WBJ #25-26 2011

Is a Greek tragedy playing out in Athens?

A British firm has struck shale gas in Poland

Techeye talks scooters and Star Trek 23

WWW.WBJ.PL

Americans want Europe to speak with one voice

VOLUME 17, NUMBER 25-26 • JUNE 27 – JULY 10, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

REAL ESTATE

Time to shine

COURTESY OF TBT I WSPÓLNICY

Lokale Immobilia

Can Poland overcome all of the challenges its EU presidency faces? 11, 12-13

•Albatross takes off •Residential prices •Luxury apartments 15-19

A guide to Polish business and industry

Przewodnik po polskim biznesie i gospodarce

Car fleet management firms

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 International . . . . . . . . . . . . . . . . . .5 Energy . . . . . . . . . . . . . . . . . . . . . . . .6 Industry News . . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Business Environment . . . . . . . . .14 Lokale Immobilia . . . . . . . . . . .15-19 Markets . . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Chinese checkers

Business diplomacy

As the COVEC debacle reverberates, another Chinese company pulls out of a deal in Poland

Undersecretary of State in the Foreign Ministry Beata Stelmach tells WBJ that foreign policy and business should go hand in hand 8-9

A GUIDE TO POLISH EXPORT is AVAILABLE NOW! To order: Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

NEWS

www.wbj.pl

Poland to reduce Afghan troops

z∏.30 billion is the estimated budget deficit in Poland at the end of 2011, around z∏.10 billion less than planned.

z∏.18.5 billion is the price media mogul Zygmunt Solorz-˚ak bid for Poland’s second-largest telecom, Polkomtel, several media sources reported.

2.4% was the rate of core inflation in Poland in May, the fastest rate in 16 months.

Quote of the Week

EU budget commissioner Janusz Lewandowski annoyed environmental groups and made some headlines in the European press last week as it came to light that he had expressed skepticism towards climate change in an interview with a Polish economic newspaper in May. News of the remarks came just a day after Poland prevented the European Union from toughening its CO2 emissions targets (see article, p. 3) over fears that overambitious environmental schemes could hurt the country’s heavily coal-dependent economy. “There’s an emerging point of view that the thesis that coal energy is the main cause of global warming is highly questionable. Question marks are appearing more and more frequently over

The EU’s Foreign Affairs Council announced it was imposing stronger sanctions against Belarus on June 20, “in view of the continuing deterioration in human rights, democracy and the rule of law since the presidential election last December.” This involves freezing the assets of an arms maker, a telecoms provider and a gambling company, all linked to the regime. ●

mission President José Manuel Barroso did not seem to share the apprehensions. A spokesperson for Mr Barroso said the EC has a clear position on climate change, one that is constantly expressed by EU climate commissioner Connie Hedegaard. Born in 1951 in Lublin, Mr Lewandowski was an economic advisor to Solidarity in the 1980s and a privatization minister in the governments of Jan Krzysztof Bielecki (1990-1991) and Hanna Suchocka (1992-1993). In June 2004, he was elected to the European Parliament from a Civic Platform list where he headed the budget committee for two and a half years. Mr Lewandowski has been EU budget commissioner since February 2010.

“Poland’s tragedy is that since 1939, it has not been ruled by Poles” Controversial priest and media mogul Father Tadeusz Rydzyk speaking at a seminar in Brussels and lamenting what he described as the “totalitarian” and “uncivilized” nature of today’s Poland.

Figures in focus Unequal earnings GDP per capita in selected EU countries, as a percentage of the EU average (EU27=100) 300

283

250 200 150

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113

107 89

100

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Gre ece Cz ech Re pu blic

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On WBJ.pl

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The European Commission reached an agreement with Russia to end the embargo the country had imposed on vegetables from the European Union in the wake of the recent E. coli outbreak. European countries will now have to give safety certificates.

EU toughens Belarus sanctions

global warming itself,” Mr Lewandowski told the Nowy Przemys∏ trade magazine. Commenting on the common energy policy’s fundamental significance for Poland’s economy, Mr Lewandowski stressed that the country’s politicians have to persuade the EU that there cannot be any quick jump away from coal energy. “For Poland that would be a disaster,” Mr Lewandowski said. A number of environmental organizations sounded alarm bells, concerned that the comments made by Mr Lewandowski, who will be a key figure in the upcoming EU budget talks, could impact the shape of the document and thus that of the EU energy policy in the next few years. However, European Com-

Russia resumes veg imports

was Poland’s unemployment rate in May, down from 12.6% in April.

ou rg

“The Polish tragedy is that since 1939, Poland has not been ruled by Poles,” controversial priest and media mogul Tadeusz Rydzyk said in Brussels. Mr Rydzyk has been accused of antiSemitism in the past and his statement was thought by many to be an allusion to the idea that the country is actually controlled by Jews. FM Rodos∏aw Sikorski reacted via Twitter saying, “the church has done service to Poland but Father Rydzyk crosses the boundaries. The Polish state will react.”

12.2%

Ge rm

Rydzyk insults government

Numbers in the News

Janusz Lewandowski

COURTESY OF JANUSZ LEWANDOWSKI /FLICKR.COM

Following US President Barack Obama’s decision to reduce his country’s military presence in Afghanistan, Polish Prime Minister Donald Tusk has asked Polish Defense Minister Bogdan Klich to prepare a similar plan for the withdrawal of Polish troops. Mr Obama announced a phased pullout of troops to end the war in Afghanistan, which would see the withdrawal of 10,000 troops by the end of 2011 and 23,000 by the end of next summer.

IN THE SPOTLIGHT

JUNE 27 – JULY 10, 2011

Lux em b

Source: Eurostat

Polish programmers among world’s elite Poland’s computer programmers continue to rake in awards in competitions throughout the world. Poland is ranked third in the Top Coder rankings, behind Russia and China. From working for startups to developing The Witcher 2, Poles are making their mark in the world of computers. Log on to WBJ.pl to learn what these hackers will code next.

Company index 3Legs Resources ....................6 Home Broker ........................17 OMV ......................................12 Balmoral Properties ............15 HSW ........................................7 Open Finance ........................17 Black Red White ....................4 Impexmetal ............................4

Optimus ..................................4

Caelum Development ..........18 Ingarden & Ewy ....................19 Orange ..................................13 CCC ........................................4 Invest Bank ............................4 CDI Polska ............................19 IPR ........................................19

Orco Property Group ............18

CEE Property Group ............17 ITI media group ......................4 Orlen........................................9

DATELINE

Event:

JULY 1 Event:

4 Event:

The National Bank of Poland releases balance of payments data for the first quarter of the year

Cushman & Wakefield..........19 Kulczyk Holding ..................4, 6

INTEREST RATES

Event:

The NBP’s Monetary Policy Council announces its decision on whether to raise, decrease or hold steady interest rates.

BASTILLE DAY

Event:

Organized by CCIFP annual event to celebrate Bastille Day. Location: Endorfina Restaurant, Warsaw

Cyfrowy Polsat ..................4, 12 Kulczyk Investments ..............4

Pol-Aqua ..............................18 Polpharma ..............................4

Czech Energo-Pro ..................6 LiuGong ..................................7 Polska Telefonia Cyfrowa ......7 Danske Bank ........................14 Marathon Oil ......................6, 9 Polski Bazalt ..........................6 Eco-Classic ..........................15 Mark-7 ..................................19 PricewaterhouseCoopers ......9 Emperia Holding ....................7 Marvipol ................................18

RE-Inwest................................6

Enea ........................................6 Mayland Real Estate ............19 Energa ....................................6 Mayra Investments ..............19

Reas ......................................17

ENI ..........................................6 MCI Management ..................6 Robyg ....................................15 Erste Securities ......................7 Miastoprojekt Wroc∏aw ........15 SABMiller ................................4

ECONOMIC DATA

Exxon Mobil ........................6, 9 Microsoft ..............................13 Samsung ..............................23

Event:

The National Bank of Poland releases money supply data for June

Fabiƒski-Goc∏owski

AMERICA’S ROUTE 66 235th Anniversary of the Independence of the United States of America. Location: US Ambassador’s residence, Mokotów, Warsaw (Invitation only)

PKN Orlen ................12, 13, 14

COVEC ....................................7 KGHM ......................................6

EUROPEAN UNION Poland takes over the six-month rotating presidency of the Council of the European Union, from Hungary

Peugeot ................................13

Coca-Cola Poland ................13 W´glowa ................................12 PGNiG..................................6, 9 ConocoPhillips ........................6 Jones Lang LaSalle ..............19

June/July JUNE 29 ECONOMIC DATA

Chevron ..............................6, 9 Jastrz´bska Spó∏ka

Miller, Canfield, W. Babicki,

Architekci studio ..................15 A. Chelchowski & Partners ....13

Scania....................................13 Telefonica ................................7

Gas System ............................6 MOL ......................................12

ECONOMIC DATA

Event:

The National Bank of Poland releases balance of payments data for May

Gazprom................................12 Morpol ....................................4

Telekomunikacja Polska ........7

GDF Suez ................................6 Netia........................................7 Warsaw Stock Exchange ..15, 18 Globe Trade Centre ..............18 Noble Securities ..................14 X-Trade Brokers..............14, 20 Gowebtrade.com ..................20 Ober-Haus ............................18 ZEW Niedzica SA ....................6

NEWS

JUNE 27 – JULY 10, 2011

www.wbj.pl

The Greek debt crisis

All eyes on Greece The Greek government passed a critical test, but bankruptcy still remains a threat

“It’s either life support or bankruptcy”

COURTESY OF PRIME MINISTER OF GREECE/FLICKR.COM

Following days of uncertainty and anxious speculation, Greek Prime Minister George Papandreou’s government won a vote of confidence on June 21. The news came as a relief across Europe as it meant the country could begin parliamentary votes on austerity measures it must implement before receiving the latest tranche of EU and IMF bailout funding. In order to receive €12 billion in aid the country must implement austerity measures, including budget cuts, tax rises and far-reaching privatization, worth roughly €28 billion in savings. Euro-zone finance ministers had previously decided to withhold the aid Greece was set to receive. It is now hoped Greece will push through the reforms so the payout can be approved at a meeting of euro-zone finance ministers on July 3. “The decision [to release the aid] should come before July 15 … it’s either life support or bankruptcy,” said Janusz Lewandowski, the

“I think this [package] would just be postponing the inevitable, which is some form of debt restructuring, maybe an extension of Greece’s debt maturities. I suspect this could happen next year or in 2013,” said Grzegorz Maliszewski, chief economist at Bank Millennium.

Greek Prime Minister Papandreou has a lot of work ahead EU’s commissioner for budget and financial programming. Asked about the size of the next aid package which may eventually be given to the debt-stricken nation, Mr Lewandowski said it would be similar to the first one, which was worth €110 billion. He added that he hoped the aid package for Greece, as

well as earlier ones given to Portugal and Ireland, would be enough until the EU “creates permanent preventive and anti-crisis mechanisms and an umbrella for bad weather.” When it comes to Poland’s participation in another possible aid package for Greece, Prime Minister Donald Tusk

had earlier announced that the country would take part in the Greek financial guarantee mechanism, pledging non-cash guarantees to the tune of about z∏.1 billion, or roughly €250 billion. Mr Tusk stressed that guarantees were a sign of European solidarity towards any country that is in trouble.

“This is an obligation for every member state, regulated by EU laws, and not a voluntary choice of this or that country,” he said.

Postponing the inevitable? Will a second aid package help Greece dig itself out of its financial hole for good?

“Another aid package will not change the situation of the Greek economy,” he added. On whether other countries like Portugal, Ireland or even Spain might now also be tempted to stretch out their hands for help, Mr Maliszewski said those countries had exhibited more will to do something about their fiscal situation than Greece and that their efforts may soon begin yielding some positive results. “There is of course still a big risk factor involved for those countries, but I think they have more options than Greece,” Mr Maliszewski said. Remi Adekoya

EU policy

The country risks starting its six-month presidency at odds with major EU players on environment policy Days before taking up the presidency of the EU Council, Poland opposed a widely supported commitment to cut carbon emissions in the bloc over a long-term period. In a meeting of EU environment ministers, all but one EU country – Poland – agreed in principle to the European Commission’s 2050 Low Carbon Roadmap, which calls for a 40 percent cut in carbon emissions by 2030, 60 percent by 2040 and 80 percent by 2050, compared to 1990 levels. A consensus was also reached concerning a target of 25 percent cuts by 2020 (up from 20 percent), but this was also opposed by Poland. “We expect greater solidarity from Europe, and an understanding of the situation

of individual member states,” Polish Environment Minister Andrzej Kraszewski said in a statement. Poland, which uses coal to produce 90 percent of its electricity, perceives Brussels’ ambitious environmental policies as a threat to its own economy. But other European leaders disagreed. “It’s a dark day for Europe’s leading role in tackling climate change,” UK Energy and Climate Change Secretary Chris Huhne said in a statement. “I am deeply disappointed that the only country in the EU that could not accept a good compromise on how we can move Europe to a low carbon economy was Poland,” he added. While Poland’s stance is nothing new (the country led opposition among other EU emerging economies to the EU’s 2020 emissions reduction targets in 2008), this latest move comes at a moment when Europe’s eyes are on the coun-

try as it takes up the presidency of the EU Council from July 1. Following the environment ministers’ meeting, Greenpeace sent a translation of an article published in Nowy Przemys∏ in May to EurActiv and The Guardian. In the article, Polish EU budget commissioner Janusz Lewandowski said that, “the thesis that coal energy is the main cause of global warming is highly questionable,” and that, “Question marks are appearing more and more frequently over global warming itself.” As WBJ went to press, MEPs had demanded that EC President José Manuel Barroso react to Mr Lewandowski’s comments. So could environment prove to be Poland’s bugbear during its time at the head of the EU Council? In May, a group of eight Polish think tank experts wrote an open letter warning climate-change issues were all but absent from the govern-

ment’s presidency program. “Were Poland to take the role of a country which neglects the issue [of climate change] or indeed treat it as a threat to its well being … then our position in the EU will suffer. Our presidency’s achievements in other fields will be dimmed,” read the letter. The experts were specifically worried about Poland’s capacity to coordinate a common EU position for the UN climate conference in Durban, South Africa, which will take place in December. Now, even before the start of the Polish presidency, it seems their fear that Poland would appear as a lone crusader on climate change issues was justified. “I am not surprised at all,” Bart∏omiej Nowak, executive director of Warsaw’s Center for International Relations and one of the letter’s signatories, said when asked about Poland’s stance. Alice Trudelle

WBJ ARCHIVES

Poland sparks controversy over climate vote

Poland’s reticence to commit to high emissions targets is causing consternation in the EU

