the Council decides to introduce to particu-

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lar legal or natural persons, or subjects associated with them. Annex I should always enshrine the grounds for the listing of natural or legal persons, entities or bodies concerned ((OJEU, LI 129/1, 17.5.2019).

This decision should be transmitted directly to the targeted natural or legal person, providing with the opportunity to submit their observations. If such observations are sent to the Council or substantial new evidence is presented, the Council is obliged to review the decision and consequently inform the concerned natural or legal person. This is without prejudice to the eventual judicial review procedures that are available to the concerned persons under EU law (Ibid).

Of particular interest is the 2019 Commission Recommendation on cyber security, directed towards the Member States. For instance, energy network operators should: (a) apply the most recent security standards for new installations wherever adequate and consider complementary physical security measures where the installed base of old installations cannot be suf-ficiently protected by cybersecurity mechanisms; (b) implement international standards on cybersecurity and adequate specific technical standards for se-cure real-time communication as soon as respective products become com-mercially available; (c) consider real-time constraints in the overall security concept for assets, especially in asset classification (European Commission, 2019). Also, if possible the addressees should choose a secure communica-tion protocol and introduce an appropriate authentication mechanism for machine-to-machine communication in real-time. Since, Europe’s electricity grids and gas pipelines are intertwined, any potential cyber-attack could trig-ger far-reaching cascading effects into other parts of that system, Member States should ensure that the relevant stakeholders take appropriate measures to thwart such cyber attacks. Due to the fact that today’s energy sector com-bines both an older technology and modern technology, the relevant stake-holders should address this issue taking adequate cybersecurity measures (European Commission, 2019).

4. International Cooperation on Cyber defence

Cyber issues (including cyber defence) become a key topic in EU global diplomacy and EU cooperates with many stakeholders like the International Telecommunications Union, G7, Internet Governance Forum, the World Summit on Information Society etc. In particular with the UN and the OSCE, a strategic framework for conflict prevention, cooperation and stability in cyberspace was developed, which include (i) the strict applica-

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tion of international law, and in particular the UN Charter in its entirety, in cyberspace; (ii) the full respect of universal non-binding norms, rules and principles of responsible State behaviour; (iii) the development and imple-mentation of regional confidence building measures (CBMs).

However, the most important is the cooperation with NATO on cy-ber defence issues, by using inter alia common standards for cybersecurity and defence. On February 10, 2016, the Computer Emergency Response Team of EU signed a Techical Arrangement with NATO Computer Incident Re-sponse Capability (NCIRC). The aim of the arrangement is the exchange of information on specific cyber threats between tthe two organisations, the sharing of best practices on technical procedures, configuration of networks, and partnership with industry (NATO, 2019). In July 2016 in the Joint Dec-laration between EU and NATO, when cybersecurity and defence were listed as hybrid threats on which the cooperation between the two organisations should be boosted. Particularly, coordination between the two organisations should be enhanced on cyber security and defence including in the missions and operations, exercises and on education and training (Presidents of the European Council, European Commission and SG of NATO: 2019). The two bodies established a robust framework in order to improve incident pre-vention, prediction, detection and response. Building upon this cooperation, the two bodies held a special workshop titled “Cyber Threat Vector Analysis” in the evening of the EP elections 2019 with a view to identufy techniques such as spear phishing and DDoS attacks to be vigilant about, and to edu-cate the internet users about the dangers from social engineering attacks like phishing.(European Commission, 2019).

EU was also involved in multinational cyber defence exercises such as: NATO’s CMX (Crisis Management Exercise, dedicated to testing internal and partner consultation and decision-making procedures at the stra-tegic political-military level), CYBER COALITION (exercise the decision making advisory processes, technical and operational procedures, and the collaboration between its participants, involving NATO and National Cyber Defence Capabilities), TIDE SPRINT (dedicated to emergent technologies to improve the interoperability, resilience and agility of NATO, and future Alliance and partner nation’s Command and Control Capabilities and Infor-mation Technology services). In April 2019 EU participated in the ‘Locked Shields’, the world’s biggest and most advanced international cyber defence exercise organized by NATO in Talinn, Estonia (EDA, 2019). In September 2017 for the first time an EU flagship cyber exercise code-named PACE was conducted. The latter was followed by NATO CMX 17 exercise in October 2017. Both exercises ensured EU – NATO staff-to-staff coordination and

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participation. Similarly, in November 2018 major civil-military crisis manage-ment exercise “EU-HEX-ML 18 (PACE) was conducted in order to test EU ability to respond to hybrid threats.

Also, EU is rapidly developing bilateral cooperation with third coun-tries, notably the EU-US Working Group on Cybersecurity and Cybercrime and other bilateral engagements with China, India, Brazil, Japan, Republic of Korea, Mexico, Canada, South Africa and Russia (Chavleski, 2018). EU is engaged in other international forums, like the (now) Global Conferences on Cyberspace (‘London Process’). These were held in London (2011), Budapest (2012), Seoul (2013), The Hague (2015), New Delhi (2017). The topics so far included: governing the behaviour in cyberspace, relationship between internet security and internet rights, launching of the Seoul Framework for Commitment to Open and Secure Cyberspace(https://www.thegfce.com/about/gccs) and “to promote an inclusive Cyber Space with focus on policies and frameworks for inclusivity, sustainability, development, security, safety and freedom, technology and partnerships for upholding digital democracy, maximizing collaboration for strengthening security and safety and advocat-ing dialogue for digital diplomacy” (https://www.internetsociety.org/events/gccs-2017/05.09.2019)).

Some of the EU partners like USA or Australia are developing more “forward cyber defences”. The latter referes to an ability to conduct of pre-ventive/ pre-emptive cyber operations outside country’s sovereign territory and more liberal use of offensive tools, with the ultimate aim to stop cyber threats before they reach their targets on dometic soil (Ivan, 2019:9-13). EU should not be a laggard in this regard.

5. ConclusionIn the last two decades EU has taken important steps in establishing

itself as a cybersecurity actor, since cyber security and now cyber defence be-come increasingly important not only for EU and its Member States security, but also the international security in general. That’s why EU has established a venue for cooperation with other states and international organizations in this field. Most important steps were the adoption of the EU Cybersecurity Strategy in 2013 and EU Cybersecurity Package in 2017. Of particular im-portance is the combat against cybercrime via EU criminal law. However, this cooperation is not seamless; for instance, the current problems with the key partner - NATO include inter alia: 1) the non-existint framework of triggers for joint response of the two organizations to cyber attacks; 2) restrictive in-

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formation – sharing practices on cyber threats; 3) different memberships of the two organisations; 4) unwillingness of the Member States to cooperate with the institutions and bodies of the two organizations, since cyber space is still regarded as critical sphere of national interests, etc.

At present, EU does not respresent a coherent cyber security actor in its own right, while the core cyber security competences remain in the hands of the Member States. EU own cyber defence competences remain siloed in various institutions and agencies, the latter being understaffed and under-funded in comparison with other cyber security actors, most notably the US Cyber Command. This “patchwork” of competences lies in the fact that the mandates within EU institutions and bodies on cyber – defence issues are based on the old ‘pillar system’, so cooperation and coordination between them is not an easy task (European Commission, 2019).

Also, it seems that the use of new technologies like Artificial Intel-ligence (AI) - Enabled Systems is underused. The latter could protect EU personnel from in theatre risks such as disinformation campaigns and cyber defence. AI-enhanced protective software have ability to enhance the pro-tection of communication information systems (CIS) via identification of unusual or unauthorised behaviour on EU networks (Fiott and Lindstrom: 2018).

The proposed Cyber Security Package 2017 by the European Com-mission was aimed at overcoming some of these deficiencies: the adoption of the Cybersecurity Act in May 2019 and the permament mandate of ENISA - the EU Cybersecurity Agency is an important step in this regard. Moreover, ENISA is now tasked to “contribute, where appropriate, to cooperation with organisations such as the OECD, the OSCE and NATO.”

On the plus – side is also the adoption of the recommendation on coordinated response to large-scale cybersecurity incidents and crises aimed at coordinated response on EU level in major cyber incidents and crisis, es-tablishing for that purpose an EU Cybersecurity Crisis Response Framework. Other points of the package like the Cybersecurity Emergency Respond Fund; building a cybersecurity competence network with a European Cyber-security Research and Competence Centre; creating an effective criminal law response and increasing cyber defence capabilities represent rather ambitious goals, but it is questionable in a climate where the information exchange be-tween the Member States is strictly voluntary what will be the net-net effect.

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.

3. Ecological Agriculture

197

Selected Aspects of Hygiene as a Qualitative Indicator of Animal Farming

Pošiváková T.1, Hromada R.1, Korim P.1 Švajlenka J.1

Abstract: Environmental conditions affect animal health and welfare considerably and the vital processes of animals. By improvement and compliance of animal hygiene practices is potentially one of the most effective means which reducing the various diseases in animal farming. For succeed hygiene promotion it is needs to identify and target to those hygiene practices which are the major source of risk in any setting. The compliance of hygiene process in intensive animal houses has a significant effect on animal health and production efficien-cy, as well as influencing the health of employees. Improving quality of hygiene is to eliminate pollutants at their source, or reduce their production. The important factors that have a negative influence on hygiene include the farming system practiced, the species farmed, the size and behaviour of animals conditioned by technology. Other factors include building characteristics, the shed environment and husbandry. In every way the level of hygiene is an important indicator of animal welfare and health conditions which may be influenced by the characteristics, conditions and facilities where they are kept. The characteristics of the building that influence hygiene and air quality include the shape and dimensions of the building, the ventilation, heating system used and effluent management.

Keywords: animal hygiene, environmental requirements, health, sustainability of livestock farming

1. Introduction

Scientific knowledge shows that the number of days with increased and even tropical temperatures during the global warming related summer days is steadily increasing every year. It is the influence of increasing tempera-ture that most affects the animal organism, the air temperature in the stables increases, which in turn has a negative impact on performance, reproduc-tion, fitness and health. These negative effects cause economic and financial losses for farmers. Therefore, farmers should create appropriate conditions in the animals’ premises depending on the species and the breed (Veissier, 2008; Langford, 2012). Therefore, deteriorated climatic conditions in build-ings must be eliminated by appropriate construction-technical measures.

1 Institute of Animal Hygiene and Environmental Protection, Department of the Environ-ment, Veterinary Legislation and Economy, University of Veterinary Medicine and Phar-macy in Košice, Komenského 73, 041 81 Košice, Slovak Republic

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2. Hygiene of buildings as a qualitative indicator of animal farming

In case of designing, it is necessary to build on a specific breeding technology and follow the principles of overall efficiency (Veissier, 2008; Langford, 2012). Integral aspects of design are the principles of veterinary care and hygiene of farm animals, as well as the principles of perfect hygiene of primary food production, occupational safety and health protection, fire safety and other conditions, as well as care and protection of the environ-ment (Hansen, 2008; De Vries, 2011).

Many factors could affect the health of animals; one of the most important is the microclimate, the environment that the animal immediately surrounds (Lindenmayer, 2011). The Physical, chemical and biological fac-tors contribute to the microclimate. Physical factors are air temperature and humidity the temperature-humidity complex, air flow, air cooling value, sun-light, lighting, barometric pressure, and noise is also attributed here (Burge, 2004; Hansen, 2008). The chemical factors include the composition of air, especially with regard to the concentration of toxic gases. Biological factors are dust and microorganisms dispersed in the atmosphere.

2.1. Selected physical factors of stable environment

Air temperature is the most important factor, as the immediate or-ganism of the heat-resistant animals must react to its changes, which in ex-treme cases may affect performance or even animal health (Hillmann, 2004). Homoeothermic animals maintain a relatively constant body temperature, so that the rate of biochemical reactions in the body does not fluctuate too much. Thus, they have developed thermoregulation. The temperature of the environment is almost always lower than the body temperature of the animals and therefore, from a physical point of view, it is mainly the heat transfer from the animal body to the environment. Thermoregulation takes place at three levels reflex, physical and chemical (Palmer, 2005). Reflective thermoregulation is triggered by information from the heat receptors stored in the skin. Based on this, the thermoregulation centre in the hypothalamus provides functions to either reduce heat loss or increase heat production in a cold environment, or to increase heat output and reduce heat production in a hot environment.

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2.1.1. Air temperature as a physical factor

Air temperature is considered to be a superior factor of the stable microclimate, because it decides on the values of some other factors such as humidity, air flow, or it can significantly influence the evaluation of the ef-fect of these factors on the living organism, a higher value of air flow can be considered desirable in case of elevated ambient temperature, otherwise it is negatively considered if the ambient temperature is below the optimum limit, when the animals are cooled down. Temperature is a major climatic factor that forces a constant temperature animal to adapt heat production and out-put to the environment (Broom, 1991; Hemsworth, 2015). Air temperature is the most important factor, as changes in it must be reacted immediately by the organism of homo-thermic animals, which in extreme cases may affect performance or even animal health (Dikmen et al., 2008). Thus, they have de-veloped a complex physiological function called thermoregulation by which the body maintains a constant body temperature. This can only be achieved with a balanced thermal balance of the organism.

2.1.2. Air humidity as a physical factor

Air humidity is given by the content of water vapours, which are always in the air, but in a relatively variable quantity. The main sources of moisture in the stables are mainly animals evaporation from the body, perspi-ration, transpiration, urine, excrement, water for cleaning floors, equipment, wet and warm feed. The humidity of the air is given by the content of water vapours, which are always in the air, but in variable quantities. It is expressed by the following bioclimatological values:

Specific humidity is the actual amount of water vapour in the air. It is expressed either in grams of water vapour in m3 of air (g. m-3) or in units of water vapour pressure in pascals.

Maximum air humidity is the largest amount of water that air can absorb in a gaseous state at a given temperature and pressure. It is expressed in g.m3 of air or in Pascals.

Relative air humidity is the ratio of specific humidity to maximum at a given temperature, expressed as a percentage. It is a value relative to the organism of animals and therefore in stables the air humidity is most often expressed by this value (Crowe, 2011; De Vries, 2011).

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2.1.3.Airflowasaphysicalfactor

In stables the air always flows from places with lower temperature where the air pressure is higher to places with higher temperature where the air pressure is lower. The air in the stables flows both turbulently and straight-forwardly. This is influenced by structures, ventilation systems, window and gate opening, leakage, etc. resulting in very complex and uneven airflow conditions. The direction of air flow is very difficult to estimate. Supplying cooler and heavier air drops to the floor and, when heated, dissipates upward to the ceiling like a warmer stream. For evaluation the effect of air flow on the livestock body, it is need to know both the direction of the air flow and the speed of the flow. The importance of the air flow is in cooling the skin of animals and in influencing the release of heat from the animal body. Its effect is increased in animals undercoated with a small layer of subcutaneous fat, respectively on those parts of the body that are imperfectly coated, for example the mammary gland (Romaniuk et al., 2005; Taylor et al., 2000).

