The EU has agreed to Croatia joining the Schengen zone of unrestricted movement. But the blocking of bids by Bulgaria and Romania has triggered disappointment and calls for boycotts in the two countries.
"Finally!" was the unanimous reaction not only of politicians, the media, and the business community, but also of ordinary citizens in Croatia after the announcement on December 8 that the youngest member of the European Union would join the Schengen Area as of January 1, 2023.
What a relief: Croatia's path to Schengen has been tedious and complicated. The government in Zagreb began the application process in 2016 after the country was admitted into the EU in 2013. Croatia had already fulfilled the 281 conditions a year ago, but there were fears till the last minute that Austria or Hungary might block the country's entry over migration policy issues. 

No more border checksFrom January 1, 2023, there will no longer be checks at the 73 border crossings between Croatia and its neighbors in the Schengen zone: Italy, Austria, Slovenia and Hungary. This is already nice even for Croats who do not leave the country that often, but it is particularly good for those who have to cross the border daily to get to work.
Ana, who lives in Zagreb but works in Slovenia, said she was delighted that she would no longer have to wait at the border each morning and worry about arriving late. Petar, who lives on Croatia's Adriatic coast and also works in Slovenia, was pleased that he would not have to take each Friday off during next year's tourist season to avoid miles of traffic jams at the border.
It is particularly good news for the transport and tourism industries in Croatia. "The waiting times at the border crossings have made the transport of goods much more expensive," economic analyst Luka Brkic told DW.
He added that studies had found that the development would send a positive signal to tourists on short breaks and weekend getaways. "Croatia is a car destination; you can reach the Mediterranean in a few hours from Austria or Hungary. But the fear of having to spend much more time on the road because of the border has deterred many visitors so far."
Bulgarians disappointedBut in Bulgaria there was dismay. "I am very disappointed," said Stanislav Savov after it became clear that his country had not been granted entry to the Schengen zone due to the resistance of the Netherlands and Austria.
The 29-year-old Bulgarian studied in Austria and knows the political situation there well — he was certain that the government was motivated by domestic reasons.
"In the wake of the declining support for his party, Chancellor Karl Nehammer is being forced to take a tougher stance regarding migration than would actually be necessary," Savov told DW. But he said it was precisely because of this issue that EU states with a long external border needed "help and not rejection."
Savov had another concern: "Given the declining support of the Bulgarian population for the EU and the success of Russian propaganda in our country, blocking Bulgaria's entry to the Schengen Area is not good for the European Union."
Bulgaria failed on corruptionHowever, Vessela Cherneva, the head of the European Council on Foreign Relations in the Bulgarian capital, Sofia, said that migration was not the only reason that Bulgaria had been rejected: "Only 5 or 6% of asylum seekers enter the EU through Bulgaria. In fact, this is about Bulgaria's problems with rule of law and fighting corruption," she said.
She said Bulgarian policymakers had to take decisive steps to finally win the trust of Western EU partners: "Romania also has major problems with corruption — but the country has been much more successful in the area of the rule of law than we have been here in Bulgaria."

