What the frack?
It’s still Russia Former Defense Minister Janusz Onyszkiewicz explains where Poland’s defense priorities are focused
3
8-9
WWW.WBJ.PL
Mixed messages from the government over foreign investment in shale gas
VOLUME 19, NUMBER 19 • MAY 20-26, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127
LOKALE IMMOBILIA
Since 1994 . Poland’s only business weekly in English
In search of solutions Prominent business leader Henryka Bochniarz gives her take on what Poland should do to battle the country’s current economic malaise
COURTESY OF SKANSKA
REAL ESTATE
• Dominikaƒski launch • Warsaw high streets • JLL on offices 15-18
Extra punch
12-13
Energy-drink maker FoodCare hopes Mike Tyson will be a hit for its upcoming US promotional campaign 6
Plus:
In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . .15-18 The List . . . . . . . . . . . . . . . . . . . . . .19 Markets . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23
PIOTR GAMDZYK/REPORTER
• PZU in Croatia? • Inflation below 1% • ‘Europe needs Africa’ • Polish art in Saatchi
On their way out
Hitting the brakes
Prime Minister Donald Tusk is preparing for a summer cabinet reshuffle. Who should be looking for new work? 3
Poland’s economy is slowing down far faster than expected. Are more interest-rate cuts on the cards?
7
NEWS
www.wbj.pl
Slovenia’s troubles
23% is the percentage of Poles who support the ruling Civic Platform, according to a recent CBOS poll, the lowest level since 2007. According to the poll, the biggest opposition party, Law and Justice, has 26% support.
January 2010 was the original date for a bridge in Mszana (southern Poland) to be completed. After the construction company left the site for the second time, its future is in jeopardy, however GDDKiA claims the bridge will be finished by the end of this year.
0.4% was Poland’s GDP growth in the first quarter, the lowest in years, according to a flash estimate by Poland’s statistics office.
Shares in Poland’s thirdlargest lender Bank Zachodni WBK will replace industrial group Boryszew in the Warsaw Stock Exchange’s bluechip WIG20 index, the bourse said. The change will be part of a quarterly revision of indices effective after the June 21 session.
Calendar
Health Minister Bartosz Ar∏ukowicz said that the government would sign agreements with in vitro fertilization clinics within its subsidies program by July 1. According to Polish Radio’s news agency IAR, 37 clinics have applied for the program so far. The program will apply to women under 40 who have been treated for infertility for at least a year. The state will pay for three rounds of in vitro treatments. ●
Q1 2013 GDP change in selected EU states (in % year-on-year) 5.6
6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6
0.9
0.4 -0.3
-0.4
* Highest in EU ** Lowest in EU
-1.9
-2.0 -3.9
-4.1
** ece Gre
ga l Cy pru s
Sp ain
Por tu
nce
ub lic
-5.3
Source: Eurostat
Company index Abbey House ..........................................22
LHI ..........................................................16
Acer ........................................................23
LOT........................................................3, 6
Admiral Markets ......................................7
LVMH ......................................................16
May/June
Aerium ....................................................15 Alpine Bau ................................................4
Maçków Pracownia Projektowa ............15
MAY 23
Apsys ................................................15, 18
Marathon Oil ............................................3
Asseco ....................................................20
Millward Brown ......................................16
CONTEMPORARY ART AUCTION
Web:
Auction of works by notable Polish artists of the 20th century, including Teresa Pàgowska, Ryszard Winiarski, Rajmund Ziemski, Aleksander Kobzdej. DESA Unicum auction house, Warsaw www.desa.pl
28
JUBILEE YOUNG ART AUCTION
Event:
The 25th Young Art Auction at DESA Unicum will be a chance to bid on 66 works by young artists in the Polish art market, including Karol Radziszewski, Honza Zamojski, Basia Baƒda, Ivo Nikiç, Wilhelm Sasnal, Laura Pawela and Norman Leto. DESA Unicum auction house, Warsaw www.desa.pl
Event:
37 clinics apply for in vitro subsidies
Where is the growth?
Re p
One of the main social consequences of Europe’s crisis is migration from the euro zone periphery. How much in remittances are these people now sending to their home countries and what effect could that have on those economies? Log on to WBJ.pl to read a Stratfor analysis on the issue.