2.1.4. Lighting as a physical factor

Sunlight is the source of light and heat on our Earth. The spectrum of this radiation decays from gamma radiation with a wavelength of 10-4. As the solar radiation passes through the atmosphere, its intensity decreases to about 40%. The largest part of the energy emitted by the sun lies in the spectrum from 200 to 3000 nm. Up to 99% of all energy is emitted in the ultraviolet, visible and infrared regions of the solar spectrum (Hansen, 2008).

2.1.5. Air pressure as a physical factor

Barometric pressure affects the partial pressure of oxygen and thus the dynamics of oxygen diffusion from the pulmonary alveoli into the blood capillaries. It is affected by altitude and fluctuates further due to weather changes. The effect of air pressure on animal health has not been fully clari-fied, and there has been no evidence of relationships between diseases such as colic disease in horses, digestive disorders in pigs, cannibalism and the like. When animals are kept in higher altitudes, mountain sickness can occur as in humans. In the first phase, pulse and respiratory rate are increased and blood stores are emptied into circulation, later bone marrow is activated, the num-ber of erythrocytes and bound hemoglobin increases, respiratory and pulse rates return to normal. The effect of barometric pressure fluctuations on ani-mal health and performance has not been demonstrated (Brouk et al., 2001).

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2.1.6. Noise as a physical factor

Noise in the stables is caused by sounds coming from the technologi-cal equipment (stable machinery, air-conditioning equipment, sounds emitted by animals and sounds from the operation around the stables. The noise from the technological equipment is estimated at 100 - 120 decibels (dB), physi-ological manifestations have a strength of 50 - 60 dB. Surrounding noise is variable, noise can cause a stress load, like other stressors, only when the intensity of stress exceeds a certain threshold In addition, different animal species are differently susceptible to a certain frequency of sounds (Veissier, 2008; Crowe, 2011).

3. Conclusion

The paper gives an overview of the present state of the selected physical aspects of hygiene as a qualitative indicator of animal farming. The present research evaluates and represents some of most important selected aspects of hygiene indicators of animal farming. The goal of animal farming based on production is establishing environmentally friendly production, sus-taining animals in good health, realising high animal welfare standards, and producing products of high quality. Stables and technological modernization is an important tool of development in modern animal farming industry. In order to guarantee the comfort of animals and the personnel, the compli-ance with animal hygiene requirements is mandatory throughout the entire process and function of construction.

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References

• Palmer, R. W. (2005) “Dairy Modernization”. Thomson Delmar Learning, Canada, 5 Maxwell Drive, PO Box 8007, Clinton Park, NY 12065-2919, 316.

• Brouk, M.J., Smith J.F., Harner J.P. (2001) “Freestall Barn Design and Cooling Systems”. EP 76. Kansas State University Agricultural Experiment Station and Cooperative Extension Service.Department of Animal Sciences and Industry. Department of Biological and Agricultural Engineering, 8.

• Broom, D.M. (1991) “Animal welfare: concepts and measurement”. J. Anim. Sci., 69, 10, pp. 4167-4175, PMID: 1778832.

• Burge P.S. (2004) “Sick building syndrome”. Occup Environ Med., 61, pp. 185-190, DOI: 10.1136/oem.2003.008813.

• Crowe, M.A.; Williams, E.J. (2012) “Triennial Lactation Symposium: Effects of stress on postpartum reproduction in dairy cows”. J. Anim. Sci., 90, pp. 1722-1727, DOI: 10.2527/jas.2011-4674.

• De Vries, M., Bokkers, E.A.M., Dijkstra, T., van Schaik, G., de Boer, I.J.M. (2011) “Invited review: Associations between variables of routine herd data and dairy cattle welfare indicators”. J. Dairy Sci., 94, pp. 3213-3228, DOI: 10.3168/jds.2011-4169.

• Dikmen, S., Alava, E., Pontes, E., Fear, J.M., Dikmen, B.Y., Olson, T.A., Hansen, P.J. (2008) “Differences in thermoregulatory ability between slick-haired and wild-type lactating Holstein cows in response to acute heat stress”. J Dairy Sci., 91, pp. 3395-3402, DOI: 10.3168/jds.2008-1072.

• Hansen, A.M., Meyer, H.W., Gyntelberg, F. (2008) “Building-related symptoms and stress indicators”. Indoor Air, 18, pp. 440-446, DOI:10.1111/j.1600-0668.2008.00571.x

• Hemsworth, P. H., Mellor, D.J., Cronin, G.M., Tilbrook, A.J. (2015) “Scientific assessment of animal welfare”. N Z Vet J., 63, 1, pp. 24-30, DOI: 10.1080/00480169.2014.966167.

• Hillmann, E., Mayer, C., Schrader, L. (2004) “Lying behaviour and adrenocortical response as indicators of the thermal tolerance of pigs of different weights”. Animal Welfare, 13(3), pp. 329-335.

• Langford, F.M., Stott, A.W. (2012) “Culled early or culled late: Economic decisions and risks to welfare in dairy cows”. Anim. Welf., 21, pp. 41–55, DOI: 10.7120/096272812X13345905673647.

• Lindenmayer, D.B., Likens, G.E. (2011) “Effective monitoring of agriculture”. J Environ Monitor, 13, pp. 1559-1563, DOI: 10.1039/c0em00691b.

• Romaniuk W., Overby T. (2005) “Systems of maintenance of cattle” in Polish. Reference book. IBMER.

• Taylor, J., Price, L., Leigh, P., Young, P., Berckmans, D., Janssens, K., Vranken, E., Geverst, R. (2000) “Proportional-integral-plus (pip) control of agricultural buildings”. IF AC Modelling and Control in Agriculture.

• Veissier, I., Butterworth, A., Bock, B., Roe, E. (2008) “European approaches to ensure good animal welfare”. Appl. Anim. Behav. Sci., 113, pp. 279–297, DOI: https://doi.org/10.1016/j.applanim.2008.01.008.

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Accumulationof copperbysunflowerplants(Helianthus annuus L.) grown in hydroponic system

Racić,G.1,Vukelić,I.1,Radić,D.1,Bojović,M.1,Mrkajić,D.2

Jovanović,Lj. 1,Panković,D. 1

Abstract: Metal pollution of soils is important environmental risk, that imposes the need for development of different methods for their removal. The use of plants that are able to accumulate and tolerate high metal concentrations is one approach that is being examined for that purpose. Sunflower (Helianthus annuus L.) has been proven as good hyperacumulator of metals, with ability to extract them from the soil and translocate them from roots to shoots and leaves. In this work we have examined ability of sunflower to accumulate copper in hydroponic conditions. Sunlower plants were grown in presence of copper with final concentrations of 50 ppm, 100 ppm and 200 ppm. Fresh and dry mass of different plant organs was measured, as well as plant height, 7 days after metal application. ICP-OES method was used to measure concentration of copper in stem and leaves of sunflower plants according to EPA 6010C method.Results has shown that copper addition decreased plants height, fresh and dry mass of stem and leaves. According to the heavy metal content measured in different plant organs it can be suggested that copper was translocated from stem to leaves. In order to conclude that sunflower could be used as good metal accumulator in copper polluted soils, further analysis of copper content in roots should be undertaken.

Keywords: heavy metal, phytoremediation, sunflower

1. Introduction

Pollution of soil and water with metals is being world wide problem, especially in the areas of agricultural and different industrial activities (Dal Corso et al., 2019). Metals, such as Fe, Cu, Zn, Ni, Co, and Mo, are essential elements for plant growth, but when present in excess are toxic. While some non-essential metals are toxic even when present in low concentrations.

Copper (Cu) is a metal, essential for normal plant growth and development. Most of the Cu present in soils is in the form which is not readily available to plants due to strong binding of soil colloids. It is mostly present in the form of Cu2+ ion, and its content in soils ranges from 10-4 to 10-9 M, whereas more than 98% of the Cu2+ in soil solution is complexed as

1 Faculty of Ecological Agriculture, Educons University, VojvodePutnika 87, 21208 Sremska Kamenica, Serbia, [email protected] A BIO TECH LAB, VojvodePutnika 87, 21208 Sremska Kamenica, Serbia

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organic compounds. Solubility of Cu2+ depends on pH in soils. However, when pH of soil solution reaches 5, toxicity of Cu2+ occurs (Bradl, 2005; Kvesitadze et al., 2006).

Metal pollution of soils is important environmental risk, that imposes the need for development of different methods for their removal. Investigations on plants that are able to accumulate and tolerate high metal concentrations is widely distributed. Plants has developed a range of adaptive mechanisms in order to optimize development and growth in different environmental conditions.

Phytoremediation is environmentally friendly technology based on the use of specially selected or engineered plants able to accumulate metals. Within this technology three processes are the most important: phytoextraction, rhizofiltration and phytostabilization. Phytoextraction is removal of toxic metals from soil with the use of metal-accumulating plants. Rhizofiltration is removal of toxic metals from polluted waters and phytostabilization is the use of plants to decrease the bioavailability of toxic metals in soils. The most suitable plants for phytoremediation are the ones with high bioconcentration factor (the ratio of metal concentration in plant and in soil), tolerance to contaminants, fast growth and appreciable biomass production, ease of agronomic management, low demand of auxiliary energy during cultivation, and economic interest for the harvestable biomass (De Maria and Rivelli AR, 2013).

Sunflower (Helianthus annuus L.) has been proven as good hyperacumulator of metals, with ability to extract them from the soil and translocate them from roots to shoots and leaves, and therefore appropriate to be used in phytoremediation.

Sunflower (Helianthus annuus L.) is an industrially and agriculturally important crop used as a source of vegetable oil and biomass, but also employed for chemical and energy purposes. Its importance as environmentally friendly crop in phytotechnologies to clean-up inorganic and organic contaminants and pollutants is increasingly recognized (Vangronsveld et al., 2009). Using the process of rhizofiltration it became the most promising candidate for metal removal from water (Prasad and Freitas 2003). Concernig removal of heavy metals, it has been demonstrated that sunflower can accumulate large amounts of some essential and non essential metals (Zn, Pb, Cu) (Lin et al. 2003; Madejon et al. 2003; Adesodun et al. 2010). Like other phytoaccumulators it mainly store metals in roots, with low efficiency to translocate them from roots to shoots (Madejon et al. 2003). It is noted that distribution in plant tissues depends on different environmental conditions and it is concentration dependent (Lin et al., 2003).

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Racić, G., Vukelić, I., Radić, D., Bojović, M., Mrkajić, D. Jovanović, Lj. , Panković, D.AccumulAtion of copper by sunflower plAnts (HeliAntHus Annuus l.) grown...





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2. Material and Methods

2.1. Seed collection and plant cultivation.

Seeds from confectionery sunflower GRICKO, were chosen for the experiment. Seeds were germinated for 4 days at 20-24 ºC, and transferred to 0.1-strength Hoagland nutrient solution (0.5 mM KNO3, 0.4 mM Ca(NO3)2, 0.2 mM MgSO4, 0.1 mM KH2PO4, 10 μM ferric ethylenediamine-di-(2-hydroxyphenylacetate FeEDTHA (Duchefa Biochemie, Netherlands), 10 μM H3BO3, 2 μM MnCl2, 0.2 μM CuSO4, 0.2 μM ZnSO4, and 0.1 μM Na2MoO4. Plants were grown under controlled conditions, at 25ºC, 60% humidity and a 16/8 h day/night regime. After 10 days plants were exposed to 50 ppm, 100 ppm and 200 ppm of final copper concentration. Copper was added in the form of CuCl2 x 2H2O. Seven days after metal addition plants height was measured, then plants were separated into three parts: roots, stem and leaves and their fresh biomass was measured. After fresh weight was measured, plant parts were dried in the oven on 50 ºC and mass of dry parts was meausured. Dry parts were smashed to ash.

Experiment was carried out in three replicates. Traetments were as follows: C-control, 1.50 ppm of Cu, 2.100 ppm of Cu, 3.200 ppm of Cu.

2.2. Metal analysis

The analysis of the Cu content in the collected samples was carried out by Inductively Coupled Plasma – Atomic Emission Spectrometry (ICP-AES, Thermo iCAP 6500 Duo) and method EPA 6010c (2007) (https://www.epa.gov/sites/pro duction/files/2015-07/documents/epa-6010c.pdf). All the reagents used in the study were of a purity suitable for metal traces analysis (Instra, Trace). For sample dilution, ultrapure water was used. All the laboratory glassware used in the procedure was cleaned by the mixture of nitric acid and ultrapure water (1: 1), and afterwards by ultrapure water. For determination of Cu in the analyzed samples primary standard solution of ultra-high purity (CRM) of the metal was used (Panreac, 1000 ppm). The working standard solutions were prepared from a primary standard solution diluting it with 0.1 M HNO3. The calibration curve was formed so the con-centration range of the analyzed metals in the samples was covered. The correlation coefficient of the formed linear calibration curve was higher than 0.99. The ultrapure water acidified with 0.1 M HNO3 was used as the calibra-tion blank solution.

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3. Results

3.1. Effect of coppet on plant growth parameters

Figure 1 and 2 show the results of leaf and stem fresh and dry bio-mass of plants subjected to different concentration of Cu in nutrient solu-tion. Leaf fresh biomass, decreased with increased concentration of copper in nutrient solution for 45% in treatment 1, and 55% in treatment 2 and 3. Stem fresh biomass decreased for 30%, 47% and 67% in treatments 1,2 and 3, respectively.

Leaf dry biomass, decreased with increased concentration of copper in nutrient solution for 15%, 37% and 63 %, respectively. The inhibition of stem dry biomass was higher, it decreased for 33%, 55% and 72%.

mas

s (g)

Figure 1: Fresh mass of aboveground sunfl ower plant parts.

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3. Results

3.1. Effect of coppet on plant growth parameters

Figure 1 and 2 show the results of leaf and stem fresh and dry bio-mass of plants subjected to different concentration of Cu in nutrient solu-tion. Leaf fresh biomass, decreased with increased concentration of copper in nutrient solution for 45% in treatment 1, and 55% in treatment 2 and 3. Stem fresh biomass decreased for 30%, 47% and 67% in treatments 1,2 and 3, respectively.