Calls for boycott of Austria in Romania"Romania doesn't need Schengen," said Nicolae Dan, a 51-year-old civil servant in the capital, Bucharest. In his opinion, the decision not to admit Romania could have positive consequences for the country. "Now, our country could also leave the European energy market," he explained. "Because it mainly brings disadvantages to our companies." But he was angry that the EU seemed to expect "us to fall on our knees and beg for Schengen."
Florina Enciulescu, a 29-year-old lawyer, said that the decision was an "injustice." She thought that the EU was worried about the impact the Russian war in Ukraine was having on it and was thus trying to "isolate its borders."
However, she thought that calls by certain Romanian politicians to boycott Austrian banks and the Austrian oil, gas and chemicals company OMV, went too far: "Austria, as a Schengen member, has the right to block our entry."
The 57-year-old engineer Ovidiu Vasile was also against boycotting Austria and said that he was less disappointed with politicians in Vienna than with those in Bucharest: "In 30 years, our politicians have not managed to implement the structural reforms that are necessary for our country to make real progress toward Europe," he said.
Cristian Preda, the dean of political sciences at the University of Bucharest and a member of the EPP Group in the European Parliament from 2009 to 2019, accused Romanian politicians of "not having prepared answers in time to questions that had long been asked by various Schengen states."
He regretted that Romania's politicians had only woken up when it became clear that only Croatia would be admitted — and had then tried to "use the Russian aggression in Ukraine as a pretext to get on the Schengen train after all, even though it had long since departed for Zagreb."
Preda also felt that it was wrong to behave in a hostile way towards Austria. "People have gone too far; even Romanian lawmakers, including MEPs as well as ministers have threatened boycotts or even the arrest of the directors of Austrian companies in Romania. This shows that even 15 years after EU accession, Romania's representatives have basically not grasped the decision-making mechanisms of European institutions."
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A tie-in of companies led by Romanian IT company Connections Consult signed a contract worth 39.4 million lei ($8.23 million/7.99 million euro), VAT excluded, to put into operation a court cases management system for the justice ministry, Connections Consult said.

The tie-in will develop, test and put into operation the new ECRIS V court cases management system for the justice ministry, it said in a statement filed with the Bucharest Stock Exchange on Monday. The contract also includes training for the ministry staff.
The value of the activities carried out individually by Connections Consult will add up to 23.1 million lei, VAT excluded, and the estimated period for the delivery of the solution is July 2024.
Connections Consult was established in 2005 and is focused on facilitating the digital transformation of companies in fields such as banking, telecom, or retail. The company has over 300 employees in Romania, Bulgaria, Serbia, Germany, and Saudi Arabia.
In April, the company established wholly-owned US subsidiary in Fairfax, Virginia, in a move to tap the local technology talent market and ecosystem.

The new centre is being set up by industry veteran Darren Owens.
Part of his task will be layering a thin layer of GBS oversight for its outsourced servcies provider IBM.

"Imperial Brands is launching a new Global Business Services Centre of Capability, located in the centre of Krakow. Here, the teams are reimagining our GBS operating model, starting with Finance.

As our business is transforming, we’re working to provide a trusted, truly global and connected service, shaping new ways of working, implementing and aligning new technologies while upskilling capabilities, all driving towards improved data accuracy, service levels and transform efficiencies across the business.

This also gives us the opportunity to develop innovative solutions enabling consistency, efficiency and effectiveness, at scale, creating opportunities within Global Business Services to work, influence and thrive."

The new shared-services centre of the $2 billion company is led by Paul Rolle.

Here from the "horse's mouth" (Huntsman's Q3 Earnings Call):
"SG&A remains under control due to our cost optimization program despite a high and persistent inflationary environment. Foreign exchange was a negative impact of approximately $15 million with approximately $20 million of translation impact, partially offset by approximately $5 million of transactional gains as a result of the weakening of the Chinese renminbi.

Our cost optimization and synergy program remains on track. At the end of Q3, we achieved an annualized run rate of $160 million of savings. Excluding our new European restructuring initiative, we expect to meet or exceed our target of $170 million of savings by the end of 2022 and $240 million by the end of 2023.

During the quarter, we made progress recruiting at our new global business services hubs in Costa Rica and in Poland. We expect to be fully operational at those sites during 2023. In addition, as part of our support service model, we announced that we would transition parts of our internal IT services to a third-party managed service provider. We are progressing geographical exits previously announced in polyurethanes. And in Advanced Materials, we announced the closure of our Maple Shade, New Jersey facility which was part of our 2020 acquisition of CVC. In terms of our $240 million program, we expect approximately $65 million of cash costs in 2022 and we're expecting approximately $70 million of cash costs next year as we work through severance and restructuring.