NEWS

www.wbj.pl

China blames Poland for A2 debacle Chinese daily Renmin Ribao (People’s Daily) wrote that Poland is to be blamed for the failure of the Chinese concern COVEC, which was commissioned with the building of two fragments of A2 motorway. Meanwhile, the Chinese government announced that it won’t take financial responsibility for the fines of z∏.740 million that are looming over COVEC. ●

Jan Kulczyk tops Poland rich-list again There isn’t much movement at the top of the list of Poland’s richest people – but there are some newcomers Energy, construction, beer and auto-sales magnate Jan Kulczyk continues to be the richest Pole, according to Wprost magazine’s annual ranking. Zygmunt Solorz-˚ak, owner of television platform Cyfrowy Polsat and Invest Bank, came in second in this year’s edition. The two top the ranking of the 100 richest Poles for the fourth year running. Mr Kulczyk, the owner of conglomerate Kulczyk Holding and Kulczyk Investments, topped the list with a net worth estimated at z∏.8.5 billion. Mr Solorz-˚ak was just z∏.600 million behind him, at z∏.7.9 billion. Both men have increased their fortunes compared to last year’s ranking, when Mr Kulczyk was reported as being worth some z∏.7.1 billion and Mr Solorz-˚ak at z∏.6.6 billion. Mr Kulczyk’s investment vehicle, Kulczyk Holding, owns a stake in multinational brewer SABMiller (Miller, Grolsch, Lech, Tyskie) and has investments in a wide variety of other industries, including automotive imports, infrastructure, chemicals and energy. Third on the list is banking and real estate tycoon Leszek

Jan Kulczyk’s fortune is worth z∏.8.5 billion, according to Wprost Czarnecki, whose fortune is estimated at z∏.7.576 billion. Construction and real estate magnate Micha∏ So∏owow was listed as fourth-richest, with a fortune worth some z∏.6 billion. After that, there is a significant drop-off in the value of the richest Poles’ fortunes. The remaining Poles in the top 10 include: Roman and Gra˝yna Karkosik, the owners of metals producer Impexmetal, with z∏.3.567 billion; Jerzy Starak, owner of Polpharma, Poland’s biggest pharmaceutical company, with z∏.2.7 billion; the Wejchert family, the majority shareholders in the ITI media

Contact: Lech Gniady lg@pnplaw.pl

On June 16, 2011 the European Court of Justice passed a judgment according to which Poland had violated the European law when in 2007-2008 it reintroduced the tax on civil law transactions for loans granted by shareholders to limited liability and joint-stock companies (case no. C212/10). Just to remind you, prior to Poland’s accession to the European Union, a loan granted to a company by its shareholders was subject to the tax on civil law transactions. From the date of Poland’s accession to the EU on May 1, 2004, Poland abolished the tax. However, from January 1, 2007 Poland reintroduced the tax. At that time the tax was 0.5% of such loans. Then, starting from January 1, 2009, loans granted by shareholders to limited liability and jointstock companies were again exempted from the tax. The European Court of Justice recog-

billion; real estate investor and businesswoman (and Jan Kulczyk’s ex-wife) Gra˝yna Kul-

Katarzyna Piasecka

Poland's top-ten richest Top 10 richest Poles (or groups of Poles), according to Wprost's 2011 ranking Rank

person

sector

Jan Kulczyk

energy, investment, real estate

fortune

Zygmunt Solorz-˚ak

telecommunications, banking

Leszek Czarnecki

banking, real estate

Micha∏ So∏owow

construction, real estate

Roman and Gra˝yna Karkosik

metals

z∏.8.5 billion z∏.7.9 billion z∏.7.576 billion z∏.6 billion z∏.3.567 billion

Jerzy Starak

pharmaceuticals

Wejchert family

media

z∏.2.7 billion

Dariusz Mi∏ek

footwear, retail

z∏.1.97 billion

Gra˝yna Kulczyk

real estate

z∏.1.85 billion

10.

Dariusz Chmiel

furniture

z∏.2.421 billion

z∏.1.8 billion

Culture

Legal News

Judgment of European Court of Justice on loans from shareholders granted in 2007 and 2008

group, with z∏.2.421 billion; Dariusz Mi∏ek, owner of footwear firm CCC, with z∏.1.97

czyk, with z∏.1.85 billion; and Dariusz Chmiel, the fouder of Poland’s biggest furniture producer, Black Red White, with z∏.1.8 billion. The authors of the ranking note that the fortune of the world’s wealthiest man, Mexican telecom tycoon Carlos Slim Helú, estimated at some $74 billion, is worth more than twice as much as that of all of the 100 richest Poles in the ranking combined – at some z∏.93 billion, or about $33.15 billion. Wprost also points to new names that have appeared on the list, namely: Jan Lubomirski-Lanckoroƒski, a real estate investor and Mr Kulczyk’s sonin-law; Jerzy Malek, who owns Morpol, a global leader in smoked salmon; computergames executive Micha∏ Kiciƒski from Optimus; and Piotr WiÊniewski, a real estate and telecommunications investor.

Source: Wprost

Polish President Bronis∏aw Komorowski has signed the amendment to the Nuclear Act, opening the way for the development of a nuclear energy program in Poland. The new regulations define the safety and control requirements concerning the location, design, start-up, operation and disposal of nuclear facilities. It is expected that a special fund will be created to which power plant operators will transfer amounts dependent on the volume of energy sold, with the money used to pay for disposal of power plant components, reported Dziennik Gazeta Prawna.

Billionaires

nized that European legal provisions do not allow a member state to reintroduce such a tax if that member state had already waived it. Considering the judgment, limited liability and joint-stock companies which paid the tax on loan contracts concluded in 2007-2008 with their shareholders may apply for acknowledgment of tax overpayment and for a tax refund.

Judicial clerks to decide on costs Pursuant to the judgment of the Constitutional Tribunal of May 12, 2011, judicial clerks may perform actions of legal protection in court, meaning they may decide on costs, among other things. In the opinion of the Constitutional Tribunal, “judicial clerks are court officials authorized to perform certain actions in court proceedings other than actions of justice administration.” In the opinion of the Constitutional Tribunal, deciding on costs of proceedings does not qualify as the administration of justice, which is a competence of independent courts that employ professional judges. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

Wroc∏aw chosen as Poland’s European Capital of Culture 2016 The city beat out Gdaƒsk, Katowice, Lublin and Warsaw A panel of Polish and European Union experts chose Wroc∏aw, capital of Lower Silesia in southwestern Poland, as European Capital of Culture 2016. The city competed with Gdaƒsk, Katowice, Lublin and Warsaw. Wroc∏aw will be Poland’s second city (after Kraków in 2000) to benefit from the huge visibility and opportunity to boost tourism and the local economy. Upon reaching their decision, the experts congratulated the city but stressed that a lot of work still needed to be done, which would entail strong commitment from public authorities. The European Capital of Culture is a program designed to “highlight the richness and diversity of European cultures, celebrate the cultural ties that link Europeans together, bring

people from different European countries into contact with each other’s culture and promote mutual understanding and foster a feeling of European citizenship.” Androulla Vassiliou, European commissioner responsible for culture, congratulated the city. “I hope it will make the most of this unique opportunity, as the title can bring significant cultural, economic and social benefits for the city and

SHUTTERSTOCK

President says yes to nuclear

JUNE 27 – JULY 10, 2011

COURTESY OF WIKIMEDIA COMMONS

its surrounding area.” Two cities, one from Poland and the other from Spain, will hold the title of European Capital of Culture in 2016. As WBJ went to press, the European Union’s cultural panel was due to select a Spanish city on June 30. Burgos, Córdoba, Las Palmas de Gran Canaria, San Sebastián, Saragossa and Segovia were all in the running. Barbara Gedek, Thomas Kolasa

INTERNATIONAL

JUNE 27 – JULY 10, 2011

www.wbj.pl

The euro crisis

Tim Geithner and John Lipsky are worried by the cacophony coming from Europe US Treasury Secretary Timothy Geithner and acting IMF head John Lipsky both spoke out last week with advice for Europe on how to handle its growing sovereigndebt crisis. More than anything, the Americans are looking for a single voice from Europe on how it plans to deal with the situation. While both were diplomatic in their statements, they were not short of suggestions for Europe, with Mr Lipsky

Mr Geithner, for his part, echoed the call for unity, telling a conference hosted by The Wall Street Journal it was very important for the European Union to speak with a “clear, more unified voice” regarding its strategy to combat the sovereign debt crisis. He noted that, so far, it has been hard for investors to understand the EU’s strategy for tackling the debt crisis, especially with so many different opinions being voiced. “The simple rule of crisis management is you want to have a simple, clear, unified, declarative strategy. That would be helpful,” he said.

saying that it was essential for the European Union to quickly end its debate on restructuring sovereign debt and to set up a European stability mechanism. “The crisis has brought the euro area to a crossroads. … Clearly, only a cohesive and cooperative approach to crisis management will be successful,” he said while in Luxembourg. “This means that the determined commitment to reforms and adjustment in the program countries must continue – including immediate and farreaching structural reforms, privatization, and the opening of markets to foreign ownership and competition.”

Andrew Kureth

COURTESY OF WIKIMEDIA COMMONS

Americans tell Europe to speak with one voice

Mr Geithner said Europe needs a unified strategy to tackle the debt crisis

Polish-German relations

Poland and Germany sign agreement to strengthen ties

COURTESY OF KPRM

During her visit to Warsaw, Angela Merkel talked up the Polish-German partnership and calmed fears over the Nord Stream pipeline

Chancellor Merkel said Polish-German friendship was an example to Europe

During a visit to Warsaw at the end of June, Polish Prime Minister Donald Tusk and German Chancellor Angela Merkel signed a declaration aimed at strengthening bilateral cooperation between the two countries. Ms Merkel said that Germany supported Poland’s priorities for its presidency of the EU Council, which begins on July 1, emphasizing that she understood how important the Eastern Partnership was for Poles.

The joint agreement outlined areas where relations between the European neighbors would deepen: in energy, infrastructure, partnership within the European Union and cross-border cooperation. “Cooperation between Germany and Poland is an example for the rest of Europe, that conflicts and difficult historical relations can be overcome. Everywhere the spirit of cooperation exists, solutions can be found,” Ms Merkel said at a joint press

conference with her Polish counterpart. Mr Tusk said that Poland and Germany were now “joined by business and friendship.” Germany is Poland’s largest trading partner and the destination for a quarter of its exports. While in Warsaw, Ms Merkel also sought to ease Polish concerns over an agreement between Berlin and Moscow to build the Nord Stream gas pipeline, which would directly connect Germany and Russia beneath the Baltic Sea. Poland had expressed concern that the pipeline could hinder access to ports in

Szczecin and ÂwinoujÊcie. “We have always said that we don’t want to go ahead with a project at the expense of another country, especially not our neighbor Poland,” Merkel said, adding that “if access to ÂwinoujÊcie was to be hindered, then we will be obliged to lay the pipeline deeper in order not to hinder access to the port.” The visit marked the 20th anniversary of the Treaty on Good Neighborship and Friendly Cooperation signed by the two countries after German reunification on June 17, 1991. Remi Adekoya

Polish-Lithuanian relations

Remarks that Poles in Lithuania are “not loyal citizens” come at a difficult time in the countries’ relations Lithuanian Ambassador to Poland Loreta Zakarevičienė, accused ethnic Poles living in Lithuania of disloyalty to her country. The statement came at a time when relations between the two nations are already strained because of alleged discrimination against the Polish minority in Lithuania,

as well as issues related to the country’s new education bill. Ms Zakarevičienė told the Baltic News Service that “Lithuanians living in Poland, as opposed to Lithuanian Poles, are loyal citizens.” She said that Russians, Belarusians and Jews were all more Lithuanian than ethnic Poles who live there, adding that Lithuanians in Poland also had problems but did not protest. Poland’s Foreign Minister Rados∏aw Sikorski reacted strongly to the comments, telling a press conference in

Brussels, “I don’t know what is the bigger problem, the [ambassador’s] statement or that many Lithuanian politicians actually believe what she said.” In March this year, Lithuanian President Dalia Grybauskaitė signed amendments to the education act which will allow local governments to close Polish schools in areas where there is also a Lithuanian school. The reforms will also see an increase in subjects on the curriculum taught in the country’s native language, a

move which has angered ethnic Poles living in the country. Another matter which has caused controversy is the issue of Lithuania’s refusal to spell Polish names using Polish characters on official documents, or to use bilingual road signs in Polish areas near the country’s capital Vilnius. Earlier this month protestors gathered in Vilnius, Warsaw, Washington and Chicago in an attempt to highlight what they feel is unfair discrimination by the Lithuanian government. David Ingham

COURTESY OF MSZ/FLICKR.COM

Lithuanian ambassador’s statement heightens tensions

FM Sikorski reacted strongly to the comments

ENERGY

www.wbj.pl

JUNE 27 – JULY 10, 2011

Shale gas

Eleven bid for Niedzica

British firm first to find shale gas in Poland British firm 3Legs Resources has announced it discovered high concentrations of shale gas along the entire length of a 1,000-meter horizontal borehole in ¸ebieƒ, northern Poland. It is the first reported successful endeavor since drilling activity began in Poland a year ago.

“We need this kind of news to keep investments coming” “We are very encouraged by the excellent gas shows encountered while drilling this horizontal well,” 3Legs Resources chief executive Peter Clutterbuck said. A previous attempt to drill vertically down 4,000-meters at the same location had been unsuccessful. The exploration group now plans to do followup testing on the borehole in the third quarter. Poland’s shale gas reserves

were estimated by the United States Energy Information Administration at 5.3 trillion cubic meters, the largest in Europe. But no other holder of the 87 exploration licenses the government has so far issued has reported discovering shale gas yet. Firms searching for shale gas in Poland include international oil companies ConocoPhillips, ExxonMobil, Chevron, Marathon Oil and ENI.

First step The Environment Ministry says confirmed information should appear within the next four to five years, but this latest discovery could give a boost to investment. “Finding shale gas is only the first step. That whole story has just begun,” Ernest Wyciszkiewicz, energy security expert at the Polish Institute of International Affairs (PISM), said. “To have credible information about even one shale basin you have to have not

one, but hundreds of those wells. But it is very optimistic, and for now we need this kind of news to keep investments coming,” he added. A key unanswered question is whether exploiting Polish shale gas will be economically viable. The first report on Poland’s shale-gas reserves from the Polish Geological Institute is expected this fall and should shed light on the issue. Sufficient transport infrastructure is another matter that is apparently already worrying investors. Stateowned Gas System, which is responsible for transporting natural gas in Poland, recently announced plans to build 1,000 km of pipelines, which could be used to transport shale gas, at a cost of up to z∏.5 billion. Gas System has received several inquiries from prospecting companies concerned about the potential capability of their production to get to the network and to consumers, CEO company Jan Chadam told Gazeta Prawna. Poland is also starting to build a legal framework which will eventually regulate the

“You cannot just leapfrog over them, and companies cannot only rely on the central government’s assurances. They must have a stable situation in the immediate neighborhood of their wells,” he said. Otherwise, added Mr Wyciszkiewicz, both the government and companies should expect public opposition to this new industry.