Leaf dry biomass, decreased with increased concentration of copper in nutrient solution for 15%, 37% and 63 %, respectively. The inhibition of stem dry biomass was higher, it decreased for 33%, 55% and 72%.

mas

s (g)

Figure 1: Fresh mass of aboveground sunflower plant parts.

mas

s (g)

Figure 2: Dry mass of aboveground sunflower plants parts

Plants height was also reduced in treatments with increased copper in nutrient solution (Table 1). Height of the plants treated with concentra-tion of 50 ppm and 100 ppm of Cu decreased in comparison to the control plants, for 5% and 15%, respectively. Significant decrease of 36 % was re-corded when 200 ppm of Cu was applied.

Table 1: Plants height in different conditions (C: control, 1: 50 ppm of Cu, 2: 100 ppm Cu, 3: 200 ppm)

Treatment Plants height (cm)

C 54.5 ± 3.53

1 51.5 ± 4.94

2 46.34 ± 7.23

3 35 ± 3.53

3.2. Copper content in leaves and stem of tomato plants

Content of copper in stem was low and ranged from 2,47 ppm to 3,92 ppm, in dependence of the treatment (Fig 3). However in leaves content was 23,13 ppm in treatmant 1, 27,64 ppm in treatman 2, while in treatment 3 it was 64,26 ppm (Fig 4).

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According to this results it can be suggested that copper was translo-cated from stem to leaves in all three treatments.

Figure 3: Copper content in stem

Figure 4: Copper content in leaves

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4. Discussion

Copper, as one of the essential micronutrients for plant growth and development, has a main role as a structural and catalytic enzyme component necessary for growth, however when absorbed in excess it can be highly toxic causing chlorophyll defficiency, decreased transpiration and growth inhibi-tion About 70% of total copper in plants is located in leaf chloroplasts. Nor-mal copper concentrations range from 2-20 ppm and are already phytotoxic above 20 ppm (Bradl, 2005; Kvesitadze et al., 2006). It has been documented that sunflower plants can accumulate relatively high concentrations of con-taminants without toxic effects, particularly under optimal nitrogen nutri-tion (Panković et al. 2000).

Based on the results presented in this paper, we can see that raise in copper conentrations in the nutrient solution has negative effect on the fresh and dry weight of sunflower plants, as well as on plant height.

The results of this study indicate that sunflower is a good copper accumulator, with higher concentration in the leaves in comparison to stem, with values close to normal in treatments where 50 and 100 ppm of Cu was added, while in the 200 ppm treatment, a higher concentration was measured in leaves which is considered to be phytotoxic. According to the results of copper content, we can conclude that a smaller amount is retained in the plant stem, while larger amount is accumulated in the leaves of the plant. Resuts on fresh and dry leaf biomass indicate that the highest inhibition of leaf water conent appeared under the lowest copper concentration applied. Of all measured plant growth parameters plants height was the least inhibited by copper.

Phytoremediation, as one of the ecological methods for the removal of metals from soil and water, is considered as cost-effective method com-pared to the physico-chemical remediation method. Also, plant biomass con-taining accumulated pollutants can be burned to produce energy (Muthu-saravanan et al.). Our results confirm that sunflower crop is interesting for phytoremediation programs. However, in order to more accurately determine the ability of copper accumulation and the application of sunflower in phy-toremediation, further analyzes should be undertaken.

ACKNOWLEDGEMENT: Presented results were supported by the III43010 and TR31080 project funded by the Ministry of Education and Science, Republic of Serbia

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REFERENCES

Adesodun, J. K., Atayese, M. O., Agbaje, T. A., Osadiaye, B. A., Mafe, O. F., Soretire, A. A. (2010). Phytoremediation potentials of sunflowers (Tithonia diversifolia and Helianthus annuus) for metals in soils contaminated with zinc and lead nitrates. Water, Air, and Soil Pollution, 207(1-4), 195-201.

DalCorso, G., Fasani, E., Manara, A., Visioli, G., Furini, A. (2019). Heavy Metal Pollutions: State of the Art and Innovation in Phytoremediation. International journal of molecular sciences, 20(14), 3412.

De Maria, S., Rivelli, A. R. (2013). Trace element accumulation and distribution in sunflower plants at the stages of flower bud and maturity. Italian Journal of Agronomy, e9-e9.

Bradl H.B., 2005, Heavy Metals in the Environment: Origin, Interaction and Remediation, Elsevier Academic Press.

Kvesitadze G., Khatisashvili G., Sadunishvili T., Ramsden J.J, 2006, Biochemical mechanisms of detoxification in higher plants. Basis of Phytoremediation. Springer, Verlag Berlin Heidelberg, 4, pp.185-194

Lin, J., Jiang, W., Liu, D. (2003). Accumulation of copper by roots, hypocotyls, cotyledons and leaves of sunflower (Helianthus annuus L.). Bioresource Technology, 86(2), 151-155.

Madejón, P., Murillo, J. M., Marañón, T., Cabrera, F., Soriano, M. A. (2003). Trace element and nutrient accumulation in sunflower plants two years after the Aznalcóllar mine spill. Science of the Total Environment, 307(1-3), 239-257.

Muthusaravanan, S., Sivarajasekar, N., Vivek, J. S., Paramasivan, T., Naushad, M., Prakashmaran, J., ...Al-Duaij, O. K. (2018). Phytoremediation of heavy metals: mechanisms, methods and enhancements. Environmental chemistry letters, 16(4), 1339-1359.

Panković, D., Plesničar, M., Arsenijević-Maksimović, I., Petrović, N., Sakač, Z., Kastori, R.: Effects of Nitrogen Nutrition on Photosynthesis in Cd-treated Sunflower Plants, Annals of Botany, Volume 86, Issue 4, October 2000, Pages 841–847, https://doi.org/10.1006/anbo.2000.1250

Prasad, M.N.V., Freitas, H.M.D., 2003. Metal hyperaccumulation in plants—Biodiversity prospecting for phytoremediation technology. Electron. J. Biotechnol., 93(1): 285-321

Vangronsveld, J., Herzig, R., Weyens, N., Boulet, J., Adriaensen, K., Ruttens, A., ... van der Lelie, D. (2009). Phytoremediation of contaminated soils and groundwater: lessons from the field. Environmental Science and Pollution Research, 16(7),

765-794.

4. Environmental Protection

213

Energy Potential of Timber-based Buildings in Terms of Sustainability

Jozef Švajlenka1, Mária Kozlovská2

Abstract: The topic of global warming is currently very much discussed in all scientific disciplines. One of the areas of global warming is the energy efficiency of buildings as such. Thermal-technical requirements for the building envelope have become and over time become increasingly important and important in the context of new legal and technical regulations for reducing the heat and energy needs of buildings. Construction of buildings and their operation are among the biggest consumers of material and energy sources and environ-mental polluters. Responding to the current state of the environment are ecological constructions. A suitable solution that represents ecological construction, operation, disposal and at the same time comfortable living is the construction of low-energy and passive houses based on wood. Wood-based constructions have many benefits that are very timely in the context of sustainability today. The aim of this paper is to describe selected aspects of wood-based constructions in the context of sustainability and thus to reduce the adverse effects of construction on the surrounding environment.

Keywords: environment, building, sustainability, wood

1. Introduction

In the Slovak Republic and in the whole Central European region, we have been following increasing interest in construction from environmentally friendly materials in recent years. These materials include wood, wood-based products and wood-based composites. Since not only the interest in the Slo-vak Republic but also the number of timber-based constructions are increas-ing, according to the Association of Wood Processors of the Slovak Republic [1], their share in the total construction of family houses is approximately ten percent, which represents a significant increase compared to the previ-ous years. In accordance with the European Directive no. 2010/31 / EU [3], which sets a common objective of reducing energy consumption in buildings by 20% by 2020, while increasing the share of renewable energy use to 20% and reducing greenhouse gas production by 20%, this area of construction is highly promising industry in terms of the energy intensity of materials production, the construction of such objects and the actual use of buildings. 1 Technical University of Košice, Faculty of Civil Engineering, Department of Construction Technology and Management, Laboratory of Construction Technology and Management, Slovakia, [email protected] Technical University of Košice, Faculty of Civil Engineering, Department of Construction Technology and Management, Slovakia

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The energy performance of buildings plays an important role not only in economic terms but also in social and environmental terms. These areas are essential aspects of sustainability as such.

2. ENERGY EFFICIENCY OF BUILDINGS

The European Union is now paying more attention to the issue of overall energy savings. Buildings have an impact on long-term energy consumption, and the residential building and tertiary sector, the main part of which is buildings, accounts for more than 40% of final energy consumption in the Community and in Slovakia. Reducing energy consumption and the use of renewable energy in the building sector are therefore important measures needed to reduce energy dependency and greenhouse gas emissions. This creates the preconditions for achieving the set binding energy efficiency targets. In the area of buildings, these objectives are followed by the requirements of the recast directive no. 2010/31 / EU on the energy performance of buildings, where new requirements for the construction of new buildings are set, to ensure that all new buildings after 2020 are nearly zero-energy buildings. For new buildings, which are owned and owned by public authorities, this is a requirement to be buildings with almost zero energy consumption after 2018 [8].

As of 1 January 2013, new legal and technical regulations have come into force, which have an impact on increasing the demand for energy for heating and thus increasing the demand for heat for heating and cooling. These requirements are not only stricter for new buildings, but also for sig-nificantly renewed buildings. The proposed measures are to meet the hygiene and energy requirements laid down in STN 73 0540-2: 2012. The properties of the built-in components influence the calculated thermal and technical properties of the building structures. The correlation of the actual properties with the proposed ones depends on the accuracy of the properties of the components, their actual quality and the quality of the installation. Design values of building materials (products) are given in STN 73 0540-3: 2012 [7].

3. ENERGY CONSUMPTION

Energy prices continue to rise, and this is supported by the Network Regulatory Office’s forecast, which has a huge impact on consumers. That’s why many consumers calculate how to reduce spending on the commodi-ties. In our climatic conditions, it is necessary to heat houses for at least four

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to five months in a year, in mountain areas often six to eight months. The amount of heat needed to heat a building also depends on how much heat escapes through the outer perimeter walls, windows, doors, roof and floor (Table 1). It should be borne in mind that most of the building materials used in the past are not able to ensure the energy-efficient operation of the building. Heat losses, which depend on the thermal-technical properties of building structures, can be quantified quite accurately. Although these are theoretical values, they should be considered before any decision to choose a building construction system, even when looking for the most economical way of heating [1].

Table 1: Percentage of heat leakage through structures [1].Part of construction Flat house Family house

Perimeter walls 25 – 40 % 20 – 30 %Windows and exterior doors 30 – 50 % 25 – 35 %

Roofs and ceilings 6 – 15 % 20 – 30 %Floors, cellars 5 – 15 % 5 – 15 %

Source: SIEA/ERDF

According to [1], the average annual heat consumption of an ordi-nary household in a residential building is approximately 12,500 kWh (45 GJ). Of this, heating accounts for about 8,611 kWh (31 GJ), expressed as a percentage of Graph 1. In a family home, the annual heat consumption for heating can be more than 75% of total energy consumption. There are there-fore more significant savings than in an apartment.

5444

7462

55

4

324

20

13

11

1731

924

0%

20%

40%

60%

80%

100%

Energy consumption inthe apartment (kWh)

Energy costs in the apartment (€)

Energy consumption ina family home (kWh)

The cost of energy in a family house (€)

Heating Gas and cooking Water heating Electric current

Figure 1: Percentage of energy consumption, energy costs in the apartment and

family house [1].

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The decisive parameter of the energy consumption of the house is its consumption for heating (fig. 1). Energy consumption for heating refers to the amount of energy in the fuel that must be brought into the building to cover the heat losses resulting from the passage through the building enve-lope structures and also by ventilation. In terms of annual energy consump-tion in kWh for heating (energy intensity), houses can be divided as shown on figure 2.

220

10040 15

35

30

2015

35

30

2010

52

0

50

100

150

200

250

300

a b c d

kWh/

m2

.yea

r

heating Hot water Electricity for ventilation Electricity for household appliances

Figure 2: Energy consumption of single-family homes for one year [4].

a – older building built in 1990, b – new building meeting the requirements of the current thermal engineering standard, c – Low-energy house, d – energy passive house.

Figure 2 shows that the most energy and finances are spent on heat-ing a house, up to 75%. Therefore, the greatest potential for savings in house operation costs is in this area. For this reason, we are paying attention to solutions aimed at reducing heat losses in the heating of buildings, where the greatest saving of money can be achieved. Therefore, the question is whether, when deciding on the construction of a new family house in what energy standard we let it realize.

The energy properties of the house are influenced by the facts that must be taken into account when buying land and pre-project preparation - the architectural design of the house.

- Choice of land and location of the house on it taking into account the local climate, terrain configuration, vegetation and prevailing winds,

- Orientation of the house on the world side with regard to the im-pact of sunlight during the year, present and future projected shading of the house by surrounding buildings,

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- Increased thermal protection of external building elements, ie. j. achievement of excellent thermal insulation parameters of the external enve-lope elements - walls, floors, roof, windows, doors,

- Prevention of geometric and structural thermal bridges,- Sufficient airtightness of the cladding - exclusion of leaks, vetrightness,- Passive use of solar energy - properly dimensioned southern glazed

areas, winter gardens, with an important measure being the accumulation of passive energy gains, variable sun protection and summer protection against house overheating,

- Additional use of solar energy through active solar installations and hybrid convective systems,

- Internal layout with respect to heating mode, thermal zones and space orientation on the world side,

- Size of heated and indirectly heated spaces (volumes) and their ad-equacy for the purpose,

- Size of glazed surfaces on individual facades,- Expected internal heat gains according to the nature of the operation,- Optimally selected heating system - with appropriate power and

good control, flexibly responsive to instantaneous temperature, low tempera-ture if possible,

- Energy efficient hot water production - active solar installations,- Controlled ventilation,- Efficient use of electricity - energy-efficient lighting and home ap-

pliances,- User behavior - conscious operation, taking into account the time

of day and year, and the correct operation of technical equipment,- Optimization of all elements [9].

