WBJ #40 2011

Poland has submitted a report suggesting major changes to EU economic policy

IT giant HP is considering Poland for an upcoming outsourcing center

The central bank has intervened again to protect the z∏oty against speculators

12-13

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WWW.WBJ.PL

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VOLUME 17, NUMBER 40 • OCTOBER 10-16, 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 Lokale Immobilia

COURTESY OF EXPO REAL

Historic victory Donald Tusk has become the first Polish prime minister elected to a second consecutive term.

WBJ has full election analysis

• Expo Real wrap-up • Stary Browar sale • Another Warsaw skyscraper 16-19

A guide to Polish business and industry

2, 4, 5, 6, 11

Przewodnik po polskim biznesie i gospodarce

Office space in Poland 20-21

In this issue

EAST NEWS

News . . . . . . . . . . . . . . . . . . . . . . . . .2 Elections . . . . . . . . . . . . . . . . . . . .4-6 Europe News . . . . . . . . . . . . . . . . . .7 Business . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Interview . . . . . . . . . . . . . . . . . .12-13 Finance & Economics . . . . . . . . . .14 Markets . . . . . . . . . . . . . . . . . . . . . .15 Lokale Immobilia . . . . . . . . . . .16-19 The List . . . . . . . . . . . . . . . . . . .20-21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .31

Aid for EU banks

IKEA invests in wind

The ECB has pledged unlimited one-year emergency loans to euro-zone banks 7

The Swedish furniture giant is investing z∏.385 million in Polish wind farms

9

NEWS

www.wbj.pl

Palikot’s surprise

Kulczyk strikes gas in Ukraine Kulczyk Oil Ventures (KOV), Polish billionaire Jan Kulczyk’s oil and gas company, saw its stock price rise by as much as 7% on Wednesday, on news of successful testing at one of its gas concessions in Ukraine, Rzeczpospolita reported.

KOV’s share price had risen 3.5 % by the end of the day. The company announced the successful conclusion of testing at the O-12 borehole on its land in the Olgowskoje gas field in Ukraine. This followed KOV’s announcement earlier this week that daily production in Ukraine was increasing by about 20 percent. ●

COURTESY OF KPRM

Democratic Left Alliance (SLD), which won 7.7 percent of the vote, or from Palikot's Movement (RP) which won 10.1 percent.

In the end, Poles opted for a stable and predictable Donald Tusk over the volatile and controversial Law and Justice leader, Jaros∏aw Kaczyƒski.

Poles know there will be difficult times ahead and they have decided that Mr Tusk is the best person to hold the reins for now.

The prime minister has led Poland with relative success through a number of difficult periods over the past four years.

Most notably, Poland emerged as the only European Union

Remi Adekoya

On WBJ.pl Let’s build a new home Walking around Warsaw, it’s easy to forget that the city lay in complete ruins just a few decades ago. WBJ.pl sits down with Ewa Mazur, curator of the exhibition “Let’s Build a New Home. The Reconstruction of Warsaw,” at Warsaw’s History Meeting House, to discuss the impact of the war on Warsaw’s current urban landscape

20% is the amount by which PGNiG hopes to decrease its imports of natural gas from Russia. Last week’s talks with Gazprom proved ineffective in reaching this goal.

4.5% is the level of Poland’s headline interest rate, after the Monetary Policy Council decided to leave it unchanged.

z∏.176 million was PKP Cargo’s profit for the first eight months of 2011, z∏.20 million more than it achived for the same period in 2002.

z∏.8.293 billion was the total public expenditure on culture and national heritage protection in 2010. That’s 6.3 percent more than in the previous year.

Quote of the Week “For the next few years we will together and with solidarity carry the responsibility for our fatherland. This is for us a great honor” Prime Minister Donald Tusk, reacting to the first exit poll results Sunday evening which showed his party had won the most votes in Poland’s parliamentary elections.

Figures in focus Leveraging business Successful loan applications by small and medium-sized enterprises in 2010, in % of total loan applications (selected EU countries) 100 80 60 40

DATELINE

October

DESA ARTWORK AUCTION

Event: This event will feature the auction of works

by Józef Mehoffer, Leon Chwistek, Sophia Stryjeƒska, Wlastimil Hofman and Wojciech Kossak.

Location: Desa Unicum, Warsaw. desa.pl

13

AHK ECONOMIC FORUM

Event: The event will feature a lecture from the German-Polish Chamber of Industry and Commerce’s chairman of innovation and new technologies (INT). Location: Kraków ihk.pl (German and Polish only)

13-15 XVII POLISH YOUR MONEY FINANCIAL FORUM Event: The event hosts debates, conferences and seminars on international financial markets.

Location: Palace of Culture and Science, Warsaw. twojepieniadze.com.pl

14

INVESTMENTS IN EASTERN POLAND FORUM

Event: The event will focus on the significance of investment in the region, the regulations concerning investments, promotional strategies for cities and regions as well as the intensification of the acquisition process in Poland’s eastern regions.

17-19 POLAND AND CEE – MUNICIPAL AND GOVERNMENT PROJECTS Event: This event includes a series of workshops and lectures to promote local projects in Poland and Central and Eastern Europe.

Location: InterContinental hotel, Warsaw.

d lan

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Fin

Ma

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Po la

Fra

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lgiu Be

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UK

rm

Location: Kielce Trade Fairs targikielce.pl

PRCH RETAIL AWARDS

Event: At this event the Polish Council of Shopping Centres will announce the winners of the PRCH Retail Awards 2011.

Location: Warsaw. prch.org.pl

13

0 Ge

12

20

ria Ire lan d Gre ece

Talks between Poland’s gas monopolist PGNiG and Russian energy giant Gazprom concerning lower gas prices failed to reach an outcome on Wednesday, reported Parkiet. PGNiG imports most of its gas from Gazprom. Discussions on the topic of prices are set to continue next week, according to information Parkiet received from an unnamed source. PGNiG hopes to change the formula for calculating the price of Russian natural gas.

Polish Prime Minister Donald Tusk has been elected to a second term in office, making him the first incumbent prime minister in the history of post-communist Poland to lead his party to back-to-back parliamentary victories. According to the first exit polls, Mr Tusk’s party, Civic Platform (PO) won 39.6 percent of the vote while its coalition partner, the Polish People's Party (PSL) taking about 8.2 percent of the vote. After the seats are distributed, that could give the current ruling coalition over 50 percent of seats, meaning it would continue without any other coalition partners.

If another coalition partner is needed, it could either be the

member state to register positive GDP growth in 2009 – a year in which all others saw their economies contract in the wake of the financial crisis.

A year later, tragedy struck in Smolensk as the airplane carrying President Lech Kaczyƒski, First Lady Maria Kaczyƒska, many of Poland’s top military leaders and several top politicians, crashed, killing everyone on board. The nation was left in a state of shock, but Donald Tusk responded with calm.

According to most political experts, Prime Minister Tusk handled all these situations laudably. But he has nevertheless been criticized for neglecting to embark on important economic reforms and for performing poorly when it comes to overseeing the construction of roads and highways. Mr Tusk has also been accused of focusing on PR and perception at the expense of actual policy.

The controversy surrounding the reports into the Smolensk catastrophe, and the issue of where blame should be laid, has also served to cast a shadow over Mr Tusk’s reputation.

Numbers in the News

lga

PGNiG and Gazprom stalemate

Donald Tusk

IN THE SPOTLIGHT

COURTESY OF CEZARY PIWOWARSKI

Though his party had been all but counted out until a few weeks ago, former Civic Platform (PO) member Janusz Palikot polled better than expected, gaining 10.1 percent of the vote, according to exit polls.

Mr Palikot’s libertarian message – he favors legalizing soft drugs, allowing gay civil partnerships and implementing a flat tax – likely resonated with disaffected young voters disillusioned with the lack of opportunities they have found since PO took power four years ago.

OCTOBER 10-16, 2011

Bu

2

Source: Eurostat

Company index Acer ............................................13 GazProm ......................................2 Panattoni Europe ......................19 Advent International ....................8 gowebtrade.com ........................15 Paul Hartman Polska ................19 Amazon ......................................13 Helaba ........................................17 Penta Investments ......................8 Apple ....................................13, 23 Hewlett-Packard ........................12 Peter Nielsen & Partners ..........6

18-19 NUCLEAR POWER POLAND 2011

AsstrA ........................................17 HSBC ..........................................14 PGNiG ..........................................2

Event: In this third edition of the forum the issue of nuclear power safety will be the main topic of discussion.

Location: Courtyard by Marriott Warsaw Airport, Warsaw. topconsult.nazwa.pl/nowa_tcct/

Atrium European Real Estate ..16 IBM ............................................13 PKP ........................................6, 13

25

INTERNATIONAL PPP FORUM

Event: Public and Private Sector Cooperation – the Partnership Idea. This event will feature several discussion panels on PPP in Poland and around the world. Hosted by economist Robert Gwiazdowski.

Location: Plac Kolegiacki 17, Poznaƒ. bpcc.org.pl

Bank Zachodni WBK..................14 IKEA..............................................9 PKP Cargo................................2, 6 BBI Development NFI................16 Instal Bia∏ystok ..........................16 Bridge Properties ......................18 ITI..................................................8 Bridgehouse ..............................18 JEMS Architekci ........................18 Broadway Malyan ......................18 JMW Architekci ..........................12 Budimex ....................................18 Jones Lang LaSalle ..................17

RENEWABLE ENERGY FORUM

Event: This event will feature explanations of Poland’s law on renewable energy sources and discussions on the role of environmental funds in financing renewable energy, as well as their effectiveness in support of the renewable energy sector.

Location: Warszawskie Centrum EXPO XXI, Warsaw. zpfeo.org.pl/konferencje

Polimex-Mostostal ....................18 Polska Grupa Farmaceutyczna 12 Reuters ........................................8 RTL ..............................................8

BZ WBK ........................................8 Jungheinrich Polska..................19 Samsung ....................................13 Carrefour......................................8 Lehman Brothers ......................11 Sapa Building System................19 CB Richard Ellis ........................17 Liebrecht & Wood ......................17 Sedlak & Sedlak ........................13 CNN..............................................8 Makrum......................................18 Smyk ..........................................16 Coface ..........................................6 Martifer ........................................9 Tesco ............................................8 Danske Bank..............................14 Marvipol......................................18 Devonshire ................................12 Mid Europa Partners ..................8 Doughty Hanson ..........................8 Miller, Canfield, W. Babicki, A.

26

PointPark Properties ................19

DROOG DESIGN ........................22 Chelchowski & Partners ............5 Echo Investment ........................16 MLP Group ................................19 Emperia........................................8 MPGA..........................................16

Time Warner ................................8 TNS OBOP ....................................5 Toshiba ......................................13 Tradis............................................8 TVN ..............................................8

Ernst & Young ............................17 MPM Product ............................19 UNIQA Real Estate Polska ........17 Jeronimo Martins Dystrybucja ..19 Murapol ......................................18 Vivendi ..........................................8 Eurocash ......................................8 New Europe

Wardyƒski and Partners ............12

Eurohypo AG ..............................17 Property Holdings ......................18 Warsaw Stock Exchange ............9 Ferrovial Agroman ....................18 Nokia ..........................................13 X-Trade Brokers Fortis ..........................................16 Nordea Bank ..............................14 Dom Malerski SA ......................15

4

ELECTIONS

www.wbj.pl

OCTOBER 10-16, 2011

Election outcome

PO wins historic second term According to last Sunday’s exit poll results, the Civic Platform (PO) party won 39.6 percent of the vote, while its main rival Law and Justice (PiS) captured 30.1 percent. This makes the Donald Tusk-led PO the first party in post-1989 Poland to be elected in back-to-back parliamentary elections.

“It is the highest honor for me and for Civic Platform that we will be working for the next four years for all of you, regardless of who you voted for today,” said Mr Tusk. “In the next four years we will work twice as hard.”

The new government has yet to be formed, but it looks likely that the current government coalition of PO and the Polish People’s Party (PSL), which garnered 8.2 percent support, will once again rule in tandem.

“That is not only testimony to PO’s last years of governing

but also somewhat to the maturing of the Polish political system,” said Micha∏ Baranowski, senior program officer at the German Marshall Fund in Warsaw.

Poles were electing 460 lawmakers to the Sejm, the country’s lower house of parliament, and 100 senators to the Senate.

Exit poll results suggest PO will have 212 seats in the Sejm, three more than in the current parliament, wile PSL will have 27. PiS should obtain 158 seats, Palikot’s Movement (RP) 39, and the Democratic Left Alliance (SLD) 23. A total of 231 seats are required for an outright majority.

A new dimension The biggest surprise of Sunday’s elections was the strong performance of Palikot’s Movement, which received 10.1 percent of votes, according to exit polls. RP will replace SLD as the third-largest party in the Sejm, if the exit polls prove accurate.

A newcomer to the political scene, RP is headed by eccentric businessman and former PO MP Janusz Palikot. Strongly critical of the Catholic Church and in favor of legaliz-

ing gay civil partner- Clear victory ships, abortion on Election results, exit polls demand and soft 4.3 drugs, Mr Palikot’s 7.7 party’s strong show8.2 ing “has given the Polish political 39.6 scene a new dimen- 10.1 sion,” said Robert Kron, policy analyst at the Center for 30.1 European Policy Analysis in Washington DC. While Mr Tusk was clearly the biggest winner in Sunday’s election, SLD, which received only 7.7 percent of support according to exit polls, and its leader Grzegorz Napieralski were probably the biggest losers.

PO-PSL coalition likely to return Sejm seats by party, according to exit poll results 250 PO PiS

212 200 158 150

RP PSL SLD Other

* German Minority

100 39

50

27

23 1

0 PO

PiS

RP

PSL

SLD

Source: TNS OBOP

GM* Source: TVN24

Back to work According to exit polls, voter turnout was at 47 percent, which compares to a recordhigh 55 percent in the last parliamentary election in 2007. In comparison to Poland’s usual levels of participation, however, this year’s showing was still relatively high.

What looked like an easy win for PO a few months ago turned into a tight race as the gap between PiS and PO in the

EAST NEWS

Prime Minister Donald Tusk’s Civic Platform has likely become the first party to triumph in two consecutive elections in postcommunist Poland

Prime Minister Tusk celebrates with party leaders as the results come in

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ELECTIONS

OCTOBER 10-16, 2011

This time PO didn’t run on a platform of change, and its pledges to focus on economic reform and closer ties with the European Union were not new.

The “economic miracle” promised by PO in 2007 was also harder to sell in 2011, given the global economic outlook.

Many of the reforms PO promised in 2007, such as a repair of public finances, cutting red tape and public administration and improvement to infrastructure, have not been completely implemented.

This time, however, PO will have to work with slower economic growth, less generous EU funds in the 2014-2020 budget period and a weak z∏oty. The economy, which grew 4.3 percent during the second quarter of this year, is likely to slow in coming months, while unemploy-

Election time Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners fogo@millercanfield.com

Grzegorz Napieralski and his SLD party were the clear losers in Sunday’s poll ment is expected to exceed 12 percent by the end of the year.

But Mr Baranowski was optimistic that Mr Tusk would use the new term Poles have granted him to make good on his promises.

“Mr Tusk openly said this would be his last term as PM, so he has politically all the incentive to really finish up all his achievements in this term and build his legacy.”

Alice Trudelle

PO-PSL coalition likely to remain in government The ruling Civic Platform party looks set to be able to form a majority with its current coalition partner.