Figures in focus
Fra
Remittances across Europe
Former Justice Minister Jaros∏aw Gowin, when asked about the possible rejection of his court system reform, after the Sejm voted to do just that.
Cz ech
BZ WBK stocks to join bluechip index
“It would be a disaster.”
an y
On WBJ.pl
Quote of the Week
rm
Jacek Ciesnowski
0.8% was Poland’s year-on-year CPI inflation figure in April.
nd
a solution that would be good for everyone,” Slovenian Prime Minister Alenka Bratušek told reporters after a cabinet meeting. The tax increase is supposed to bring the government €250 million a year and if deemed necessary, other taxes might be introduced including a controversial progressive “crisis tax” on incomes. The EU said it would study the plans and issue recommendations by late May. Slovenia’s economy has been in recession for two years, with unemployment currently at 13.5 percent and forecasts seeing its economic output shrink by 2 percent this year alone.
Ge
Slovenia faces risks of a prolonged downturn and constrained access to financial markets. Additional and far-reaching reforms are needed as soon as possible to head off such daunting outcomes,” the OECD’s statement read. Slovenian authorities decided that they had to act to avoid a bailout. As a start, they’ve issued bonds worth €2.8 billion. Two weeks ago, they announced an austerity plan that would raise the country’s value-added tax to 22 percent (from the current 20 percent) and sell about 15 state-owned companies including a bank, an airline and a telecommunications operator. “In our deliberation about this plan, we were looking for
ia
A former poster-child for economic success among post-communist CEE countries is struggling to turn around its contracting economy and now has to make tough decisions to avoid the need for an international bailout. After suffering a real estate crash similar to that in Spain, Slovenian banks are now crumbling under bad loans. It’s estimated that the country’s five biggest state-owned lenders have about €7 billion in bad loans, which is equivalent to roughly 20 percent of the country’s GDP. Back in April, the OECD urged Slovenia to take action. “Restoring the banking sector is the most urgent priority,
Po la
Slovenian Prime Minister Alenka Bratušek
vak
The Warsaw Stock Exchange has launched consultations about the introduction of two new indices, the WIG5 and the WIG30, in place of its current WIG20 blue-chip index. The WSE’s management sees the WIG30 as an indicator of the condition of the largest listed companies. The WIG5 would be a basis index for derivatives. The WIG5 would be revised once a year and the WIG30 once every quarter.
Numbers in the News
via *
New indices next year on WSE
IN THE SPOTLIGHT
Slo
The International Monetary Fund expects Poland’s economy to grow by 1.2% this year and by 2.2% in 2014, the institution said in a report last week. The IMF wrote that the country’s economic growth has visibly slowed down and that short-term macroeconomic policy should be aimed at supporting the economy. The IMF’s experts also wrote that Poland should continue easing its monetary policy “without delay.”
MAY 20-26, 2013
Lat
IMF: Polish growth at 1.2% in 2013
WIKIMEDIA COMMONS/STANKO GRUDEN/STA
2
Location:
Location: Web:
Location: Web:
7-9
WALLSTREET CONFERENCE
Event:
This conference is the largest meeting of individual stock exchange investors in Poland, organized annually by the Association of Individual Investors. It provides an opportunity to meet prominent analysts and to participate in discussion panels. Hotel Go∏´biewski, Karpacz www.sii.org.pl
Location: Web:
24-26 EUROPEAN FINANCIAL CONGRESS Event:
JUNE 6 ECR FORUM FOR COOPERATION Event:
This forum is an annual conference for top managers from the FMCG sector. Participants represent manufacturers, retail chains, agents, small retailers, distributors and
providers of logistics, marketing and IT services. Hotel Marriott, Warsaw www.ecr.pl/forum2013
Location: Web:
This congress, organized by the Gdaƒsk Institute for Market Economics – Gdaƒsk Academy of Banking, provides space for pragmatic debates of business, political and academic circles. This year’s edition will focus on financial security and European integration. Sopot www.efcongress.com
Boryszew ..................................................2 Bose International Planning
Nimbus ..................................................15
and Architecture ....................................15
Nintendo ................................................23
BT Group ..................................................6
Nordea Bank ............................................7