The Ministry of Treasury has announced it shortlisted 11 bidders for a 100 percent stake in state-owned hydroelectric power plant ZEW Niedzica SA. According the Treasury’s announcement, the company is valued at over z∏.225 million. But PGNiG, one of the bidders, has valued Niedzica at z∏.300-400 million, Bloomberg reported. After examining the initial tenders submitted in April, the Treasury is now inviting the country’s second-largest utility Tauron, French utility GDF Suez, Poland’s gas monopoly PGNiG, copper giant KGHM, Kulczyk Holding (in a joint bid with Niedzica’s employees), Poland’s third- and fourth-largest utilities Enea and Energa, investment company MCI Management, Czech EnergoPro, Polski Bazalt from Kraków and RE-Inwest from Wroc∏aw to make binding offers. Niedzica consists of four hydroelectric power plants with a total capacity of about 100 MW.

Alice Trudelle

SHUTTERSTOCK

The news could provide a boost for investments, infrastructure and the regulation of Poland’s emerging shale industry

The discovery is a small step towards developing a shale gas industry, but carries big hopes industry. A bill giving the state the authority to force landowners to allow gas-extracting companies to conduct drilling on their property in exchange for compensation is now awaiting President Bronis∏aw Komorowski’s signature. According to Mr Wyciszkiewicz, a major issue that has yet to be tackled is for companies to obtain the support of local communities.

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INDUSTRY NEWS

JUNE 27 – JULY 10, 2011

Privatization

Privatization of HSW suspended The Chinese firm has pulled out of the z∏.250 million deal, for now Chinese excavator-maker LiuGong has suspended talks over the purchase of an arm of stateowned Huta Stalowa Wola (HSW). LiuGong was in negotiations to purchase the construction-equipment arm of HSW, a firm which also produces military equipment. The deal for the construction-equipment arm was valued at around z∏.250 million. The breakdown in talks represented the second instance in a matter of weeks in which collaboration between Polish and Chinese firms had come to a halt, after the Polish government terminated a contract with China Overseas Engineering Group (COVEC) to build two sections of the A2 highway.

Polish media have suggested that the suspension of talks over the HSW deal could be linked to the decision by Poland’s General Directorate for National Roads and Motorways to ditch COVEC as contractor. LiuGong’s management wrote in a letter addressed to the Polish Treasury Ministry that the signing of the privatization agreement would now be delayed until “a reasonable time.” In addition to issues related to COVEC, another major factor was the failure of talks regarding a package of social guarantees for HSW’s employees. Media reports have indicated that workers were demanding 5 percent pay raises and five-year employment guarantees, but that the Chinese investor was reportedly only willing to offer 3 percent raises

and three-year employment guarantees. Last week there were suggestions that LiuGong would build its own manufacturing facility in Poland if a deal with union members was not reached, although the Chinese firm refused to comment on the issue. Speaking about the news, Bartosz Kopyto, a spokesperson for HSW told the press, “We still care about Chinese investment in the steel mill, which is why we are trying to cool tempers. Negotiations with the Chinese have not been definitively forgone, we are still hoping to reach an agreement.” The Polish state currently controls over 80 percent of HSW, with the civilian construction equipment arm currently employing 1,270 people of the firm’s 2,000 workers. David Ingham

Telecoms

EU imposes €127.5 million fine on TP Telekomunikacja Polska is being punished for thwarting rivals’ access to the market EU antitrust regulators have fined telecommunications giant Telekomunikacja Polska (TP) for abuse of its dominant position on the market. The European Commission said that Poland’s dominant telecommunications’ firm must pay a fine of €127.5 million for consistently hindering its competitors access to its internet network. The fine concerns practices conducted by the telecoms firm between 2005 and 2009. “We are determined to convince the dominating operators not to block their competition.

It is competition that makes the telecoms market varied and this is advantageous for consumers and entrepreneurs alike,” Joaquín Almunia, the EU commissioner responsible for competition, said after the verdict. In a statement, the Commission said TP gave unreasonable conditions to its competitors, used delaying tactics in negotiations, rejected requests to make use of its infrastructure without justification and gave insufficient information when it was requested. The EC’s investigation into TP’s practices started in 2009 and was initiated by their competitors Netia and Polska Telefonia Cyfrowa. The firms filed a complaint with the EC that TP was hindering access to its network concerning the use of broadband internet.

Telekomunikacja Polska is not the first European ex-state monopolist to use the infrastructure they posses to fight competition on the broadband internet market. In 2007, Spanish telecoms firm Telefonica was fined €151 million for abusing its dominant position in the sector. In its official response, TP said the EC’s decision was “surprising” since it concerned practices which were voluntarily ceased by the firm in 2009. It argues that rather than pay such a fine, it would be better for Poland and the whole EU if it could use such funds to further develop its infrastructure. The firm vowed to take legal action to fight the EC’s decision, which is not yet legally binding. Remi Adekoya

Retail

Emperia looks to offload retail The firm wants nearly z∏.1 billion for its grocery stores and supermarkets Emperia Holding, one of the biggest FMCG distributors in Poland, has started the process of selling off its retail subsidiaries. The company’s management board says it plans to raise not less than z∏.900 million from the transactions, which it hopes to conclude by the end of March 2012. The retail outlets Emperia wants to dispose of are Stokrotka, Lewiatan, Spo∏em Tychy, Euro Sklep and Kolber.

The sales process began on June 20 with the gathering of preliminary offers, which is set to last until the end of August. Binding offers are to be made before the end of October this year, with due diligence of the retail companies scheduled to take place at the turn of September and October 2011. But what are the chances of Emperia getting its asking price? “In January, I valued Emperia at z∏.1.5 billion. If the retail section alone was sold for z∏.900 million, then that would mean the whole group is worth z∏.2 billion,” Marek

Czachor, analyst at Erste Securities told Parkiet, suggesting that the z∏.900 million price tag might be judged on the high side by the market. Emperia Holding posted a consolidated net profit of z∏.300,000 in Q1 of 2011 compared to a z∏.6.75 million profit for the same period last year. The group’s Q1 operating profit was z∏.2.19 million, compared to z∏.10.47 million for the corresponding period last year. The consolidated revenue in Q1 of this year was z∏.440.99 million compared to z∏.430.25 million a year earlier. Remi Adekoya

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INTERVIEW

www.wbj.pl

JUNE 27 – JULY 10, 2011

Diplomacy and business

Foreign Ministry looks to become an ambassador of Polish business Beata Stelmach, Undersecretary of State in the Ministry of Foreign Affairs, talks with WBJ about her role in promoting Polish business abroad Ewa Boniecka: Your appointment as Undersecretary of State at the Ministry of Foreign Affairs, responsible for promoting our business abroad, suggests a desire for economic matters to play a bigger role in Poland’s foreign policy. How do you view the connection between politics and the economy? Beata Stelmach: Nowadays it is impossible to look at Poland’s presence abroad solely through the context of our political activity. In a global market economy, where the movement of capital, work forces and services is devoid of restrictions, we have to make sure that our companies, especially those for which the internal market becomes too small, expand abroad. We have a very welldeveloped economy and for many of our companies organic growth is now not enough. Economically speaking the world is developing very fast and as a result we have to increase our economic activity and form new areas of business abroad. There is a common perception that Poland’s diplomats spend little time promoting our business abroad when compared to politicians from other EU member states. How would you react to this?

In my opinion it is possible to connect political diplomacy with promoting our businesses abroad. And I would not look to the past; certainly it is always possible for us to perform better. Nowadays the development of a country cannot be achieved without connecting politics and business. This should not be viewed in a negative light, but as a legitimate political tool for economic expansion abroad. Such political support is needed in Poland because it often opens the door for firms to expand overseas.

What mechanisms do you have at your disposal to further the promotion of Polish business abroad? Around the world we have our diplomatic network, which is the first place for businesspeople to turn if they are interested in investing in our country. On the other hand, we also have our ambassadors, who understand local markets and conditions for expanding Polish business in a particular country. So if Polish companies are interested in moving to a new market I can use our line of communication and diplomacy to help them.

Foreign Affairs from the business community, I believe it is easier for me to understand the needs of our businesses. I want to combine the language of diplomacy with the language of business. I want to point out that we have many diplomatic missions which are supporting negotiations on trade contracts, but while negotiations are ongoing this information is confidential, especially in the case of listed companies. Yet this kind of discretion is not usually performed in other countries because after the visits of foreign politicians to Poland, one can read two days later in the news about business topics raised by them, regardless of the outcome.

Why have these methods not always been used effectively? As I came to the Ministry of

Up and down investment Foreign direct investment inflows to Poland, 2000-2010 (€ billions)

20 17.242 15.741

*estimate

15 10.334

10.237

10.085

9.863

8.330

7.538

6.372 5

2000

2001

4.371

4.067

2002

2003

2004

2005

2006

2007

2008

2009

2010*

Source: PAIiIZ

I agree with you that there is room to improve the situation. I have imposed on myself the task that in the coming months I will use diplomatic occasions to convince top politicians, including prime ministers and presidents, to use official visits to provide our firms with the opportunity to promote themselves abroad. Often foreign politicians are accompanied by businesspeople on visits but in Poland, possibly because of previous corrupt links between business and politics, businesspeople do not want to be associated with such visits. How do you view this situation? Such an opinion should be changed, because it is not fair to blame business for a lack of transparency in the past. If businesspeople were to accompany our politicians abroad it needs to be a welldefined and selected group, which has strategic aims to move their activity to a given country. It will be my task to give such a signal. I am now sending the message to Poland’s biggest companies that I will offer them support in all their efforts to expand abroad. If there are proper responses, we will invite the representatives of Polish businesses to accompany politicians on official visits. Yet I want to stress that the Foreign Ministry cannot

be involved in or deal with the business strategy of any company. It is the managers’ task and their risk. We can only respond to their efforts of expanding abroad by providing them with diplomatic assistance. In which countries do Polish businesses have the best chance of expanding? Each business and each holding group can have entirely different needs and opportunities for expansion abroad. Some are moving to Ukraine, Russia and Georgia in the east, whereas some Polish businesses have found opportunities in countries such as Vietnam in the the Far East. Obviously, we are not responsible for decisions on where to move and for the inevitable risks involved. Our diplomatic support does not mean that we can do the work for them, yet we are making sure support is available. How can you help to promote Polish business interests within the European Union? Since Poland is part of the EU market, our companies have to operate and spread activities within this framework. Our small and medium-sized businesses are currently doing very well in the EU and they do not need diplomatic support on a daily basis. However for major Polish firms to expand abroad they have to place themselves in foreign markets through

INTERVIEW

JUNE 27 – JULY 10, 2011

www.wbj.pl

Poland grants asylum to 16 Polish FM Rados∏aw Sikorski returned from Tunisia and Egypt with 16 Christian refugees in mid-June. Originally from Eritrea and Nigeria, they fled to Tunisia from Libya. The undertaking was made to show Polish support for Christians in Africa, the Foreign Ministry said. It was also an act of solidarity with Tunisia, which has been overwhelmed by refugees from Libya.

“Nowadays the development of a country cannot be achieved without connecting politics and business”

Some media reports have suggested that as the search for shale gas is being performed by American firms, Poland’s natural wealth could go to foreign hands. What is your opinion? That is not true. The technology for searching and later exploring shale gas comes from American firms, be-

cause the US, as well as Canada, are the only countries in the world which possess such technology. The Polish government has taken legal steps at the highest political level to secure our interests in exploring shale gas. In December last year, during President Komorowski’s visit to the US, a memorandum of understanding was signed, which is the basis for Polish-American cooperation regarding shale gas in Poland. Within this framework Polish scientists and representatives of energy firms will have the opportunity to learn about American technology and how to apply it in Poland. Concessions and exploration licenses were issued by the Environment Ministry to American firms such as Chevron and Exxon Mobil, Polish companies including Orlen and PGNiG, and international consortium Marathon Oil. In total, more than 80 concessions for research have been given. Research is tremendously expensive and needs a lot of capital investment. If shale gas is found, its use will occur in 10 years at best. Currently politicians and business in Poland, the EU and the US are faced with totally new developments in energy policy which our diplomacy is playing a crucial part in. The world of international business is very competitive, do you think that our firms are aggressive enough in their expansion? It depends on each particular venture. Yet research conducted by consulting firm PricewaterhouseCoopers shows that our businesses do not think enough regarding how to compete on the international market. Despite having a lot to offer, Polish managers are also concerned mainly with local and organic development. I believe there are two explanations for this. Firstly,

Poles to cash in on Euro 2012 Foreign tourists who will come to Poland for Euro 2012 will spend an estimated z∏.844 million, Rzeczpospolita reported. Commission on reselling tickets can reach z∏.2,500. Advertising, graphic design, PR, massage parlors and travel agencies are also opening specifically for the event. Manufacturers of sports accessories, souvenirs and t-shirts expect demand to be 10 times higher than usual.

EAST NEWS

more complex means, such as building capital or strategic alliances. This is more demanding from a legal, political and business point of view. Sometimes operations need diplomatic lobbying and we are ready to do it. We have to use every available occasion to promote our businesses. During our presidency of the EU Council I would like to present our economic potential and activity by organizing various meetings between companies. We are currently working on specific dates for such meetings both at home and abroad. In addition, one of the most important matters that we now have ahead of us is the exploration and future production of shale gas in Poland, and we are in the middle of EU discussions regarding this. It is not only an economic issue, but also a strategic one for Poland, so our diplomatic involvement is urgently needed. In the European Union arguments for and against such exploitation have already appeared and false claims have been raised about possible damage which could be done to the environment. Our duty in economic and diplomatic strategy is to present the truth about such exploration, which will not negatively affect the environment, and to defend our right to use our shale gas resources. Future exploration of shale gas will not only provide Poland with energy independence, but by exporting it we may raise the level of energy security for the whole of the EU.