Regarding the proposed European restructuring we have announced today, we have advised the relevant works councils that we intend to consult with them to reduce our costs by exiting certain legacy commercial and R&D facilities, as well as accelerating our move of support services to Krakow, Poland. We intend to achieve approximately $40 million of additional savings over and above our $240 million program by the end of 2023 through certain site closures and headcount reductions in Europe. We expect to spend approximately $50 million of cash restructuring relating to those savings, the majority of which we expect to incur next year. We also expect to spend approximately $15 million of capital expenditure related to the restructuring which we will manage within our normal capital expenditure allocation."

PKC Group, part of Motherson Group since 2017, is a trusted and acknowledged partner in the global commercial vehicle industry. The company plans to expand its operations in Lithuania and therefore will hire 100 more employees.
Motherson is a diversified global manufacturing specialist and one of the world’s leading automotive suppliers for OEMs. Motherson provides professional support to its customers from over 300 facilities in 41 countries. Thanks to the trust of its customers, the group recorded revenues of USD 10.5 billion during the years 2021 – 2022 and is ranked among the top 25 automotive suppliers worldwide.
PKC Group established its first Lithuanian facility in Panevėžys in 2014, followed by a facility in Klaipėda in 2022 to manufacture wiring harnesses for commercial trucks and agricultural machines. The company employs a full-service concept to deliver tailored, cost-efficient solutions to its customers.

birkle IT, an international IT consulting and software development company, announced growing its branches in Vilnius and Kaunas, Lithuania in the coming years. The company has extensive experience across the insurance, healthcare, manufacturing and logistic sectors, and helps to deliver innovative solutions for industry leaders across DACH (Germany, Austria and Switzerland), Nordic and Baltic markets. In Vilnius, birkle IT will be looking for a broad spectrum of talent, including Developers, Infrastructure Engineers, Project Managers, and other specialists.
The Munich-headquartered company specializes in consultancy and customized enterprise software solutions. Combined with bespoke AI-based software solutions and partnerships with the likes of Odoo, ServiceNow, IBM, d.velop and Softwareallianz Deutschland birkle IT helps organizations of various sizes and industries – like Allianz (insurance), Tesla (automotive), Charité (healthcare) and various incubator projects in AI – to achieve their strategic goals and full digital potential. The company’s clients are mainly midsize companies in DACH countries, the Nordics and the Baltics.
Established in the Swabia region of Germany in 2016, birkle IT has chosen the route of bestshoring – a level up from the traditional outsourcing model. By providing a tailored mix of local onshore experts and competent development teams in Estonia, Latvia and Lithuania, the company seeks to offer invaluable assets to their clients to help them digitalize, expand their services, and innovate their businesses to a new level.
Already operating a branch in Estonia since 2017, birkle IT entered Lithuania in 2021. According to the company, Lithuania was chosen for its highly skilled specialists, similar work ethics, and availability of German speaking talent, among other reasons. In October 2022, a new office was opened in the University and Hanseatic city of Greifswald, Germany, a town located close to the Baltic Sea and serves as the new technology site of birkle IT. With this opening, a bridge and stronger connection should be built to the Baltic region.
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Infosys BPM, the business process management arm of the Indian IT services firm, on Monday launched a unit for artificial intelligence (AI) and automation in Poland's Lodz city to assist global clients.
The new unit, in collaboration with IBM, will use AI and automation to offer solutions for automation, lowering costs, productivity, and customer experience. The Center of AI and automation will deliver Infosys BPM's solutions including Infosys Intelligent Document Processing, Infosys Interaction Analytics, Infosys Multilingual Conversational AI, and Infosys Accounts Payable on Cloud.
The unit will assist organisations to analyse workflows, design AI-infused apps with low-code tooling, assign tasks to bots, and track performance, the company said in a press release.
"IBM is focused on providing clients and valued partners such as Infosys the key capabilities needed to scale AI for business. As evidence of the importance of the IBM Ecosystem strategy, the newly opened Center of AI powered by IBM Watson in Lodz, Poland, will provide our joint clients significant support in building the digital economy, as well as new skills and expertise in the field of AI and hybrid cloud," said Marcin Gajdzinski, country general manager, IBM Poland, and Baltics.
Infosys BPM and IBM for two years have collaborated to assist clients, identify new-use cases, and build solutions.
"As organizations continue to transform their cloud environments, they will increasingly need to rely on a diverse ecosystem of partners and supporting technologies to unlock enhanced hyper-productivity, agility, and scale. This collaboration with IBM Watson, through end-to-end hybrid cloud offerings, robust AI capabilities, domain-specific use cases, and business functional contextualization, will enable organizations to better navigate the complexities of digital transformation, leading to enhanced business value," said Kapil Jain, executive vice president and global head of sales and enterprise capability at Infosys BPM.
The Lodz will be an innovation powerhouse and enable enterprises to address complex business processes, the company said.