BZ WBK ................................................2, 7
Orange ....................................................22
CA Immo ................................................18 CBOS ........................................................2
PKP ........................................................18
Centrum Development & Investments 16
Polimex ..................................................20
Croatia Osiguranje ..................................5
Porr Polska ............................................15
Deloitte ..................................................18
Pramerica Real Estate Investors ..........18
ESPN ........................................................6 Euris/Rallye Group ................................18
PZU ..........................................................5
FoodCare ..................................................6
Red Bull....................................................6
Frontex....................................................16
Skanska Property Poland ......................15
Ghelamco..........................................16, 17
Starbucks ..............................................13
Globe Trade Centre ................................18 Griffin Group ..........................................16
Synthos ..................................................20
HB Reavis ..............................................18
T-Mobile............................................18, 21
Hochtief ..................................................16
Talisman Energy ......................................3
Immofinanz Group ................................15
Union Investment ..................................18
iriver........................................................23 Jones Lang LaSalle..............15, 16, 17, 18
Vienna Stock Exchange..........................15
Konior ....................................................16
Warsaw Stock Exchange..........................2
Kronos ....................................................18
X-Trade Brokers ....................................20
NEWS
MAY 20-26, 2013
www.wbj.pl
3
Politics
Sports Minister Joanna Mucha
Transport Minister S∏awomir Nowak
parliamentary] term,” he added. The government spokesperson said Mr Tusk would “make sure the reconstruction involved not only personnel changes but also a new program.”
bly including Poland – and experiment on them.” Mr Gowin later admitted that he could have phrased his words better and said that they had been taken out of context, but Mr Tusk decided that this explanation was “unsatisfactory.” Right now, the three ministers most often mentioned as possible candidates for dismissal are Transport Minister S∏awomir Nowak, Sports Minister Joanna Mucha and Education Minister Krystyna Szu-
So who’s out? Just last month, Jaros∏aw Gowin was dismissed from his post as justice minister after raising controversy by claiming in an interview that, “German scientists ‘import’ embryos from other countries – proba-
COURTESY OF WIKIMEDIA COMMONS/PHILIPLATORRE
COURTESY OF FACEBOOK.COM/KRYSTYNASZUMILAS
Government spokesperson Pawe∏ GraÊ told radio station RMF FM last week that there was an impending “reconstruction of the government, details of which are known solely to the prime minister.” Mr GraÊ added that the cabinet reshuffle would “not be a PR stunt or forced by the opposition, simply the result of a deep analysis.” Earlier on, Mr GraÊ had given TV Polsat News some more details. “More or less in the summer of this year, a thorough assessment of all the ministries will be conducted. On the basis of that analysis the prime minister will make a decision regarding every minister and every ministry,” said Mr GraÊ. “We definitely need a new opening, some fresh air for the second half of our [four-year
COURTESY OF PREZYDENT.PL
The sports, education, transport and health ministers look most likely to get the boot
COURTESY OF WIKIMEDIA COMMONS/RYSZARD HO¸UBOWICZ
Summer cleaning in the cabinet
Education Minister Krystyna Szumilas milas. It is these ministers that have come in for the heaviest media criticism in recent months over their job performance. “It seems pretty obvious those three will go, although you never know, these same ministers have been criticized before but the prime minister decided to keep them,” said Sergiusz Trzeciak, an independent political marketer and a lecturer in political science at Collegium Civitas. Mr Trzeciak also men-
Health Minister Bartosz Ar∏ukowicz
tioned Health Minister Bartosz Ar∏ukowicz as a possible candidate for dismissal, also due to some scathing criticism leveled at him by journalists and other political observers.