Ms Stelmach intends to use Poland’s presidency of the EU Council to promote Polish companies and shale gas exploration the consolidation processes for Polish firms is not yet complete. Secondly, rather sadly, is the fact that Polish managers still have too little experience and possibly are a little fearful regarding expansion. Of course, there are examples of aggressive moves to reach foreign markets. One such example is the firm Asseco, which over the last two years has established itself as the leading provider of software production and integration services in the entire Central European market. Yet looking at the general picture of Polish business, I think it is doing well with regard to the domestic market, but firms often need support to move and establish themselves in foreign markets. We are ready to offer this diplomatic support. ●

Beata Stelmach • Appointed Deputy Minister of Foreign Affairs by Prime Minister Donald Tusk on May 1, 2011 • Worked as director of Poland’s Securities and Exchange Commission (Komisji Papierów WartoÊciowych i Gie∏d) • Participated in Poland’s negotiations to join the OECD and the EU • Worked as a consultant for the World Bank for capital market development in Ukraine (1996) and Russia (1997) • President of the Warsaw Commodity Exchange, 2000-2001 • Served on the supervisory board of Prokom Software and as vice president of MCI Management • Served as president of the Polish Association of Listed Companies (Stowarzyszenia Emitentów Gie∏dowych, SEG) • Graduated from the School of Planning and Statistics in Warsaw and studied at Calgary University and INSEAD for her MBA SOURCE: MINISTRY OF FOREIGN AFFAIRS

PiS to launch newspaper Main opposition party Law and Justice (PiS) is considering launching its own weekly publication, Rzeczpospolita reported. According to the daily, Stanis∏aw Janecki, former editor-in-chief of weekly Wprost, could become head of the editorial team.

Amnesty for illegal migrants The Polish government has announced that foreigners living in Poland without legal status will get a residency permit for two years. Estimates regarding the number of illegal immigrants in Poland vary from 40,000 to 500,000. Without legal status or a work permit, illegal immigrants live on the margin of society and are forced to work on the black market. ●

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OPINION & ANALYSIS

www.wbj.pl

JUNE 27 – JULY 10, 2011

Foreign policy focus

Struggling for a strong Europe – Hungarian presidency of the Council of the European Union Agata Gostyƒska

he Hungarian presidency of the EU Council finishes the work of the first trio presidency under the post-Lisbon institutional establishment. Contributing to the fruitful implementation of the treaty is not an easy task for any member state, especially for a newcomer that only joined the EU in 2004 and still lacks experience moving about Brussels’ Schuman Square. The inauguration of the Hungarian program was burdened with internal reforms concerning, among other things, a new media law that raised controversy and questions within the EU about the presidency even before it had started. However, the actions it undertook, particularly within the scope of the economic agenda, home affairs and external actions, proved the presidency’s determination to fulfill its priorities. While keeping its fingers crossed for its Hungarian friends, Poland, which takes over the presidency in July, is carefully watching Hungary’s stumbles and analyzing their potential effects on the Polish program.

Economy in focus The economic agenda is of particular significance to the dossiers of the Hun-

garian and Polish presidencies. In the face of persistent, deep fiscal problems in the EU, there has been important Hungarian involvement in negotiations with the European Parliament (EP) on the legislative package of economic governance measures, which aim to provide the EU with tools to force member states to reform their economies. The Hungarian presidency has been organizing informal meetings on a daily basis that aim to draw closer the positions of both parties. Reaching the compromise the presidency is ready to offer to the EP would mean a more favorable position at the outset of the forthcoming Polish presidency.

International affairs Contrary to the economic agenda, where the presidency’s competences are evident, the Lisbon Treaty limits its prerogatives in external actions by assigning foreign policy to the High Representative and Permanent President of the European Council. Hungary contributed to the formulation of the new practice of the presidency’s cooperation with EU institutions in this respective scope. While respecting Lisbon’s division of powers,

Hungary played a supporting role in North Africa. On the presidency’s motion, the EU Civil Protection Mechanism was activated to support the evacuation of EU citizens, while the Hungarian embassy in Tripoli coordinated this process in Libya.

“Hungary has performed better than public opinion initially expected” The further consolidation of the “supporting presidency” is attractive for member states holding the sixmonth leadership as it guarantees a presence on the international stage. However, this transition will depend highly on subsequent presidencies and their readiness to be flexible in terms of supporting and, when necessary, representing the High Representative.

Schengen zone The North Africa crisis accelerated the legislative work of Hungary’s priority focus on the Common Asylum System,

sage to other candidates that it is an enlargement-friendly presidency.

while it cast a shadow on the integrity of the Schengen zone. Concerned about an influx of migration from the south, France imposed temporary checks on the EU’s internal borders in response. This further muddied the waters when it came to Bulgaria’s and Romania’s already vague prospects for joining Schengen. Despite a green light from the EP, the EU Council decided to postpone the decision on Schengen enlargement until at least September. The Polish presidency will have a tough nut to crack to find consensus on this issue in the Council.

Better than expected Despite operating in a critical period for the EU, Hungary has performed better than public opinion initially expected. Part of its success may arise from its close cooperation with institutions, particularly the EP, which proved its ambitions to play a significant role in the decision-making process. The Hungarian presidency has striven to establish foundations for the EP’s involvement in the development of the next multi-annual financial framework. Early established rules of cooperation would enable the forthcoming trio presidency to focus on moderating the merit of debate and leave troublesome technicalities of inter-institutional cooperation behind. ●

EU enlargement Contrary to home affairs, Hungarian efforts were praised in the field of EU enlargement. The European Commission recently supported completing negotiation talks with Croatia, though it is not certain whether the Hungarians will be able to conclude the remaining four chapters by the end of June. However, there seems to be a political agreement to sign the Accession Treaty during the Polish presidency, which might constitute a precious mes-

Agata Gostyƒska is an analyst at the Polish Institute of International Affairs. This column is the first in a series by experts at the Polish Institute of International Affairs (PISM). www.pism.pl

Note: This article reflects the state of the debate in the EU as of June 17. It does not cover the results of the negotiations on the final content of a six-pack of measures on economic governance or conclusions of the European Council as of June 23-24.

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OPINION & ANALYSIS

JUNE 27 – JULY 10, 2011

www.wbj.pl

Poland’s EU presidency carries huge risks

ere’s a question: What do you remember about Hungary’s presidency of the EU Council over the past six months? The likely answer is, “not much.” There has been very little media attention given to Hungary’s six-month tenure at the head of the Council of the European Union. The only time when it got a significant amount of press was earlier in the year, when the government chose to implement an unfortunate law putting tighter controls on the media. Understandably, the publicity was bad. But Hungary’s presidency has been important in setting precedent for exactly what the role entails in the post-Lisbon Treaty era. As the experts from PISM write in our pages this week (see analysis, p. 10), Hungary has taken important steps in both domestic and foreign EU policy. Still, it’s unsurprising that little has been said about it. Now that the positions of President of the European Council and High Representative of the Union for Foreign Affairs and Security Policy have taken many of the responsibilities once held by the rotating presidency, Hungary inherited a largely administrative position.

Opportunity – and risk That hasn’t stopped Polish media from going ga-ga over the country’s presidency. And, to a certain extent, that’s justified. Poland will, at least at the beginning of its presidency, be in the spotlight, and will also have a chance to give greater voice to its priorities for the bloc. But Poland should also be wary. The realities of the presidency now mean that it is much easier to garner negative publicity than positive. Off the record, some analysts say that the most Poland can hope for from this presidency is some mildly positive press in the West. Achieving even that will be a difficult task. The European Union is facing the greatest crisis it has seen in its short history, and there is little that Poland, even at the head of the Council of the European Union, can do about it. What happens with the euro zone will be decided upon by euro-zone leaders, especially Germany. If the crisis deepens, all eyes will be on Chancellor Angela Merkel. Poland’s presidency will be totally overshadowed. Indeed, the first two months of

Poland’s presidency – July and August – take place while most of Europe is on vacation.

Election fever And in the autumn, just when Poland will really be able to move forward on important issues and garner some attention, parliamentary elections will be held, probably in October. As a result, the government will be focusing inward, while the opposition will be jumping on any opportunity to show how the government isn’t using Poland’s position to advance the nation’s interests. This carries the double risk of the government not giving the necessary attention to the presidency, or worse, that it will look to use the presidency to score political points domestically. One need only to look to the disastrous Czech presidency a couple of years ago to see just how risky holding elections during the rotating presidency can be. All of that looks daunting, and that’s without considering significant opposition in the EU to Poland’s main policy goals (see Cover Story, pp. 12-13). On the EU budget, the largest

members will resist greater cohesion spending. When it comes to security, Europe balks at the thought of beefing up defense. As for the “open Europe” policy, it does indeed seem that Croatia will finish its EU membership application under Poland’s term, but there is little appetite for any more expansion, and little energy for strengthening the Eastern Partnership, especially in the face of a resurgent Russia. Can all of this be overcome? Theoretically, yes. In practice, it’s likely that Poland will make some minor headway on some of its goals, and tout them as major successes. If it grows Poland’s international standing and influence in the EU, that will be a success in itself.

Emissions mess But Poland hasn’t exactly gotten off on the right foot. Towards the end of June, the country blocked an EU initiative to make its targets for carbon emissions cuts more ambitious (see story p. 3). The move revived Poland’s reputation as the stubborn, backward member of the bloc, and EU Commissioner Lewandowski

questioning whether global warming is even occurring (see Spotlight, p.2) has reinforced that image. It seems strange that Poland would stick its neck out on this non-binding agreement just before it takes over the rotating presidency.

“The EU is facing the greatest crisis in its history, and there is little Poland can do about it” With all of the challenges ahead, and the possibility that the Greek crisis could take center stage in international affairs for the next six months, Poland’s resistance to European action on climate change has the potential to be the defining issue of its presidency. Let’s hope it’s not what will come to mind when in six months we look back and ask: “What do you remember about the Polish EU presidency?” ●

The amazing, flexible Civic Platform

he last few weeks have seen a flurry of political transfers, all of them in the direction of the ruling Civic Platform (PO). The first major defector was Bartosz Ar∏ukowicz, a popular leftist politician who decamped from the Democratic Left Alliance (SLD) to Prime Minister Donald Tusk’s party.

So what does this say about the political situation in Poland today and what does it say about PO? Well, for one it means PO is now increasingly seen as a sure bet to win October’s parliamentary elections, which has inevitably increased its attractiveness to the country’s political movers.

An all-inclusive party

“Civic Platform has something for everyone” After that came Joanna KluzikRostkowska, the former leader of the center-right Poland is Most Important (PJN) and once a key member of PO’s biggest rival, the conservative Law and Justice (PiS). Then there was Dariusz Rosati, another major leftist politician who once served as Poland’s foreign minister, and Józef Pinior, a leftist intellectual and former Euro MP. Negotiations are said to be ongoing with other politicians from both the left and the right, who want to join the PO bandwagon.

When it comes to the ruling party, Prime Minister Donald Tusk’s recent moves show he is bent on building a non-ideological, all-inclusive political party where possible admirers of Che Guevera can sit side by side with fans of former Chilean leader Augusto Pinochet and raise their hands together in a parliamentary vote. PO started out in 2001 as a centerright, socially conservative, economically liberal party. During the 2005 parliamentary and presidential elections, the party campaigned on such a platform, proposing to implement a flat-tax rate and to fight against corruption. They lost both elections to the more socially conservative but economically leftist Law and Justice (PiS). Then in 2007, after two years of controversial PiS-led government, Donald Tusk and his party won snap parliamentary elections on a wave of anti-PiS sentiment.

Something for everyone Since 2007, PO has consistently done two things: continue to fuel the flames of anti-PiS sentiment (sometimes with the generous help of PiS politicians themselves) and blunt out any edges of ideological slant that could render the party unacceptable to a large number of voters. This is not to say that PO politicians are not allowed to voice opposing views and opinions. It’s just the opposite – but it is mostly done in a mild, non-confrontational manner. Even when a PO politician presses his viewpoint aggressively, the leadership always stresses the fact that opposing opinions and viewpoints are, after all, a strength of PO, not a weakness. Civic Platform has something for everyone. “You are a social conservative? No problem, this is Jaros∏aw Gowin, one of our party leaders. He is against public funding for in-vitro fertilization, against abortion and is very close to the Catholic Church, an upright citizen by any account.” “Oh, you have socially liberal views? Don’t worry, this is Bartosz Ar∏ukowicz, he supports public funding for in-vitro fertilization, a woman’s right to abortion and is keen on Poland being a secular state.”

And what does the PM himself believe in? His stance is presented thusly: “He is still an economic liberal, but he has matured and become aware of the plight of the average Kowalski and the weaker citizens in our society. So now he is a sensitive economic liberal who is not hostile to leftist ideas.” It is easy to be cynical and smug about Mr Tusk’s politics, but opinion polls show he is doing something right, with his party gaining over the last few weeks. After four years in power his party’s popularity has hardly been dented, despite constant accusations that they haven’t achieved much.

Just leave me alone Indeed, it seems the PM is right in thinking that Poles are simply not in the mood for ideology nowadays. Their minds are more focused on the mortgages and consumer loans that they have to pay off. They work longer now than they ever did in the past, get home late and are in no mood to watch politicians debate the merits and demerits of patriotism, the separation of church and state, or the downsides to state influence in the economy. When PiS was in power, you

couldn’t get away from ideological debates about former communist agents and their influence in today’s Poland, or about the moral decay corruption inflicts on society, among other things. It was all a bit too much for many people, as the 2007 election results showed. Too emotionally draining. And it certainly didn’t help anyone pay off their mortgage. PM Tusk’s politics of “small steps,” as he calls it, seems more palatable to many Poles. Over the past few years he has become an expert at sniffing out where the mainstream is on any given day. This is no doubt to a large extent thanks to the countless opinion surveys his aides commission but it’s undeniable that Mr Tusk also has a healthy dose of political talent. There used to be a time when politicians tried to convince citizens to their views. Today it is voters who decide politicians’ views (at least the ones they voice in public). PO doesn’t want to decide your views, they welcome them, literally. ● This is an edited version of a post from WBJ.pl blog “The business of politics” by WBJ politics editor Remi Adekoya. For more, log on to WBJ.pl

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Solorz-˚ak sells 25% of Cyfrowy Polsat Cyfrowy Polsat founders Zygmunt Solorz-˚ak and Heronim Ruta have obtained z∏.1.35 billion from the sale of a 25% stake in the company. Investors paid z∏.15.7 per share for the 86.1 million shares on offer. According to Mr Solorz˚ak, who still controls the majority stake at Cyfrowy Polsat, the money obtained from the sale will be invested in the telecoms segment, including the expansion of the high-speed LTE mobile internet network, Parkiet reported.