4. THE COST OF HEATING WOOD BUILDINGS

The costs of heating are clearly lower than in conventional construc-tion. The first factor is the length of the heating season, which is shorter for timber buildings. At a time when masonry houses have to start heating to maintain indoor temperature (this is related to the surface temperatures of the structure), due to the high thermal standard, the wooden building does not have to start heating. This will reduce the energy demand for heating again. Other factors are higher wall surface temperatures, high heat standard, low wall accumulation, which is just compensated for by the high thermal standard and shorter heating season. In particular, users of such timber build-

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ings benefit from these factors, accounting for only one-third of the cost of heating compared to conventional construction [9].

Implementation of a house in a low-energy standard will provide us with savings of 70% of the energy used to heat it in comparison with the same house, which is implemented according to the current heat of the tech-nical standard (STN 73 0540-2).

In financial terms, this means that if we compare a house with a heated area of 100 m2, meeting the conditions of the Low-energy house and in the second case the same house, but meeting the energy consumption con-ditions for heating according to the current STN, we will pay about approx. € 700 to € 850 per year less at current electricity and gas prices.

5. WOOD-BASED CONSTRUCTION SAVES OPERATING COSTS

Wooden constructions provide excellent thermal comfort for users even at relatively thinner walls compared to brickwork. This is due to the use of high-efficiency thermal insulation in all layers of the perimeter wall and ceiling.

The thermal insulation compactness of the cladding is ensured by the correct design of the construction details and their correct design. In the case of faulty design or execution (details with a strong thermal bridge or without thermal insulation), there is a risk of condensation on the inner surface at temperatures below the dew point and increased heat losses in such a loca-tion. The perimeter structures are checked by thermovision measurements when finished, where the smallest casing irregularities are revealed. Infrared cameras are used for measurement, thereby measuring temperatures on the surfaces of the structure. The irregularity of the cladding becomes evident as a place with a changed surface temperature.

6. CONCLUSION

Modern wooden buildings are often perceived as a synonym for low energy or passive words. But this connection is not automatic, though logical. Wood buildings whose structure of the building’s shell is made of sandwich panels are modern technologies which, by their basic characteristics, are des-tined to be one of the most suitable technologies for low-energy or passive building. And in combination with other ecological aspects of timber con-struction, this predestination is even more obvious. The basic prerequisite for energy-efficient wooden buildings is a well-insulated building. Sufficiently

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insulated cladding, ceiling and floors have a positive effect on the thermal comfort of the house throughout the year. At the same time, they minimize energy consumption for heating, saving in addition to money the environ-ment. This creates the preconditions for achieving the set binding energy efficiency targets in the context of sustainability.

Acknowledgment

The article presents a partial research result of project VEGA - 1/0677/14 „Research of construction efficiency improvement through MMC technologies”.

REFERENCES

[1] K. Specht, R. Siebert, S. Thomaier, U. B. Freisinger, M. Sawicka, A. Dierich, D. Henckel, and M. Busse, “Zero Acreage Farming in the City of Berlin: An Aggregated Stakeholder Perspective on Potential Benefits and Challenges.” Sustainability, 7, 4511-4523, 2015.

[2] P. Smith, “Delivering food security without increasing pressure on land.” Global Food Security, 2, 18-23, 2013.

[3] F. M. Langford, and A. W. Stott, “Culled early or culled late: Economic decisions and risks to welfare in dairy cows.” Animal Welfare, 21, 41-55, 2012.

[4] I. Veissier, A. Butterworth, B. Bock, and E. Roe, “European approaches to ensure good animal welfare.” Applied Animal Behaviour Science, 113, 279-297, 2008.

[5] P. Johansson, T. Svensson, and A. Ekstrand-Tobin, “Validation of critical moisture conditions for mould growth on building materials.” Building and Environment, 62, 201-209, 2013.

[6] T. Garnett, M. C. Appleby, A. Balmford, I. J. Bateman, T. G. Benton, P. Bloomer, B. Burlingame, M. Dawkinsm, L. Dolan, D. Fraser, M. Herrero, I. Hoffmann, P. Smith, P. K. Thornton, C. Toulmin, S. J. Vermeulen, and H. C. J. Godfray, “Sustainable intensification in agriculture: premises and policies.” SCIENCE, 341, 33-34, 2013.

[7] N. Kitson, “Farm Buildings Design Guide.” 2006.[8] H. García, M. Zubizarreta, J. Cuadrado, and J. L. Osa, “Sustainability

improvement in the design of lightweight roofs: A new prototype of hybrid steel and wood purlins.” Sustainability, 11(1), 39, 2018.

[9] S. Burwood, and P. Jess, “Modern Methods of Construction Evolution or Revolution,” A BURA Steering and Development forum report, 2005.

[10] Building Dictionary. [online], [cit. 2019-01-10], <http://www.atrium-sk.sk/sk/technika/stavebny-slovnik>.

[11] Wood constructions. [online], [cit. 2019-01-10], <http://drevotomka.sk/drevostavby/>.

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[12] P. Hájek, et al. “Konstrukce pozemních staveb – komplexní přehled,” Skriptum, Praha, 2011.

[13] A. Adamuščin, “Economic benefits of green buildings and certificates for sustainable construction,” Nehnuteľnosti a Bývanie, 2014.

[14] D. Westphalen, and S. Koszalinski, “Energy Consumption Characteristics of Commercial Building HVAC Systems,” U.S. Department of Energy, Cambridge, MA 02140-2390, 2001.

[15] W. A. M. Thanoon, et al. “The essential characteristics of industrialised building system,” International Conference on Industrialised Building Systems, Malaysia, 2003.

[16] A. Puškár, et al. Obvodové plášte budov, Vydavateľstvo Jaga group, Bratislava, 2002.

[17] Poľnohospodárske stavby – Wolf system. [online], [cit. 2019-01-21], <https://www.wolfsystem.sk/referencie/polnohospodarske-stavby/>.

[18] Zemedelske stavby – Haas-Fertigbau. [online], [cit. 2019-01-21], <https://www.haas-fertigbau.cz/ucelove-stavby/zemedelske-stavby/kravin-velky-bor/>.

[19] Zemedelske stavby – Haas-Fertigbau. [online], [cit. 2019-01-21], <https://www.haas-fertigbau.cz/ucelove-stavby/zemedelske-stavby/kravin-necin/>.

[20] J. Koppelhuber, B. Bauer, J. Wall, and D. Heck, “Industrialized timber building systems for an increased market share - a holistic approach targeting construction management and building economics.” Procedia Engineering, 171, 333-340, 2017.

[21] M. Sandanayake, W. Lokuge, G. Zhang, S. Setunge, Q. Thushar, „Greenhouse gas emissions during timber and concrete building construction-A scenario based comparative case study.“ Sustainable Cities and Society, 38, 91-97, 2018.

221

Systematic Noise Monitoring in the Territory of Autonomous Province of Vojvodina

JelenaTomić1*, Zorana Georgijev2,MarinaPljakić1,BrankoRadičević1

Abstract: Environmental noise represents unwanted and unpleasant outdoor sound caused by transport, industrial and recreational activities. In a typical urban environment, road traffic represents the dominant source of noise pollution which affects human health and quality of life. Serbian law on environmental noise protection and following by-laws define principles of assessment of noise impact, noise mapping and drawing of noise action plans. In accordance with Serbian legislation related to noise protection, the Autonomous Province of Vojvodina (AP Vojvodina) is responsible for assessment, monitoring and control of environ-mental noise, as well as for provision of financial means for noise monitoring within its territory. This paper presents an analysis of the systematic noise measurements conducted in several urban agglomerations of AP Vojvodina close to major traffic roads.

Key words: environmental noise, noise measurement, noise pollution, traffic noise

1. Introduction

The sound is part of our everyday lives, but when it disrupts or di-minishes the quality of human life by interfering with sleep, conversation and work-related activities, it becomes unwanted noise. Environmental noise is defined as unwanted, unpleasant and disturbing outdoor sound created by human activity. Noise pollution can be caused by traffic, construction, indus-trial and recreational activities.

The results of strategic noise mapping in the European Union (EU) clearly indicate that road traffic represents dominant source of noise pollu-tion in the urban environments. Close to 68 million EU citizens are exposed to daytime road traffic noise levels above the excess exposure threshold, fixed by the EU at 55 dBA [1]. In the past decades many studies [2-4] have shown that a long term noise exposure causes stress, sleep disturbance, cardiovas-cular problems, and therefore significantly affects human psycho-physical health and productivity of the population.

1 Faculty of Mechanical and Civil Engineering, University of Kragujevac, email: [email protected] Provincial Secretariat for Urban Planning and Environmental Protection, AP Vojvodina

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Since 2002, European Union has been implementing the strategy for combating noise according to the Environmental Noise Directive (2002/49/EC) [5]. Under this directive, Member States are obliged to produce strategic noise maps every five years. Furthermore, the competent authorities, based on results of noise mapping, had to draw up action plans designed to man-age noise issues and effects, including noise reduction if necessary. As Serbia is in accession process to the European Union, Serbian legislation related to noise protection is in accordance to Environmental Noise Directive. Law on environment noise protection [6], which was passed by Serbian parliament in 2009, and following by-laws determinate the principles of assessment of noise impact, noise mapping and drawing of noise action plans.

Implementation of Noise Directive 2002/49/EC and Regulation on Noise Indicators, Limit Values, Noise Indicators Assessment Methods, An-noyance and Harmful Effects of Environmental Noise aims to prevent or reduce noise pollution and harmful impact of noise on the population. As significant part of noise control strategy, monitoring of noise levels in the urban environment is conducted for the purpose of:

• identifying urban areas which are vulnerable to environmental noise pollution,

• estimating of percentage of population affected by noise,• providing data to support development of noise action plans.

The current practice for noise monitoring in the Autonomous Prov-ince of Vojvodina considers conducting of 15-min or twenty-four hour con-tinuous noise level measurements together with collecting information about traffic flow and measurement site.

This paper presents an analysis of the systematic noise measurements conducted in 15 municipalities of the Autonomous Province of Vojvodina close to major traffic roads. Beside Serbian legislation related to environmen-tal noise monitoring and definition of noise indicators that quantify environ-mental noise levels, measurement procedure and an analysis of reports on noise monitoring are given in the scope of the paper.

2. Legislation

The following regulations govern the measurement of environmental noise levels within the territory of Republic of Serbia:

1. Law on Environmental Noise Protection (“Official Gazette of the RS” No 36/09, 88/10)

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Jelena Tomić, Zorana Georgijev, Marina Pljakić, Branko RadičevićSyStematic noiSe monitoring in the territory of autonomouS Province of vojvodina





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2. Regulation on Noise Indicators, Limit Values, Noise Indicators As-sessment Methods, Annoyance and Harmful Effects of Environ-mental Noise (“Official Gazette of the RS” No 75/10)

3. Rulebook on the Methods of Noise Measurement, Content and Scope of the Noise Measurement Reports (“Official Gazette of the RS” No 72/10)

4. Rulebook on the Conditions to Be Fulfilled by a Professional Organ-isation for Noise Measurement, and Documentation to Be Submitted with the Application for Acquiring the Authorisation for Noise Mea-surement (“Official Gazette of the RS” No 72/10)

5. SRPS ISO 1996-1:2010 Acoustics - Description, Measurement and Assessment of Environmental Noise - Part 1: Basic Quantities and Assessment Procedures

6. SRPS ISO 1996-2:2010 Acoustics - Description, Measurement And Assessment Of Environmental Noise - Part 2: Determination of En-vironmental Noise Levels

7. Rulebook on the Methodology for Determining Acoustic Zones (“Official Gazette of the RS” No 72/10)

In accordance with Serbian legislation, the Autonomous Province of Vojvodina is responsible for assessment, monitoring and control of envi-ronmental noise pollution, as well as for provision of financial means for noise monitoring within its territory. Measurement of environmental noise may be carried out by an authorized professional organization if it meets the requirements prescribed by the Law on Environmental Noise Protection and accompanying regulations.

For the purpose of effective environmental noise protection, regula-tion [7] defines limit values of noise pollution levels for different acoustic zones. Acoustic zone of some territory is determined according to the land use. Regulation [7] defines noise limit values for daytime period (between 6:00 h and 18:00 h), evening period (between 18:00 h and 22:00 h) and night period (between 22:00 h and 6:00 h). Limit values for noise indicators accord-ing to acoustic zones are given in Table 1. Based on acoustic zone and noise measurement result, the condition of noise level should be evaluated.

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Table 1: Limit values for environmental noise indicators

Zone Land use

Noise level [dBA]

Day and evening Night

1

For rest and recreation, hos-pitals and recovery facilities, cultural-historical locations, large parks

50 40

2 Touristic areas, camps and school zones 50 45

3 Residential areas 55 45

4Business-residential areas, commercial-residential areas and children’s playgrounds

60 50

5

City centre, trade, commer-cial, administrative zones with dwellings, areas along the motorways, main roads and city roads

65 55

6Industrial, storage and ser-vicing areas and transport terminals without dwellings

At this area borders, noise must not exceed the limit value of the neighbouring area

3. Noise Indicators

Noise indicator is a physical quantity that describes environmental noise pollution. Since human ear has variable response to different frequen-cies, in order to mimic the human hearing, A-weighting corrections are ap-plied to frequency spectrum of environmental noise. Therefore, A-weighted decibel (symbol dBA) is a unit of measure of environmental noise level. Noise indicators are used for the purpose of noise assessment, prediction of noise levels, development of strategic noise maps and planning of noise mitigation strategies. For the purpose of strategic noise mapping, Serbian legislation requires the use of following noise indicators:

• the day-evening-night noise level which describes annoyance caused by noise over a whole day;

• the daily noise level which describes the annoyance caused by noise within the daytime period (between 6:00 h and 18:00 h);

• the evening noise level which describes the annoyance caused by

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noise during the evening period (between 18:00 h and 22:00 h);• the night-time noise level which describes the annoyance caused by

noise over a night period (between 22:00 h and 6:00 h).On the other hand, for the purpose of noise monitoring, following

noise indicators are required by Serbian legislation:• rating noise level - an equivalent noise level (i.e., constant sound lev-

el which over a given time period has the same total energy as observed fluctuating noise) adjusted for tonal or impulsive character of noise;

• sound exposure level - constant sound level with the same sound energy in one second as the original noise event.

4. Measurements

According to SRPS ISO 1996-2:2010 standard, equivalent A-weight-ed noise level should be measured over a time period larger than 10 minutes. Microphone should be positioned at least 1.5 m above the ground level. The measurements should be performed in dry weather conditions, without snow coverage, and with wind speed lower than 5m/s. During each measurement, numbers of light and heavy3 motor vehicles should be collected. Measure-ment uncertainty should be estimated based on meteorological conditions, distance between the microphone and the noise source, the number of motor vehicles, residual noise level and the instrument used for noise level monitor-ing.