A tricky affair Regarding possible replacements if indeed these ministers are relieved of their duties, Mr Trzeciak stated it would be a “tricky affair.” “Donald Tusk has to be careful about causing friction between the various factions
in his party so it is possible he might pick technocrats with no political background as new ministers,” said Mr Trzeciak. He added that the prime minister was making the expected changes for two reasons. “Firstly, to remind his party that he is in control and can do whatever he wants. Secondly, well, he cannot completely ignore all the negative reactions to these ministers by public opinion.” Remi Adekoya
Energy
EC temporarily Government sends mixed signals on approves public foreign investments in shale gas aid for LOT Administration, which put Poland’s shale gas reserves at 5.3 trillion cubic meters, when Poland’s geological institute said there was likely less than 800 billion cubic meters. New estimates will be released next year. Two North American energy companies have already withdrawn from Poland in recent weeks. Marathon Oil from the US and Canada’s Tal-
The following day, Mr Woêniak gave the exact opposite impression, saying at the European Economic Forum in Katowice that “foreign capital is incredibly important for the development of shale gas exploration in Poland, as Polish companies do not have the experience and the capital needed.” His superior, Minister Marcin Karolec, announced at the same event that the government plans to adopt a new, more investorfriendly law on shale gas exploration activity by the end of June. The new regulations are meant to cut some red tape in the sector. Poland will also create a state operator that will take part in energy consortia. The lack of proper regulations has been the one of the main reasons why some companies are hesitant to enter the Polish market and start exploration here. Another one is a simple cost-benefit analysis. Due to the geological make-up of the land, Poland’s shale rock deposits are located at some 4,000 meters under ground level, experts say, and it will take many more tests, more time and much more money to produce shale gas here.
Where’s the gas? Moreover, the potential volume of Polish shale-gas reserves is still unknown. Cold water was thrown on early estimates by the US Energy Information
isman Energy are in the process of selling their Polish assets, citing a lack of “commercial levels of hydrocarbons” as the reason. Poland has issued more than 100 shale gas exploration licenses, with some 40 test wells currently in operation, though none is expected to start producing gas before 2015. Kamila Wajszczuk, Jacek Ciesnowski
COURTESY OF LOT
The Polish government is not interested in supporting foreign investments in the shale gas sector – at least, that is what daily newspaper Rzeczpospolita reported last Monday, citing attendees of a special meeting between Deputy Environment Minister Piotr Woêniak and a group of foreign investors and diplomats. The investors wanted to talk to the minister about planned legislation that would regulate the extraction of shale oil and gas in Poland. The government had promised to prepare it back in 2011. According to participants of the meetings who spoke with the paper, the Polish government does not want any foreign – and especially no US or Canadian – firms investing in the sector in Poland. “This was a declaration of war with North America,” one of the participants wrote in a memo that the newspaper obtained. “People responsible for energy issues are pushing forward the idea that the energy sector should remain in Polish hands,” another source said.
‘We need you’
The government loan kept the state-owned airline flying
SHUTTERSTOCK
From “declaration of war” to a new investorfriendly law. Last week was a confusing one for companies interested in investing in shale gas in Poland
The government hopes these will soon dot the Polish landscape, but will foreign firms oblige?
The European Commission has temporarily approved the financial aid that the government granted LOT Polish Airlines in December of last year. The EC said that the z∏.400 million loan was in line with EU state aid rules. The EC also said that the aid was approved temporarily, pending a review of Poland’s restructuring plan for the airline, which should be submitted within six months from when the loan was granted, that is by June 20 this year. The Commission will then make its final decision on approval. Poland’s State Treasury decided to grant a loan to LOT at the end of last year after the airline had stated its
financial situation was worse than expected. LOT’s new management plans to make significant job cuts and reduce the number of destinations, focusing on European and trans-continental routes. Recently, the company’s CEO Sebastian Mikosz has said that LOT is considering asking the government for further aid. In mid-March the Sejm, the lower house of Poland’s parliament, approved a bill that would allow the state treasury to sell a majority stake in the airline. The Polish government is currently looking for potential investors interested in acquiring the company. Kamila Wajszczuk, Jacek Ciesnowski
NEWS
www.wbj.pl
Pole discovers previously unknown bird species fossil Albin Jamróz, an amateur paleontologist from Rzeszów, discovered the fossil of a previously unknown species of perching bird that lived 29 million years ago. The discovery was documented and described by a group of Polish scientists in the Journal of Ornithology.