Maximum share price for JSW? The stock market debut of Polish coal miner Jastrz´bska Spó∏ka W´glowa (JSW), set for July 6, could see a price of z∏.141.80 per share, close to the maximum, according to Parkiet. Poland’s Treasury Minister set the maximum price for the JSW’s IPO at z∏.146 earlier this month. If the reports prove be correct, the firm will be worth some z∏.17.4 billion, with the Treasury set to earn z∏.5.76 billion. The exact share price was due to be revealed on June 28.

Orlen eyes Czech Cepro Polish concern PKN Orlen has expressed interest in the Czech Republic’s largest fuel distributor, Cepro. The Czech government is currently planning the firm’s privatization. Orlen will most likely compete with MOL, OMV and Gazprom, reported Dziennik Gazeta Prawna. Meanwhile Orlen Deutschland, a full subsidiary of Polish oil company PKN Orlen, plans to purchase an additional 200-250 service stations in Germany. The value of that project could reach €50 million. ●

JUNE 27 – JULY 10, 2011

Remi Adekoya

Poland's EU presidency

History in the making Poland has an opportunity to prove its worth as a major European player – but its EU presidency faces some daunting challenges Poland will take over the rotating six-month Presidency of the Council of the European Union on July 1, for the first time since it joined the bloc in 2004. At a time of economic turmoil in the euro zone, uncertainty concerning the situation in North Africa and concerns regarding energy policy brought about by the Fukushima nuclear disaster, the Polish government will certainly have its hands full. One of the most important items on the agenda will be the EU’s 2014-2021 budget, a particularly significant issue for Poland as the largest beneficiary of EU funds. Although largely a ceremonial role with little executive power attached to it, the presidency does entail framing the EU’s agenda and chairing meetings of the EU Council of Ministers. One advantage for the country is having Poles in important EU roles, which could help increase Poland’s influence during its presidency. For example, former Polish Prime Minister Jerzy Buzek is the current president of the European Parliament. Another Pole, Janusz Lewandowski, is the current commissioner for budget and financial programming and likely to be a strong ally of Prime Minister Donald Tusk’s government in pursuing the kind of budget desired by Poland. So what are the country’s prorities for the presidency and what are the chances they will be advanced during this six-month period?

Poland’s priorities Poland’s priorities begin with the EU’s purse strings. It is calling its policy “European integration as the source of growth,” essentially a call for increasing economic ties between EU members. It also wants the Cohesion Policy, which enables poorer regions of the EU to receive generous

subsidies, to remain a key cornerstone of EU policy. Poland also supports reform of the oft-criticized Common Agricultural Policy (CAP). The Polish government’s second priority is what it calls “a secure Europe.” The government’s position is that key to improving European macroeconomic security is the creation of a basis for an external energy policy for the EU and the advancement of direct EU-NATO dialogue. The third priority is described as “Europe benefiting from openness.” This entails strengthening the EU’s position on the international arena, further enlargement and the development of cooperation with neighboring countries. Poland hopes to ink an accession agreement with Croatia during its presidency, as well as cooperation agreements with countries like Ukraine and Moldova. It also wants a stronger focus on the Eastern Partnership, a program aimed at strengthening EU ties with former Sovietbloc states to the east of the bloc’s borders.

Diplomacy and crisis management “A lot of external factors could affect the Polish presidency. If there is a crisis situation, which is not difficult to imagine today, then Poland will have to focus on crisis management and that will distract it from its stated agenda,” said Jan Techau, director of Carnegie Europe, a think-tank. “But if there is no crisis and it can forge compromises with a good set of allies, then it can be successful,” he added, saying that Poland is widely praised in Brussels for playing the diplomatic game skillfully. One of the best ways to push through a particular issue in the EU is to make it part of a broader package of issues. Prior to putting the particular set of issues to a vote, negotiations take place, quid-proquos are exchanged and a con-

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Although largely an administrative affair, the EU presidency could go a long way in enhancing – or diminishing – Poland’s importance in the bloc sensus on the bigger picture is reached. Therefore all of Poland’s diplomatic skill will be needed to ensure gains are made on any major issue during its presidency. Leszek Jesieƒ of the Polish Institute of International Affairs (PISM) thinks that Poland’s priorities can be advanced, but will not be fully realized by the end of its sixmonth period at Europe’s helm in December. “The final agreements will not be a result of the formulations of the Polish presidency, but Poland can provide valuable input for setting the tone and direction of discussions for next year,” he said.

Cohesion and the CAP Poland is currently the largest beneficiary of EU funds, having been allocated a total of €65 billion for the 2007-2013 budgetary period. As a result it wants the EU to maintain its Cohesion Policy, a structural instrument meant to help the poorest member states reduce economic and social disparities with their richer European counterparts. Mr Techau believes a con-

tinuation of the Cohesion Policy is likely, though he thinks the biggest net spenders will attempt to reduce the amount of money they pay into the EU’s coffers. Jan Filip Stani∏ko from the Sobieski Institute agreed. “A consensus has to be reached on the issue. So while the major spenders will pursue the path of diminishing expenditure, they will not advocate a change in priorities, since there would be too many potential vetoes to such a move.” When it comes to CAP Policy, experts also do not foresee significant change. “The simple fact is that European farming would not be competitive without subsidies, and agriculture is an industry you want to keep alive. You never know, you just might need it some day,” said Mr Techau. “So I would expect some incremental changes in the 2014-2021 budget, but nothing revolutionary,” he added.

Energy for reform? As far back as 2005, the European Commission approved

the concept of the introduction of a comprehensive European energy policy. Six years later, no such policy has been formulated, much less agreed upon. Mr Stani∏ko, for his part, is skeptical that will change during the Polish presidency. “[The energy policy] goal is unrealistic, but if Poland wants to at least try to start a discussion on preparing the conceptual basis on which such an external energy policy would be based, then it is probably worth a try,” he said. Mr Techau also expressed doubt about the chance for a comprehensive energy policy coming out of the Polish presidency, saying that if Poland could manage to keep the subject in discussion, that in itself could be viewed as a success. “Unfortunately, I am afraid countries like Italy, Belgium, Greece and France will probably not be overly receptive to the concept,” he said.

Security and Cyprus With respect to EU-NATO dialogue, a major obstacle stems from hostilities between Turkey, a key NATO member,

COVER STORY

JUNE 27 – JULY 10, 2011

Reaching beyond Europe Despite the current difficulties within the EU’s borders, there seems to be a positive atmosphere concerning the issue of enlargement. Croatia is close to gaining full membership status and negotiations with Serbia and Iceland also seem to be going well. “Things are moving slowly but the picture is optimistic. The only thing is that nowadays, the EU isn’t satisfied

Legal Eye

Poland takes EU ‘presidency’ Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com

COURTEY OF KPRM

and the Greek side of the island of Cyprus, an EU member whose sovereignty is not recognized by Turkey. “An EU-NATO dialogue is being blocked by the seemingly unresolvable Cyprus issue. Unresolvable because Greece and Turkey approach it on principle and when you base your position on principle in such matters, then we end up getting nowhere,” Mr Techau said, adding that the chances of increased EU military spending during the current euro-zone crisis were “close to zero.” Mr Stani∏∏ko even sees a threat to the existence of NATO all together. “Recently, there have been several articles in influential periodicals calling for the dismantling of NATO due to a lack of common goals among its members. Apart from the Cyprus issue, Turkey seems to be at a crossroads in its foreign policy,” he said. “It is uncertain about the EU and has not made up its mind about whether to continue pursuing European integration or to focus on being a key player in the Middle East, which is within its capabilities,” he added. Advancing EU-NATO talks during its presidency thus seems a tall order for the Polish government

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Mr Tusk has said he wants to return “faith and energy” to Europe with promises, it needs to see the facts on the ground,” Mr Jesieƒ said. When it comes to the Eastern Partnership, a lot will depend on Ukraine. Russia has made Poland’s neighbor the offer of joining a Moscow-led customs union, but the Ukrainian government is still considering the EU’s offer of a free-trade zone with the bloc. “If the Ukrainians take the Russian offer of a customs union, they will be marginalized in Europe. But if they choose the EU offer, a lot of windows could be opened for them. So far, they are playing it smart by upping the ante, but the best solution would be for them to accept the EU offer in a manner that would allow Russia to save face,” Mr Techau said. The current Ukrainian government led by President Viktor Yanukovich has demonstrated its flexibility, and word from Kiev is that there is a realization among the decision-makers that the EU

option is by far the better one. But although it would be difficult to imagine Poland not pushing the Eastern Partnership issue, it must tread carefully. There has to be a balance between the interests of eastern and southern members who are now more concerned with the North African situation than about Ukraine or Moldova. If Poland were to push the issue too hard, they could meet with resistance from those who might not see any great gains (at least in the immediate future) from further eastward expansion.

A path full of hurdles Significant divisions exist within the EU on all of the abovementioned issues. This suggests Poland’s presidency will face some tall hurdles. Since the 2005 rejection of a draft EU constitution in France and the Netherlands, the bloc has been in a somewhat pessimistic mood, made even bleaker by the economic crisis which hit in 2008.

Sponsors for Poland's presidency of the EU While the EU presidency is a prestigious role, it is also very expensive. The Polish Ministry of Foreign Affairs said it will spend almost €110 million (z∏.440 million) on organization of the country’s six-month presidency, Dziennik Gazeta Prawna reported last year. Businesses from sectors including transportation, technology, and energy were chosen in public tenders to help finance Poland’s presidency. French car manufacturer Peugeot will provide use of 117 passenger vehicles worth over z∏.11 million, including 52 new 508 model cars and 3 Peugeot iOn electric cars. Polish oil company PKN Orlen will help refuel the vehicles within the presidency fleet by offering 150 prepaid TankBank fuel cards worth z∏.1 million.

In a deal worth approximately z∏.500,000, Microsoft will supply Warsaw with 400 copies of Windows 7 Ultimate and 400 licenses for Microsoft Office Professional. Mobile operator Orange plans to lend foreign delegates mobile phones which work on the Orange network and to grant access to Orange hotspots at five Polish airports. It will also supply wireless modems and laptops along with software and technical support. Meanwhile, soft-drink giant Coca-Cola Poland will supply over 100,000 liters of Kropla Beskidu bottled water, worth approximately z∏.350,000. In addition, Swedish-based bus manufacturer Scania will offer six Scania Touring HD coaches for use during Poland’s EU presidency. TK

There are worries today that growing populism and nationalism in some member states might even reverse the process of European integration, notably with regard to the Schengen area and the euro zone. Prime Minister Donald Tusk has said that he would like the Polish presidency to return some “faith and energy” to Europe, something which would be welcome in the current environment, analysts agreed. But this fall Poland will hold parliamentary elections, and a nasty campaign could derail Poland’s attempt to inject that positive energy into EU politics. Along with all of the challenges that Poland’s presidency faces, this adds another layer of complexity that will require some deft maneuvering. That said, the success or failure of the Polish presidency will to a large extent depend on the negotiation abilities of the Polish government, the willingness of EU members to compromise and, ultimately, a degree of luck. Stakeholders in the Polish presidency are keeping their fingers crossed that a major crisis doesn’t hit within the next six months. Poland has been granted a chance to prove that it can play in the major leagues. If it does so, its status will be enhanced in Europe and around the world, but if it fails, it would be a major blow for a country which is still viewed by some as having a minor role in EU affairs. ●

On July 1, Poland will assume the presidency of the Council of the European Union, otherwise known as the Council of Ministers. Despite all the fanfare leading up to the event, Poland may very well find that such title comes with little, if any, real power. Since the adoption of the Lisbon Treaty in 2009, the EU has a new, more powerful president, known as the President of the European Council. The Council of the EU and the European Council, despite similar names, are entirely different institutions.

Competing presidencies? By creating a new and more permanent position of President of the European Council, the Lisbon Treaty has significantly downgraded the importance and power of the six-month rotating presidency of the Council of Ministers. While Poland will serve a sixmonth term, the President of the European Council will be in the middle of his two-anda-half-year term.

Poland’s presidency While Poland will be able to play a role in setting the legislative agenda among member states, the more difficult and controversial legislative initiatives are increasingly being spearheaded by the the more permanent President of the European Council. Poland’s mandate will be limited to coordinating the cooperation of EU member states at the ministerial level, meaning that if the topic at hand is agriculture, Poland’s minister of agriculture will chair any meeting of EU agricultural ministers. Of course Poland may seek to push its own agenda by calling more meetings devoted to a specific issue important to Poland, but final decisions will almost always be subject to approval at a higher level. Moreover, the Lisbon Treaty has further reduced

the mandate of the Council of Ministers and that of its rotating presidency by stripping it of all responsibility for EU foreign policy in favor of the newly created office of the High Representative of the EU for Foreign Affairs.

The ‘other’ president Previously, the European Council (comprised of heads of state) and the Council of Ministers (comprised of government ministers) acted as one entity, at least in a formal sense. The Lisbon Treaty split the two into separate legal institutions. To the European Council was added a new more permanent office of president, while the Council of Ministers continued with the tradition of a six-month rotating presidency. Many of the powers previously held by the rotating presidency have been transferred to the President of the European Council or to the newly formed High Representative of the EU for Foreign Affairs. The European Council is charged with creating the vision and spearheading the implementation of the EU’s political goals. The President of the European Council oversees the work of the Council, chairs Council meetings, liaisons with the EU Commission and serves as the titular head of the EU in foreign affairs.

What if … Just how many presidents does the EU need ? What if the EU abolished the sixmonth rotating presidency … would the EU cease to function? Many political commentators answer no, with some arguing that doing away with the six-month rotating presidency would in fact improve the functioning of the EU by eliminating unnecessary overlap and duplication between the two presidencies. I tend to agree … but only after Poland closes out is presidency. ●

BUSINESS ENVIRONMENT

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Poland’s budget deficit will level off at about z∏.30 billion at the end of this year, the government said. This is z∏.10.2 billion lower than the amount previously anticipated. Deputy Finance Minister Dominik Radziwi∏∏ told Dziennik Gazeta Prawna that the government’s goal is to have sufficient funds available in case the Greek financial system should collapse to avoid borrowing money at high rates.