According to SRPS ISO 1996-2:2010, noise measurement report should contain following information:

• time, date and place of measurement• list of instruments and information about their calibration• measured noise levels and, optionally, octave noise spectrum• measurement uncertainty• duration of measurement interval• microphone position and description of measurement location • information about traffic flow (numbers of light and heavy motor

vehicles during the measurement interval)• meteorological conditions, including wind speed, wind direction,

cloudiness, temperature, atmospheric pressure, humidity

3 vehicle with mass larger than 3.5 t

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5. Reports On Noise Monitoring

Within the territory of the Autonomous Province of Vojvodina, envi-ronmental noise level monitoring is performed in 15 municipalities. Although carried out in accordance with the law and accompanying regulations, the methodology of noise monitoring varies in different municipalities. Noise monitoring reports differ in the number of measurement locations, duration of measurement interval, frequency of noise monitoring, noise indicators used for noise evaluation and provided traffic flow information.

Monitoring of noise is conducted either during the twenty-four hour time interval, or within the time frame of 15 minutes. When measuring 15-min noise levels, two measurements are conducted during the daytime pe-riod (6:00-18:00 h), one during the evening (18:00-22:00 h) and two dur-ing the night-time (22:00-6:00 h). Reports on 15-min noise measurements provide information on equivalent noise level (Leq), percentile noise levels4 (LN, N∈{1, 5, 10, 50, 90, 95, 99}), sound exposure level (LAE) and maximum and minimum levels of environmental noise (LAFmax and LAFmin). Twenty-four hour noise monitoring reports contains data about daily (Ld), evening (Le), night-time (Ln) and day-evening-night (Lden) noise levels, percentile noise lev-els (LN), as well as percentage of population affected by road traffic noise and percentage of population highly vulnerable to noise. For each of 15 municipalities, the number of measurement locations, measurement interval duration and the list of environmental noise indicators provided by noise monitoring reports are given in Table 2.

Table 2: Noise indicators provided by noise monitoring reports

Municipality No. of measure-ment locations

Measurement interval Noise indicators

Ada 3 15 min Leq, LAE, LAFmax, LAFmin, LN

Bačka Palanka 23 24 h Ld, Le, Ln, Lden, LN

Bački Petrovac 11 24 h Ld, Le, Ln, Lden, LN

Bečej 1 24 h Ld, Le, Ln, Lden, LN

Inđija 4 15 min Leq, LAFmax, LAFmin

Kikinda 9 24 h Ld, Ln

4 noise level exceeded for N percent of the time

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Novi Bečej 1 24 h Ld, Le, Ln, Lden, LAFmax, LAFmin

Novo Miloševo 1 24 h Ld, Le, Ln, Lden, LAFmax, LAFmin

Novi Sad 8 24 h Ld, Le, Ln, Lden, LN

Pančevo 41 24 h Ld, Le, Ln, Lden, LN

Senta 3 15 min Leq

Sombor 3 24 h Ld, Le, Ln, Lden, LN

Sremska Mitrovica 5 15 min Leq, LAFmax, LAFmin, LN

Subotica 9 24 h Ld, Le, Ln, Lden, LN

Vršac 30 24 h Ld, Le, Ln, Lden, LAE, LAF-

max, LAFmin, LN

Zrenjanin 6 24 h Ld, Le, Ln, Lden

For each measurement point, in addition to noise level data, the re-

ports include information on meteorological conditions, description of mea-surement location, data about instruments used for noise monitoring and limit values of noise indicators. Number of motor vehicles and data on traf-fic flow composition, if collected during the measurement time interval, have also been presented in the monitoring report. Table 3 shows which data are included in reports on noise monitoring for each of 15 municipalities that perform systematic monitoring of environmental noise within the territory of Autonomous Province of Vojvodina.

Table 3: Data provided by noise monitoring reports (8)

Municipality

Report data

Ada

Bačk

a Pa

lank

aBa

čki P

etro

vac

Beče

j

Inđi

ja

Kik

inda

Nov

i Beč

ej

Nov

o M

iloše

vo

Nov

i Sad

Panč

evo

Sent

a

Som

bor

Srem

ska

Mitr

ovic

a

Subo

tica

Vrš

acZ

renj

anin

Instruments and their calibration

• • • • • • • • • • • • • •

Information on measure-ment location

• • • • • • • • • • • • • • • •

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Microphone position • • • • • • • • • • •

Date and time of mea-surement

• • • • • • • • • • • • • •

Meteorologi-cal conditions • • • • • • • • • • • • • •

Measurement time interval • • • • • • • • • • • • • • • •

Measured, and if neces-sary cor-rected, noise levels

• • • • • • • • • • • • • • • •

Noise spec-trum • • • • • • •

Residual noise •

Measurement uncertainty • • • • • •

Information on traffic flow

• • • • • • • • • • •

Percentage of the popula-tion affected by noise

• • • • • • • • • •

Limit values for noise indicators

• • • • • • • • • • • • • •

Within the scope of the reports, indicators obtained by environmen-

tal noise monitoring are compared with limit values of outdoor noise. Fur-thermore, percentage of population affected by noise is estimated based on day-evening-night noise level by applying a calculation method specified by regulative [7].

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6. Conclusion

This paper presents an analysis of systematic measurements of noise in the territory of the Autonomous Province of Vojvodina. Beside the methodology of environmental noise monitoring, the analysis considers the content of monitoring reports. Although noise measurements are applied in accordance with the law and accompanying regulations, the noise monitor-ing methodology varies in different municipalities. Noise measurements are performed either during the twenty-four hour time interval, or over a 15 min-utes period. Therefore, noise monitoring reports differ in the noise indicators used for evaluation of noise pollution. Furthermore, a majority of reports do not provide all information required by SRPS ISO 1996-1:2010 standard. Reports for only 6 out of 15 municipalities contain measurement uncertainty, while residual noise level is given only in the report on noise monitoring within the territory of Ada. Reports clearly show that, in many cases, noise levels are above the permitted values, which indicates a need for development of action plans which aim to manage environmental noise and its effects.

ACKNOWLEDGEMENT

The authors wish to express their gratitude to Serbian Ministry of Education and Science for support through project TR37020.

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REFERENCES

[1] De Vos, P.; Licitra, G. “Noise maps in the European Union:An overview”. In Licitra, G. (Ed.), Noise mapping in EU: Models and Procedures, pp. 285–310, USA: CRC Press, 2013.

[2] Ohrstrom, E.; Rylander, R. “Sleep disturbance by road traffic noise - A labora-tory study on number of noise events”. Journal of Sound and Vibration, vol. 143, no. 1, pp. 93–101, 1990.

[3] Fyhri, A.; Klboe, R. “Road traffic noise, sensitivity, annoyance and self-reported health - A structural equation model exercise”. Environment International, vol. 35, no. 1, pp. 91-97, 2009.

[4] Pirreera, S.; Valck, E. D.; Cluydts, R. “Nocturnal road traffic noise: A review on its assessment and consequences on sleep and health”. Environment Interna-tional, vol. 36, no. 5, pp. 492–498, 2010.

[5] “Directive 2002/49/EC of the European Parliament and the Council of June 2002”, Official Journal of the European Communities, 2002.

[6] “Law on environmental noise protection of Republic of Serbia”, Official Ga-zette of Republic of Serbia, No. 36/2009

[7] “Regulation on Noise Indicators, Limit Values, Noise Indicators Assessment Methods, Annoyance and Harmful Effects of Environmental Noise”, Official Gazette of the RS, No 75/10

[8] Provincial Secretariat for Urban Planning and Environmental Protection, AP Vojvodina, http://www.vojvodina.gov.rs/en/provincial-secretariat-urban-plan-ning-and-environmental-protection

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Bioremediation of groundwater contaminated by petroleum hydrocarbons

JelenaAvdalović1,MilaIlić1,SrđanMiletić1,AleksandraŽerađanin1, Nikoleta Lugonja1,JelenaMilić1MiroslavM.Vrvić2

Abstract: Groundwater is an very important natural resource. Clean groundwater is essential for the pres-ervation of the entire ecosystem. Bioremediation is a process which is based on the natural capacity of microorganisms to remove or transform hazardous substances from the environment into less toxic or harmless products. This paper presents the bioremediation of groundwater contaminated by petroleum hydrocarbons. The contaminated area was located at the thermal energy facility, near the city of Belgrade, on the terrace sediments of the Sava River. In the process, which lasted for 18 months, groundwater was treated by in situ bioremediation. Bioremediation treatment was conducted by a combination of biostimulation and bioaugmen-tation. Biostimulation was conducted by injection of nutrients. Bioaugmentation was achieved by injection of a zymogenous consortium of microorganisms, previously isolated from the contaminated groundwater, which were capable of using the contaminating substances as nutrients. The treatment was carried out in a closed bipolar system,with groundwater recirculation, by combination of extraction and injection wells. During the bioremediation, the content of petroleum hydrocarbon in groundwater decreased by 93% of the initial level. This indicates that the process of bioremediation was performed successfully.

Keywords: bioremediation, groundwater, petroleum hydrocarbons

1. Introduction

Groundwater represents about 98% of the Earth’s available fresh water [Alvarez and Illman, 2000; Marić et al. 2015]. However, groundwater contaminated by petroleum hydrocarbons has become a one of the major problem worldwide, and is a consequence of industrial growth. During the exploitation, processing, accidental spills, transport, distribution, storage and use of crude oil and its products, these may be released into the hydrosphere in an uncontrolled manner. Due to the extent of impact and the adverse effect of oil derivatives on both the inanimate and animate environment, the development and using of sustainable technologies for the removal of petroleum substances and their derivatives from aquatic environments has therefore become extremely important today [Bandura et al. 2017].

1 Institute of Chemistry, Technology and Metallurgy, University of Belgrade, 11000 Belgrade, Njegoševa 12, Serbia2 BREM GROUP Ltd., 11090 Belgrade- Oslobođenja 39b, Serbia

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Bioremediation is a method of reducing petroleum pollution from environment which has been widely used in the last years. Bioremediation is a process which is based on the natural capacity of microorganisms to decom-pose toxic waste from the environment into harmless products. The use of microorganisms as biological agents in bioremediation is continually increas-ing because of their biodiversity and their great catabolic capacity. Bioreme-diation process enables the optimization of biodegradation of pollutants, which is achieved by aeration, biostimulation (adding nutritional substances) and bioaugmentation (adding microorganisms). Bioaugmentation implies adding microorganisms which are previously isolated form contamination sites and mulitiplied in bioreactors and returned to the site of contamina-tion. The use of microbial populations characteristic for specific area pre-vents introduction of external pathogenes during the remediation process, which decreases the risk of disturbing the environmental equilibrium of the remediation site and the surrounding area [Avdalović et al. 2016; Beškoski et al. 2011; Gojgić-Cvijović et al. 2012]. The above-mentioned technology is successfully applied for treatment of water ecosystems contaminated with petroleum hydrocarbons. In additional, bioremediation procedures are eco-nomically advantageous, are categorized as “environmentally friendly” tech-nologies, because do not form waste [Avdalović et al. 2016].

This paper presents the bioremediation of groundwater contaminat-ed by petroleum hydrocarbons, in the process which lasted for 18 months.

2. Materials and methods

2.1. Preparation of the consortium of microorganisms for biodegradation process

A consortium of indigenous microorganisms was obtained from the groundwater contaminated by petroleum hydrocarbons in 200 ml volumes of mineral medium (10 vol. %; Loser et al., 1998), in diesel fuel (2 g dm−3) was used as the only energy and carbon source, and held in Erlenmeyer flasks (1 dm3). Suspensions of the microbial consortium were then used to inoculate four Erlenmeyer flasks (5 dm3), each containing 2000 cm3 of mineral medium containing 23 g of nutrient broth (Torlak, Belgrade, Serbia); 100 cm3 of soil extract; and 20 g of diesel fuel. Commercial non-toxic and biodegradable surfactants, BioSolve CLEAR (Westford, MA, USA), were used to solubilize diesel fuel. The original solution of BioSolve CLEAR was used at a concen-

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tration of 1 ml dm−3. The growth conditions were as follows: temperature, 28 °C; 120 r min–1 of a rotatory shaker; pH 7.0 (adjusted with 1 M HCl or NaOH); duration of growth, 96 h. The microorganisms from all four flasks were then used to inoculate a bioreactor (total volume 1000 dm3) with a working volume of 800 dm3, producing the microbial consortium. The me-dium used was as follows: 12 g dm−3 meat peptone (Torlak, Belgrade, Serbia); 0.2 g dm−3 (NH4)2HPO4; 50 g dm−3 of autoclave-sterilized soil extract; Bio-Solve CLEAR original solution (1 ml dm−3); and 10 g dm−3 of diesel fuel. The growth conditions were as follows: non-sterile, 25 °C, aeration and agitation 0.70 volume of air/volume of medium min−1, pH 7.0 (adjusted with 10 M HCl or NaOH), duration 72 h and sunflower oil (1 ml dm−3) as the antifoam-ing agent [Marić et al. 2015; Avdalović et al. 2016].

Reinoculation with the prepared microbial consortium was performed at 30-day intervals.

2.2. Number of microorganisms

The number of microorganisms in the groundwater was determined by plating appropriate serial dilutions on agar plates incubated at 28°C. The media used were nutrient agar (15 g/L peptone, 3 g/L meat extract, 5 g/L NaCl, 0.3 g/L K2HPO4, 18 g/L agar; Torlak, Serbia) for total chemoorgano-heterotrophs (TC) and mineral base medium (1 g/L NH4NO3, 0.25 g/L K2H-PO4, 50mL soil extract, 16 g/L agar) containing 2 g/L standard D2 diesel fuel for hydrocarbon degraders (HD) [Marić et al. 2015; Avdalović et al. 2016].

2.3. The bioremediation treatment

The contaminated area was located at the thermal energy facility, near the city of Belgrade, on the terrace sediments of the Sava River. In the pro-cess, which lasted for 18 months, groundwater and sediment in contact with groundwater were treated by in situ bioremediation.This remediation treat-ment was performed by a combination of biostimulation and bioaugmenta-tion within the closed bipolar system (one extraction and two injection wells), with adsorption in the external unit. Adsorption/filtration column, used in external unit, filled with natural inorganic hydrophobic adsorbents. During water filtration, a biofilm of zymogenous HD microorganisms was formed on the material of the adsorption column.