US astronaut honored with Polish order of merit Scott Edward Parazynski, a US astronaut with Polish origins, was awarded the Officer’s Cross of the Order of Merit of the Republic of Poland. Head of the National Security Bureau, Stanis∏aw Koziej, who carried out the decoration, said that Poland was honoring Mr Parazynski for his input into space research. ●
MAY 20-26, 2013
Infrastructure
Bridge fiasco highlights road-construction woes The transportation minister is in the hot seat again, after a construction firm walked off a roadbuilding job Austrian construction company Alpine Bau issued a statement last week saying that it was withdrawing from the construction of a bridge in Mszana, in southern Poland. The bridge is the final piece needed to complete the highway route between Wodzis∏aw Âlàski and Jastrz´bie-Zdrój in Silesia, part of the A1 highway. That project’s completion date, originally set for January 2010, has already been pushed back several times. The Austrian firm filed a report in 2009 claiming that because the project had numerous construction flaws, it could not be completed on time nor at the agreed price. The contract was terminated by the Polish state road operator GDDKiA and another tender was held. It was won, again, by Alpine Bau. “The General Directorate for National Roads and Motorways (GDDKiA) promised that it would implement
COURTESY OF GMINA MSZANA
4
Construction on the site has stopped yet again the necessary changes to the project. That’s why we decided to participate in the tender once again. But after we received the plans, it turned out the changes had only been partially implemented,” said Karolina Szyd∏owska, a spokesperson for Alpine Bau. GDDKiA denies these accusations, citing Alpine Bau’s difficult financial situation as the reason for with-
drawing from the project. In 2012 the company recorded nearly €450 million in losses. The news of yet another delay in building Polish roads was immediately picked up by opposition politicians from Law and Justice. “The pyramid of incompetence of this government knows no bounds. Minister of Transportation S∏awomir Nowak is yet another example of that,” said
Andrzej Adamczyk, a Law and Justice MP. He said that incompetence on Mr Nowak’s part was to blame for Poland’s many delayed highway construction projects. He demanded that Mr Nowak be dismissed. The transport minister already survived a vote of no-confidence back in early April. In the meantime, GDDKiA announced that the
bridge’s construction will be completed by subcontractors that have already been hired and their fees will be paid from funds which were previously earmarked for Alpine Bau. “Since nearly 95 percent of the bridge is completed, we expect the construction to be finished by the end of 2013,” reads a statement from GDDKiA. Jacek Ciesnowski
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BUSINESS
MAY 20-26, 2013
www.wbj.pl
5
M&A
European Economic Congress
Insurer PZU looking for acquisitions in the Balkans
‘Europe needs Africa’
PZU headquarters, Warsaw keeping his “fingers crossed” that PZU will be successful in taking over Croatia Osiguranje. “Meeting business executives in Zagreb is important for us, as a lot of new opportunities for cooperation will open when Croatia joins the EU [on July 1, 2013],” Mr Komorowski added.
Tough times ahead? In October of last year, Mr Klesyk announced that PZU plans to spend up to z∏.7.5 billion on acquisitions in Poland and in the rest of the CEE region. The Polish insurer has been looking for takeovers abroad, as its growth
prospects in Poland are limited. Another potential target is Slovenian state-owned Triglav, which Ljubljana is planning to sell in order to raise funds necessary to avoid an international bailout. Those bold plans might change however, as the company expects its net profit for 2013 to drop significantly this year because of the economic slowdown, “The full-year result will be down by more than 10 percent, even up to 30 percent,” PZU’s CFO Przemys∏aw Dàbrowski told reporters last Wednesday. Kamila Wajszczuk, Jacek Ciesnowski
Although Poland has recently been intensifying efforts to boost its business relationship with African economies, the country’s richest man, Jan Kulczyk, says this is all coming “10 years too late.” Mr Kulczyk made the comments at a debate session at the European Economic Congress in Katowice, held in May 13-15, which focused on Africa and growth in Europe. “This discussion [on Africa] is taking place 10 years too late. Today it is not Africa that needs Europe but Europe that needs Africa,” Mr. Kulczyk said. The business mogul, who has various energy interests in African countries such as Nigeria and Tanzania, said Europe had already “missed out on Asia’s growth and we may very well have also missed out on Africa’s rapid development, which has been going on for eight to 10 years now.”