Cheaper gas this summer Oil giant PKN Orlen, looking to increase its market share, has devised a strategy which could seriously lower gas prices during the summer. Customers who buy over 30 liters of gas at one of a selected 300 Orlen stations can now receive a discount of at least z∏.0.10 per liter. This means the price of gas will fall below the z∏.5 per liter mark, according to Dziennik Gazeta Prawna. ●

A guide to Polish business and industry

JUNE 27 – JULY 10, 2011

Strong franc worries mortgage-takers The month of June was not a good one for Poles who pay their mortgages in Swiss francs. Between May 31 and June 24, the currency rose some 2 percent. On June 23 the Swiss franc broke its all-time record against the z∏oty, reaching z∏.3.39, before coming back down before the close of trade. The more expensive franc could have some serious consequences for the many Poles who have taken out mortgages in the Swiss currency, lured by low interest rates. “When the franc rises by

z∏.0.06, that means that the monthly cost of a z∏.300,000 loan will increase by z∏.27,” Pawe∏ Majtkowski, an analyst at financial advisory Expander, told Dziennik Gazeta Prawna. The rise was the result of fluctuations in the dollar and the euro, analysts said, as jitters over Greece continued to fluster markets. On the franc’s record-breaking day of trade, both it and the dollar gained about 2.5 percent against the z∏oty, while the euro lost 1.3 percent against the dollar and 1.4 percent against the franc. “The value of the Polish

currency against the franc is a derivative of the euro/franc situation” said Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers. “When the franc gains against the euro, then automatically it becomes expensive against the z∏oty.” Economists put the blame for the fluctuations squarely on the uncertainty in Greece. “The market does not believe in the positive effects of the EU assistance to the Athens,” Emil Szweda from Noble Securities told the newspaper. AS, AK

SHUTTERSTOCK

Budget deficit z∏.10 billion lower

Unemployment rate drops slightly Retail sales grow in May, in line with expectations slower than in April Poland’s unemployment rate decreased to 12.2 percent in May from 12.6 percent in April, the Central Statistical Office revealed. The number of unemployed Poles dropped to 1.96 million in May from 2.04 million in April. The drop was more or less in line with expectations. A Reuters poll of analysts had expected the unemployment rate to drop to 12.1 percent, while BZ WBK correctly predicted the AK 12.2 percent figure.

Przewodnik po polskim biznesie i gospodarce

Back to work? Poland’s unemployment rate, May 2010-May 2011

15.0 Source: Central Statistical Office

13.5 12.0 10.5 9.0

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2011 2010

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Poland’s retail sales increased by 13.8 percent year-on-year in May, slower than the 18.6 percent seen in April but still beating expectations. A poll of analysts by Reuters had expected an increase of just 13.1 percent. “Despite this small upside surprise, we expect retail sales growth to soften for the remainder of 2011 as monetary tightening begins to reach consumer spending,”

Danske Bank said in an analysis note. Retail sales of food, drinks and tobacco rose 5.9% y/y. Sales of clothing and footwear shot up 24.2 percent annually. In monthly terms, retail sales dropped 1.1 percent, in contrast to the 2.3 percent rise seen in April. In JanuaryMay, retail sales grew 12.3 percent compared to the corresponding period in 2010. AK

The Polish residential market offers some real bargains now, but don’t count on a quick return on investment 17

As Poles become wealthier, the country’s luxury residential real estate segment is in for further growth

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

TriGranit Development Corporation and IPR have opened the first two buildings in their Bonarka 4 Business (B4B) class-A office complex in Kraków. The independent structures offer a total of almost 15,700 sqm of space which has already been nearly fully leased out by the investment’s commercializing agent, Jones Lang LaSalle. The whole B4B project will comprise 32,000 sqm.

Hubertus phase 5 on sale Developer Eco-Classic has launched sales of apartments in the fifth, and penultimate, phase of its Hubertus residential project in Warsaw. The latest building in the scheme, which was designed by the Fabiƒski-Goc∏owski Architekci studio, will comprise 180 units sized from over 32 sqm to more than 106 sqm and priced at z∏.8,454-9,891 per sqm.●

In this issue Albatross Towers in Gdańsk . .15 Balmoral buys Warsaw land . .15 Residential market overview .17 Luxury homes segment . . . . . .18 Family on its Own changes . . .18 New Hill Park launch . . . . . . . .18 New Mayland malls . . . . . . . . .19 Pasaż Victoria . . . . . . . . . . . . . . .19 Property-related stocks . . . . . .19

JUNE 27 – JULY 10, 2011, LI 16/25-26

Residential projects

Albatross Towers project takes wing Robyg is ramping up its activity in the northern city of Gdaƒsk Developer Robyg has laid the cornerstone at the construction site of its Albatross Towers residential project in Gdaƒsk. The first phase of the investment, which is scheduled for completion in Q4 2012, will deliver 143 apartments on 17 storeys with the units sized 27126 sqm and priced z∏.5,9408,300 per sqm. Robyg, which is already working in Gdaƒsk on its S∏oneczna Morena and Lawendowe Wzgórza housing developments, will later add four more phases to the Albatross Towers scheme. When completed in 2014, the whole project, which will be located in the city’s Przymorze neighborhood, will comprise a total of approximately 720 apartments. “Gdaƒsk is a very promising market for us and Przymorze [is] one of the most

interesting districts in terms of creating modern residential developments,” Wojciech Okoƒski, president of Robyg’s management board, said in a statement. Oscar Kazanelson, president of Robyg’s supervisory board, told Lokale Immobilia that the company owns plots in Gdaƒsk for future investments which will allow the company to build approximately 600 apartments a year in the city in the near future. Warsaw Stock Exchangelisted Robyg specializes in the development of residential projects, with the company’s ongoing investments in Warsaw including City Apartments in the district of ˚oliborz and Nowa Rezydencja Królowej Marysieƒski and Osiedle Zdrowa in the Wilanów district. The developer is planning to launch its first office project in the capital in the near future. Adam Zdrodowski

COURTESY OF TBT I WSPÓLNICY

Bonarka 4 Business opening

•

The Albatross towers scheme will comprise some 720 apartments when complete

Balmoral Properties buys prime Warsaw plot Real estate investor Balmoral Properties has bought three hectares of land located on Warsaw’s ul. K∏opot and ul. K∏opot Bis, between the capital’s Arkadia shopping center and Dworzec Gdaƒski subway station. The company, which has not revealed the value of the transaction, is planning the development of a multiphased mixed-use complex at

the location. “The size and location of the plot will allow us to create a very attractive space for people to live and work close to the city center with easy access to well-developed retail, recreation and commercial services,” Alun Jones, a representative for Balmoral Properties, said in a statement. According to a newly

enacted zoning plan, approximately 100,000 sqm of space can be developed at the location. Balmoral Properties’ plans envision the construction of some 600 housing units and 20,000 sqm of office space. The investor is now in the process of selecting the architectural firm which will design the planned complex; design work is expected to finish by

the end of this year. Construction on the scheme could start in the second half of 2012. Owned by an investment company that is managed from the Channel Islands and which previously developed luxury apartments in London, Balmoral Properties has been active in the Polish market for three years. Currrently the firm is

involved in a project in Kraków that will see revitalization of the precincts of the historic brewery on the city’s ul. Lubicz. Balmoral Properties will soon launch construction on 300 apartments, as well as almost 7,000 sqm of office and 5,000 sqm of retail and service space there, respectively. Adam Zdrodowski

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LOKALE IMMOBILIA – REAL ESTATE

JUNE 27 – JULY 10, 2011

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Residential market

SHUTTERSTOCK

Strong growth leads to price decrease

The number of apartments for sale is at a long-term high

Small apartments can now be had on the cheap – but don't expect a quick return on investment The Polish residential market has continued to grow in the first half of the year, a trend that has been visible in sales volumes. According to Home Broker and Open Finance

data, the number of deals in the January-May period was approximately 25 percent higher than in the first five months of 2010. Developers have been trying to respond to the growth in demand with an increased number of construction starts, although the most recent data from Poland’s statistical office suggests this trend may now actually be changing, said Bar-

tosz Turek, a property market analyst at Home Broker.

ket analysis firm Reas, the figure for the six largest housing markets in Poland amounts to a total of almost 42,000. “This has translated into a decrease in apartment prices and a change in the structure of the supply. Currently, in the largest markets new apartments are sold at prices which are more than 10 percent lower than in 2009. Besides, the apartments which enter the market are relatively small, so that the total price is affordable for the average Kowalski,” Mr Turek said. He added that more than a half of all potential buyers are now looking for two-room apartments whose size does not exceed 50 sqm, and many are also considering studio apartments. When looking at the structure of actual sales transactions, the bias towards small units is even more evident, Mr Turek said.

Warning of oversupply Experts have recently been warning that the market could suffer from oversupply if developers continue to churn out new schemes at their current pace. The number of units available for sale is now at a long-term high. According to data from residential mar-

Unheard-of offers Some developers have recently been redesigning their investments so that they comprise more of the sought-after two-room units and are easier to commercialize. Meanwhile, already completed apartments, which according to Mr

Property-related stocks Security

Closing price on June 22

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏.mln)

BUDIMEX

87.00

-0.17

83.80

109.20

-1.08

25,530,098

2,221.12

CELTIC

19.55

-2.25

17.00

60.55

N/A

34,068,252

666.03

DOMDEV

50.45

-0.69

38.52

50.80

11.37

24,560,222

1,239.06

ECHO

5.30

-0.38

4.16

5.55

22.97

420,000,000

2,226.00

ELBUDOWA

159.70

-0.81

149.00

188.40

-3.21

4,747,608

758.19

ENERGOPLD

3.78

-3.57

3.57

4.13

-9.13

70,972,001

268.27

ERBUD

26.20

-5.24

24.95

61.00

-49.03

12,602,711

330.19

GANT

12.39

-2.44

11.90

23.38

-42.77

20,499,953

253.99

GTC

18.99

-1.61

17.58

24.98

-20.54

219,372,990

4,165.89

HBPOLSKA

2.26

0.89

2.02

3.90

-31.52

210,558,445

475.86

JWCONSTR

14.90

-1.97

13.50

18.35

-18.22

54,073,280

805.69

LCCORP

1.37

-6.80

1.37

1.72

-9.27

447,558,311

613.15

MARVIPOL

9.10

5.08

7.40

16.18

-39.33

36,923,400

336.00

MIRBUD

3.86

-1.53

2.89

4.75

33.10

75,000,000

289.50

MOSTALWAR

29.90

-12.70

29.90

69.40

-54.73

20,000,000

598.00

MOSTALZAB

2.65

-5.36

2.54

3.82

-32.57

149,130,538

395.20

ORCOGROUP

32.95

-3.60

19.00

40.00

50.05

14,053,866

463.07

PBG

150.00

-0.13

134.70

252.00

-33.33

14,295,000

2,144.25

PLAZACNTR

4.20

-5.62

3.70

5.59

-17.00

292,647,720

1,229.12

POLAQUA

18.79

3.24

16.00

20.60

3.81

27,500,100

516.73

POLIMEXMS

3.18

-0.31

2.91

4.84

-30.11

521,154,076

1,657.27

POLNORD

26.53

-4.40

26.53

39.41

-28.63

23,798,439

631.37

RANKPROGR

12.85

-1.15

9.59

13.60

N/A

37,145,050

477.31

ROBYG

1.94

0.00

1.70

2.13

N/A

257,390,000

499.34

RONSON

1.43

0.70

1.36

1.78

-19.21

272,360,000

389.47

TRAKCJA

2.78

-1.77

2.49

4.97

-35.35

232,105,480

645.25

ULMA

83.70

1.95

70.00

88.00

9.55

5,255,632

439.90

UNIBEP

6.57

-3.38

6.38

10.30

-17.88

33,927,184

222.90

WARIMPEX

8.84

-0.67

7.64

10.89

11.90

54,000,000

477.36

ZUE

10.30

-6.36

10.30

15.14

N/A

22,000,000

226.60

Turek constitute approximately 20 percent of the offer, usually feature relatively large areas and are thus more expensive and more difficult to sell. As developers grapple with large existing housing stocks, it is not that difficult to find offers in the primary market which two or three years ago were almost unheard of. In Warsaw, for one, buyers will currently be able to find new apartments in the prestigious Wilanów district which are priced at less than z∏.7,000 per sqm, a price limit previously reserved for the cheapest locations in the capital. Prices could soon decrease even further as the planned introduction of more restrictive regulations governing the highly popular Family on its Own preferential mortgage program for first home buyers (see story, p. 18) is expected potentially to limit housing demand by more than 10 percent.

Time to invest? So is now the right time to invest in homes in Poland and capitalize on their growing value once the market has fully recovered?

The answer, it turns out, depends on how long you are ready to wait for a return. Experts point out that while property values tend to appreciate in the long term, steep increases within the next two or three years are unlikely. “The rules of the real estate market say that when the economic situation is stable, the value of a property can appreciate by a maximum of 5 percent per year, as long as it is in a new building (with the exception of unique locations such as the Old Town) and is relatively well-located,” said Pawe∏ Grzàbka, president of the management board of CEE Property Group, a real estate advisory. He added that in the next two years the Polish residential market would still be unpredictable and that it can’t be ruled out that even cheaper offers will continue to emerge. If that happens, the average growth for property values will come in considerably lower than the above-mentioned 5 percent, he said. So while prices may make buying attractive, the days of a quick, profitable turnaround are now over. Adam Zdrodowski

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

JUNE 27 – JULY 10, 2011

Luxury market

Poles show growing appetite for luxury homes

Dworska 13 is one of the leading examples of luxury apartments in Poland inevitably increase social prosperity.

Additional conveniences Developers point out that a growing number of home buyers on the Polish market have started to value additional conveniences when considering where to live. To keep up with increasing expectations, luxury apartments are now expected to be

not only well-located, tastefully designed and spacious (their area usually starts from 100 sqm), but should also be equipped with intelligent systems including air-conditioning, alarm systems and audiovideo security. In addition, many luxury apartments now include a spa area, gym, and “concierge” services, which can include buying tickets for events or

doing minor house or repair work. Among the leading examples of luxury residential investments in the Warsaw area are Orco’s city center apartment building Z∏ota 44, luxury building Pu∏awska 111 (ECC Real Estate) Orco’s apartment building Mokotowska 59, as well as luxury housing estates Apartamenty Dworska 13 (Caelum Devel-

Residential

SHUTTERSTOCK

The Sejm has passed legislation modifying “Family on its Own,” the government’s popular mortgage-subsidy program for first-time home-buyers. Through the program, the government pays about 50 percent of the interest on qualifying mortgages over the first eight years. The changes must now be passed by the Senate and signed by President Bronis∏aw Komorowski. Most importantly, the price limits determining which residences are available for the program will be changed, significantly reducing the number of such dwellings. Another change calls for excluding secondary market homes from “Family on its Own,” a modification that was cheerfully welcomed by developers. Also, despite previous plans to the contrary, singles –

and not just married couples, families and single parents – will be allowed to benefit from the subsidies.

Finally, people eligible for the program can be no older than 35. If nothing out of the ordinary occurs, and the Senate

passes the changes and the president signs them, they should come into force in September or October of this year. “Family on its Own” was created in September 2006.