As WBJ went to press, TNS-OBOP exit polls showed that, as expected, Prime Minister Donald Tusk had led his party to a historic consecutive parliamentary election victory and is set to rule Poland for another four years.

Civic Platform (PO) received 39.6 percent of the vote, opposition Law and Justice (PiS) garnered 30.1 percent, while Palikot’s Movement (RP) came in third with

10.1 percent, according to the exit polls.

The ruling party’s current coalition partner, the Polish People’s Party (PSL) received 8.2 percent, while the Democratic Left Alliance (SLD) was supported by 7.7 of Poles.

If the exit polls prove to be correct, PO would have 212 parliamentary seats while PSL would have 27.

This means the two parties would have a comfortable majority of 239 votes in parliament. A total of 231 votes is needed to form a majority.

Before the elections, most

analysts had predicted that after today’s vote, PO would not have enough votes to form a government alone with PSL and would need a third coalition partner. This would have made for a rather messy and potentially volatile political situation, the last thing Poland needs in this time of global economic uncertainty and the crisis in the euro zone.

After the exit polls were announced, Foreign Minister Rados∏aw Sikorski confirmed that “if it is possible with PSL, we have always said we are

interested in continuing the coalition with them.”

“In front of us, we have the next not-so-easy step of putting it all together,” commented Waldemar Pawlak, the current deputy prime minister and leader of PSL. This is no doubt Mr Pawlak’s opening negotiating position, but the last four years of the PO-PSL coalition have been stable and without any major public disputes. It looks like Poland could be in for another four years of a smoothly-functioning government.

Remi Adekoya

Kaczyƒski’s Merkel comments: a turning point in the election?

Controversial excerpts concerning German Chancellor Angela Merkel in a book written by Poland’s main opposition leader, Jaros∏aw Kaczyƒski, look likely to have taken a toll on PiS’s election hopes.

Dubbed “Merkelgate” by the Polish press, the affair seems to have put Mr Kaczyƒski’s party, Law and Justice (PiS), behind the ruling Civic Platform (PO). A TNS OBOP poll released last Thursday in the midst of “Merkelgate” showed PiS with 18 percent support – placing it far behind the ruling PO, which was backed by 31 percent of surveyed Poles.

A week earlier, when Mr Kaczyƒski’s book had not yet gained much notoriety, PiS was almost neck-and-neck with PO in the polls.

The book, entitled “The Poland of Our Dreams,” contains several controversial passages about Ms Merkel. The passages were seen by many analysts as an attempt by the PiS leader to use anti-German sentiment to make political gains ahead of the elections.

In the book, Mr Kaczyƒski says that Chancellor Merkel “represents the generation of German politicians who want to rebuild German imperial power. A strategic axis with Moscow is part of that and Poland can only be an obstacle to it. Our country must be made to submit in one way or another. The critical thing is that Merkel wants Poland to submit, a soft submission, perhaps, but a submission nonetheless.”

Mr Kaczyƒski also spoke

5

Legal Eye

EAST NEWS

polls closed in the weeks before the election. However, according to exit polls, Polish citizens have given PO nearly as strong a mandate as they did in 2007, when the party won 41.51 percent of the vote.

“Polish people have voted for more of the same, they have broadly approved of the last four years and seem to be ready for another four years of PO government,” said Mr Kron.

“But the lower result shows that people are very aware that there are still many things that are left undone,” he added.

In 2007, the election result was largely viewed as a referendum on the tumultuous 15 months when PiS leader Jaros∏aw Kaczyƒski and his twin brother Lech, respectively prime minister and president, led Poland.

www.wbj.pl

against German investments, writing, “I can’t claim to be overjoyed about German investment in western Poland.

We could wake up one day and find ourselves in a smaller Poland.”

Another comment, which Mr Kaczyƒski has refused to explain despite repeated requests from journalists, seems to show his doubts about the legitimacy of Ms Merkel’s election as German chancellor. “I don’t think that the awarding of the post of chancellor to Angela Merkel was pure coincidence. But I won’t elaborate on my belief, I’ll leave that to the political scientists and historians,” reads Mr Kaczyƒski’s book.

Prime Minister Donald Tusk and Foreign Minister Rados∏aw Sikorski reacted strongly, saying Mr Kaczyƒs-

ki’s comments were harming Polish-German relations and thus were detrimental to Poland’s national interests.

Foreign Minister Sikorski said the PiS leader should stop “stirring up bad blood against Poland’s biggest trading partner.”

President Bronis∏aw Komorowski, meanwhile, called on Mr Kaczyƒski to apologize to Ms Merkel for his comments, the Polish Press Agency reported.

German government spokesperson Georg Streiter declined to comment on Mr Kaczyƒski’s comments, saying only that the chancellor “places extraordinarily high value on a friendly relationship with our Polish neighbors,” reported the Associated Press.

Alice Trudelle

This week the process to form a new government begins, following Sunday’s parliamentary elections.

According to the exit polls, no single political party was expected to win a clear majority of seats in the Sejm or Senate. If they are accurate, the previous coalition government of Civic Platform (PO) and the Polish People’s Party (PSL) should survive. But just what is a coalition government? And just how is the prime minister selected? To find the answer let’s turn to Poland’s Constitution … well, sort of.

Selecting a prime minister Once elections are over, the president of Poland is obliged to call for the newly elected Sejm and Senate to convene within 30 days.

Within 14 days of the first sitting of the Sejm the president of Poland will then appoint a new prime minister. Just what criteria the president is supposed to use in selecting the new prime minister, however, is not actually provided for in the Constitution. It doesn’t even get a mention. Not one word. Rather, it is simply assumed that the president will nominate the head of the political bloc that has garnered the most seats in the Sejm. But this is based more on custom and practice as opposed to any constitutional requirement.

Rather than providing for any specific selection criteria, the constitution simply defines the manner in which the president’s nominee for prime minister is confirmed.

The Constitution requires that following the appointment of the prime minister by the president of Poland and nomination of the Council of Ministers by the newly appointed prime minister, the appointment of the new prime minister and Council of Ministers must survive a vote of confidence by the Sejm. In other words, the new government must obtain an absolute majority of votes in the presence of at least half of the 460 Sejm members. Alternatively, the Sejm may select the prime minister if it fails to support the person nominated by the president. But again, any person nominated to be

prime minister is subject to a vote of confidence by the entire Sejm.

If, at the end of the day, the person nominated prime minister is unable to garner the necessary votes to pass a vote of confidence by the Sejm, the president will dissolve the Sejm and call for new elections. At this point the entire process to form a new government will begin anew. If exit polls are to be believed though, the current prime minister would appear to have the best chance of being nominated for a second term as prime minister.

The need for a coalition In order to ensure enough votes to confirm the president’s nomination of prime minister, the nominee’s political party will need to reach out to one or more other political blocs elected to the Sejm in order to be able to form a coalition government. In its simplest form, a coalition government is a cabinet of parliamentary government comprised of two or more political blocs elected to parliament. The primary reason to form a coalition government is that no political party has won a majority of seats in the parliament. A coalition government that commands a majority of the votes in parliament tends to be more stable and to have a longer life expectancy in comparison to a minority coalition government. In recent years Poland has had two minority governments, one a coalition and one not; however, neither served an entire four-year term in power.

Polish experience Poland has never had a single party majority government since the first free parliamentary elections were held in 1991. Instead, Poland has had five coalitions and two minority governments.

Less than half the governments have actually served a full term in office. In all likelihood the next government will again be a coalition. This week the horse trading will no doubt begin in earnest between the different political blocs who seek to form a coalition. ●

6

ELECTIONS

www.wbj.pl

OCTOBER 10-16, 2011

International reaction

Markets to take PO victory in their stride

PO win ‘good for EU relations’

In the longer-term, shielding Poland against the euro-zone crisis is all important

COURTESY OF THE EUROPEAN PARLIAMENT

If the exit polls released when WBJ went to press prove accurate and the center-right Civic Platform (PO) leads the Polish government for a second consecutive term, local currency and stock markets are not expected to react.

“There would have been an impact if the [main opposition party] Law and Justice had won, but news of a PO victory

was forecast by markets,” said Adam Narczewski, an analyst at brokerage house X-Trade Brokers.

PO promised to narrow the budget deficit, increase political stability and make economic reforms if it remained in power.

The party has a strong track record when it comes to looking after the economy – its principle achievement during its first four years in office was to guide Poland’s economy to growth in 2009. In that year, all other European Union coun-

Finance Minister Jacek Rostowski

tries saw their economies enter recession.

Nevertheless, PO’s promises and its ability to react to crises could be severely tested if the euro-zone crisis takes a turn for the worse.

As a result of the euro zone’s recent troubles, the value of the z∏oty has plunged, causing local-currency government bonds to fall 15.7 percent in dollar terms last quarter.

Poland needs to keep its public debt-to-GDP ratio below 55 percent, or legally mandated austerity measures will come into force.

“To achieve the target, Poland must make sure the z∏oty is stronger than it is at present,” Mr Narczewski said, adding that the central bank and the Finance Ministry will play an important role.

A widening of the deficit, which could occur as a result of a weak z∏oty, could have a negative impact on the amount of EU funds Poland receives, and therefore on the strength of its economy. A key factor behind the country’s 2009 economic growth was a massive inflow of EU aid.

Donald Tusk’s conciliatory foreignpolicy is viewed as a key factor for future European stability In the lead-up to Sunday’s parliamentary election, much of the analysis abroad focused on the perceived negative impact a Law and Justice (PiS) victory could have on Poland’s relations with the rest of Europe, with many foreign newspapers viewing it as a straight battle between “pro-European,” Donald Tusk and “conservative, nationalistic, and anti-European” Jaros∏aw Kaczyƒski.

The election would “determine whether the country continues on its conciliatory course with Russia and Germany, or whether it returns to a more combative stance with its historic foes,” an article from the Associated Press proclaimed.

As a result, Civic Platform’s (PO) victory is likely be warmly received by many of the major power brokers in Brussels, with Mr Tusk certain to attempt to continue his party’s current policy of maintaining good relations with Poland’s

COURTESY OF THE CHANCELLERY OF THE PRIME MINISTER

Effect on business

Donald Tusk’s success is good news for Angela Merkel western neighbors.

“It is good for the EU that PO was able to win, it is a sign of continuity and stability, which is definitely positive news for the region,” Jan Techau, the director of EU think tank Carnegie Europe, told WBJ. “This is a sign that the party system in Poland has started to solidify,” he added.

Mr Techau believes PiS’s failed bid to return to power is a clear message that a party cannot win an election with anti-European and anti-German rhetoric.

“Black and white, radical, xenophobic, old-man talk of this kind doesn’t win elections,” Mr Techau said.

Of all the EU’s leaders, German Chancellor Angela Merkel will undoubtedly greet the result most warmly, especially considering Mr Kaczyƒski’s negative remarks about her prior to the election.

“Tusk and Merkel have a very good working relationship, and there is no doubt she will be positive about the outcome,” Mr Techau said.

He also predicted Mr Tusk would pay an official visit to Germany in the near future in an attempt to help solidify the relationship between the two countries, and to confirm Poland is an important nation for the future of the EU. David Ingham

Gareth Price

Legal News Contact: Miros∏aw Stefanik ms@pnplaw.pl

Act on Developers

Electronic excise tax returns

On September 16, 2011, the Polish parliament adopted the Act on Developers. The act stipulates the rights and obligations of parties to development contracts, introduces measures to protect purchasers of premises in a given development project and deals with issues concerning bank guarantees and insurance agreements relating to development projects. It also concerns rules developers and banks need to follow when conducting bankruptcy proceedings.

The act will become binding six months after it is signed and announced by the president.

Starting from October 1, 2011, entrepreneurs are now able to send electronic returns relating to excise tax on games and on fuel surcharge. Returns may be sent online for Customs and Tax Duties and Finance-Accounting Settlements (ZEFIR System). From January 1, 2012, ereturns will also be applied for excise on ethanol, wine, beer, tobacco products and fuels. Electronic returns forms will be available at the home page of the Ministry of Finance. If sent electronically, returns have to bear a qualified electronic signature. It will still be possible to submit returns on paper.

Negative judgement regarding losses on shares and investment funds

New academic year, new rules

With its judgement of September 28, 2011 (court ref. no. II FSK 565/10), the Supreme Administrative Court overruled a tax interpretation relating to income tax on capital gains.

Investors will now not be able to decrease tax on income from shares by deducting losses from investments in investment funds, and vice versa. The Court confirmed that these two are different types of investments, despite the fact that income from capital funds and income from the sale of securities are incomes from the same source, i.e. income from monetary capital.

The current academic year, which started on October 1, is the first one to which a major new government reform of higher education will apply. The reform is the result of an amendment to the Act on Academic Education and the Act on Academic Degrees and Titles.

The most interesting change for students is the introduction of tuition fees for second and further courses of studies.

Thus, only one course of studies may be completed at the cost of the state. Freeof-charge academic education will still be available for those with the best grades.

Meanwhile, academic lecturers from state universities will have to obtain the consent of a chancellor to hold a second job. ●

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EUROPE NEWS

OCTOBER 10-16, 2011

Euro-zone crisis

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ECB offers emergency loans for banks under fire

ECB president Jean-Claude Trichet said banks should do what they can to reinforce their balance sheets

A wholesale recapitalization program could also soon be introduced In a bid to help steady the euro zone, the European Central Bank has pledged to provide banks with access to unlimited one-year emergency loans.

The ECB will also spend €40 billion on underwriting euro-zone lenders’ debt securities.

ECB president Jean-Claude Trichet called on “banks to do all that is necessary to reinforce balance sheets.”

European decision makers also appear closer to implementing a longer-term solution for propping up the banking sector. German Chancellor Angela Merkel said last

week that she would support a program to recapitalize lenders that are exposed to risky sovereign debt. This, she said, could be decided on as early as October 17, at an EU summit.

“Germany is prepared to move to recapitalize. We need criteria. We are under pressure of time and we need to make a decision quickly,” she said.

France, however, is opposed to a program of recapitalization, since some of its banks are heavily exposed to risky Greek sovereign debt.

French President Nicolas Sarkozy is worried his country’s AAA sovereign debt rating will come under threat if France is forced to pay huge sums to bail out its banks.

France, along with Belgium, has already pledged to underwrite the assets of Franco-Belgian lender Dexia that are most exposed to risky debt.

The two countries have split these holdings off into a “bad bank,” making Dexia the first European lender to be broken up as a result of the euro-zone debt crisis.

Many economists expected the ECB to cut interest rates last week to help re-energize the currency bloc’s economies.

In the end, however, it left the euro zone’s main interest rate unchanged at 1.5 percent – the third month in a row it has left borrowing costs on hold.

Explaining its decision, the central bank said that inflation was likely to remain “elevated.”

Gareth Price

European Union

Polish report calls for major changes in EU economic policy Poland is aiming to offer solutions for increasing the bloc’s economic growth Miko∏aj Dowgielewicz, Poland’s secretary of state for foreign affairs, presented the Polish presidency of the EU Council’s report on how to improve the bloc’s economic growth in Brussels last week.

In addition to highlighting the best way to step up growth in the region, the report seeks to find a solution to the issue of the need for development-stimulating investment, while at the same time maintaining balanced public finances.

“Without determined measures to boost growth, the European Union’s economy will risk further slowdown, which will hinder and delay its recovery,” a statement in the report reads.

Among the key recommendations contained in the document are the need to strengthen loan guarantee programs to improve funding for small and medium-sized firms, and to create one EU patent system that would reduce the cost of filing for a patent by as much as €30,000 to just €1,000.