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The cycle of bioremediation consisted of three phases:• Injection of nutrients and chemical oxidant—biostimulation• Injection of the zymogenous consortium of microorganisms—bio-

augmentation• Establishment of recirculation in a closed bipolar system [Marić et

al. 2015; Beškoski et al. 2017].

2.4. Chemical analyses

Total petroleum hydrocarbons (TPH) from sediments and ground-water were extracted as per methods ISO 16703 (2004) and ISO 9377-2 (2000) and determined by gas chromatography The content of total pe-troleum hydrocarbon (TPH) in the composite samples of sediment was ex-tracted as per method ISO 16703 (ISO 16703, 2004) and determined by gas chromatography. The gas chromatographic analyses were conducted on an Agilent 7890A gas chromatograph with a flame ionization detector (FID), equipped with a 30 m × 0.32 mm i.d. × 0.25 μm film chromatographic col-umn HP-5. The chromatographic conditions were as follows: injection at 60 C oven temperature (injector temperature 250 °C, detector temperature 300 °C), 1 min hold, then programmed at 4 °C min−1 to 300 °C. The carrier gas was hydrogen at a velocity of 30 cm s−1. The software used for data process-ing was ChemStation, Agilent Technologies [Avdalović et al. 2016].

3. Results and discussion

Stimulated in situ bioremediation was started with addition of nutri-ents from the reservoir through the injection well into the aquifer. Together with nutrients, in order to stimulate chemical oxidation and increase oxygen-ation of the aquifer, H2O2 was added. Finally, zymogenous HD microbial consortia was added via the same injection well. The zymogenous consor-tium of hydrocarbon-degrading microorganisms was prepared as previously described, and was also added to the groundwater so that it initially con-tained 7x109 CFU dm-3 hydrogen-degrading microorganisms. Reinoculation with the prepared microbial consortium was performed at 30-day intervals. Recirculation was achieved by extraction of contaminated groundwater using the extraction well followed by filtration through the filtration/adsorption column filled with natural inorganic hydrophobic adsorbents and finally in-jection to the subsurface through the injection well. During water filtration, a

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biofilm of zymogenous HD microorganisms was formed on the material of the adsorption column [Marić et al. 2015; Beškoski et al. 2017].

The gas chromatogram of TPH extracted from groundwater and sediment are shown in Figures 1-4.

Figure 1. Gas chromatogram of TPH extracted from groundwater at the beginning of in situ bioremediation

Figure 2. Gas chromatogram of TPH extracted from groundwater at the end of in situ bioremediation

During the bioremediation, the content of petroleum hydrocarbon in groundwater decreased by 93% of the initial level.

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Numbers located next to “C”, which mark the signals, indicate the number of C-atoms of n-paraffin. Signals marked with Pr and Fit come from isoprenoid hydrocarbons pristane (C19) and phytane (C20), which are bio-markers of petroleum and its derivates, all except benzene, and in environ-mental and forensic chemistry they represent an evidence that pollutants are petroleum-originated [Avdalović et al. 2016].

Figure 3. Gas chromatogram of TPH extracted from sediment at the beginning of in situ bioremediation

Figure 4. Gas chromatogram of TPH extracted from sediment at the end of in situ bioremediation

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During the bioremediation, the content of petroleum hydrocarbon in the sediment decreased by 86% of the initial level.

The described groundwater treatment is more cost-effective in relation to other remediation techniques such as “pump-and-treat”. Also, there is no waste production that needs to be further disposed. Additionally, the procedure described may also treat surfaces that are inaccessible to other techniques. Contaminating substances that are adsorbed or trapped in the pores of sediment particles can be effectively removed, as shown in this paper. The final level of total petroleum hydrocarbons achieved after bioremediation treatment of groundwater was lower than the level required by Serbian regulation and indicates that the process of bioremediation was performed successfully.

4. Conclusion

This study describes in situ bioremediation of groundwater and sediment contaminated by petroleum hydrocarbons. The efficiency of bioremediation was evaluated on the basis of changes in the content of TPH. During bioremediation, the TPH content in groundwater was reduced dramatically (93%). In the same tame, the TPH content in the sediment decreased by 86% of the initial level. These results provide evidence of the high efficiency of the applied method for removing petroleum pollutants from groundwater and sediment in contact with groundwater by an in situ bioremediation treatment in a closed bipolar system.

Acknowledgements

This research was partially financed by the Ministry of Education, Science and Technological

Development of the Republic of Serbia as a part of the Projects III 43004.

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REFERENCES

• Alvarez, J.-Illman, A. (2006), “Bioremediation and natural attenuation: process fundamentals and mathematical models”, John Willey & Sons, New York.

• Avdalović, J.-Miletić,S.-Ilić M.,-Milić J.,-Šolević Knudsen T.,-Djurić A.,-Nešković, D.-Vrvić M. (2016), “Monitoring of underground water-necessary step in determining the method for site remediation”, Zaštita materijala, 57 (3), pp: 389-397, March.

• Avdalović, J.-Đurić, A.-Miletić, S.-Ilić, M.-Milić, J.-Vrvić M. (2016), “Treatment of a mud pit by bioremediation”; Waste Management & Research 34(8), pp: 734-739, September.

• Bandura, L.-Woszuk, A.-Kołodynska D.-Franus W. (2017), “Application of Mineral Sorbents for Removal of Petroleum Substances: A Review”, Minerals 7(37), pp: 1-25, March.

• Beškoski, V.-Gojgić-Cvijović, G.,-Milić, J.,-Ilić, M.-Miletić, S.-Šolevic, T.-Vrvić, M. (2011), “Ex situ bioremmediation of a soil contamminated by mazut (heavy residual fuel oil)-A field experiment”, Chemosphere 83, pp: 34–40, February.

• Beškoski, V.-Miletić, S.,-Ilić, M.-Gojgić-Cvijović, G.-Papić, P.-Marić, N.- Šolević-Knudsen, T.- Jovančićević, B.-Nakano, T.-Vrvić, M. (2017), “Biodegradation of isoprenoids, steranes, terpanes and phenanthrenes during in situ bioremediation of petroleum contaminated groundwater”, CLEAN – Soil, Air, Water 45(2), pp:1-7, February.

• Gojgić-Cvijović, G.-Milić, J.-Šolević, T.-Beškoski V.-Ilić M.-Đokić L.-Narančić, T.-Vrvić, M. (2012), “Biodegradation of petroleum sludge and petroleum polluted soil by a bacterial consortium: a laboratory study”, Biodegradation 23, pp:1-14, May.

• Marić, N.-Ilić, M.-Miletić S., Gojgić-Cvijović. G.-Beškoski V.-Vrvić M.-Papić, P. (2015), “Enhanced in situ bioremediation of groundwater contaminated by petroleum hydrocarbons at the location of the Nitex textiles, Serbia”, Environmental Earth Sciences 74(6), pp: 5211-5219, May.

239

Bioleaching of metals from electronic waste

JelenaAvdalović1,KristinaJoksimović2, BiljanaDojčinović

1,SnežanaZildžović3,VladanMilošević3,GordanaGojgić-Cvijović1, Vladimir Beškoski4

Abstract: Recycling of electronic waste is an important subject not only from the point of waste treatment but also from the recovery aspect of valuable materials. The object of this study was to investigate the possibility of microbial leaching of metals (Cu, Zn, Ni and Co) from electronic waste by iron-oxidizing Acidithiobacillus sp. B2. Bacterial culture Acidi-thiobacillus sp. B2 was isolated from copper sulphide mine wastewater (Lake Robule) in Bor, Serbia. The leaching was studied using a shake-flask technique. Experimental conditions were: initial pH of 2.5, 100 rpm, at 28 0C for a leaching period of 14 d. Leaching solution (20 mL) contained (g/L): (NH4)2SO4 (3), K2HPO4 (0.5), MgSO4 x 7H2O (0.5), KCl (0.1), Ca(NO3)2 (0.01), and H2SO4 at a pH of 2.5 in 100 mL Erlenmeyer flasks with a pulp density of 10% (m/V) (2 g) leaching substrate (electronic waste of PC motherboard). Fresh biomass was added so that the initial number of Acidithiobacillus sp. B2 in the flasks was 105 CFU/mL. The results obtained show 3- to 2500-fold (for Ni and Co approx. 3, Zn approx. 15, and Cu approx. 2500) higher metal leaching efficiency in the suspension with Acidithiobacillus sp. B2 than in the control suspension. The presented results show the great potential of bacterial culture Acidithiobacillus sp. B2 to recover metals from electronic waste.

Key words: Bioleaching, electronic waste, Acidithiobacillus sp. B2

1. Introduction

Electronic waste is the fastest growing waste category. This empha-sizes the need for effective electronic waste recycling strategies. Recycling of electronic waste is crucial not only from the viewpoint of waste treatment but also from aspect of the recovery of valuable metals. Recycling of elec-tronic waste is still limited due to the heterogeneity of the materials of this equipment. Electronic waste can be defined as a mixture of different metals (copper, aluminum, nickel, iron, precious metals) and steel, attached to, cov-

1 Institute of Chemistry, Technology and Metallurgy, University of Belgrade, 11000 Bel-grade, Njegoševa 12, Serbia2 Innovation Centre Faculty of Chemistry, University of Belgrade, 11000 Belgrade, Stu-dentski trg 12-16, Serbia3 Institute for Technology of Nuclear and Other Mineral Raw Materials, Franše Deperea 86, 11000 Belgrade, Serbia4 Faculty of Chemistry, University of Belgrade, 11000 Belgrade, Studentski trg 12-16, Serbia

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ered with, or mixed with different types of plastics and ceramics [Ilyas et al. 2010; Jingwei et al. 2009].

Mechanical and pyrometallurgical recycling of electronic waste has been investigated by many researchers. Processes mentioned are requiring high consumption of energy, cannot efficiently recover metals and contain halogenated flame retardants in the smelter feed that can lead to the forma-tion of dioxins and furans [Li et al. 2007; Veit et al. 2007].

Use of microorganisms for the recovery of metals from electronic wastes could be an economical alternate to these processes. Although, this pro-cess has been successfully applied for the leaching of metals from ores, there is a shortage of information which are related to its application for the extraction from electronic waste material [Ilyas et al. 2010; Jingwei et al. 2009].

The aim of our study was to investigate the potential of using the Acidi-thiobacillus sp. B2, to solubilize metals from electronic waste (PC motherboard).

2. Materials and methods

2.1. Chemical analysis of electronic waste and pyrite

The electronic waste (after separating of the plastic parts) and pyrite were pulverized and sieved through a 63 µm stainless steel sieve in prepa-ration for chemical and leaching studies. For determination of Cu, Zn, Ni and Co, the sample of electronic waste was decomposed with a mixture of HClO4 and HF. The metals were determined by atomic emission flame spec-trophotometry (PERKIN ELMER Aanalyst 300).

The contents of elements in solution (Cu, Zn, Ni and Co) were de-termined by inductively coupled plasma optical emission spectrometry (ICP-OES). ICP-OES measurement was performed using Thermo Scientific iCAP 6500 Duo ICP (Thermo Fisher Scientific, Cambridge, United Kingdom) spectrometer with iTEVA operational software according to the instrument instruction manual.

2.2. Electronic waste preparation for the leaching experiment

The presence of alkali components in electronic waste is considered inconvenient for the reaction between the electronic waste and the acidic iron(III) sulphate solution. Hence, it is necessary to neutralize the electronic waste before adding the bacterial culture which would generate the oxidant.

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Before the leaching experiment, electronic waste was dispersed in 0.05 M H2SO4 solution, shaken for 48 h, filtered from the solution, washed out with deionized water and dried at 110 °C [Jekić et al. 2007].

2.3. Preparation of pyrite for the leaching experiments

The pyrite concentrate for the leaching experiments was prepared from commercial Bor concentrate by treating with a 0.5 mol/dm3 sulphuric acid solution (pH ~ 0.5) (solid to liquid phase ratio 1:5 m/V), and mixing with a mechanical stirrer at a room temperature overnight. Then, the solution was decanted, washed with deionized water and dried at 80 °C to a constant mass [Jekić et al. 2007].

2.4. Leaching experiments

The leaching experiments were carried out with bacterium Acidithio-bacillus sp. B2 (NCBI GenBank KC69130). Experimental conditions were: leaching period of 10 d, 20 ml leaching solution (g/dm3): (NH4)2SO4 (3), K2HPO4 (0.5), MgSO4 x 7H2O(0.5), KCl (0.1), Ca(NO3)2 (0.01), at a pH of 2.5 in 150 mL Erlenmeyer flasks at a pulp density of 10% (m/V) (2 g leach-ing substrate in 20 ml solution). The pH of the leaching solution was main-tained at a constant value during the leaching process.. One half of the sub-strate was pyrite and the other was an electronic waste. The initial number of microogranisms was 104 per mL, determined by the Most Probable Num-ber method. The control suspension had the same chemical content and pH value as the suspension with Acidithiobacillus sp. B2, but the Acidithiobacillus sp. B2 culture had been inactivated by sterilization. The study was realized on a horizontal shaker New Brunswick Scientific. The incubation temperature was 28 °C and the rotation speed 100 rpm [Jekić et al. 2007].

3. Results

Chemical analyses of pyrite and electronic waste after preparation for the leaching experiments are presented in Table 1.

Table 1. Content of metals in electronic waste (1g) and pyrite (1g) after preparation for the leaching experiments

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Sample Cu (µg) Zn (µg) Ni (µg) Co (µg)Electronic waste 610000 130000 68396 229Pyrite 1952 12 14 1

The process of leaching is based on Fe2+ oxidation to Fe3+, which after that attacks pyrite, with thyosulphat as major intermediate and sulphat as terminat product. Oxidation of pyrite can be described with following equations:

FeS2 + 6Fe3+ + 3H2O → S2O32- + 7Fe2+ + 6H+

(1)S2O3

2- + 8Fe3+ + 5H2O → 2SO42- + 8Fe2++ 10H+ (2)

Fe2+ (produced in reactions 1 and 2) can be reoxydized to Fe3+ by acting of iron-oxidizing microorganism Acidithiobacillus sp. B2.

2Fe2+ + 0,5O2 + 2H+ → 2Fe3+ + H2O (3)

Key role of Acidithiobacillus sp. B2 is to regenerate sulphuric acid and Fe3+, which is strong oxidizing agent [Rawlings-Johnson 2007; Avdalović et al. 2012]. All these things lead to lower pH and leaching of metals from electronic waste.