Katarzyna Piasecka

Marvipol to launch New Hill Park project

Sejm passes changes to ‘Family on its Own’ program The legislation will set new price and age limits for the government’s popular mortgage-assistance program

opment) and Osiedle Konstancja (Globe Trade Centre), both in Konstancin-Jeziorna, near the capital. In 2009, at the height of the economic crisis, 70 percent of the apartments in Mokotowska 59 were sold. Their average price amounted to some z∏.25,000 per sqm and the majority of the transactions were concluded without a mortgage.

In addition, investments in Poland’s second-home sector have also met with considerable interest from clients. One new growth area in this sector is for condo-hotels, luxury buildings used both as hotels and condominiums. Tri-city developer Inpro is currently building a four-star condo-hotel in the popular Mazurian resort of Miko∏ajki. The facility is expected to be completed in Q1 2013. The attractiveness of condo-hotels is due mainly to the fact that they fulfill the role of full-service weekend and holiday homes. “Developers’ enthusiasm is justified. True luxury apartments are a really soughtafter real estate in this country. I say ‘true’ to emphasize their distinctiveness from the apartments with increased standards sometimes advertised as luxury dwellings,” said analyst Ma∏gorzata Pajor from real estate advisory Ober-Haus. “The popularity of exclusive apartments has been increasing gradually and will continue to do so in the future, which is a reflection of the prosperity in Polish society.”

Under its current framework, a family or a single parent can take a loan for an apartment not larger than 75 sqm or a house with space up to 140 sqm. In January this year, the government announced that the program would expire in 2012. December 31, 2012 will be the last day that applications will be accepted. According to the Ministry of Infrastructure, as of October 2010, over 71,000 preferential loans for total of some z∏.12 billion had been granted within the program. The ministry also estimated that by 2012, the number of loans granted under the program would reach between 110,000 and 130,000. Katarzyna Piasecka

COURTESY OF MARVIPOL

Poland’s luxury residential real estate market has continued to grow despite recent difficulties in the economic climate. According to developers and analysts, as Poland becomes wealthier, this particular real estate sector will continue to see growth. “During the economic crisis, Warsaw’s real estate market turned out to be one of the most stable markets among all the CEE countries. At the same time, investors were inclined to withdraw their assets from banks and to invest them in real estate,” Agnieszka Tomczak-Tuziƒska, of Caelum Development, said. According to Alicja KoÊciesza, deputy marketing manager at Orco Property Group, the current demand for luxury apartments in Poland has been enhanced by the fact that Euro 2012 is set to take place in the country next June. Preparation work for the event, which includes the expansion of infrastructure, in particular roads, hotels and stadiums, has boosted the country’s employment rate which will

COURTESY OF CAELUM DEVELOPMENT

Increasing prosperity has led to added demand in the sector

Marvipol is also currently selling units in its Apartamenty Mokotów Park development Warsaw Stock Exchange-listed developer Marvipol will soon launch construction on its New Hill Park residential project in Warsaw. The company has just selected Przedsi´biorstwo Robót In˝ynieryjnych Pol-Aqua as the general contractor of the investment with the value of the transaction amounting to z∏.39.8 million. The New Hill Park scheme, which will be located between ul. Pasymska, ul. Encyklopedyczna and ul. Pu∏kowa in the capital’s Bielany district, will comprise 31 low-rise buildings

with a total of 124 upscale housing units. Marvipol is financing the investment, which Pol-Aqua is expected to build by the end of February 2013, with its own funds. Warsaw-based Marvipol has developed 14 residential projects to date. The company is currently selling units in the Apartamenty Mokotów Park, Osiedle Zielona Italia, Villa Avanti and Melody Park projects in Warsaw and is planning the launch of new schemes in the capital’s ˚oliborz and Bielany districts. Adam Zdrodowski

JUNE 27 – JULY 10, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Retail development

Mayland to build new malls in Wroc∏aw, Pi∏a Retail space developer Mayland Real Estate is planning to build a new shopping center in Wroc∏aw’s Gàdów district by 2014. Called Idylla, the planned development will be located in the area of the city’s ul. Na Ostatnim Groszu, ul. Legnicka and ul. Horbaczewskiego and will deliver 120,000 sqm of space. Mayland, which says the location of the future investment was decided upon due to the quickly progressing development of the western part of Wroc∏aw, wants the Idylla project to include a three-star hotel with 200

rooms, as well as a business center. The tenants of the retail part of the scheme are to include brands which are not yet present in the Polish market. In related news, the developer has announced it will soon launch construction on the Nimfea shopping center project in Pi∏a, Wielkopolskie voivodship. The development, which will be located on the Gwda River and will be one of the first modern shopping centers in the city, will provide 45,000 sqm of space. Mayland Real Estate has been active in Poland since 2006. In 2008, the company delivered three shopping centers in the country:

Karolinka in Opole, Pogoria in Dàbrowa Górnicza and Jantar in S∏upsk. The devel-

oper plans the construction of seven malls totaling approximately 300,000 sqm

of GLA in the next few years. Adam Zdrodowski

COURTESY OF PROCONCEPT COMMUNICATIONS

Together the new shopping centers will provide 165,000 sqm

which currently occupies the area, if planning permission is granted. The company’s previous plan was rejected by Lublin voivodship’s historic buildings preservation authorities because they said it interfered with the historical character of the area in which the

The Nimfea shopping center in Pi∏a will deliver 45,000 sqm of space

proposed shopping center would be constructed. According to the new plan, the facility will be lower and its architectural style will fit in with neighboring historic buildings, the firm says. Called Pasa˝ Victoria after a 19th-century hotel which stood at the same location until it was

First tenant in MARR Business Park Food-products wholesaler Mark-7 will be the first tenant in the MARR Business Park industrial project in Kraków. The company has taken up over 1,700 sqm of space in the scheme with Cushman & Wakefield having facilitated the transaction. MARR Business Park is located on Kraków’s ul. Nad Drwinà close to several major transportation routes.

Podhale water park opened

New planning decision for Pasa˝ Victoria Mayra Investments, a special purpose vehicle owned by Centrum Development and Investments Polska (CDI Polska) has applied for a new planning decision for Pasa˝ Victoria, its downtown Lublin shopping center project. Pasa˝ Victoria will replace the “Sezam” shopping center

destroyed in World War II, and designed by Kraków-based architectural studio Ingarden & Ewy, the facility was orginally to offer some 36,000 sqm, 19,000 sqm of which would have been retail space. The parking lot was to have a capacity of 250 cars. CDI Polska specializes in

the revitalization and development of retail and office projects in the centers of Poland’s largest cities. The company’s portfolio includes such properties as the Renoma building in Wroc∏aw, Okràglak in Poznaƒ, Posejdon in Szczecin and Supersam in Katowice. Katarzyna Piasecka

Contractor and designer Miastoprojekt Wroc∏aw has announced the opening of Terma Bania, a new water park in Bia∏ka Tatrzaƒska which will add to the tourism infrastructure in the Podhale region. The investment is owned by private investor Józef Dziubasik, who also owns a nearby guest house and a neighboring ski lift. Terma Bania is a three-storey building offering over 43,000 sqm of space. ●

MARKETS

www.wbj.pl

JUNE 27 – JULY 10, 2011

Stocks report

world stock indices DJIA

NASDAQ

12,109.67 (June 23 close)

S&P500

2,686.75 (June 23 close)

1.22% (for the week)

FTSE100

1,283.50 (June 23 close)

2.39% (for the week)

DAX

5,674.38 (June 23 close)

1.27% (for the week)

-0.43% (for the week)

Greek drama hits markets

NIKKEI225 7,149.44 (June 23 close)

9,596.74 (June 23 close)

0.60% (for the week)

1.97% (for the week)

CHANGE: 4.60%

CHANGE: 0.38%

CHANGE: 2.06%

CHANGE: -3.82%

CHANGE: 2.52%

CHANGE: -7.30%

(year to June 23)

52-week high: 12,876

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 9,614

52-week low: 2,061.14

52-week low: 1,010.91

52-week low: 4,790.00

52-week low: 5,809.37

52-week low: 8,227.63

Andrew Nawrocki, Market analyst & trader, Gowebtrade.com The markets continue to react nervously to any mention of debt-ridden Greece. With limited macroeconomic data released at the end of June, investors turned their attention yet again to the troubled nation, and the state of the US economy. Monday June 20 began with indices across Europe falling sharply. Failed attempts over the previous weekend to bring any solution on the Greek situation was not welcomed by investors. Tuesday June 21 saw a reversal, as developments in Europe concerning austerity measures, as well as traders betting correctly that Greek PM George Papandreou’s government would pass a vote of confidence, shot markets upwards. The Polish blue-chip index rose more modestly than most

Major indices WIG

48,485.26 (June 22 close)

WIG20

2,807.74 (June 22 close)

22.06

21.06

20.06

17.06

16.06

15.06

14.06

13.06

10.06

09.06

08.06

07.06

06.06

22.06

21.06

20.06

17.06

16.06

15.06

14.06

13.06

10.06

2,800

09.06

48,000

08.06

2,840 07.06

48,600

06.06

2,880

03.06

49,200

02.06

2,920

01.06

49,800

31.05

2,960

30.05

50,400

27.05

3,000

26.05

51,000

03.06

52-week low: 2,270.522

02.06

Change year to June 22: 1.93%

01.06

52-week low: 39,366.83

31.05

52-week high: 2,932.62

Change year to June 22: 1.75%

30.05

Change for the week: -2.05%

27.05

52-week high: 50,371.74

26.05

Change for the week: -1.57%

Top 5 BEST PTI FAM KCI ATLAN

Closing 6.84 9.77 1.59 0.93 12.75

% change (week) 52-week high 35.18 16.50 29.4 12.00 28.23 2.56 16.25 1.61 14.35 13.40

52-week low 4.60 6.51 1.22 0.79 6.96

Top 5 PGNIG GETIN CEZ TAURON BZ WBK

Closing 4.28 13.34 147.00 6.77 227.90

% change (week) 2.39 2.22 0.96 0.89 0.18

52-week high 4.40 15.29 154.10 6.89 235.30

52-week low 3.29 9.35 118.70 5.04 179.00

Bottom 5 BMPAG ASBIS ZASTAL DELKO NEWW

Closing 4.36 2.55 2.26 6.90 36.30

% change (week) -18.81 -17.74 -15.67 -14.81 -13.34

52-week low 3.06 2.47 2.26 6.90 36.30

Bottom 5 TPSA TVN CYFRPOL PKOBP LOTOS

Closing 16.90 15.76 15.70 41.81 45.20

% change (week) -11.1 -6.47 -5.88 -3.33 -3.00

52-week high 19.01 18.90 17.35 46.81 49.42

52-week low 14.21 15.76 13.36 36.15 28.35

52-week high 6.80 4.49 5.35 15.60 45.60

Currency report

Swiss franc’s historic highs

Other indices mWIG40

2,866.56 (June 22 close)

sWIG80

12,061.74 (June 22 close)

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

22.06

21.06

20.06

17.06

16.06

15.06

14.06

13.06

10.06

09.06

08.06

07.06

06.06

22.06

21.06

20.06

17.06

16.06

15.06

14.06

13.06

10.06

12,000

09.06

2,800

08.06

12,160 07.06

2,840

06.06

12,320

03.06

2,880

02.06

12,480

01.06

2,920

31.05

12,640

30.05

2,960

27.05

12,800

26.05

3,000

03.06

52-week low: 10,980.45

02.06

Change year to June 22: -1.53%

01.06

52-week low: 2,361.69

31.05

52-week high: 12,932.00

Change year to June 22: 2.10%

30.05

Change for the week: -1.93%

27.05

52-week high: 2,987.72

26.05

Change for the week: -1.24%

12 800

NewConnect

54.96 (June 22 close)

WIG-Banki

6,864.66 (June 22 close)

SOURCE: WSE

22.06

21.06

20.06

17.06

16.06

15.06

14.06

13.06

10.06

09.06

08.06

07.06

06.06

22.06

21.06

20.06

17.06

16.06

15.06

14.06

13.06

10.06

6,800

09.06

55.0

08.06

6,880 07.06

55.6

06.06

6,960

03.06

56.2

02.06

7,040

01.06

56.8

31.05

7,120

30.05

57.4

27.05

7,200

26.05

58.0

03.06

52-week low: 5,751.39

02.06

Change year to June 22: -1.40%

01.06

52-week low: 54.52

31.05

52-week high: 7,387.49

Change year to June 22: -13.33%

30.05

Change for the week: -2.02%

27.05

52-week high: 64.39

26.05

Change for the week: -2.33%

European indices. June 22 saw markets trade sideways for most of the day, partly in anticipation of Federal Reserve Chairman Ben Bernanke’s speech late in the day, and partly because of lower volumes expected on Thursday June 23 due to the Corpus Christi holiday. The index in Warsaw was not hammered like other European indices, which fell in reaction to Bernanke’s pessimistic speech on the state of the US economy. Amongst the hardest hit up until Wednesday June 22 were PKN Orlen and Lotos, falling 3.13 percent and 4.88 percent, respectively. Tauron, one of the newest additions to the WIG20, managed to perform well, up close to one percent for the week as of 3 pm on Friday June 24. ●

The end of June brought a lot of market nervousness. Uncertainty due to the apparent reluctance of many in Greece to back further reforms translated into volitile trading in the euro and Swiss franc. The second reason for traders’ anxiety was weak macro data from China and Europe, and later the US’s the decision to release some oil reserves. June 24 brought a rebound after the EU and the IMF approved a five-year savings plan for Greece, and China declared that it was winning the fight against inflation. These factors increased volatility and risk aversion in the currency market. After reaching $1.44 the EUR/USD dropped to $1.42, as capital flew to safer currencies. Emerging markets’ currencies also suffered, includ-

ing the z∏oty. The currency depreciated and reached z∏.4.02 against the euro. After reaching z∏.2.84 the USD/PLN finished the week at z∏.2.80. The story of the week for June 20-24 was the Swiss franc, which reached an historic high against the z∏oty at z∏.3.39 on Thursday, June 23. The franc is causing a lot of concern for many Polish credit-holders. The government is even considering an aid program similar to the one Hungary introduced with the CHF/HUF rate (pay maximum HUF180 per CHF1, and the rest is put aside and re-paid later as a low-interest loan). The Monetary Policy Council will certainly have to act in terms of monetary policy since inflation is higher than expected. ●

currency rates 3.4789 24.06

SOURCE: NBP

3.4658

3.4500

21.06

22.06

3.4658

3.4912 17.06

20.06

3.4795 3.4

16.06

0.0993 24.06

0.0991

0.0992

PLN-100JPY

3.6

22.06

21.06

0.0996 20.06

17.06

0.0995 16.06

3.2883

3.3375 24.06

0.09

0.0996

PLN-RUB

0.11

22.06

3.2908 21.06

3.3149 20.06

17.06

3.2969 16.06

4.4705

4.4706 24.06

3.0

3.3081

PLN-CHF

3.5

22.06

4.4983 21.06

4.5329 20.06

17.06

4.5300 16.06

2.7661

2.7914 24.06

4.5278

PLN-GBP

22.06

2.7776 21.06

2.8058 20.06

17.06

2.8069 16.06

3.9846

3.9905 24.06

2.5

2.8077

PLN-USD

3.0

22.06

3.9848 21.06

3.9930 20.06

17.06

3.9678 16.06

3.9

3.9788

PLN-EUR

4.1

THE LIST

JUNE 27 – JULY 10, 2011

www.wbj.pl

Motor Industry and Freight

Car Fleet Management Firms

Rank

Ranked by size of car fleet

Company name Address Tel./Fax E-mail Web page

Size of car fleet (number of cars)