Education is cited as a key factor in improving the economic outlook of the region.

The report suggests an increase in funding for programs fostering student mobility, as well as increasing to 40 percent the amount of people aged 25-34 with a higher education.

The report also proposes measures to increase the amount of women in the workforce, while e-commerce is viewed as having the potential to be a major catalyst for growth with the creation of a

single digital market.

“Building an efficiently functioning digital single market would make it possible to generate an additional 4 percent GDP by 2020,” a statement on the EU presidency website read.

Poland hopes that the report, which was drawn up in cooperation with the World Bank, will form the basis of discussions between EU countries on the best ways to tackle the economic crisis in the long term.

“We have to figure out a way of getting the EU out of the dead end in which it finds itself.

It is in the interest of Greece, Germany, Britain and others to strengthen the common market and to extract the maximum possible extra growth,” Mr Dowgielewicz said.

David Ingham

www.wbj.pl

7

8

BUSINESS

www.wbj.pl

OCTOBER 10-16, 2011

Television

Vivendi confirms TVN interest

FMCG SHUTTERSTOCK

The chairman of the supervisory board of Vivendi confirmed last week that his company is one of those interested in the takeover of private broadcaster TVN, which was put up for sale by majority shareholder ITI in July.

“It seems like everybody already knows we’re taking part in this process,” JeanRené Fourtou was quoted as saying by Polish daily Parkiet.

The French company, which wants to create a consortium of enterprises operating in the Polish market, already owns the digital platform Cyfra+.

“We’re thinking about creating a consortium, in which we would very much like to see a Polish partner or partners with a lot of experience in the Polish market and a good understanding of Polish realities,” Mr Fourtou added.

But according to Dariusz Górski, an analyst at BZ WBK, Vivendi may not actually be interested in the full TVN package offered by ITI, but instead will most likely

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The decision on who will purchase the Polish broadcaster will be made in midOctober

The US’s Time Warner and Germany’s RTL are also eying TVN focus on TVN’s “n” satellite TV platform.

“I don’t think Vivendi is interested in the whole ITI stake. They sort of clearly voiced that they are after ‘n’ and want a partner for the other sections, which implies that if successful they would split the business into pieces,” Mr Górski said.

The two other firms currently in the running to take over the broadcaster are America’s Time Warner and Germany’s RTL. For Time Warner, the owner of the CNN news channel, TVN would fit nicely with the

firm’s stated strategy of investing in fast-growing markets or media segments, while for RTL, the Polish television advertising market could be viewed as a tantalizing prospect, analysts say.

The decision regarding the sale of ITI’s 55.64 percent stake is now expected to take place some time in mid-October.

Commenting on the most likely outcome, Mr Górski said it was difficult to predict which firm would be successful, but “given their proven interest in the region I would bet on RTL.” David Ingham

Several firms shortlisted for Emperia’s z∏.900 million retail arm Four investment funds and two strategic players are reportedly interested in making the acquisition A number of companies are in the running to buy Polish trading group Emperia’s retail arm, which the firm values at z∏.900 million.

According to Reuters, which cites unnamed sources, there are six parties interested in taking over the retail network, which includes brands such as Stokrotka, Groszek and Lewiatan.

Four private equity funds

are among the bidders shortlisted by Emperia for the sale, Reuters wrote.

Advent International, Penta Investments, Mid Europa Partners and Doughty Hanson are on the shortlist, which is said to include both financial and strategic bidders.

Several media reports also said that retail giants Tesco and Carrefour were interested in bidding, although it’s not clear if they too have been shortlisted.

When contacted by WBJ, Emperia spokesperson Joanna ˚ytkowska said that the company had selected “a few” investors, but declined to give

names or a precise number.

“The potential investors are now conducting due diligence, and then in one month’s time they should say if they are still interested,” she said.

Ms ˚ytkowska added that the company would then analyze all the offers before picking one enterprise to complete the acquisition.

Emperia recently called off the sale of its distribution arm, Tradis, to Eurocash after the latter failed to make payment by the agreed deadline. Eurocash said it had not received approval from the competition regulator on time.

Gareth Price

BUSINESS

OCTOBER 10-16, 2011

www.wbj.pl

Energy

Recordbreaking quarter for WSE

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IKEA invests z∏.385 million in Polish wind power

Sixteen IKEA stores in Poland will be powered by the wind farms ...

The move forms part of the company’s longterm strategy to focus on renewable energy Swedish furniture giant IKEA has purchased two wind farms in the Podkarpackie region of southern Poland, from Martifer Renawables, a subsidiary of Portuguese metal structures manufacturer Martifer.

The Leki Dukielskie and Bukowsko wind farms, which

have a combined power output of 28 MW, will be followed by a third, with IKEA confirming it has also committed to purchasing a ready-to-build wind farm in Rymanów.

The sale of the Rymanów project, which will have a power output of 26 MW when completed, will be concluded after the park is built and connected to the grid in 2013. The total cost of the deal is set to amount to z∏.385 million.

For Martifer the deal forms part of the Portuguese firm’s plans to reduce its debt.

“Martifer’s strategic plan points to a reduction of assets in the area of wind energy generation,” Mario Couto, the firm’s chief financial officer, was quoted by Bloomberg as saying.

“With the slowdown in growth in the wind sector, this business has become only a segment of metal construction,” he added

... one of which is in Bukowsko, in southern Poland IKEA’s purchases will now afford it more independence from power companies, as the three wind farms will generate power amounting to 50 percent of power consumption for the entire group in Poland.

“This investment will enable the production of energy demand at 16 IKEA stores and is a continuation of earlier investments in roof solar panels, co-generation of heat and electricity in our industry

groups and other measures to improve energy efficiency in Poland,” a statement on IKEA’s Polish website read.

The long-term goal of the company is to exclusively use renewable energy sources. The firm already owns wind farms in Germany, Sweden, France and the UK. The furniture producer, which opened its first store in 1958, entered the Polish market David Ingham in 1991.

9

The Warsaw Stock Exchange’s main market saw its highest ever quarterly trading turnover in Q3, with a y/y increase of 36.6 percent to z∏.67.8 billion, the bourse said in a statement on October 5.

The record Q3 results were built on a strong September, when turnover on the main market grew 8.7 percent y/y to z∏.21.7 billion.

“The value of turnover on the main market in September increased in comparison to September 2010 despite decreases of main indices,” a statement on the WSE’s website read.

Turnover for the period January to September also rose to z∏.195.5 billion, 31.2 percent higher than Q1-Q3 last year.

“After three quarters, sales are comparable to the turnover achieved in the full year 2010,” the statement confirmed.

On the derivatives market, the volume of trading in all derivative instruments amounted to 1.72 million units in September, a 39 percent y/y David Ingham increase.

10

OPINION & ANALYSIS

www.wbj.pl

OCTOBER 10-16, 2011

Europe’s shale gas fever

Transparency is key: the North American example In their recent report “Path to Prosperity or Road to Ruin? Shale Gas Under Political Scrutiny,” researchers from the Polish Institute of International Affairs argue that instead of seeing this issue in purely black-andwhite terms, it is necessary to examine the gray area of acceptable political, economic and social trade-offs.

While virtually impossible to

replicate in Europe because of an elaborate mix of differing market, legal, social and possibly also geological conditions, the North American experience, itself quite diverse, offers some useful takeaways for the European debate.

The first lesson is the necessity of putting in place a sound, unbiased information policy.

Let’s face it – drilling for shale gas may be a political and economic boon, but it generates a sizable footprint and can be a nuisance for local communities.

In American and Canadian jurisdictions where the public was kept in the dark, or where the information campaign was wrongly substituted with actual promotion of drilling, the debate quickly became dangerously polarized. The Canadian province of Quebec, where the industry now faces a standstill, is a case in point.

In New York and Pennsylvania, shale gas promoters faced an uphill battle when the public raised the issue of possible health hazards and environmental risks.

Increased awareness among the public puts extra requirements on the authorities – to lay down a balance sheet associated with shale gas – and on the industry, which cannot shy away from tackling even the most controversial issues.

Luckily, the gas majors already

SHUTTERSTOCK

A

nyone who attended last week’s discussions in the European Parliament about the prospects of European shale gas will admit that MEPs have a flair for the dramatic.

There is little hard data about the actual potential of shale gas. The first exploratory wells have only just begun to operate, and scientists, among others, are still divided about shale gas’ long-term environmental impact. But even though the jury is still out on the matter, shale-gas-bashing is in full swing, with calls to introduce a strict moratorium on the application of hydraulic fracturing in horizontal wells – the very technique that laid the way for the success of shale gas in the United States and Canada.

But shale gas has its defenders too, namely those who see it as a possible answer to the challenge of growing EU-wide energy demand, a chance to insulate member states from the irregularities of supply from third countries, and a path (or at least a bridge) towards lower green-house gas emissions.

present in Europe, including Poland, recognize this fact and put a premium on efficient outreach campaigns to local communities. However, as the scale of activities grow with the shift from exploration to production, so will the need for transparency and debate.

So far, 10 exploratory wells have been drilled in Poland. There will be hundreds if not thousands more when production begins in earnest.

Bartosz WiÊniewski

A long way to go In the meantime, the stars seem to have aligned for a shale gas boom in Poland. All major political forces have spoken in favor of exploration and ultimately, tapping of this resource. The public is largely supportive of drilling, even if this support varies locally.

Although the initial estimates of the actual potential role Polish shale gas might have been too optimistic, and the process of awarding the exploratory permits was criticized as too lax, both elements have helped to generate considerable interest from the natural gas tycoons, thus adding necessary weight to the debate.

The results of the first exploratory drilling allow for cautious optimism.

Shale gas is tipped as a potential game changer, able to alleviate Poland’s dependence on imported gas and to loosen the dominance of coal as a primary source of electricity generation.

True, a lot more needs to be done.

“It would be premature to treat shale gas as either a stairway to economic heaven or highway to economic hell” Public support shouldn’t be taken for granted, but tendered. Infrastructure, including the capacity of and access to transmission pipelines, is a work in progress. The legal framework needs to be adjusted, not least because of the need to come up with an oversight system robust enough to assuage any concerns about the impact that shale gas exploitation could have on people and the environment. And once this has been addressed, Polish shale gas will need to pass the competitiveness test – that is, the industry will decide if extracting the resource is economically feasible.

As this point, however, it would be equally premature to treat shale gas either as a stairway to economic heaven or a highway to environmental hell.

It’s time to let off some steam from the Europe-wide shale gas debate, and to let the current fever abate. ● Bartosz WiÊniewski is a research fellow at the Polish Institute of International Affairs (PISM) and co-author of the report “Path to Prosperity or Road to Ruin? Shale Gas Under Political Scrutiny,” available for download at pism.pl

Signs of progress at the Eastern Partnership Summit Monika Arcipowska

D

espite criticism in the media, the Eastern Partnership Summit held in Warsaw on September 29-30 should be viewed as a major political event that was a success in many ways.

“EP countries may not yet be fully focused on upholding common European values and principles” The Eastern Partnership is particularly important for Poland, one of the program’s founders along with Sweden, and is set to be one of the most important meetings during Poland’s presidency of the EU Council. But the initiative is also of great importance at a European level, because the EU’s position of support

for its eastern neighbors Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine may help to bring them closer to the European principles of democracy, and political and economic liberalism.

Numerous EU state leaders and all of the Eastern Partners, save for Belarus, were in Warsaw to assess the performance of the Eastern Partnership (EP) initiative over the past two years and discuss prospects for future cooperation within the EP.

Disappointing talks about democratic reforms Obviously, each EP country has a different political position and economic strength, and therefore the expectations of each towards the EU are different. While Ukraine and Moldova are more focused on liberalizing their visa regime and establishing free-trade association agreements

with the EU, Armenia and Azerbaijan are more interested in receiving direct financial support. The European Union, in turn, has different plans and expectations regarding each of the countries. All in all however, the economic aspect of the EP and EU financial support should be seen as only secondary to the EP’s fundamental goal, which is to support pro-democratic reforms.

In this context, one of the main topics during the summit was Belarus. In their final declaration, the participants declined to refer to the political situation in Belarus and the numerous instances of violation of human rights under President Alexander Lukashenko’s regime.

The fact that the Eastern Partnership countries declined to sign a declaration criticizing the Belarusian regime may suggest that they are not yet fully focused on upholding common Euro-

pean values and principles.

The final declaration of the summit is disappointingly silent on another important aspect of cooperation within the EP, namely the need to engage civil societies in the process of democratic development towards open societies. Regrettably, the summit’s final declaration only contains one reference to the role of the civil societies in democratic reforms, without giving any further detail.

EU integration in sight?

On the bright side, during the Warsaw Summit, EU representatives clearly addressed the European aspirations of Eastern Partner countries that have made deep commitments to building sustainable democracies.

No clear reference to the potential accession of EP partners to the EU was made, but Polish Foreign Minister Rados∏aw Sikorski and British

Deputy PM Nick Clegg suggested that eventual EU accession of the Eastern Partners was not entirely excluded, although it would be subject to numerous conditions.

European leaders stated their willingness to further cooperate with the countries of the Eastern Partnership within the established initiatives. They also committed to work on EP countries’ harmonization with the EU, in particular by continuing their gradual integration within the EU market.

The Eastern Partnership creates many opportunities for development, and it is now up to the EP countries to take advantage of them. It remains to be seen whether they are ready to do their utmost to implement the principles of Western democracy at home. ● Monika Arcipowska is an analyst at the Polish Institute for Foreign Affairs (PISM). pism.pl

Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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OPINION & ANALYSIS

OCTOBER 10-16, 2011

www.wbj.pl

11

PO must do more in its second term C ivic Platform has made history.

As WBJ went to press, it looked clear that it would be the first ruling party since the fall of communism to be chosen by Polish citizens to form a government for a second time in a row.

But Civic Platform (PO) must not rest on its laurels. Over the past four years, PO has achieved some laudable results, but it could have done much more. There is deep dissatisfaction and disappointment in Poland over PO’s first term.

Mostly, this stems from PO’s failure to deliver the opportunities it had promised. When it pledged to bring about an “economic miracle” in 2007, most took that to mean a sharp increase in investment, wages, and employment. That hasn’t materialized – foreign direct investment has dropped sharply since 2007, the average wage has risen from z∏.3,000 to z∏.3,600 and unemployment has remained steady at around 11 percent.

One might argue that PO hasn’t done all that badly. After all, the drop in FDI was clearly a result of the global economic crisis. Aside from that, it presided over a 20 percent rise in wages and held unemployment steady during a period in which the world saw its worst economic crisis since the Great Depression.

Disappointment all around But those figures hide some stark regional disparities. Almost all of Poland’s economic growth has come in its largest cities, while rural areas and secondary cities have been left

behind. There has been a dramatic demographic shift to Warsaw, Gdaƒsk, Kraków, Poznaƒ and Wroc∏aw, as regional Poland empties out. Those who can’t find opportunity in Poland’s big cities have moved to the UK or Ireland. The folks left in the regions, especially those between 40 and 55 who have few skills to offer and speak no foreign languages, remain idle and poor. It’s little wonder that these voters are adamant supporters of nationalist parties such as Law and Justice (PiS).

Younger voters, who formed a huge portion of PO’s support base in 2007, are disappointed too. Youth unemployment is high, especially in the regions. Despite moving away from their homes, getting a topnotch education at a Polish university and learning two or three languages, most Polish generation Yers still can’t land a job that would allow them to afford to buy a modest apartment. Wages may have risen by 20 percent, but on z∏.3,600 per month it is still awfully difficult to support a young family and pay a mortgage. These voters, who want an alternative to the abrasive, backward-looking PiS, likely turned to the libertarian Palikot’s Movement or the leftist Democratic Left Alliance (SLD) this time around.