The experiment of microbiological electronic waste leaching was completed after 10 d.

The obtained results are presented in Figure 1.

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Figure 1. Leaching of the tested metals during 10 d

The results of the effective metal leaching (calculated by subtraction of percentage metal leaching in the control suspension from that in the Aci-dithiobacillus sp. B2 suspension) are as follows: Ni (22.00 %) > Cu (18.7%) > Zn (17.4%) > Co (4.00 %). Given that pyrite has very few metals tested in relation to electronic waste (Table 1.), we can assume that all leaching origi-nates from electronic waste.

The obtained results demonstrate that Acidithiobacillus sp. B2 was able to grow in the presence of electronic waste and the metals such as copper, nickel, zinc and cobalt can be recovered from PC motherboard.

4. Conclusion

The presented results show the potential of bacterial culture Acidi-thiobacillus sp. B2 to recovery metals from electronic waste. On the basis of the obtained results, investigation of electronic waste bioleaching will be con-tinued in the future, with a larger initial number of microorganisms and a longer duration of leaching.

AcknowledgementsThis research was partially fi nanced by the Ministry of Education,

Science and Technological Development of the Republic of Serbia as a part of the Projects III 43004 and TR 33007.

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References

• Avdalović, J.-Milićević, S.-Milošević, V. (2012), “Investigation of the possibility of microorganisms application in copper recovery from waste mineral materials”, Mining Engineering 4, pp: 271-275, December.

• Ilyas, S.- Ruan, C.-Bhatti, H.- hauri, M.-Anwar, M. (2010), “Column bioleaching of metals from electronic scrap”, Hydrometallurgy 101, pp: 135-140, March.

• Jekić, J.-Beškoski, V.-Gojgić-Cvijović, G.-Grbavčić, M.-Vrvić, M., (2007) “Bacterially generated Fe2(SO4)3 from pyrite, as a leaching agent for heavy metals from lignite ash”. Journal of the Serbian Chemical Society 72, pp: 615-619. May.

• Jingwei, W.-Jianfeng, B.-Jinqiu, X.-Bo, L. (2009), “Bioleaching of metals from printed wire boards by Acidithiobacillus ferrooxidans and Acidithiobacillus thiooxidans and their mixture”, Journal of Hazardous Materials 172, pp: 1100-1105, December.

• Li, J.-Lu, H.-Guo, J. (2007), “Recycle technology for recovering resources and products from waste printed circuit boards”, Environmental Science and Technology 41, pp: 1995–2000, February.

• Rawlings, D.-Johnson, D. (2007), “The microbiology of biomining: Development and optimization of mineral-oxidizing microbial consortia”. Microbiology 153, pp: 315-324, February.

• Veit, H.-Diehl, T.-Salami, A.-Rodrigues, J.-Bernardes, A. (2007), “Waste multilayer ceramic capacitors”, Hydrometallurgy 86, pp: 89–95, April.

245

Ecologic Cadastre: Comparative Overview of the EU and Macedonian Law

Temelko Risteski, PhD1 Aleksandar Chavleski, PhD,2 Anita Gligorova, PhD,3

Abstract. Recent rapid climate changes on world level prompted swift action by both state and non-state actors in order to counteract them and take preventive steps to preserve the environment. In this regard, timely and adequately informing the public about polluters and dangers for the environment is of paramount impor-tance. These are called INDOC services - records and information services or information and documentation services. In Republic of Macedonia, the Ministry of Environment and Physical Planning maintains a single Cadastre for the environment (ecological cadastre). This cadastre includes several cadastres like: the Cadastre of air pollutants, waters and the soil, the Cadastre of the noise producers, the Cadastre of the Waste Genera-tors, the Cadastre of protected areas and other cadastre determined by the special laws which contain provi-sions for the protection of the environment. On EU level, European Pollutant Release and Transfer Register contains data from total of 33 countries. It covers the releases to air, water and land as well as the transfers of pollutants in waste water for 91 substances and across 65 industrial sub-sectors, and the transfer of waste from these industrial facilities. This particular article aims to give overview of the recent developments in this area in both EU and Macedonian Law.

Key words: European Union, ecologic cadastre

1. Introduction

The rapid industrialization on global level led to the opening of a vast amount of industrial plants, which use raw materials and natural materials resulting in continuous degradation of the nature. These processes generate and emit a significant amount of harmful substances into land, water and air, and the consequences of such pollution are detrimental and sometimes fatal. In this regard, the public has the right to be fully informed about polluters and dangers for the environment. The greater access of the public in the

1 Faculty of Law and Political Science FON University, Skopje, MACEDONIA, [email protected] Faculty of Law and Political Science, FON University, Skopje, MACEDONIA, aleksan-dar_chavleski @yahoo.com.3Faculty of Law and Political Science FON University, Skopje, MACEDONIA, [email protected].

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environmental matters contribute to a greater awareness, a free exchange of views, more effective participation in the decision-making process and con-sequently to a better environment. The Aarhus Convention and particularly its Kiev Protocol paved the way for greater say of the general public in en-vironmental matters. Following these developments on global level, EU has established in 2004 a free platform (European Pollutant Emmision Register), which in 2009 was upgraded to European Pollutant Release and Transfer Register. The latter covers not only the EU countries, but also Iceland, Nor-way, Lichtenstein, Switzerland and Serbia.

In order toinform the public about polluters or dangers to the envi-ronment, a records and information services or information and documenta-tion services, abbreviated as INDOC services were established [Chucevska, D., 1984]. In Macedonia, the Ministry of Environment maintains several ca-dastres of polluters. This article will give detailed overview of the existing solutions under EU and Macedonian Law.

2. European Union Pollutant Emmission Register

In line with the developments under Aarhus Convention, in 2004 EU has launched EPER (European Pollutant Emission Register), a free dataset platform accessible via the European Environmental Agency website. EPER provided database of pollution parameters from around 10 000 industrial in-stallations in EU and Norway. The legal basis was the Commission Decision 2000/479/EC, according to which the Member States should submit reports on emissions from all individual facilities with one or more activities as men-tioned in Annex I to Directive 96/61/EC. The said report encompasses the emissions to air and water for all pollutants for which the threshold values are exceeded as specified in Annex A1. At first, the Member States were obliged to sent this reports every three years. The June 2003 report was intended to provide data on emmisssions for the year 2001, or optionally 2000 or 2002, when the data for the 2001 were not available. The second report in June 2006 should be submitted for the year 2004. And from 2008, the Member States were encouraged to sent the reports on emmissions in December that year for the previous year (for instance in December 2009 for the year 2008).

The ambition was to establish an extensive internet portal about re-gional and localized emmissions by 2008 and covering the territory of EU and EFTA. Historically, the idea for setting up a emission’s inventory dates

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back to the 1992 Rio Earth Summit and formally was set up as an obligation under IPPC Directive 96/61. EPER on a tri-annual basis was designed to provide data on industrial emissions to water and air relating to 50 industrial pollutants from 56 types of industrial activity and general information on re-ported pollutants and the impact on environment and health. The European Commission intended to establish European Pollutant Release and Transfer Register by 2009 that will cover 91 pollutants from 65 different industrial activities emitted to air, water and land. In addition, the Register should pro-vide information on the processing of solid waste and waste water as well to provide wide access information on diffuse pollution – like traffi c, avia-tion, shipping, agriculture) (Hedemann-Robinson, 2007:339). The fact that the Register encompasses comparable data on emmission from different EU counries, it is a conditio sine qua non that certain compatability of methods and data collction systems must exist (Makuch & Pereira, 2012).

E-PRTR implements the Kiev Protocol on Pollutant Release and Transfer Registers to the Aarhus Convention, which become legally binding from 8 October 2009. It is the only legally binding international instrument on pollutant release and transfer registers. Its objective is “to enhance public access to information through the establishment of coherent, nationwide pollutant release and transfer registers (PRTRs) https://www.unece.org/env/pp/prtr.html.

Source: European Environment Agency: https://www.eea.europa.eu/data-and-maps/daviz/releases-of-air-pollutants-and-3#tab-chart_2

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What should be reported? The reported releases and off-site transfers represent totals of deliberate, accidental, routine and non-routine activities at the site of the facility.

In addition, accidental releases represent all not deliberate, routine or non-routine, and result from uncontrolled developments in the course of the operation of Annex I activities on the site of the facility. Non-routine activi-ties are extraordinary activities that are carried out under controlled operation of Annex I activities and that may lead to increased releases of pollutants; for example shut-down and start-up processes before and after maintenance op-erations (European Commission, 2006:14). The releases to air, water and land shall include all releases from all sources included in Annex I to the E-PRTR Regulation at the site of the facility, although there are special considerations for land releases.

Pollutant release and transfer registers are a effective tool for encour-aging improvements in environmental performance, for providing public ac-cess to information on releases of pollutants and off-site transfers of pol-lutants and waste, and for use in tracking trends, demonstrating progress in pollution reduction, monitoring compliance with certain international agree-ments, setting priorities and evaluating progress achieved through national environmental policies and programs. The European Pollutant Release and Transfer Register (E-PRTR) is the Europe-wide register that provides easily accessible key environmental data from industrial facilities. E-PRTR was en-acted in 2006 by European Parliament and Council Regulation.

E-PRTR contains data reported annually by more than 30,000 in-dustrial facilities covering 65 economic activities across Europe. This online register provides free of charge service for its users (although this was not the case with the initial proposal from the Commission), data on emmissions searchable by various criteria like: type of pollutant, affected area, source facility etc.

The activities are grouped in 9 activity sectors: energy; production and processing of metals; mineral industry; chemical industry; waste and waste water management; paper and wood production and processing; in-tensive livestock production and aquaculture; animal and vegetable products from the food and beverage sector; and other activities. The majority of these activities are also regulated under the Directive on Industrial Emissions.

For each facility, information is provided concerning the amounts of pollutant releases to air, water and land as well as off-site transfers of waste and of pollutants in waste water from a list of 91 key pollutants including heavy metals, pesticides, greenhouse gases and dioxins for years 2007 on-

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wards. The register contributes to transparency and public participation in environmental decision-making.

The Regulation “... establishes an integrated pollutant release and transfer register at Community level in the form of a publicly accessible elec-tronic database and lays down rules for its functioning, in order to implement the UNECE Protocol on Pollutant Release and Transfer Registers and facili-tate public participation in environmental decision making, as well as con-tributing to the prevention and reduction of pollution of the environment.” An integrated and coherent PRTR gives the public, industry, scientists, insur-ance companies, local authorities, non-governmental organisations and other decision-makers a solid database for comparisons and future decisions in en-vironmental matters.

The E-PRTR Regulation includes specific information on releases of pollutants to air, water and land and off-site transfers of waste and of pollut-ants in waste water. Those data have to be reported by operators of facilities carrying out specific activities.

Operators of facilities have to report all required information to the competent authorities in the Member States. Before submitting the data to the relevant competent authority, the operator should ensure an appropriate quality of the data which must be complete, consistent and credible. If an operator of a facility has justifiable reasons that specific information con-cerning releases or off-site transfers should be kept confidential, it has to inform the competent authorities. Member States may decide to keep data confidential. In such cases, the Member State must, in providing information to the Commission and the EEA, indicate separately for each facility claiming confidentiality the type of information that has been withheld and the reason for which it has been withheld. The E-PRTR Regulation does not stipulate deadlines for the reporting from facilities to the competent authorities in the Member States. In accordance with the principle of subsidiarity, it is the re-sponsibility of Member States to adopt such timelines at national level. These timelines must enable timely reporting to the Commission. In accordance with Article 5 of the Regulation, operators are obliged to keep records of the data from which the reported information was derived and a description of the methodology used for data gathering for a period of five years.

Operators shall report releases to air, water and land of any pollut-ant specified in Annex II to the E-PRTR Regulation for which the applicable threshold value specified in Annex II is exceeded.

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EU countries must submit the report to the European Commission within 15 months of the end of each reporting year (for instance in May 2020 for the year 2018). Subsequently, the Commission and the European Envi-ronment Agency, secures access for the users to the database online within 16 months of the end of each reporting year. The first results were dissemenat-ed on the Internet in November 2009, when the European Environmental Agency established a dedicated website where environmental information was available (www.prtr.ec.europa.eu) (Bünger, 67-8).

Under Art. 17 of the E-PRTR Regulation the Commission must re-view Member State emission data returns provided under Article 7 and addi-tional information submitted under Article 16. The first report was submitted to the European Parliament and the Council in 2013 (for the years 2007, 2008 and 2009). The latest such report published in 2017 covers the years: 2010, 2011, 2012 and 2013). The 2013 Report identified several areas for possible improvements, and following several years of their implementation, the 2017 Report notes that: 1) regarding the quality of data and user confidence, the data is now more complete, more consistent and more accurate; although infringement procedures are envisaged, in the following years there was no need for this; enhancing data quality remains a priority, since it increases use confidence, which as a consequence has increased use of the EPTR. Associ-ated work with other EU environmental policies was carried with the Water Framework Directive’s working group on chemical aspects.

2) regarding the data use and exchange: in 2016 new user friendly website and the the Commission has actively promoted the use of E-PRTR for scientific, technical, and policy analysis and for public use.

3) Regarding the clarifying the E-PRTR Regulation and links with other legislation, the Report notes that the Register is in line with the Com-mission’s 7th Environment Action Plan, the acquiring and using data under INSPIRE, enables that the E-PRTR is aligned with the IED and the waste acquis. Other improvements include inter alia that E-PRTR data is used, to improve information on national waste generation and management under Waste Framework Directive; better coordination with the reporting under the directives on industrial emissions, urban waste water treatment and national emission ceilings European Commission, 2017a).

Also, the European Commission ensured evaluation of the effective-ness, efficiency, coherence, relevance and the added value of the E-PRTR Regulation as a part of the Commission’s Regulatory Fitness and Performance Program (REFIT) to make EU law lighter, simpler and less costly. The main findings of this process were that: 1) the E-PRTR is effective, as it

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provides a highly comprehensive and detailed dataset on industrial emissions; 2) The E-PRTR performed well on efficiency; 3) while consistent in itself, there were some concerns on coherence with data reported under related environmental legislation, such as the Industrial Emissions Directive (IED); 4) the E-PRTR is still relevant, as it provides a detailed dataset that the public can easily access; 5) There is added value beyond the requirements of the Kiev Protocol by ensuring consistent implementation across Member States. However, in order to improve the current system, certain steps should be taken, like: 1) to update the existing EU-level guidance, 2) undertake further harmonisation with closely related environmental reporting, 3) the triennial obligation on Member States should be simplified; 4) providing more con-textual data would improve the E-PRTR’s effectiveness as a comprehensive source (European Commission, 2017b).