Revenue from fleet management (z∏. mln)

Total revenue (z∏. mln)

www.bookoflists.pl

Number of contracts held

Number of branch offices (locations)

Services

Selected clients

Number of employees / Year founded

Ownership: Polish / Foreign

Top local executive / Title

5,672

17 (Warsaw; Gdaƒsk; ¸ódê; Bia∏ystok; Bydgoszcz; Szczecin; Olsztyn; Wroc∏aw; Katowice; Koszalin; Zielona Góra; Lublin; Poznaƒ; Rzeszów; Toruƒ; Kraków; Opole)

Long term leasing; fleet management; leasing

Lotos; Eden Springs; Empik; Agencja Greenfish; Agencja Ochrony Juwentus

113 1995

Abris Capital Partners - 100% None

Jerzy Kobyliƒski

1 (Warsaw)

Full-service operational leasing; car fleet management including: registration, insurance, transport damage liquidation, substitute cars, technical check-ups and repairs, tire replacement and safekeeping, fuel management, car sales, car fleet and user safety policy consulting, reporting

Metro Group; Polbank EFG; Raben; Statoil; ThyssenKrupp

73 2001

None LeasePlan Corporation - 100%

S∏awomir Wontrucki

WND

WND 1999

None BNP Paribas - 100%

Janusz Kowalik

WND

46 2001

None ING Lease Holding Amsterdam - 100%

Leszek Pomorski

68 2004

Europejski Fundusz Leasingowy - 100% None

Frederic Lustig

1st half of 2010 / 2009 / 2008 / 2007

Masterlease Polska (Prime Car Management SA, Futura Leasing SA) ul. Polanki 4, 80-308 Gdaƒsk 58 340-4400/58 340-4499 centrala@masterlease.pl www.masterlease.pl

LeasePlan Fleet Management (Polska) Sp. z o.o. ul. Domaniewska 52, 02-672 Warsaw 22 335-1666/22 335-1661 info@leaseplan.pl www.leaseplan.pl

Arval Service Lease Polska Sp. z o.o. ul. Domaniewska 49, 02-672 Warsaw 22 454-5500/22 454-5510 arval@arval.pl www.arval.pl

ING Car Lease Polska Sp. z o.o. Pl. Trzech Krzy˝y 10/14, 00-499 Warsaw 22 820-5555/22 820-5560 ingcarlease.polska@ingcarlease.pl www.ingcarlease.pl

9,121

WND 19.0 15.0 14.0

Carefleet SA Pl. Orlàt Lwowskich 1, 53-605 Wroc∏aw 71 377-7634/71 377-7636 info@carefleet.com.pl www.carefleet.com.pl

6,458

49.5 83.6 WND WND

332

Long-term leasing of vehicles along 5 (Wroc∏aw; Warsaw; with full technical service; financing Ministry of the Treasury; Selena; Lukas Katowice; Gdaƒsk; Poznaƒ) and consulting on car fleet Bank; Alior Bank restructuring

Armada Fleet Management SA ul. Gen. Jankego 15B, 40-615 Katowice 32 200-8086/32 200-8076 armada@armada-fm.pl www.armada-fm.pl

6,390

WND WND WND WND

233

5 (Góraszka Katowice; Zabrze; Poznaƒ, Szczecin)

Fleet management; long- and short-term car rental; used car sales; full-service leasing; fleet management

WND

69 1996

WND

ALD Automotive Polska Sp. z o.o. ul. Ostrobramska 101A, 04-041 Warsaw 22 465-6879/22 465-6366 biuro@aldautomotive.pl www.aldautomotive.pl

5,693

WND WND WND WND

WND

2 (Warsaw; Katowice)

Full-service leasing; used car sales

Estee Lauder Poland; Abott Products Polska; McCain Poland; Grohe Polska

50 2000

WND ALD International - WND%

Tomasz Âlepowroƒski

Express SA ul. RzemieÊlnicza 26, 30-403 Kraków 12 1 97-79/12 254-0019 express@express.pl www.express.pl

3,960

30.3 WND WND WND

37.3 WND WND WND

489

12 (Kraków, Warsaw, Wroc∏aw, Gdaƒsk, ¸ódê, Poznaƒ, Szczecin, Lublin, Katowice, Bydgoszcz)

Long-term car leasing; car-fleet management

Budimex; Toyota Material Handling Polska; Polimex Mostostal; APC Instytut

94 1989

WND None

Hubert Laszczyk

Volkswagen Leasing Polska Sp. z o.o. Rondo ONZ 1, 00-124 Warsaw 22 538-7000/22 538-7070 info@vwleasing.pl www.vwleasing.pl

3,500

WND WND WND WND

WND 163.8 140.4 92.1

WND

Leasing of cars from the Volkswagen Group (VW, Audi, Skoda, Seat)

WND

WND 1997

2,960

WND WND WND WND

WND

Nivette Fleet Management Sp. z o.o. ul. Lotnicza 3/5, 04-192 Warsaw 11 22 517-9300/22 717-9330 info@nivettefleet.pl www.nivettefleet.pl

2,390

WND WND WND WND

159

Carolina Fleet Management Sp. z o.o. Al. Prymasa Tysiàclecia 54, 01-242 Warsaw 12 22 492-5678/22 492-5673 info@carolinafleet.pl www.carolinafleet.pl

1,290

WND WND WND WND

WND

Watin Leasing&Finance SA ul. Obornicka 4A, 62-002 Suchy Las /Poznaƒ 13 61 811-7360/61 811-7342 biuro@watin.pl www.watin.pl

850

WND WND WND WND

WND

1 (Poznaƒ)

Hertz Lease (Orbis Transport Sp. z o.o.) ul. ¸opuszaƒska 47, 02-232 Warsaw 10 22 500-1510/22 500-1520 biuro@hertzlease.pl www.hertzlease.pl

23,810

WND WND WND WND

230.5 427.2 337.1 255.1

15,216

132.3 243.7 195.5 151.0

207.4 322.9 268.4 208.1

13,109

WND WND WND WND

WND

1 (Warsaw)

Long-term leasing (fleet financing) and car-fleet management (technical maintanance, tire replacement, insurance, fuel cards, assistance, special services, reporting)

WND 19.0 15.0 14.0

9,121

2 (Katowice, Warsaw)

Long-term rental; full-service leasing; repairs and service; 24hour assistance; insurance; replacement cars; winter tires; fuel cards

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in November 2010. Number of employees and ownership structure are as of October 2010. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

630

President

Managing Director

President

Grzegorz ¸ozowski President

Managing Director

Joanna Wujcik-Lasocka;

Kulczyk Pon Investment - 40% Rados∏aw Sa∏ek; Artur Volkswagen Financial Services Zalewski - 60% Board Members

1 (Warsaw)

Long-term leasing; full service leasing; fleet management; consulting

WND

WND 1996

Orbis - WND% WND

Jeronimo Martins; Honeywell; SSL Healthcare

38 2002

WND

Marcin Nivette

Long-term car leasing; financing for car purchases; insurance; maintanance; fuel cards; substitute cars; GPS monitoring; assistance; short-term leasing

WND

12 2002

WND

Jacek Olesiƒski

Car-fleet management; full service leasing; rent-a-car

WND

17 1998

WND - 100% None

Short- and long-term leasing; full car-fleet management; sale and lease-back; substitute cars; fuel 2 (Warsaw, Piekary Âlàskie) cards; tire change management; 24-hour assitance; consulting; reporting; used cars sales

Grzegorz Uszycki President

President

Miros∏aw Kwiatkowski President, General Director

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

ARTS & CULTURE

www.wbj.pl

JUNE 27 – JULY 10, 2011

Talk about a celebration

Jazzing up Warsaw’s Old Town

Warsaw Talking Plac Defilad July 1 10 pm-2 am

The 17th International Jazz in the Old Town Festival Old Town Square, July 2-August 27 7 pm

With Poland taking over its six month presidency of the EU Council on July 1, Warsaw will host a day of musical events on four stages around the city to celebrate. The main concert of the inuguration party is entitled “Warsaw Talking” and will feature performances by artists including Polish band Perfekt, American singer Michael Bolton, and British trip-hop pioneer Tricky, as well as reinterpretations of classical music pieces by modern artists. This free event will also

feature a spectacular fireworks display at the Palace of Culture. ●

For more information log on to www.nina.gov.pl

Festival

Art out in the street The International Street Art Festival Various locations around Warsaw July 1-5 This unique summer event aims to make art accessible to all. Officially part of the cultural program attached to

Poland’s presidency of the EU, the festival will take place in some of the most popular, picturesque and unlikely (S∏odowiec subway station) parts of Warsaw, allowing maximum exposure for all of the acts taking part. International guests include Company Malabar

from France, Theater Titanick from Germany and Britain’s Bash Street Theatre, who will perform a comedy show in the Old Town. Other locations include the New Town and ¸azienki Park. ● For more information log on to www.sztukaulicy.pl

One of the largest jazz festivals in Europe will take place in the capital for the 17th time this summer. Fans of jazz will have free access to some of the world’s greatest living performers, who will play every Saturday night throughout July and August. The line up for this year’s event includes Scandinavian pianist Tord Gustavsen, trumpeter Gary Guthman, who has performed with artists including Aretha Franklin, Tom Jones and Tony Bennett, the Tingvall Trio, Manu Delgao & The Wokheads, the

COURTESY OF JAZZNASTAROWCE

Festival

SHUTTERSTOCK

Concert

Omar Puente Sextet and legendary Kraków group Laboratorium. ●

For more information log on to www.jazznastarowce.pl

Opera Premiere

Enlightened opera King Roger Teatr Wielki – Polish National Opera Pl. Teatralny 1 July 1 7 pm

Organized in conjunction with the Adam Mickiewicz Institute as part of the Polish presidency’s cultural program, the opera is about the enlightenment of 12th-century King

First performed in 1926, this Polish Opera was composed by Karol Szymanowski and Jaros∏aw Iwaszkiewicz. Britain’s David Pountney directs this updated version which premiered at the Bregenzer Festival in 2009.

Roger II of Sicily. The performance will feature English subtitles. ● For more information log on to www.teatrwielki.pl

Content provided by the Warsaw Insider. For more information on culture and entertainment in Warsaw this month, pick up the latest issue.

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl

Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl Le Guern Gallery ul. Widok 8, www.leguern.pl Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl Pracownia Galeria ul. Emilii Plater 14 www.pracowniagaleria.pl

State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.website.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl

Rempex Art and Auction House ul. Karowa 31 www.rempex.com.pl

Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 www.milanow-palac.pl www.postermuseum.pl

Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl

Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl

Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

LAST WORD

JUNE 27 – JULY 10, 2011

www.wbj.pl

Tech Eye

If Techeye were captain of our own destiny, we’d let chaos reign triumphant in our life, consequences be damned. We’d steal the rich and give them to the poor. We’d dress like a one-eyed, underwear-scorning pirate and give up religion for Lent, but only sometimes. That’s the kind of featherbrained fool we’d be. Alas, we aren’t even the cabin boy of our own destiny. Our wife is mistress of the leaky, mold-covered vessel we call our life and she keeps a firm hand on the TV remote at all

that do nothing and one that makes an odd noise; it’s built to the exact dimensions of the original “Star Trek” chair; and it’s made in the US, so the cost of shipping it abroad may amount to tribble the base price. Oh, and one other thing: “if you rotate the chair from right to left, it will slowly return to its centered position.” Star Fleet technology never disappoints. Techeye’s plan to achieve dominance through “Star Trek” kitsch has one flaw – our snaggle-toothed sweetheart will never let us spend $5k on a chair and our son won’t

easily give up that much floor space. So we’re going to have to be sneaky. And by sneaky, we mean bribe them. For the boy, we’re thinking the Torpedo scooter by Czech designer Jerry Koza (www.pragueart.cz/home) would be a good diversion. Mr Koza’s scooters look like dented cigars perched atop skateboard trucks and, judging by appearances, they’re sized for younger kids. Does the Torpedo offer enough bang for the buck? We kind of doubt it – at over $1,000 per scooter, you’d need an awful lot of bang. Our son will probably be happy enough, though, which just leaves the wife. And for her we have Samsung’s saucy NC215S, a solar-powered notebook (cost: around $480). With a 10.1 inch display, a 1.66

COURTESY OF SAMSUNG

times. Meanwhile, our offspring and his toys rule almost every square centimeter of the apartment. What does that mean for Techeye? Evenings spent watching reality TV and makeover programs while the boy tries to jam his inexhaustible collection of cars into our nose. That’s just the way it is. That’s what we used to think, anyway. And then we saw it – the “Star Trek” Original Series Captain’s Chair Replica from Entertainment Earth (www.entertainmentearth.com). Yes, it costs $5,500. Yes, it will dominate any room this side of Iota Geminorum IV. But William Shatner is the only man our wife has ever truly respected, so maybe if she sees us lounging around, Captain Kirk-style, she’ll transfer some of that respect to Techeye. Here are a couple more facts regarding the Captain’s Chair Replica: it features a number of glowing buttons

COURTESY OF JERRY KOZA

COURTESY OF ENTERTAINMENT EARTH

Gadgets to help you live long and prosper

GHz Intel Atom processor and an overall battery life of around 14.5 hours, the computer isn’t going to break any performance records, but then again it’s being marketed as environmentally friendly tech and your average granola-muncher doesn’t need a supercomputer to read about Greenpeace. The solar panel on the NC215S only charges around an hour of battery life per two hours of sun-soakage, but we won’t tell the wife that. She’ll get some sun, the boy will get some exercise and Techeye will at least be captain of his own living room. ●

Ever channeled William Shatner to impress a woman? Let us know: techeye.wbj@gmail.com

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22-03-10

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