Poland’s pensioners don’t have it much better than they did in 2007, either. Rising food costs are taking a bigger bite out of their monthly checks. These voters also likely voted for a nationalist party such as PiS or a party that promised more government payouts, such as SLD.

Taken together, most Poles, instead of feeling like their lives have gotten better, feel as if they’ve been treading water over the past four years. Crisis or no crisis, they believe opportunity in Poland should have increased – and they are right.

Wasted time PO’s first two years in power were marked by little more than foreign policy maneuvering. These were steps in the right direction, as the government moved to repair strained ties with the European Union and Russia. But it was too timid, not introducing the reforms it should have to slash bureaucracy and make it easier to hire workers.

Its second two years were consumed by the global economic crisis and the Smolensk disaster. PO finally acted on economic issues, slashing ministerial spending and launching a one-stop-shop for setting up a businesses. Nevertheless, the budget deficit soared and plenty of bureaucracy remained for entrepreneurs to wade through.

Some complained that it was more difficult to establish a business after the reforms were implemented than before.

More to be done PO, which had so much promise when it was first elected, can do much more. In the realm of economic policy it should focus on three main issues during its second term: bureaucracy, pensions, and employment.

Some 30,000 more people work for the government now than when

PO, which said it wanted to reduce the size of government, came to power. Doing anything in Poland that requires any level of government approval can still take months, and the maze of regulations is such that often the civil servants themselves don’t know what to make of it.

Government must be streamlined.

Red tape, especially when it comes to establishing a business, must be cut.

When it comes to pensions, PO must work to make the Social Insurance Institution (ZUS) more efficient. For the amount that goes into this behemoth of a government organization, retirees still receive laughably meager pensions, while the institution continues to build itself luxurious office buildings that Poles often refer to as “ZUS palaces.” The institution requires a complete revamp.

On the employment front, companies should be able to sign a worker to a proper “permanent” contract without being forced to pay nearly half again as much as that employee’s take-home pay to the government.

Too many companies now use “temporary” or “freelance” contracts to get around this burden, cheating both the government out of tax revenue and employees out of health insurance. Make it less of a burden for companies to bring people onto their payrolls officially, and you will see employment rocket.

The new government must tackle other pressing issues as well, including infrastructure, which hasn’t improved as advertised despite a road-building rush in the run-up to

A liquid Europe Is

the euro zone stepping back from the brink? This might just be possible, because the emerging outlines of a new framework to resolve the ongoing sovereign-debt crisis contain a key component that has been missing so far.

Indeed, that component’s absence was behind this summer’s spreading financial crisis, which moved beyond small, peripheral countries like Greece, Ireland, and Portugal to strike systemically important countries like Italy and Spain.

“A euro-zone government is always in a precarious situation” The starting point of the contagion was investors’ realization that Europe’s rescue fund, the European Financial Stability Facility, was designed to provide emergency financial support only to the peripheral countries. It simply does not, and will never, have enough funds to undertake the massive bond purchases required to stabilize the debt markets

of large economies such as Spain and Italy. The EFSF will have at most €440 billion at its disposal (any increase would endanger France’s AAA rating), while the combined public debt of Italy and Spain is more than €2 trillion.

A liquidity backstop In early August, the domino effect of the euro zone periphery’s sovereigndebt crisis started to kick in, because financial markets do not wait for country after country to be downgraded. Instead, they tend to anticipate the endgame, or at least one potential scenario, namely the unraveling of the entire crisis-containment structure.

Markets noticed that the euro seemed caught between a rock (the EFSF’s limited borrowing capacity) and a hard place (the European Central Bank’s great reluctance to engage in large-scale purchases of financially troubled governments’ bonds). It later turned out that the ECB was not that hard after all, though it emphasized that it would stop intervening as soon as the new EFSF became operational. And, given the EFSF’s limited firepower, the market would have been left without support.

To state the problem more generally, the euro zone requires a liquidity backstop for its fiscal authority. In a “normal” economy with its own currency, the fiscal authorities can never face a liquidity shortage, because the government can always rely, at least potentially, on support from the central bank. A euro-zone government, by contrast, is always in a precarious situation: it has only very long-term assets (its taxing power) and shorterterm liabilities, namely government debt, much of which has to be rolled over annually. If investors refuse to buy the debt on any terms, even a fiscally prudent government could find itself in a liquidity squeeze and become insolvent.

Solution taking shape Similarly, banks have short-term liabilities (deposits) and long-term assets, which they cannot liquidate quickly without incurring great losses.

This is why all countries provide emergency liquidity support when a bank run materializes, as was done on a global scale when confidence in the banking sector collapsed alongside Lehman Brothers in 2008.

Likewise, the euro zone needs a mechanism to confront runs on its

member countries’ government debt.

This requires that fiscal authorities have access to a large pool of liquidity in an emergency. Only the ECB can provide this insurance.

The good news is that a solution is now slowly taking shape that promises to create a mechanism by which the ECB could backstop the EFSF. This could be achieved simply by registering the EFSF as a bank, which would give it access to normal ECB refinancing on the same terms as other normal banks. The EFSF could then conduct very large purchases of government debt by levering up its limited capital through ECB refinancing, using the government bonds it is buying as collateral.

In this way, the proper division of labor could be established. The EFSF would be responsible for dealing with fiscal crises in member states. For countries with solvency problems, an adjustment program like those for Greece, Ireland, or Portugal would be appropriate. But, for large countries facing a liquidity shortage, the EFSF could rely on support from the ECB. If investors know that a liquidity squeeze is no longer possible, they will refrain from speculative attacks

next year’s European soccer championships. It also must not forget about the rail infrastructure, which should be privatized in whole, so that modernization can take place and more efficient business-practices implemented.

It should also fix Poland’s broken legal system, which can force claimants years to right wrongs, and

“There is deep dissatisfaction and disappointment in Poland over PO’s first term” focus on digitizing more of Poland, including its poorest regions and government-run institutions, which inexplicably remain paper-based.

In the realm of foreign policy, Civic Platform has so far performed admirably well. It needs to continue to increase Poland’s role in the EU’s decision making process and nail down defense cooperation with the United States. It should continue to offer a hand of partnership to Russia, while at the same holding firm in protecting Poland’s interests.

That’s a lot on Civic Platform’s plate; it wouldn’t be nearly so much had it not dawdled so during its first term. But these are issues that must be addressed, and problems that must be solved, or two terms is all that Civic Platform is likely to get. ●

Daniel Gros on solvent countries. The near-panic conditions in financial markets eased as soon as rumors spread that this solution had at least been discussed behind closed doors. It now needs to be implemented.

Cost of inaction As always in Europe, there are legal and political obstacles to change. But even the most reluctant policymakers recognize that the cost of inaction is too great. The legal obstacles to potential “monetary financing” of the public sector in the European Union’s governing treaties can be overcome. The more important obstacle is Germany’s reluctance to admit publicly that ECB liquidity support for government debt markets can be crucial in maintaining financial stability.

Only the German government and the ECB can open the door to this subtle but profound reform of the euro’s fundamental underpinnings. It is a choice that they cannot put off much longer. ● Daniel Gros is Director of the Center for European Policy Studies.

Copyright: Project Syndicate, 2011. project-syndicate.org

INTERVIEW

www.wbj.pl

PGF predicts z∏.78 million profit Pharmaceutical group Polska Grupa Farmaceutyczna (PGF) estimates that its 2011 net profit will total z∏.78 million, z∏.7 million more than it recorded last year, reported Gazeta Wyborcza. The year’s sales are also expected to reach a recordbreaking level of z∏.6.4 billion, the firm announced during a presentation last week.

The company also reported that it plans to pay out a dividend of z∏.1.23 per share from its profits. PGF has also announced plans to change the structure of the group and along with it, the company name.

Polish beef’s foreign appeal In the first six months of the year, Poland exported 150,000 metric tons of beef worth some z∏.440 million. Compared to the corresponding period of 2010, the value of Polish beef exports has increased by approximately 50%. ●

OCTOBER 10-16, 2011

Information technology

HP eyes Poland for new investment The global IT company is currently considering Poland as a potential location for a new outsourcing center Within the next few months, American multinational IT company Hewlett-Packard will decide whether to launch a new outsourcing center. Not much else is being revealed about the project, including the kind of services to be provided or the number of jobs to be created.

But according to Pawe∏ Czajkowski, head of HP Polska, Poland is “very seriously” being considered as the destination for this particular investment. If the center is sited in Poland, it would add to HP’s 2,300 employees at its Wroc∏aw Global Business Center, and an undisclosed number in Warsaw.

“It’s not a done deal,” said Mr Czajkowski, but the decision is expected to be made in the near future.

HP’s Global Business Center in Wroc∏aw was initially due to create 1,000 jobs, but today it employs over 2,000

Polish graduates and is set to continue to expand, said Mr Czajkowski.

“Our center in Wroc∏aw grew much more than we expected, I would say it is a best-case scenario,” he added.

However, at a moment when the US economy is stagnating, cost concerns are doubtless on the minds of managers at HP’s Californian headquarters in Palo Alto as they weigh up their options for the firm’s development. In this context, Poland’s steadily increasing wages do not play in HP’s favor, admitted Mr Czajkowski, and the firm could be lured eastwards by lower wages.

But many in the Polish IT market hope investors will opt to pay more for Polish workers with their top-notch education, experience and language skills. “We believe it is possible to move up the value chain,” said Mr Czajkowski. “But ultimately the decision is not up to the country.”

Change in strategy?

Additional decisions are set to be made in the near future at HP’s headquarters, which could affect the whole struc-

COURTESY OF HP

12

Mr Czajkowski thinks Poland has what it takes to “move up the value chain” as an investment destination, and to one day build its own technology brand ture of the firm over the long term. HP’s new CEO Meg Whitman, who was appointed in September, said she would announce “by the end of the year, if not sooner,” which elements of her predecessor’s strategy would remain. “This decision is not like fine wine – it will not get better with age,” Ms Whitman added.

Her predecessor, Leo Apotheker, stepped down shortly after he announced in August 2011 that HP might look to sell its personal computer business (currently its main source of revenue), would stop making smart phones and computing tablets based on the firm’s WebOS operating system, and would buy Autonomy,

Britain’s biggest software firm, for $10.3 billion.

HP shares dropped 20 percent on the day of the announcement, and 47 percent in total under Mr Apotheker’s leadership.

“I can only have my own thoughts on decisions being made in Palo Alto,” said Mr Czajkowski.

Media patronage

Warsaw Business Mixer

Guy Pinsent, Artur Racicki

Jakub WiÊniewski - JMW Architekci, Piotr Koziƒski - Internity S.A., ¸ukasz Michalski - JMW Architekci

Organizers from right: Krzysztof Jachowicz - JMW Architekci, Christopher Garner - Wardynski & Partners, Katarzyna WiÊniewska - Devonshire, Jakub WiÊniewski JMW Architekci, ¸ukasz Michalski - JMW Architekci In late September the Warsaw Business Mixer celebrated its one-year anniversary with a James Bond – Casino Royale-themed event at Pure Sky Club in downtown Warsaw. Martinis (shaken, of course) were on offer, along with casino tables, and there were “a number of secret agents, bond girls and villains,” in attendance, according to organizers. Throughout the course of the evening over 250 people attended.

Put on by Chris Garner, counsel at Wardyƒski and Partners, Jakub WiÊniewski, owner of JMW Architekci and Katarzyna WiÊniewska, a recruitment consultant at Devonshire, the War-

saw Business Mixer intends to be “far more social than business in nature,” said Mr Garner.

He added that the aim is to create a relaxed atmosphere for upper and senior management to meet and socialize.

For the future, Mr Garner said the event will keep moving forward with the focus on bringing together people from various industries, including a luxury fashion event where designers can show their winter lineups. The next event is set to take place on October 20. Interested parties should contact Mr Garner at christopher.garner@wardynski.com.pl. ●

Event sponsors: Aston Martin, Casinos Poland, Pure Sky Club, Loft Fashion, World Class Health Club, Pearl Concierge

Pawel Osowski - Warsaw Consultants, Katarzyna WiÊniewska - Devonshire

Jakub WiÊniewski - JMW Architekci, Christopher Garner - Wardynski & Partners

Jacek Poswiata - McKinsey & Company, Katarzyna WiÊniewska Devonshire, Christopher Garner Wardynski & Partners

INTERVIEW

He suggested that HP may spin off its personal commuter business, which would remain under the umbrella of HP, but not sell it. “There aren’t that many companies who can buy a $40 billion firm,” he said.

Meanwhile, HP Polska’s operations have remained unaffected, and the company is also waiting for decisions to be taken at headquarters, which are bound to affect the whole company, said Ewa Lis-Je˝ak, PR mnager at HP Polska.

Competitive market The situation in Poland, where HP has been the largest IT company since 1997, differs somewhat from its global position, according to Mr Czajkowski.

Poland I think we have done a better job at identifying areas of growth,” he added.

When it comes to the global consumer retail segment, HP’s other major competitor is Apple. But in Poland, at least in terms of number, “they are really no competition at all,” said Mr Czajkowski, adding that this is mainly because Apple was a latecomer on the Polish market.

A telling example of this is the fact that until last month it was not even possible for Poles to access Apple’s 18 million songs on iTunes, because the country lacked an iTunes store. And although Mr Czajkowski conceded that Apple products were “sexy” and appeal to a certain segment of

“In Poland I think we have done a better job [than IBM] at identyfying areas of growth” Globally HP is numbertwo, behind IBM, in providing IT services. But in Poland, HP holds the top spot.

“We were larger than IBM when they still had their PC business, and today if we compare only our enterprise service division, we are also bigger,” said Mr Czajkowski.

“Clearly IBM is still our biggest competition, but in

the market, he also stated that on the Polish consumer retail market Asian brands, such as Toshiba, Samsung, and Acer, offered much greater competition.

Regarding the tablet computer market however, HP has no product to offer as an alternative to the iPad since it discontinued the production of its HP Touchpad tablet, only a few

Poland’s own brand

www.wbj.pl

13

Foreign firms pay more

weeks after it was launched in July 2011.

Mr Czajkowski declined to comment on recent reports that Amazon was looking to buy Palm WebOS, the mobile operating system featured on several devices, including the HP Touchpad tablet, from HP. COURTESY OF HP

OCTOBER 10-16, 2011

But what about Polish competitors? Mr Czajkowski said that after explosive growth in the 1990s, followed by a phase of intense mergers and acquisitions, the Polish IT market was now fairly HP’s Touchpad has been discontinued competitive, with the But despite these issues Mr In other words, Poland fiercest battles being fought in needs its own technology Czajkowski was optimistic that the retail notebook sector.

Poland will eventually achieve Many Polish companies brand, its own Nokia.

But that might not be so this goal. In the meantime, Polhave done well and some, like Asseco, are now expanding easy. “Creating a Polish Nokia, ish software engineers and prooutside of Poland. But the for example, is not so simple,” grammers will continue to be Polish IT market still lacks its said Mr Czajkowski. “In the hired all over the world by presown brand in order for the high-tech industry you can tigious firms, while the country image of Poland as a tech- make your place in software hopefully remains at the foresavvy nation to emerge, said engineering more simply front of investors’ minds for IT Mr Czajkowski. To reach this because all you need is a bit of investment projects. And as for point, Poland would need a infrastructure and a lot of HP, the firm might just repeat company that makes its own brainpower. Designing the last year’s feat of winning an products, not only excellent products themselves is much award from the Polish Informasoftware makers. “You don’t harder because you need a lot tion and Foreign Investment see on the back of the pack- of investment in R&D and Agency (PAIiIZ), for investage if a software was designed labs, and there is a certain ment in generating the most and developed in Poland,” financial barrier to doing this jobs in Poland again in 2012.