3. Macedonian Ecologic Cadastre

Space and time are the basic determinants of matter in motion. The moving material constitutes the objects in the space. Every object, every part of matter, even the smallest, takes up some space and lasts for a while. The whole cosmic space is filled with matter. Stars, comets, planets, and other heavenly bodies are huge agglomerations of matter in the cosmic space. The planet Earth is one of those agglomerations. It occupies part of the cosmic space. Her substance is shaped in a large number of inanimate and living be-ings. Inanimate beings are divided into natural and artificial forms of matter. Natural: mountains, rocks of rivers, seas, lakes and are the work of nature. Artificial: buildings, roads, bridges, roads, vehicles and other objects are hu-man beings. Living beings-plants and animals are always natural. Science has not yet managed to artificially create living matter. The plants make up the flora of the planet earth, and the animals its fauna. The space in which a person lives, the objects, the flora and fauna of him is a human environment. The space that is not polluted by harmful agents, emissions of harmful radia-tion, noise, which does not have excessive humidity, unbearably high or low temperatures is a healthy environment.

Citizens live on the geographical area of the state. All objects that are built on this space in different ways directly touch their interests. That is why they are always the most directly interested in the problems of spatial and urban planning and the building of objects in the space.

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With the spatial and urban planning and the arrangement of the space, the rational organization of the space and the settlements is envisaged and the construction of the settlement of the populated areas and the wider spatial units in accordance with the policy of the socio-economic develop-ment is directed, and for the promotion of the material basis of the life and work of the citizens and the improvement of the general living and living conditions of the space. In this connection, it can be said that the basic goals of spatial planning and space arrangement are:

- the achievement of the highest level of functionality of the space in the realization of the interests and satisfaction of the needs of the citizens, in accordance with the principles of economy and rationality;

- protection and promotion of the values of the space, as well as the natural, as well as those created by man;

- construction and arrangement of settlements and areas of space in accordance with the natural needs of people for a healthy environment, and in connection with this, for unmet and correct psychophysical and spiritual (cultural and aesthetic) development of the human person.

One of the basic imperatives of modern planning and arrangement of space is providing the maximum level of functionality in meeting the needs of the citizens. The functionality of the settlements, the space around them and the wider space will be achieved if they best suit the needs of the citizens as places for becoming, for work and for rest. Then, if they provide their physical and mental health, if the costs of building and maintaining the facilities, installations and devices in them are in accordance with the material possibilities of the citizens and the local self-government units, and if their formation and aesthetics provide them with pleasure and joy citizens, which is important for their mental health. Man as a creation of nature can live nor-mally and happily in a healthy environment. He has the right to do so. This right is guaranteed to him by the international legal acts and the constitutions of the states. One of the fundamental values of the constitutional order of the Republic of Macedonia is the arrangement and humanization of the space and the protection and promotion of the environment. Under Article 43 of the Constitution, everyone has the right to a healthy environment. Ev-eryone is obliged to promote and protect the environment and nature. The Republic provides conditions for the exercise of the right of citizens to a healthy environment.

To conduct in the life the cited constitutional provisions related to a healthy environment and for implementation the documents of the Euro-

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pean Union on the environment the Republic has passed several laws that directly and indirectly protect the environment. Among them, the most im-portant are: The Law on Environment Protection, the Law on Nature Pro-tection, the Law on Quality of Ambient Air, the Law on Plant Protection, the Law on Hunting, the Law on Fisheries and Aquaculture, the Law on the Protection and Welfare of Animals and the Law on Waste management.

4. Ecological Cadastre in Function on Control Over the Pollutants of the Space

In order for a person to enjoy the rights of the complex of the right to a healthy environment and the rights to protection of the natural environ-ment, he must have information on environmental pollutants. In the function of informing the person about polluters or endangers of the environment, the records and information services or information and documentation ser-vices, abbreviated as INDOC services. In the ranks of these services, from the aspect of environmental protection, the Environmental cadastre comes first. The Law on Environment (2005), Article 5, item 15 defines the cadastre of the environment as a quantitative and qualitative record of pollutants and sources of pollution that release pollutants and substances in the environ-mental media, which includes the map of pollutants. The Law on Environ-ment (2005) in Articles 42 and 43 in detail regulates the competence for the establishment and maintenance of the unique Environmental Cadastre. As regards the competence for establishment and maintenance of this cadastre, according to the Law, the body of the state administration responsible for the affairs of the environment is competent. This body is the Ministry of Environment and Physical Planning.

The Law stipulates the contents of the Environmental Cadastre with the provisions of Article 42.

According to Article 42 of the Law on Living Environment, the Ministry of Environment and Physical Planning establishes and maintains a single Cadastre for the environment (ecological cadastre). This cadastre, as unique, includes several cadastres, as follows: Cadastre of air pollutants, waters and the soil, the Cadastre of the Noise Producers, the Cadastre of the Waste Producers, the Cadastre of Protected Areas and other cadastre determined by the special laws. which contain provisions for the protection of the environment.

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According to the Law (Article 42), the Environmental Cadastre con-tains data on the activities and installations that endanger it and can endanger the environment, especially for:

- the name or the name of the operator and the address of the location of the installation;- a brief description of the activities and the technical process;- significant data pertaining to emissions, hazardous substances present in the plants, generation of waste, use of natural resourc-es and energy, and- for the issued licenses and for the amendments and additions to the licenses and the control carried out, for the significant results and for taking measures.

The form and the content of the cadastre shall be prescribed in detail by the Minister of Environment and Physical Planning.

For the purpose of completing and updating the cadastre, the Law obliges legal entities and natural persons to submit to the Ministry of Envi-ronment and Physical Planning data on their activities of importance for the conduct of the cadastre records.

The Law, with a dispositive norm, especially gives the opportunity for the municipalities on the territory of the Republic, the City of Skopje and its municipality, to establish and maintain environmental cadastres for their areas. The mayors of the municipalities, the City of Skopje and the munici-palities in it are they are obliged to submit the data from these cadastres to the Ministry of Environment and Physical Planning at least once a month.

The Ministry of Environment and Physical Planning, as the holder of the cadastral records for environmental protection, in accordance with Article 3, line 1 of the Law on Free Access to Public Information is the au-thorized holder of the information contained in that record. As holder of information, it is obliged, in accordance with Article 8 of this Law, to appoint one or more officials who will work on the issues of providing free access to information. These officials should reach out to interested stakeholders, provide them with the information they need, and help them reach out to the information more easily.

The establishment of a digital ecological cadastre imposes the need for these persons to be well trained in the electronic management of cadastral records and in the use and submission of data and information contained in those records and to be capable of handling information and computer technology. The establishment of this cadastre will facilitate and expedite the

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information of interested stakeholders about phenomena and processes in the living environment important for its protection. Easily accessible and fast information regularly leads to a rapid response by environmental stakehold-ers. That, in turn, means more effective protection of that environment and thus, more effective realization of environmental human rights. From this it can be concluded that the digital ecological cadastre will directly serve the ef-fectiveness and efficiency in the protection of the environment, and through it indirectly will serve the protection of the human environmental rights of the Macedonian citizens. To achieve this, the cadastral handling of data and information should enable the establishment of comprehensive, complete and easily accessible records of cadastral data.

Comprehensiveness of records, from the aspect of living environ-ment protection, implies recording of all data on activities and installations in space that may endanger it.

Completion of records implies timely and complete entry in the re-cords. It is in dialectical unity with the comprehensiveness of the records. As a dialectical unity they lead to a quality of records. Comprehensiveness constitutes the outer - external dimension of quality and the completeness its inner dimension. Contrary to completeness, lies the incompleteness of cadas-tral records, which is always the result of inadvertent and unethical cadastral work. In this regard, the Law on Free Access to Public Information (Article 9) obliges the holders of environmental cadastral records to regularly update the lists of information - data available to them and make it publicly available. There is no doubt that the most convenient means of publishing these lists is the internet site whose establishment for this purpose is prescribed by this law.

The easy accessibility of cadastral records data encompassed by the digital environmental cadastre implies the existence of networked cadas-tral data holders and users, with unified communication models for infor-mation exchange and standardized information support. The material basis of standardized information support consists of standardized information technique and technology. By this will be established technical-technological compatibility between the user information systems and the information sys-tems of the information holders within the networked information system of users and information providers. The technical-technological compatibility of information systems enables interoperability in the exchange of informa-tion. Interoperability is the basis of the efficiency of the information process understood as information communication between the information-holders and their recipients, i.e. users.

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5. Ecological Cadastre as a Info-Hub for the Public

The data (information) contained in the ecological cadastre are basi-cally data, i.e public information. They are intended for informing the public entities (legal and natural persons and others) interested in taking measures for environmental protection. Therefore, the INDOC services that manage this data should provide all interested clients with free access to them.

The normative-legal bases for free access to this and other data are contained in the Law on Free Access to Public Information (2006). This law regulates the conditions, manner and procedure for exercising the right to free access to public information available to the bodies of the Republic and the units of local self-government, as well as public institutions and services, public enterprises, legal and natural persons performing public authorities and activities of public interest established by law (holders of information). This law has been enacted to ensure publicity and openness in the work of information holders, and to enable interested social entities to exercise their right to free access to public information in accordance with the general rule that free access to information have all legal entities and individuals, except in cases determined by law.

Otherwise, from the analysis of the basic and special environmental laws, and the laws on information and electronic communications, there is a certain delay between the environmental laws and laws on information and communication regarding the normative regulation for electronic keeping of records and submission of data, ie information by electric way. There is no doubt that this is a consequence of the fact that the development of non-environmental laws was apparently carried out by persons with knowledge deficits in the field of information and communication technologies.

The Law on living Environment does not contain provisions about digitalization of the cadastral evidence. The establishment and maintenance of the digital ecological cadastre is an imperative of the contemporary pro-tection of environmental rights. The Constitution of the Republic of Mace-donia(1991), as the hierarchical highest legal act, raises the right to inform citizens about all issues that are in their interest at the level of basic consti-tutional law.

The Law on Environment contains a principle that encompasses the obligation of all organs of state power, municipal bodies, and the City of Skopje to prescribe procedures that ensure the right of access to information of importance for the protection and improvement of the environment. In

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addition to this principle, this Law in the provisions for specific obligations and measures also contains provisions for informing the public about envi-ronmental pollution and for undertaking and introducing mandatory mea-sures for the most protection. Finally, this law contains provisions for the establishment of a separate environmental information system and its threats (Article 40 -50). Similar provisions also include the Law on Nature Protection (2004) in Article 158. There is no doubt that informing citizens and other en-vironmental actors about environmental threats will be far more efficient if a digital ecological cadastre is established. Its establishment will allow the data on environmental threats to be available to every social entity and at any time. With such data available, the social entities, the citizens and their associations, the inspections and other control and protective institutions of the society will be able to timely undertake the necessary measures for the protection of nature, and thus for the fulfillment of their ecological rights.

Timely and quality informed citizens, directly or through the autho-rized social institutions, react with the taking of environmental protection measures, usually as soon as the information about its pollution and deg-radation. This is because of the notorious fact that the protected environ-ment allows a person to live in a healthy environment as the most immediate condition for a healthy life. Only a healthy life can be happy and long-lasting. There is no healthy life without a healthy environment. There is no healthy environment without its protection. With the protection of the environment, the citizens’ environmental rights are directly realized and protected.

A natural characteristic of a person is to react to the danger as soon as he finds out about it. Precisely because of this, the provision of timely and thorough information on environmental threats is of existential significance for the citizens and for every social entity. By timely informing the citizens about the threats to nature we will ensure the existence of one of the fun-damental values of the constitutional order of the Republic of Macedonia declared in Article 8 of the Constitution. That is the arrangement and hu-manization of space and the protection and promotion of the environment and nature.

Effective information involves the dissemination of fast, timely, and quality environmental information to stakeholders. The natural response to such information is to take measures to protect that environment. Taking protection measures is in the function of protecting and exercising environmental rights, especially the right to healthy living environment, as a basic ecological right.

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6. Conclusion

In the last two decades EU has taken important steps in establishing itself as a credible actor in the fight against climate change, both internally and externally. Access to information for the public about the emmisions in the air, water and land, and thus securing a say for the citizens is a key benefit from the Aarhus Convention and in particular its Kiev Protocol (with bind-ing effect since 2009). Begining in 2004 as EPER, and upgraded in 2009 to a E-PRTR, today this easily accessible free of charge platform provides a plethora of comparable data on various polluting sites, levels of emmissions, graphs, charts, statistical data etc. which secure that European citizens are fully aware of all relevant polluters affecting European (and global) environ-ment. However, the European Commission suggested that several improve-ments can be made: updating the existing EU-level guidance, establishing closer connection with the related environmental reporting, simplification of the triennial obligation for reporting and providing more contextual data in order to improve the EPTR’s effectiveness.

Macedonian law normatively has followed the trends on international and European level in this regard, particularly as a part of the pre-accession process to the EU and regular monitoring by the European Commission. However, further efforts are needed to ensure easy, free of charge access to comprehensive data about environmental polluters for the Macedonian citi-zens. In such way, the latter will have greater say in environmental decision-making. There is only one data platform accessible via the website of the Ministry of Environment (http://air.moepp.gov.mk/) with very meager data. In order to remedy this situation, much more technological, financial and hu-man resources should be engaged in the process.

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CIP - Каталогизација у публикацији Библиотеке Матице српске, Нови Сад 551.583:330.34(082) 551.583:316.3(082) 551.583:502/504(082) INTERNATIONAL Scientific Conference on Climate Change, Economic Development, Environment and People (8 ; 2019 ; Novi Sad) Proceedings of 8th International Scientific Conference on Climate Change, Economic Development, Environment and People (CCEDEP 2019), Novi Sad, 24th October 2019. / [editor Marko Malovic]. - Sremska Kamenica : Educons, 2019 (Novi Sad : Tampograf). - 276 str. : ilustr. ; 24 cm Tiraž 50. - Napomene i bibliografske reference uz tekst. - Bibliografija uz svaki rad. ISBN 978-86-87785-92-2 а) Климатске промене - Економски развој - Зборници б) Климатске промене - Друштво - Зборници в) Климатске промене - Животна средина - Зборници COBISS.SR-ID 331115271

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