To mark the rebranding of the Hungarian Service and Outsourcing Association (HOA) as the Association of Business Service Leaders (ABSL), the Budapest Business Journal sat down with István Lenk, president of ABSL Hungary and managing director of Eaton Hungary Kft., to discuss what thename change means for the organization and the sector. The following are excerpts from that conversation. Look outfor the full interview in our Top Business Services Executives publication, due to be published early in 2023.
BBJ: The HOA was established by leading local and multinational companies in 2004. It has now joined the Association of Business Service Leaders (ABSL) international network and rebranded as ABSL Hungary. When did you decide to take this step, why, and how long has the process been?
István Lenk: HOA was created to support shared service and outsourcing industrial players in Hungary. ABSL is an international organization in 11 countries: Albania, Austria, Bosnia and Herzegovina, the Czech Republic, Germany, Hungary, Latvia, Moldova, Poland, Romania and Switzerland. We started the discussion more than two years ago and finally became part of ABSL in May 2022, following a decision by the general assembly. We believe ABSL is the next stage of maturity, and we can leverage the international environment to get support, better understand our industry in the region, and grow.
BBJ: How important is the business services sector to Hungary’s economy?
IL: In Hungary, it takes in about 90,000 people. There is a trend moving to knowledge-intense jobs and roles. Companies are raising the number of higher value-added positions and investing in digitalization. It is primarily multinational companies that define the trends and how the sector is viewed from the outside; they provide a stable financial background for their long-term investments and commit themselves to hire and keeping the workforce for a long time. Their agenda is to attract, develop and retain talents to support their core businesses. Highly-skilled workers are the most critical asset. The industry provides a high-quality work environment, an open and inclusive corporate culture, flexibility, and a wide range of compensation and benefits packages. In this atmosphere, people are treated equally and with respect. The sector is a stable part of the Hungarian GDP and has opportunities to grow and expand further in countryside locations.
BBJ: Hungary has near full employment. Are you confident your members will continue to be able tofind suitable numbers of staff?
IL: Sector banding plays a crucial role; the more people know about the sector and its knowledge-intense jobs, and we can show that it is way more than a “call center,” the better opportunities we can provide future talents. Earlier sector players were looking for talents in the 20-30 year age group but the trend going forward is how we can reach other age groups, people who are career changers. Higher value-added activities require reskilling and upskilling existing employees but may also create opportunities to open the door for a broader talent pool.
BBJ: Inflation and the energy crisis are concerns for the whole economy. How is it manifesting in the BSS?
IL: The business services sector is organically linked with, and dependent on, the mother companies and follows their corporate strategies. Companies are working to find ways to compensate employees to retain thepurchasing power of salaries, while cost consciousness is a crucial topic everywhere. Centers need to find a good balance between fulfilling cost-saving targets and paying attention to what employees require.

This article was first published in the Budapest Business Journal print issue of November 18, 2022.