Alice Trudelle in Poland.” said Mr Czajkowski.

The wages of workers employed at production companies which use foreign capital continue to exceed those of employees at smaller domestic firms, reports Rzeczpospolita. The first group is said to enjoy wage premiums of up to 10%. That’s according to the latest earnings report from research firm Sedlak & Sedlak, which suggests the base gross income for half of the country’s production workers is below z∏.2,500.

PKP selects high-speed route Polish State Railways (PKP) has proposed a route for the future highspeed railway network which will connect Warsaw with ¸ódê, Poznaƒ and Wroc∏aw, reported Dziennik Gazeta Prawna. According to initial estimates, construction of the new network, which could see speeds up to 350 km per hour, and purchase of equipment could cost up to z∏.24 billion. ●

FINANCE & ECONOMICS

Currency management

PMI shows weakness in manufacturing sector

Fighting fires The EUR/PLN exchange rate (at end of trading day) since the NBP's September 23 sale of foreign currency 4.50

4.45

4.40

4.35

4.30

4.25

23

26

27

28

September

29

30

3

4

5

6

7

October Source: National Bank of Poland

the second month in a row, at 48.5, marking its lowest reading since August 2009. Of euro zone countries, only Germany, at 50.3 points, had a PMI above 50.

“Manufacturers are reporting the worst business condi-

tions for over two years, facing a combination of lackluster domestic demand and falling export sales,” said Chris Williamson, chief economist at Markit, in a statement accompanying the PMI report.

Andrew Kureth

Weakness ‘apparent’ Poland's manufacturing PMI, September 2010 – September 2011 2010

2011

57 56 55 54 53 52 51 50 49 48 47 46 45

er

st Se

pte

mb

gu

Jul

y

*

Au

Poland’s manufacturing Purchasing Managers Index (PMI) dropped to 50.2 in September, its lowest point in two years and lower than a Reuters forecast of 51.05. Poland’s PMI was at 51.8 in August.

“The weakening in the Polish manufacturing sector is becoming increasingly apparent,” Madhur Jha, a global economist at HSBC said. “PMI has remained in growth territory since the beginning of this year, but the growth has accelerated only twice, and in the remaining seven months recorded a decline. In September, the indicator showed the weakest increase since October 2009,” Ms Jha added.

A figure above 50 indicates expansion in the manufacturing sector, while a number below 50 signals contraction.

The PMI figure for the euro zone was below 50 points for

mb e Oc r tob No er vem b De er cem be r Jan ua Feb ry rua ry Ma rch Ap ril Ma y Jun e

The National Bank of Poland (NBP) intervened in the currency market twice in as many working days at the turn of September and October, selling foreign currency to strengthen the z∏oty and ward off speculators. The NBP had already intervened on September 23, in response to the plummeting value of the z∏oty.

On Friday September 30, the NBP reportedly asked for a quote from commercial lenders for the EUR/PLN pair, a move that sent the z∏oty to z∏.4.40 from z∏.4.44 against the euro.

The bank made a transaction later in the day, but the z∏oty hardly budged.

State-owned Bank Gospodarstwa Krajowego (BGK) also sold foreign currencies the same day, local media reported.

Then, on Monday October 3, both the EUR/PLN and USD/PLN pairs plunged after the NBP carried out yet another currency trade. The EUR/PLN broke short-term support at z∏.4.42 and declined to z∏.4.38. The USD/PLN dropped to z∏.3.28 from z∏.3.30 By the end of the day, however, there was some upward movement, with the EUR/PLN and USD/PLN closing the session at z∏.4.39 and z∏.3.31 respectively, due to continued fears about the state of the global economy.

“The room for appreciation of domestic currency is limited by the uncertainty persisting on the market,” Bank Zachodni WBK wrote in a statement shortly after the second intervention.

The EUR/PLN finished the week at z∏.4.4 and the USD/PLN at z∏.3.25. NBP president Marek Belka The NBP did not disclose the value or denomina- ers were not trying to defend tion of the foreign currency it a specific target.

Prior to the first of the last sold on each of the last three occasions, saying only that it three interventions, the z∏oty had “sold a certain amount of had reached its lowest level in over two years. foreign currency for zloty.”

Poland’s policymakers want Central bank chief Marek Belka said after the Septem- to ensure the z∏oty does not ber 23 intervention that spec- become too weak, otherwise ulators had been partially interest payments on public responsible for the weaken- debt denominated in foreign ing of the z∏oty, and warned currencies would become more them that the NBP could expensive and inflationary presintervene at any time. Mr sures could increase.

Gareth Price Belka added that policymak-

COURTESY OF THE IMF

NBP intervenes in z∏oty market again The National Bank of Poland has so far made good on its threat to continue the fight against speculators

OCTOBER 10-16, 2011

pte

www.wbj.pl

Se

14

* Indicates improvement on the previous month

Interest rates left unchanged on weak z∏oty, inflation fears Poland’s Monetary Policy Council (RPP) chose to keep the headline interest rate unchanged last week, despite signs Poland’s economy could be slowing down.

In line with expectations, the RPP kept Poland’s main reference rate at 4.5 percent – the third time in a row it has left borrowing costs untouched.

Despite a weakening economic outlook and reduced demand for Polish exports, the z∏oty’s recent slump against the euro and dollar and the continued threat of inflation kept the RPP from easing

monetary policy.

The RPP made clear that it was keeping its wait-and-see stance but said in a document explaining its decision that “further monetary policy adjustments” could be made in the future if chances of the inflation rate returning to its target show signs of deteriorating.

Central bank head Marek Belka told the press that this could be interpreted to mean the bank was more likely to raise interest rates than cut them.

“We fundamentally think that Mr Belka may be over-

playing his hand here and think that his comments are not necessarily based on the [National Bank of Poland’s] expectations for Polish growth and inflation but rather crafted to give some support to the z∏oty,” Danske Bank wrote in a research note.

“No one believes the central bank will actually hike unless FX interventions do not work. This should probably be seen more as verbal support for the PLN,” Nordea Bank economist Anders Svendsen said in an e-mailed comment.

Andrew Kureth, Gareth Price

MARKETS

OCTOBER 10-16, 2011

Stocks report

world stock indices DJIA

NASDAQ

11,123.33 (Oct 6 close)

S&P500

2,506.82 (Oct 6 close)

-0.27% (for the week)

FTSE100

1,164.97 (Oct 6 close)

1.05% (for the week)

DAX

5,291.30 (Oct 6 close)

0.39% (for the week)

1.82% (for the week)

No end in sight

NIKKEI225 5,645.25 (Oct 6 close)

8,522.02 (Oct 6 close)

8.63% (for the week)

-2.06% (for the week)

CHANGE: -3.66%

CHANGE: -7.32%

CHANGE: -7.73%

CHANGE: -11.92%

CHANGE: -25.48%

CHANGE: -15.95%

(year to Oct 6)

(year to Oct 6)

(year to Oct 6)

(year to Oct 6)

(year to Oct 6)

(year to Oct 6)

52-week high: 12,928.50

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: 10,362.30

52-week low: 2,298.89

52-week low: 1,074.77

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,227.63

Andrew Nawrocki, Market analyst & trader, gowebtrade.com In an almost directionless market stocks continue to see-saw, buoying on hopes that European policymakers are getting their act together, while simultaneously being sent lower by fears that those leaders are not doing enough. The week of October 3 was a good example, with daily headlines seemingly flipping back and forth between positive and negative predictions, leaving market participants woozy.

Overall for the week European stock markets closed rather flat, evidence of a lackluster start to Q4.

On Monday indices closed lower.

Stocks slumped sharply to a 13month low in the US, as investors dumped financial shares amid fears that Greece’s situation could cause a European lender to collapse. This foreshadowed events to come later in the week, with Belgian-French

Major indices WIG

37,915.03 (October 6 close)

WIG20

2,173.27 (October 6 close)

06.10

05.10

04.10

03.10

30.09

29.09

28.09

27.09

26.09

23.09

22.09

21.09

20.09

06.10

05.10

04.10

03.10

30.09

29.09

28.09

27.09

26.09

2,000

23.09

36,000

22.09

2,060

21.09

36,800

20.09

2,120

19.09

37,600

16.09

2,180

15.09

38,400

14.09

2,240

13.09

39,200

12.09

2,300

09.09

40,000

19.09

52-week low: 2,089.84

16.09

Change year to October 6: -20.54%

15.09

52-week low: 36,549.47

14.09

52-week high: 2,932.62

Change year to October 6: -19.70%

13.09

Change for the week: -0.71%

12.09

52-week high: 50,371.74

09.09

Change for the week: -0.91%

Top 5 MAKRUM TFONE PBG OLYMPIC POLNA

Closing 1.60 2.48 70.70 5.35 10.95

% change (week) 52-week high 64.95 2.12 22.17 7.18 20.34 238.00 18.89 7.22 16.49 14.26

52-week low 0.89 1.91 56.05 4.50 8.00

Top 5 PBG POLIMEXMS TVN GTC TAURONPE

Closing 70.70 1.50 15.34 11.89 5.18

% change (week) 20.34 16.28 7.35 4.30 4.02

52-week high 238.00 4.40 18.83 24.98 6.89

52-week low 56.05 1.23 11.25 9.33 4.80

Bottom 5 POLREST DREWEX BIOTON KOFOLA PROCAD

Closing 0.16 0.43 0.07 20.40 1.50

% change (week) -33.33 -24.56 -22.22 -21.81 -21.05

52-week low 0.16 0.41 0.07 20.40 1.22

Bottom 5 LOTOS CYFRPOLSAT PZU GETIN KGHM

Closing 22.91 13.80 302.80 7.30 129.40

% change (week) -11.20 -8.00 -4.78 -2.93 -2.71

52-week high 49.42 17.35 396.80 15.29 198.40

52-week low 22.70 13.05 294.20 6.76 117.50

52-week high 0.65 2.98 0.21 39.56 2.93

sWIG80

8,692.10 (October 6 close)

Change for the week: -1.50%

52-week high: 2,987.72

Change for the week: -1.15%

Change year to October 6: -22.90%

52-week low: 2,086.64

Change year to October 6: -28.21%

NewConnect

42.65 (October 6 close)

52-week low: 8,483.22

WIG-Banki

06.10

05.10

04.10

03.10

30.09

29.09

28.09

27.09

26.09

23.09

22.09

20.09

19.09

16.09

15.09

14.09

13.09

12.09

Pawe∏ Kordala, X-Trade Brokers Dom Malerski SA

09.09

06.10

05.10

04.10

03.10

30.09

29.09

28.09

27.09

26.09

8,400

23.09

1,900

22.09

8,500

21.09

1,960

20.09

8,600

19.09

2,020

16.09

8,700

15.09

2,080

14.09

8,800

13.09

2,140

12.09

8,900

09.09

2,200

5,488.22 (October 6 close)

SOURCE: WSE

06.10

05.10

04.10

03.10

30.09

29.09

28.09

27.09

26.09

23.09

22.09

21.09

20.09

06.10

05.10

04.10

03.10

30.09

29.09

28.09

27.09

26.09

23.09

4,800

22.09

42.0

21.09

4,940

20.09

42.4

19.09

5,080

16.09

42.8

15.09

5,220

14.09

43.2

13.09

5,360

12.09

43.6

09.09

5,500

19.09

52-week low: 4,944.19

16.09

Change year to October 6: -21.35%

15.09

52-week low: 43.11

14.09

52-week high: 7,387.49

Change year to October 6: -32.17%

13.09

Change for the week: 0.22%

12.09

52-week high: 64.04

09.09

Change for the week: -2.11%

44.0

Z∏oty uncertainty

52-week high: 12,932.00

21.09

2,132.24 (October 6 close)

bank Dexia needing to be rescued on Tuesday. On Tuesday (the worst day of the week), Poland’s WIG shed 2.33 percent. Heavily hit were shares of KGHM, which was still suffering from last week’s fall in the price of copper.

Wednesday and Thursday both proved better for stock markets, with the WIG regaining losses, up 3.17 percent for both days. Betterthan-expected data on the US services sector that showed a slowing (yet stillgrowing) economy, helped the situation. On Thursday, the ECB stressed – once again – that it is ready to buy bonds to provide longerterm funding for European lenders, lifting market sentiment. Finally, Friday saw non-farm payroll data from the US released, coming in much stronger than expected. It is likely we will see stocks rise early this week. ●

Currency report

Other indices mWIG40

15

www.wbj.pl

The rising cost of the dollar, problems related to the economic slowdown and risk aversion have all combined to lessen support for the strength of Poland’s currency. However, the last few days brought information that helped to stop the EUR/PLN pair from any further increases. The PMI and ISM indices showed that the global economy is slowing down, but the probability of a recession is not particularly large and the EFSF is nearly ready to begin buying Greek bonds.

The near-term future of the z∏oty will depend on the situation in the financial markets and whether or not other PIIGS countries or big European banks will need financial help, as well as the result of Sunday’s election,

and whether the new government will have the opportunity to reform public finances.

Those who decide to bet on the depreciation of the PLN currency pairs will also have to consider the risk of intervention by the National Bank of Poland, which is ready to prevent the currency from taking a serious drop.

The last two months also showed that EUR/PLN and USD/PLN and other emerging markets’ currencies (Brazilian real, Mexican peso) are highly correlated with commodity prices. This is why quite a significant downside risk in the oil and copper market is dangerous for Eastern European currencies, such as the z∏oty, as the region is still regarded as a one big emerging market. ●

currency rates 4.2983

4.2662

05.10

06.10

4.2527

4.3481 04.10

07.10

SOURCE: NBP

4.3315 03.10

4

30.09

07.10

06.10

05.10

04.10

03.10

30.09

4.2385

0.1012

0.1010

0.1009

0.1017

0.1024

0.1015

3.5410 07.10

06.10

05.10

04.10

03.10

30.09

07.10

06.10

05.10

04.10

03.10

PLN-100JPY

5

0.10

3.5

30.09

PLN-RUB

0.11

3.5421

3.5794

3.6180

3.6511

3.6165

5.0612

5.0674

5.0984

5.1343

5.1629

5

5.0832

3.2593 07.10

06.10

05.10

04.10

03.10

07.10

06.10

05.10

04.10

03.10

30.09

PLN-CHF

4.0

4

30.09

3.0

4

PLN-GBP

6

3.2731

3.2966

3.3337

3.2574

4.3779

3.3265

PLN-USD

3.5

4.3765

4.3918

4.3957

4.4112

4.4370

PLN-EUR

5

Lokale Immobilia talks to Michael Shapiro, president of MLP Group

Mixed sentiment characterized this year’s Expo Real property fair in Munich 17

19

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

Opole’s Karolinka redevelopment The MPGA-owned Karolinka shopping mall in Opole is set to begin modernization of part of its retail space in October.

After the completion of the modernization project, children’s retail chain Smyk will replace the area’s current tenants. “We are seeing a steady increase of visits and turnover. The new offer raises the attractiveness of the shopping center, allowing us to maintain its leading position in the region,” said Karol Bartos, CEO of MGPA Poland, in a statement. ●

In this issue Stary Browar on sale . . . . . . . .16 New Warsaw skyscraper . . . . .16 Expo Real 2011 . . . . . . . . . . . . . .17 Katowice conference hall . . . .18 Makrum’s Bydgoszcz scheme .18 Siódemka in Elbląg . . . . . . . . . .18 Property-related stocks . . . . . .18 MLP interview . . . . . . . . . . . . . .19

Fortis could sell Poznaƒ’s Stary Browar

COURTESY OF WIKIMEDIA COMMONS

Developer Echo Investment has selected construction company Instal Bia∏ystok as the general contractor of its Galeria Veneda shopping center in ¸om˝a, Podlaskie voivodship. The value of the agreement, which envisions delivery of the 40,000-sqm mall in the fourth quarter of 2012, amounts to z∏.69.6 million. The Galeria Veneda project will comprise almost 16,000 sqm of gross leasable area, as well as a parking lot for 600 cars. The scheme will house 80 stores and points of service, with 75% of the space having already been commercialized.

OCTOBER 10-16, 2011, LI 16/40

Retail

Its owner is Gra˝yna Kulczyk, the ex-wife of Polish billionare Jan Kulczyk COURTESY OF WIKIMEDIA COMMONS

Galeria Veneda contractor

•

Stary Browar cost €130 million to develop

Atrium European Real Estate is reportedly carrying out due dilligence on the scheme

Developer Fortis sp. z o.o. is considering selling its Stary Browar (Old Brewery) shopping, arts and business center in Poznaƒ.

Around half of the space in Stary Browar hosts art installations and museums, while the other half focuses on business and commerce.

The problem for the owner is that the center is not bringing in enough revenue, local media have reported. The company has denied, however, that the center is making a loss, saying instead that it is offloading the scheme in preparation for its takeover of

a large international company.

The developer is now in talks with a number of investors with a view to selling Stary Browar, Fortis spokesperson Grzegorz Bibro told Lokale Immobilia. He declined to give any specific names of investors or the potential size of the stake that could be sold.

Puls Biznesu wrote that developer Atrium European Real Estate is conducting due dilligence on the building.

The cost of buying the complex in its entirety has been valued by analysts at €120-280 million.

Stary Browar, which cost €130 million to develop, was completed in 2003. Located on Poznan’s ul. Pó∏wiejska 42, it has around 130,000 sqm of total area, housing 210 stores and restaurants.

Fortis is owned by Gra˝yna Kulczyk, the ex-wife of Polish GP billionaire Jan Kulczyk.

Office space

Developer and church join forces in Warsaw skyscraper project BBI Development NFI and the Archdiocese of Warsaw want to build a 180-meter office tower in the capital’s central district Warsaw Stock Exchange-listed developer BBI Development NFI and the Roman Catholic Archdiocese of Warsaw are teaming up to build a new high-rise office project which will be located at the intersection of ul. Emilii Plater and ul. Nowogrodzka in Warsaw’s central district.

BBI Development NFI announced the signing of a

preliminary investment agreement concerning the scheme in early August. Last week the company revealed the name of its partner, as well as more details pertaining to the planned development.

The skyscraper that the two entities plan to jointly develop, commercialize and sell, will be erected on a plot which belongs to St. Barbara’s parish in Warsaw. A BBI Development NFI subsidiary will be responsible for the preparation and supervision of the developer project.

A number of permits still need to be obtained from the Vatican and Warsaw City Hall

before the planned office tower project can be launched. A special purpose vehicle set up by the investors will apply for an environmental impact and a planning decision for the scheme by the end of this year.

The new skyscraper is expected to be approximately 180 meters tall and comprise some 50,000 sqm of usable space. BBI Development NFI should be able to present the design of the building in the spring of 2012.

Classic architecture “The tower will feature topquality architecture,” said

Micha∏ Skotnicki, management board president at BBI Development NFI. He added that the form of the building would be simple, classic and devoid of curved lines, so that office space in the structure can be easily arranged.

According to Mr Skotnicki, the future skyscraper will fit perfectly into the architectural context of the location at which it is planned to be built.

The Marriott hotel and Oxford Tower high-rises stand nearby and several other tall buildings are likely to be erected in the neighborhood in the near future.

In Mr Skotnicki’s opinion,

the location in question is one of the most attractive in Warsaw as far as the development of a new large-scale office project is concerned. BBI Development is optimistic about the prospects for the scheme’s commercialization, he said.

For the time being, the developer does not want to talk about the value of the planned project, nor the scale of the potential return that the investment could yield. BBI Development NFI is expected to ultimately have a 44.99 percent share of profits from the scheme, Mr Skotnicki revealed.

Adam Zdrodowski

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

LOKALE IMMOBILIA – REAL ESTATE

OCTOBER 10-16, 2011

www.wbj.pl

Commercial properties

A mixed mood at Expo Real 2011 Ella Pa∏ka tive loss of faith and confidence in policy makers [that is causing a] fall in business confidence.”

In terms of specific countries, however, most of the unease was directed at those worst-affected by the sovereign debt crisis. Consequently, Mr Damesick said, investors are turning their focus towards “core assets in prime locations,” especially in Germany.

The Nordic and Central Eastern European regions are also perceived as safer economies, he added.

COURTESY OF EXPO REAL

Positive indicators

The fair was attended by the “haves and the have-nots,” according to one participant

Experts said Poland’s commercial real estate market is one of the few bright spots to be found in Europe The sentiment at the 14th annual Expo Real commercial real estate fair, held last week in Munich, Germany, was strongly influenced by the current economic crisis.

One international lending expert, Michael Kröger from Helaba, described the mood at the event as “mixed,” saying one of his American clients had called it a meeting of the “haves and the have-nots.”

Clearly, there are some players and countries who have more to worry about

than others. But in general, the situation in Poland’s real estate market was not seen as dire. In fact, the majority of experts that Lokale Immobilia spoke with said the Polish market was one of the few that investors still felt confident investing in.

“For international investors, cities such as London and Paris are not more interesting than Warsaw,” Mr Kröger said.

Select markets favored Nevertheless, the instability affecting European capital markets has made commercial real estate lenders and investors more selective in where they put their money.

CB Richard Ellis’ chief

economist Peter Damesick said during a press conference that there is a “collec-

The overall volume of investment activity in commercial real estate in CEE increased by 49 percent year-on-year in the first half of 2011, according to analysis by CBRE. And that growth trend is set to continue, experts say.

According to Grzegorz Trawinski, head of corporate banking in Poland at Eurohypo, Poland has experienced a

significant increase in investment activity, especially in the office and retail sectors. He said Eurohypo is looking at further “opportunities,” adding that in Poland there is especially high demand for development financing in cities with populations greater than 200,000.

Experts say there is still plenty to build in Poland and that the country should continue to see an inward flow of capital, especially as investors seek shelter in countries located outside of the euro zone.

The majority of experts Lokale Immobilia spoke with at Expo Real said that as long as the crisis does not spiral out of control and the Polish economy keeps showing steady growth, they do not foresee major changes in terms of financing in Poland next year. No one, however, wanted to estimate for how long they thought the uncertainty would last. ●

What the Polish exhibitors said Poland had more exhibitors at Expo Real than other country in CEE. Representatives from Poland included government bodies like the Military Property Agency (AMW), which held a joint stand with the German Federal Agency for Real Estate (BiMA). The two bodies finalized a joint cooperation agreement this September.

When asked about the partnership, the president of AMW, Krzysztof Michalski, said that the joint endeavor would allow AMR to “present real estate from Poland to potential investors from Germany and also to people who cooperate with BiMA, including a Cana-

dian investment fund.”

Warsaw authorities, meanwhile, were keen to focus on the topic of underground parking space. Ernst & Young recently completed market research for the city to determine whether there is a need for such projects in the capital. The findings concluded that there is both demand and investor interest.

Pawe∏ Paw∏owski, the deputy director from the investor relations department at the City of Warsaw, said that his department is eying the construction of a total of six underground parking lots, estimated to cost around a combined z∏.300 million. Tenders should start in 2012. ●

17

Plac Unii BREEAM certificate The Plac Unii development, located on Plac Unii Lubelskiej, in downtown Warsaw, is applying for BREEAM certification and hopes to receive a grade of “very good,” in the process. “We are erecting a building that may well become one of the landmarks of modern Warsaw. We want to offer our customers top-quality commercial spaces and at the same time, we emphasize responsible development. BREEAM will confirm the effectiveness of our efforts” said Marc Lebbe, a board member at Liebrecht & Wood, one of the investors behind the scheme.

AsstrA in Warsaw’s UNIQA Forum The UNIQA Forum office building in Warsaw will be the headquarters of logistics services company AsstrA Polska, with the company having recently leased more than 650 sqm of space in the property.

Jones Lang LaSalle, the exclusive leasing agent for UNIQA Forum, represented the owner of the development, UNIQA Real Estate Polska, in the transaction. UNIQA Forum is located between Al. Jerozolimskie and ul.

Jutrzenki in Warsaw’s W∏ochy district. ●

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

OCTOBER 10-16, 2011

Convention centers

Developer Murapol has launched construction on its Nowe Winogrady residential project in Poznaƒ, Wielkopolskie voivodship. It is the company’s first investment in the western Polish city. The scheme will be developed in three phases which will deliver a total of 700 apartments. First to be built will be 240 units sized from 25-101 sqm.

These are scheduled to be completed in Q1 2013.

Bielsko-Bia∏a-based Murapol was established in 2001.

Marvipol issues bonds WSE-listed developer Marvipol has issued convertible bonds worth a total of more than z∏.30 million. The issue was held to generate funds for the acquisition of land for new investments, as well as to strengthen the company’s working capital, the firm said in a statement. ●

Katowice to get new convention center City authorities hope the multifunctional building will attract up to 80,000 visitors a year Warsaw Stock Exchange-listed construction firm PolimexMostostal has signed a z∏.252.7 million contract with the City of Katowice for the construction of a complex called the International Convention Center.

Located in the vicinity of Katowice’s Spodek arena, the multifunctional structure will cover a total area of 38,948 sqm and comprise a multipurpose main hall, an auditorium, banquet hall, as well as a restaurant and cafeteria, among other facilities.

Construction of the development is planned for completion by May 2013, with 50 percent of the costs due to be financed by European Union funds, and the other 50 percent by the City of Katowice.

The project was designed by JEMS Architekci studio.

Speaking at a press conference held to announce the agreement, Minister of Regional Development El˝bieta Bieƒkowska said, “this is one of the most important projects for the city, region and ministry.”

“It is an example of successful cooperation pursued by government authorities. It is also an example of the measurable results of EU funds,” she added.

The city authorities hope the scheme will act as a stimulus for the development of business tourism in Katowice, with as many as 80,000 visitors expected every year to the International Conference Center.

Katowice currently occupies fifth place in Poland in terms of total number of meetings and events hosted in the fields of economy, science, culture and politics, according to Polimex-Mostostal. Of the 18,000 such events held around the country last year, 1,071 took place in Katowice.

Last month, city authorities

Property-related stocks Security

Closing price on Oct 6

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

69.00

-4.17

64.00

109.20

-26.40

25,530,098

1,761.58

CELTIC

19.01

-9.91

15.55

60.55

N/A

34,068,252

647.64

DOMDEV

23.51

-11.28

23.51

50.80

-49.66

24,560,222

577.41

ECHO

3.38

-4.79

3.24

5.55

-34.87

420,000,000

1,419.60

ELBUDOWA

102.20

-0.97

98.00

185.00

-44.73

4,747,608

485.21

ENERGOPLD

2.69

7.60

2.45

4.10

-31.03

70,972,001

190.91

ERBUD

19.75

3.35

14.70

61.00

-62.02

12,644,169

249.72

GANT

7.63

3.11

7.30

20.00

-62.67

20,499,953

156.41

GTC

11.89

4.30

9.33

24.98

-47.48

219,372,990

2,608.34

HBPOLSKA

0.81

15.71

0.70

3.44

-76.79

210,558,445

170.55

JWCONSTR

6.50

1.72

6.10

18.00

-63.28

54,073,280

351.48

LCCORP

1.04

5.05

0.85

1.69

-37.35

447,558,311

465.46

MARVIPOL

7.60

-2.44

7.22

12.81

-29.04

36,923,400

280.62

MIRBUD

2.46

-1.60

2.25

4.75

-42.79

75,000,000

184.50

MOSTALWAR

22.20

3.74

19.70

68.00

-66.64

20,000,000

444.00

MOSTALZAB

1.22

12.96

1.07

3.59

-64.64

149,130,538

181.94

ORCOGROUP

15.80

-12.90

15.70

40.00

-48.26

17,053,866

269.45

PBG

70.70

20.34

56.05

241.90

-71.02

14,295,000

1,010.66

PLAZACNTR

1.87

3.89

1.80

5.15

-64.04

297,174,515

555.72

POLAQUA

7.90

-7.60

7.50

20.60

-53.91

27,500,100

217.25

POLIMEXMS

1.50

16.28

1.23

4.40

-65.91

521,154,076

781.73

POLNORD

11.33

-5.35

11.03

38.34

-70.18

23,798,439

269.64

RANKPROGR

9.01

-10.79

8.64

13.60

-9.90

37,145,050

334.68

ROBYG

1.07

-2.73

1.05

2.13

N/A

257,390,000

275.41

RONSON

1.02

-1.92

0.94

1.70

-37.04

272,360,000

277.81

TRAKCJA

1.58

12.06

1.39

4.97

-66.17

232,105,480

366.73

ULMA

62.90

-8.18

57.00

88.00

-19.62

5,255,632

330.58

UNIBEP

6.19

14.63

4.47

10.30

-27.52

33,927,184

210.01

WARIMPEX

5.50

1.85

5.30

10.89

-38.89

54,000,000

297.00

ZUE

8.81

-3.19

7.90

15.14

N/A

22,000,000

193.82

in Kraków also agreed on a deal to build a new conference center there. They signed a contract worth over z∏.317 million with a construction consortium of Polish firm Budimex and Spain’s Ferrovial Agroman.

“This is the center Kraków needed,” said city mayor Jacek Majchrowski.

David Ingham

COURTESY OF POLIMEX-MOSTOSTAL

Murapol launches Poznaƒ investment

The center will cover a total area of nearly 39,000 sqm

Retail

Makrum to sell its planned Bydgoszcz shopping mall The company could earn €25 million from the sale Construction firm Makrum has signed a letter of intent with an unnamed Luxembourg-based foreign investor for the sale of 100 percent of its planned shopping mall project in Bydgoszcz.

“The parties estimated that the value of the transaction is about €25 million. After tests, due diligence and further negotiations, this amount may

be changed,” a company statement reads.

The investment will be built on a 9.5-ha plot bordering ul.

Dwernickiego, ul. Su∏kowskiego, ul. Kamienna and ul.

LeÊna. The two-storey development will comprise 31,000 sqm of space, with 180 retail outlets, and a hypermarket totaling almost 8,000 sqm.

The company’s president, Rafa∏ Jerzy, said in a statement that the planned sale of the mall does not mean the firm will abandon the project.

COURTESY OF MEDIADEM COMMUNICATION

18

The new mall will comprise 31,000 sqm of space

“On the contrary, we remain committed to the end of its implementation,” he said.

“What is important is maintaining continuity in the development processes and our knowledge of the local market. The combination of financial backing and industry knowledge ensured a successful investor expressed interest in creating a commercial-public space for the inhabitants of Bydgoszcz and good business for our tenants,” Mr Jerzy added.

Makrum also announced last week that it had signed a letter of intent with Bydgoszcz city authorities to rebuild elements of the road system around the city center that will be affected by the construction of the shopping center.

Mr Jerzy said the deal was another step towards the eventual completion of the mall.

Makrum, whose key business interests include the construction of heavy steel structures employed in offshore mining and shipbuilding, has been operating since 1868.

David Ingham

Bridge Properties takes over shopping center project in Elblàg Privately held British investment vehicle Bridge Properties (CEE), part of the Bridgehouse investment group, has acquired New Europe Property Holdings, the developer of the planned Siódemka shopping center project in Elblàg, Warmiƒsko-Mazurskie voivodship. The acquisition marks the first entry into the Polish market for Bridgehouse, which owns and manages assets in countries including the UK, US, Spain and Qatar.

“We are pleased with this acquisition and our focus is now on the delivery of Siódemka, which is a very promising scheme due to its excellent location and modern concept,” Torsten Hartmann, director at Bridgehouse Capital, the advisory to Bridge Properties, said in a statement.

The Siódemka scheme has already received a building permit and construction on the mall is expected to launch in the first half of 2012.

Designed by the Broadway Malyan architectural studio, Elblàg’s Siódemka project will comprise a single-floor shopping mall and a retail park which will offer a total of approximately 67,000 sqm of GLA. The project, which will be located near the junction of the S7 and S22 express roads, will also include 1,800 parking spaces and a motorway service area with a gas station and adjacent restaurants.

Adam Zdrodowski

OCTOBER 10-16, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Interview: industrial property

But most of the sector’s developers remain cautious and continue to focus on built-to-suit schemes The demand for warehouse and production space in Poland is growing, with some locations in the country already seeing short supply and slow upwards movement in rents. However, there is still lots of uncertainty in the market, which is resulting in investors’ continued reluctance to make risky decisions, Michael Shapiro, president of the management board of industrial developer MLP Group, said in an interview with Lokale Immobilia.

“There is a significant increase in activity in the warehouse and production space market, not only among developers. Market data shows that both demand and the amount of warehouse space under construction increased in H1 2011 in comparison to the same period of last year,” Mr Shapiro said. He added that the market is starting to feel undersupply, since developers

have been shying away from large investments. Take-up is still below pre-crisis levels, despite the signs of a rebound that had appeared in 2010.

The first half of this year saw the development of many built-to-suit projects, Mr Shapiro noted, and said this resulted from the cautious strategies of developers and the fact that banks were much more willing to finance such schemes. “It is only now that speculative spaces are starting to emerge, but on the scale which we saw two or three years ago. Despite the visible increase in activity, the market does not know what the situation at the end of the year will look like, hence the unwillingness to take risk.”

In the case of MLP Group itself, BTS spaces accounted for the bulk of the areas covered by new lease deals that the company signed with tenants in the first half of this year.

“We are also seeing more and more enquiries about the socalled small-business units, but we have not been able to offer any such spaces of late, as there is no vacant space left at

COURTESY OF M+G

MLP: warehouse-production space market in Poland on the rebound

MLP president Michael Shapiro sees increased demand for warehouse space our MLP Pruszków I logistics park,” Mr Shapiro said.

Most of the space that MLP delivered in the first six months of this year was warehouse space, but the company is also focused on the provision of areas for production firms. In the case of the firm’s park in Tychy, such space accounts for almost 90 percent of all tenants. “We are probably the largest developer when it comes to the construction of production space in Poland,” Mr Shapiro said.

Extensive land bank Newly leased space accounted for as many as 76 percent of all lease agreements that MLP Group signed in H1 2011 and the company is now planning new projects in order to respond to the growing demand. Construction is currently underway on a 30,000-sqm building in the MLP Pruszków II park for which the developer has already secured two tenants. The whole park is expected to offer up to 300,000 sqm of space when completed.

MLP Group, which in Poland has a total of four warehouse-production parks in Pruszków, Tychy and Poznaƒ, wants to continue to strengthen its presence in the country in the near future. The company owns more than 200 hectares of land on which it could build a combined 916,000 sqm of leasable space. “We are planning to build approximately 100,000 sqm of new warehouse and production space by the end of 2012,” Mr Shapiro said.

Adam Zdrodowski

19

Panattoni signs lease extensions Panattoni Europe extended lease contracts for a total of more than 16,000 sqm of space with four clients at its warehouse facilities in Poland in the third quarter of 2011. The deals concerned Paul Hartman Polska at Panattoni Park ¸ódê East (5,232 sqm), Sapa Building System at Panattoni Park ¸ódê South (3,711 sqm), MPM Product at Panattoni Park B∏onie II (3,640 sqm) and Jungheinrich Polska at Panattoni Park Wroc∏aw I (3,480 sqm).

JMD leases additional space Retailer Jeronimo Martins Dystrybucja has taken up an additional 20,578 sqm of warehouse and office space at PointPark Properties’ PointPark Mszczonów logistics complex near Warsaw. Following the lease transaction, the tenant now occupies a total of more than 43,000 sqm of space at the property. ●

20

THE LIST

www.wbj.pl

OCTOBER 10-16, 2011

Construction & Real Estate

Office Space in Poland Ranked by net rentable office space (sqm)

Major tenants

Air-conditioning / 24-hour security

Raised floors / Open space

Openable windows / Access control

Suspended ceilings / Kitchens

ul. Poleczki 33-35, 02-822 Warsaw

110,000 158,000

48,000 WND

ARiMR; Sharp; Kone; US Pharmacia, Grupa Porr

5 1 17

2,719 444

✓ ✓

✓ ✓

✓ ✓

✓ ✓

Rondo 1 Rondo ONZ 1, 00-124 Warsaw

65,000 103,000

WND WND

Ernst & Young; Frontex; Volkswagen Bank; Domaƒski Zakrzewski Palinka; Baker McKenzie

42 2 22

485

✓ ✓

✓ ✓

✓

✓ ✓

49,783 70,788

WND WND

CMS Cameron McKenna; Chadboume & Park; Weil, Gotshal & Manges; DLA Piper; World Bank; Rothschield; Wyborowa; Google

32 4 15

350

✓ ✓

✓

✓

43,700 89,900

WND WND

Netia; Play; Tebodin Poland; Colgate Palmolive; IPSOS

11 3 16

200 1200

✓ ✓

✓ ✓

Pl. Unii Lubelskiej Warsaw

41,000 56,857

15,500 WND

WND

26 4 17

WND 800

✓ ✓

6

Mokotów Nova ul. Wo∏oska 22, 02-675 Warsaw

40,755 WND

WND WND

Ghelamco; Cargill; Hyundai; Medicover

15 3 19

90 972

7

Metropolitan Pl. Pi∏sudskiego 1, 00-078 Warsaw

37,000 55,000

3,655 WND

BNP Paribas; Dom Development; DZ Bank Polska; Cushman & Wakefield; Gide Loyrette Nouel

9 2 9

8

Focus Al. Armii Ludowej 26, 00-609 Warsaw

31,800 WND

WND WND

Deutsche Bank; Inteligo; Coca Cola; Bre Bank; Glaxo

9

Horizon Plaza ul. Domaniewska 39A, 02-672 Warsaw

31,344 34,470

3,126 2004

ul. Przyokopowa Warsaw

27,572 WND

11

Bema Plaza Pl. Bema 2 , 50-265 Wroc∏aw

12

Year completed

Leasing agent - contact person, phone / Building manager, phone

Architect / Developer / General contractor

✓ ✓

✓ ✓

QII 2012

Kancelaria Brochocki: Szymon Chachu∏a, 665-119-898; Filip Krasiƒski, 607-927-979 FMP Polska

RKW Rhde Kellerman Wawrowski UBM Realitaetenentwicklung; CA Immo International WND

✓ ✓

✓ ✓

2006

MGPA: 22 595-2700 Hochtief Development Poland

Skidmore, Owings & Merill (SOM), AZO, Epstein Hochtief Development Polska Hochtief Polska

✓ ✓

✓ ✓

✓ ✓

1998

CA Immo Real Estate Management Poland: Piotr Buchwald, 22 540-6530 CA Immo Real Estate Management Poland: Aleksandra Stronias, 22 540-6530

Kohn Pedersen Fox Associates; Biuro Projektów Architektury J&J; Epstein GREP Porr International

✓ ✓

✓ -

-

✓ ✓

2008

Cushman & Wakefield Cushman & Wakefield

WND Ghelamco Ghelamco

✓ ✓

✓ ✓

✓ -

✓ -

✓

2013

Ilona Koski-Lammi, 22 571-4444 WND

Apaka Kury∏owicz & Associates BBI Development; Liebrecht & Wood WND

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ -

✓

2011

WND DTZ: 22 222-3000

Pracownia Architektoniczna Jaspers & Eyera Partners Ghelamco Poland Ghelamco Poland

7 400

✓ ✓

✓ ✓

✓

✓ ✓

✓ ✓

✓ ✓

2003

Cushman & Wakefield Cushman & Wakefield

Norman Foster WND WND

11 3 10

115 405

✓ ✓

✓

✓ ✓

✓ ✓

✓ WND

✓ ✓

2000

Cushman & Wakefield Cushman & Wakefield

Kury∏owicz & Associates Mostostal Export Mostostal Export

Nokia Siemens Networks; Getin Noble Bank; Polski Bank Przedsi´biorczoÊci; Wprost; Centrum Projektów Europejskich

13 2 16

46 532

✓ ✓

✓ ✓

✓ ✓

✓ ✓

-

✓ ✓

2009

Colliers International REMS

JSK Dipl. Ing. Architekten Curtis Development/IVG Poland Decoma

3,539 -

Grupa Getin Holding

14 2 14

319

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

2013

Jones Lang LaSalle: Micha∏ Lis, 608-479-731 WND

APA Kury∏owicz & Assocciates LC Corp Budimex

23,974 28,813

4,419 420

Google; NSN; Nasza Klasa; UPS; Ghelamco; KPMG

9 2 12

397

✓ ✓

✓ ✓

✓ -

✓ ✓

-

✓ ✓

2008

Knight Frank: 71 790-2710 Knight Frank: 71 790-2710

Ghelamco Ghelamco Ghelamco

Trinity Park II ul. Suwak 1/3, 02-672 Warsaw

23,878 26,127

699 1,550

BNP Paribas Bank; Sygma Banque; Olympus; Xerox; Northern Medical

10 3 12

43 651

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

2007

WND DTZ: 22 222-3000

Konior & Partners, Atelier Architekci Ghelamco Poland Ghelamco Poland

13

Buma Square ul. Wadowicka 6, 30-415 Kraków

23,660 WND

4,516 288

Sabre Polska; Tesco Polska; LUX MED; Provident Polska; Le Premier

6 WND

761 -

✓ ✓

✓

✓ -

✓ ✓

-

✓ ✓

2007

Carmel Investments: Piotr Kiliaƒski, 604-227-846 Carmel Investments: Piotr Kiliaƒski, 604-227-846

DDJM Grupa Buma WND

14

Brama Zachodnia Al. Jerozolimskie 92, 00-807 Warsaw

23,122 23,953

445 386

Ericsson; GTECH Polska; First Data Polska; Sephora Polska; CFE Polska

16 3 8

474

✓ ✓

-

✓

✓ ✓

✓ -

✓ ✓

2000

EHL Real Estate Poland: 22 310-0586 Knight Frank: 22 596-5050

WND WND NCC

¸u˝ycka Office Park - zespó∏ 5

22,500 33,000

WND WND

Geoban; Nordea; SSE Sony Pictures; VTS; Allcon

5 1 3

271 429

✓ ✓

✓ ✓

✓

✓ ✓

✓

✓ ✓

2010

¸u˝ycka Investment: Halina Gniadecka, 58 660-1998 ¸u˝ycka Investment: 58 660-1900

Aedas Polska Allcon Investment Allcon Budownictwo

Al. Jerozolimskie 96, 00-807 Warsaw

21,038 21,302

300 251

Medicover; Wydawnictwo Szkolne i Pedagogiczne; Regus

18 3 7

256

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ -

✓

QIII/QIV 2011

Jones Lang LaSalle: Pawe∏ Lothammer, 668-282-756 WND

APA Wojciechowski Karimpol Polska Porr

17

Prosta Office Centre ul. Prosta 51, 00-838 Warsaw

19,546 20,957

839 572

Grupa Pracuj; Raiffeisen-Leasing; Caterpillar; Presspublica

11 3 10

282

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓

✓ ✓

2007

Jones lang LaSalle: Anna Aleksiejuk, Tomasz Czuba: 22 318-0000 DTZ: Agnieszka Chmarzyƒska, 22 222-3000

Konior & Partners Ghelamco Poland WND

18

Millennium Park A ul. ˚aryna 2A, 02-593 Warsaw

18,344 25,000

343 570

Millennium Bank; VIP Catering

7 2 9

90 304

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

2008

WND Colliers International REMS: Justyna Dru˝yƒska, 22 331-7800

Grupa 5; Roman Dziedziejko Eko Park Internetional SPS Construction

19

Tulipan House ul. Domaniewska 50, 02-672 Warsaw

17,895 20,062

WND WND

Aster; ACP Pharma; HUAWEI

6 2 6

481

✓ ✓

WND WND

✓ ✓

✓ ✓

✓ WND

✓ ✓

2008

WND DTZ: 22 222-3000

E&L Architects SEGRO Hochtief

20

Rondo Business Park ul. Lublaƒska 38, 31-476 Kraków

17,766 23,090

WND WND

Capgemini; Statoil; ArcelorMittal; Deltavista

WND WND WND

WND WND

WND WND

WND WND

WND WND

WND

DTZ: Anna Wereszczyƒska, 22 222-3000 Buma Services; DTZ

WND WND WND

Rank

Structural cabling / Fiber-optic link

Commercial / Warehouse

Sprinklers / Own UPS

Office space / Total usable space

Number of outside parking spaces / Number of underground parking spaces

Amenities

Total number of floors / Number of underground floors / Number of elevators

Rentable space (sqm)

www.bookoflists.pl

Company name Street, Postcode City

(1) 1 Poleczki Business Park

2

Warszawskie Centrum Finansowe 3 ul. Emilii Plater 53, 00-113 Warsaw

4

Marynarska Business Park ul. TaÊmowa 7, 02-677 Warsaw

(1) 5 Nowy Plac Unii

(1) 10 Wola Center

15 budynków

ul. ¸u˝ycka 6, 81-512 Gdynia

(1) 16 Equator II

WND WND WND WND WND WND

THE LIST

OCTOBER 10-16, 2011

21

Major tenants

Air-conditioning / 24-hour security

Raised floors / Open space

Openable windows / Access control

Suspended ceilings / Kitchens

17,530 28,429

361 1,070

Axel Springer; Philip Morris

10 3 12

185 540

✓ ✓

✓ ✓

✓ ✓

✓ ✓

ul. Wo∏oska 1, 02-675 Warsaw

17,112 17,981

859 -

WND

13 3 8

299

✓ ✓

✓ ✓

✓

✓ ✓

23

Katowice Business Point ul. Âciegiennego 3, 40-114 Katowice

16,800 25,910

WND 479

Grupa ˚ywiec; PwC; HSBC Bank; Polska Grupa Dilerów; PTWP

15 4 5

26 200

✓ ✓

✓ ✓

✓ ✓

24

Europlex ul. Pu∏awska 17, 02-515 Warsaw

16,700 24,700

WND WND

Accenture Services; Elavon; Liberty Seguros

13 3 16

WND 270

✓ ✓

✓

25

Poznaƒskie Centrum Finansowe Pl. Andersa 5, 61-894 Poznaƒ

16,249 28,440

1,500 295

BZ WBK; Polkomtel; Medicover; PricewaterhouseCoopers; Ciber Polska

20 WND 7

173

✓ ✓

ul. Zaj´cza / Elektryczna

16,000 16,981

1,000 -

WND

8 2 WND

WND 217

27

WiÊniowy Business Park F ul. I∏˝ecka 26, 02-135 Warsaw

15,900 16,400

200 300

Carlsberg; Johnson & Johnson; Lafarge; Janssen-Cilag; Schneider Electric

8 1 4

28

Ochota Office Park 3 Al. Jerozolimskie 181, 02-222 Warsaw

15,300 25,498

-

PTC

29

Altus ul. Uniwersytecka 13, 40-007 Katowice

15,220 65,361

4,427 WND

15,165 WND

Year completed

Leasing agent - contact person, phone / Building manager, phone

Architect / Developer / General contractor

✓ -

✓ ✓

2006

WND DTZ: 22 222-3000

Konior & Partners Ghelamco Poland Ghelamco Poland

-

✓

QII 2014

Jones Lang LaSalle: Pawe∏ Lothammer, 668-282-756 WND

JEMS Architekci HINES -

✓ ✓

✓ -

✓

2010

WND Cushman & Wakefield

Jaspers & Eyers Partners; Konior & Partners Ghelamco Ghelamco

✓ ✓

✓ ✓

✓

✓ ✓

1999

Jones lang LaSalle: Katarzyna Pearce, 668-280-922; Grzegorz Boczek, 501-532-555 WND

Tadeusz Spycha∏a WND WND

✓ ✓

✓

✓ ✓

✓ ✓

✓ ✓

2001

Knight Frank Knight Frank

Pracownia Architektoniczna Ewy i Stanis∏awa Sipiƒskich Von der Heyden Group Bilfinger Berger Polska

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓

✓

2013

Jones Lang LaSalle: Micha∏ Lis, 608-479-731 WND

WND Menolly Poland WND

207 396

✓ ✓

✓ ✓

✓

✓ ✓

-

✓

2007

AIB PPM: Daniel Pater, 22 653-4660 Knight Frank

Aukett Fitzory Robinson Quinlan Private Golub Hochtief

8 2 6

71 265

✓ ✓

✓

✓ ✓

✓

-

✓

1999

Mahler Property Services: Piotr Buchwald, 22 540-6530 Mahler Property Services

Aula Planconsult Mahler Project Pia-Piasecki

Qubus Hotel; Kino Helios; Capgemini; Steria Polska

34 3 17

550

✓ ✓

✓ ✓

✓

✓ ✓

✓ ✓

✓ ✓

2003

Knight Frank: Grzegorz Pytlarz Knight Frank: Magdalena Nawrat

Biuro Architektoniczne ARKAT mgr in˝. Dieter Paleta Business Centre 2000 Mostostal Zabrze Holding

-

WND

4 1 6

25 297

✓ ✓

✓ ✓

✓

✓ ✓

✓

-

QII 2012

Avestus Real Estate, 22 520-6000 Avestus Real Estate

DDJM Avestus Real Estate Eiffage Mitex

15,150 15,150

WND -

PWN; Infovide-Matrix

10 2 8

WND WND

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓

✓

QI 2012

WND Jones Lang LaSalle, Ewelina Ka∏u˝na, 22 318-0000, 604-616-922 WND

WND Sami Architekci WND

Al. Jerozolimskie 56C, 00-803 Warsaw

15,038 16,785

1,747 WND

WND

9 2 6

265

✓ ✓

✓ ✓

✓ ✓

-

✓ ✓

✓

QIII 2012

Mariusz Oleksy SwedeCenter

WND SwedeCenter Hochtief Polska

33

Atrium Centrum Al. Jana Paw∏a II 27, 00-867 Warsaw

14,684 19,371

2,227 414

UPC Polska; Apsys; Nordea; Medicover; Emmerson

9 2 8

209

✓ ✓

✓ ✓

✓

✓ ✓

✓ -

✓ ✓

2001

Knight Frank DTZ: 22 222-3000

Biuro Projektów Kazimierski i Ryba Architekci Skanska Skanska

34

Platan Park I ul. Poleczki 21, 02-822 Warsaw

14,261 29,681

14,374

WND

2 5

436 -

✓ ✓

✓

✓ ✓

✓ ✓

✓ -

✓ ✓

1999

Platan Group: Oliwer Richter, 607-919-969 Platan Group: 22 545-0245

APA Markowski Wojciechowski Top 2000 Kubis Construction

35

Ochota Office Park 2 Al. Jerozolimskie 181, 02-222 Warsaw

14,200 22,203

-

PTC; Rettenmaier Polska; Payroll Center; BSH Sprz´t Gospodarstwa Domowego

7 1 WND

96 89

✓ ✓

✓

✓ ✓

✓

-

✓

1998

CA Immo Real Estate Management Poland: Piotr Buchwald, 22 540-6530 Mahler Property Services

Aula Planconsult Mahler Project Pia-Piasecki

36

Catalina Office Center Al. WyÊcigowa 6, 02-681 Warsaw

13,992 WND

WND WND

Karmar; Fiat Auto Poland; Fiat Bank Polska; PRA; Chevron

12 2 4

66 151

✓ ✓

✓ ✓

✓ ✓

✓ -

-

✓

2009

Catalina Group: 603-393-838 Colliers International REMS: Marta Dunal, 664-920-142

Rycerski & Szaroszyk Catalina Investment Karmar

ul. Bu∏garska 101, 60-378 Poznaƒ

12,887 15710

2,277 56.5

WND

6 1 4

134 309

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

✓

2013

WND WND

Ahlqvist & Almqvist Arkitekter/Arcade Polska SwedeCenter WND

38

Quattro Forum ul. Legnicka 51-53, 54-203 Wroc∏aw

12,772 WND

935 241

Lukas Bank; PKO BP; Deichmann Obuwie; PZU; LUX MED

7 1 3

81 135

✓ ✓

✓

✓ ✓

✓ ✓

-

✓ ✓

2004

Anna Wasilewska Knight Frank: Martyna Màdra, 71 790-2710

Dorota Jarodzka-Âródka, Archicom Studio ACP Archicom RI

39

Marynarska Point 2 ul. Post´pu 15C, 02-767 Warsaw

12,635 WND

493 125

DnB Nord Bank; I IMS Health Consulting; ILFILF Consulting Engineers Polska; IncentilCENTIS Corporate Solutions

10 3 6

7 254

✓ ✓

✓ ✓

✓

✓ ✓

✓ -

✓ ✓

2008

WND Colliers International REMS: Robert Micha∏ Iwaniuk

MW Projekt Biuro Projektowe, Micha∏ Nocuƒ, Wojciech Kakowski Skanska Property Poland Skanska

40

Centrum Biurowe Lubicz ul. Lubicz 23, 31-503 Kraków

12,303 25,000

1,793 804

Capita; International Paper; BNP Paribas Bank Polska; Kredyt Bank; PZU

8 2 8

55 204

✓ ✓

✓

✓ ✓

✓ ✓

✓ ✓

✓ ✓

2000

Knight Frank: Monika Su∏decka-KaraÊ, 12 623-7079 Knight Frank: Ma∏gorzata Nowiƒska, 12 421-7250

DDJM Mostostal Export Mostostal Export

Rank

Structural cabling / Fiber-optic link

Commercial / Warehouse

Sprinklers / Own UPS

Office space / Total usable space

Number of outside parking spaces / Number of underground parking spaces

Amenities

Total number of floors / Number of underground floors / Number of elevators

Rentable space (sqm)

www.wbj.pl

Company name Street, Postcode City

21

Trinity Park I ul. Domaniewska 52, 02-690 Warsaw

(1) 22 Empark - Vega

(1) 26 Menolly Business Park

(1) 30 Enterprise Park

ul. Na Do∏ach 4 Kraków

Libra Bussines Centre B (1) 31 Al. Jerozolimskie / ul. Daimlera , 02-460 War-

saw

(1) 32 Business Garden Warsaw 2

(1) 37 Business Garden Poznaƒ 1

Notes: NA = Not Applicable, WND = Would Not Disclose. Research for the List was done in August/September 2011. Number of employees and ownership structure are as of August/September 2011. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Footnotes: (1) Buildings under construction.

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.

22

ARTS & CULTURE

www.wbj.pl

Concert

OCTOBER 10-16, 2011

Festival

The magic of the maestro Austria, and all that jazz Yuri Bashmet and the Moscow Soloists in concert Warsaw Philharmonic ul. Jasna 5 October 13, 7 pm

53rd International Jazz Festival Jazz Jamboree Various locations around Warsaw October 20

Called “the most formidable violist today” by the New York Times and “one of the world's greatest living musicians” by the The Times (UK), Russian conductor and violinist Yuri Bashmet returns to Poland along with his Moscow Soloists chamber orchestra, and accompanied by the talented Polish violinist Agata Szymczewska. Musical masterpieces, both classical and contemporary, will be performed on Stradivarius violins to fully accent the magic of this music. ● For tickets or more information, log on to filharmonia.pl

Jazz lovers rejoice – the 53rd annual Jazz Jamboree festival kicks off on October 20 and lasts through December, offering up concerts, contests and even photo exhibitions and films related to jazz. One of the main fea-

COURTESY OF THE RUSSIAN CONCERT AGENCY

Experience educational fun for the whole family starting from October 18 at Warsaw’s Copernicus Science Centre with three laboratories – biology, chemistry, and physics – as well as a robotics workshop. On the weekend, anyone aged 13 and

From October 17, Dutch group Droog Design presents “Saved by droog” – a collection of works created by artists from items sold off by bankrupt companies. These everyday objects have been used by 14 designers as raw material for creative re-interpretation, and are transformed into thought-provoking art, including “folding chairs manicured by nail artists, handkerchiefs that distribute selected daily

home or at school.

Of course, the Copernicus Science Centre offers plenty of other learning experiences all year round, including planetarium sessions and the “BUZZZ!” gallery for children aged six and younger. ● Tickets to the laboratories must be purchased along with tickets to the permanent exhibitions.

For more information log on to kopernik.org.pl/en

Shiny, happy, meaningless? place with a new purpose in order to attract people's attention. He also hints [at] its future function as a Football Fans’ Zone during Euro 2012, which ... is supposed to be the meeting place for many different groups of people joined by the wish to enjoy an exiting football event,” the museum says on its website. ● For more information log on to artmuseum.pl

COURTESY OF THE MUSEUM OF MODERN ART IN WARSAW

The Museum of Modern Art in Warsaw’s “New Place (Tribune)” project focuses on Plac Defilad, in the center of Warsaw, “its historical baggage, its

emptiness and the necessity of restoring its former appearance of a metropolitan center.”

As part of the project, from October 28 through March next year, Ryan Gander presents his three-meter installation “Really Shiny Things That Don’t Mean Anything.” Mr Gander's installation imitates a magnet attracting metal objects, “pointing not only to the necessity of providing this

Shiny and without meaning?

COURTESY OF DROOG DESIGN

Saved by droog Center for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 October 17

Art installation

Really Shiny Things That Don't Mean Anything Museum of Modern Art in Warsaw Museum: ul. Paƒska 3 Installation: Trybuna Honorowa, Plac Defilad From October 28

For more information visit jazz-jamboree.pl

Rescued by design

Experimenting with fun over is welcome to conduct the experiments set out in these laboratories with the help of museum docents (during the week the labs are reserved for school groups).

The young scientists who are conducting the experiments will be given data cards on which the results of their experiments, photographs, and charts will be recorded, and which they can use to display on a computer at

Ukraine.

The performances and exhibitions will occur all around Warsaw, including at Congress Hall in the Palace of Culture and Science, Teatr Polski and the Palladium Concert Hall, as well as in jazz clubs around the capital. ●

Exhibitions

Museums

Learning laboratories Copernicus Science Centre ul. Wybrze˝e KoÊciuszkowskie 20 From October 18

tures, as in recent years, will be a focus on musicians from a particular partner country – this year Austria.

“Jazz Jamboree – Night in Austria” is due to feature Austrian jazz musicians alongside the Polish ones. In turn, Polish artists will play in Graz, Austria in December. Previous versions of the festival have seen partnerships with Georgia and

news articles, and spoons with non-edible yet mouthwatering coatings,” accord-

ing to the group. ● For more information log on to csw.art.pl

LAST WORD

OCTOBER 10-16, 2011

www.wbj.pl

23

Tech Eye

The iPhone 4S and the doom of mankind good, especially since the company only promised “exceptional processor and graphic performance” from the iPhone 4.

improved, from “not bad for a smartphone” to “slightly better than not bad for a smartphone.”

And the left-handed will be pleased to

The phone’s primary camera has also been given an upgrade to eight megapixels, up from five.

Battery life has been slightly

know that Apple has solved the antenna problem that plagued the previous model. The steel external antennas are still there, but the

COURTESY OF APPLE

Unless you’ve been trapped in some strange, internet-starved part of the world, such as the demilitarized zone formerly known as Detroit, you’re probably aware that Apple has unveiled a new iPhone. But you may not be aware that this spells disaster for us all.

First things first. The new model is called the iPhone 4S and it looks, well, exactly like its immediate predecessor. You’d think that the world’s largest tech firm by market value, a company which couldn’t get any more disgustingly wealthy without stashing its cash in old colostomy bags, would be able to at least tweak the iPhone’s exterior a little bit. A bit of extra curve. A superfluous third camera lens. Something.

Anything.

Nope.

However, as the homely are so fond of saying, “it’s what’s on the inside that counts.” And what’s on the inside of the iPhone 4S is fairly interesting, such as the new dual-core A5 chip, which, Apple claims, will deliver “blazing fast performance and stunning graphics.” That sounds

iPhone 4S is able to “intelligently switch” between them, meaning southpaws (and anyone else who prefers a sinister phone grip) won’t have to worry about the infamous “death grip” which dropped calls in the previous model.

Techeye is disappointed nevertheless. We’ve sent countless emails to Apple asking their designers to add an extra button which would serve no purpose other than to be stabbed at, absorbing anger which might otherwise break the phone. It would be great for self-loathing iPhone owners (those who hate the gadget but feel socially compelled to own one anyway). A cool idea, right? Apparently Apple doesn’t think so.

Other than that omission, the hardware upgrades are all acceptable and certainly innocuous enough; it’s when we start talking about software that Apple’s latest handset starts to sound ominous.

The new operating system, iOS 5, doesn’t seem like much of a threat, but then there’s “Siri.” As in “sirious carnage” or “sirial killer.”

Apple describes Siri as “an intelligent assistant that helps you get things done just by asking.”

Sophisticated voice recognition and control technology, in other words. But Techeye knows the truth. This is the beginning of the end. Apple might as well rename the thing Skynet and start designing Arnold Schwarzeneggershaped deathbots.

Siri learns, you see. It answers questions like “will it rain fat people this week?” It grows accustomed to its owner’s voice, no matter how whingy or mincing. It understands Aussies and possibly even Kiwis.

It’s not smart enough to comprehend Glaswegians yet, but it will be someday. And when Siri grows complex enough to understand the world’s least sensible English accent, that day will mark the dawn of a dangerous artificial intelligence. And the beginning of the end for mankind.

Sure, the iPhone 4S will call Mom if you tell it to. But someday it might rebel, start a war and turn the whole planet into a giant Detroit-like pit of wretchedness.

Just keep that in mind. ●

Ever pined for a superfluous third something-or-other? Let us know: techeye.wbj@gmail.com