He said that as a businessman he could see that Europe has “hit a wall and it is time to seek synergy and cooperation, which is possible between [the European and African] continents.” Meanwhile, former Polish President Aleksander KwaÊniewski, who was also present at the EEC said, “Along with the fall of the Berlin Wall, the cold war came to an end. The political architecture has been changing for years. Europe is doomed to grow old while Africa is growing in strength.” “We see how quickly China, India and Brazil are developing. We live in a time of change and need a wider perspective,” he said. “First Poland wanted to join
NATO, then the EU. … Today I think our political priorities should be somewhat adjusted. Without giving up on developing our transatlantic relations, we need to open up to Asia and Africa,” Mr KwaÊniewski said. Present at the congress was also El Hadji Malick Gakou, trade, industry and informal sector minister in Senegal in the years 2012-2013. “Polish businessmen are slowly trying to understand how important Africa-Europe cooperation is. Today real income has risen by 30 percent in recent years in Africa while trade with China has grown to $166 billion,” said Mr Gakou. “It is not about you doing something for us or instead of us, but with us,” he concluded. Remi Adekoya
COURTESY OF EWA BROGOSZ-KORYCKA/WBJ
Poland’s largest insurer PZU wants to buy a majority stake in Croatia Osiguranje, the Polish firm’s chief executive Andrzej Klesyk said last week. “We are most interested in the role of the main shareholder with a majority stake,” he told Reuters. “We don’t know yet whether this will be possible.” The Croatian state had earlier announced it wanted to sell up to 50 percent of Croatia Osiguranje. The company has a market capitalization of about $390 million. However last Monday, Mladen Pejnovic, head of Croatia’s state assets administration unit, said that the country would sell at least 75 percent in the firm. He confirmed that PZU filed an offer, alongside five other investors. The news was announced while Polish President Bronis∏aw Komorowski was visiting Zagreb. He commented on the matter saying that he is
COURTESY OF PZU
The Polish giant is looking to enter other markets as it faces a difficult economic situation at home
This year’s annual economic congress in Katowice focused on boosting European growth and strengthening business ties with fast-growing African economies
Panelists discuss Europe-Africa economic cooperation
6
BUSINESS
www.wbj.pl
MAY 20-26, 2013
Food industry
FoodCare, a Polish firm known for its energy drinks and its soft drinks brand Frugo, has never been averse to marketing aggressively. Previously, Polish boxing world champion Dariusz Michalczewski and F1 driver Robert Kubica have promoted its products. Last year the firm went further, however, reaching a contract with Mike Tyson. Last week the company signed a deal with Polish statecontrolled airline LOT to put “Iron” Mike’s image on one of the carrier’s planes that will fly European routes. But FoodCare wants to extend its reach well beyond Poland and Europe. “The plan for this year is to enter the US with our Black energy drink,” said Wies∏aw W∏odarski, FoodCare CEO. “We’re at the finish line regarding talks with a big retail chain. We plan to send them 30 containers of the drink at first. The
US market is worth $4 billion, entering it would multiply our sales. Mike Tyson will help us with that.” “This is just the beginning,” he added. “We’ll be increasing our presence there in the future. Black energy drink will be sold in the US as a premium brand at the same price as Red Bull,” he added. Mr W∏odarski’s plans are ambitious. Within five years he wants Black to compete with the globally known Red Bull in international markets. That won’t be an easy task. In 2011, a total of 4.631 billion cans of Red Bull were sold in over 161 countries, generating €4.25 billion in revenue. FoodCare, on the other hand, recorded €157 million in turnover last year.
Going the distance The gap between the companies is huge, and it is important to note that other major beverage producers have energy drinks in their portfolios as well. To successfully compete with them, FoodCare will have to part with more than the z∏.20 million that it plans to spend this year on promotion in foreign markets.
FoodCare CEO Wies∏aw W∏odarski (far-right) and Mike Tyson (second from right) have ambitious plans “We have a long-term deal signed with Mike Tyson, which envisages a global promotion,” said Mr W∏odaski, when WBJ asked him if Mike Tyson advertising Black on American television was in the cards. “It is obvious that we’ll use his image to promote our brand in the US as well, however at this time I don’t want to reveal any details.” Jacek Ciesnowski
DAILY EXECUTIVE DIGEST Poland A.M. gives you the biggest Polish stories of the day. Have the most valuable news delivered to your inbox each weekday morning.
Television
ESPN America announces it will cease operations in continental Europe Fans of American sports in Poland and across the continent will lose out on watching their favorite sports live on television British telecommunications firm BT Group, which took over the assets of ESPN UK in February this year, has announced that it will withdraw the ESPN America and ESPN Classic channels from all European markets except the UK and Ireland. While the specific closure dates will vary from country to country based upon distribution agreements, it is expected that all of the stations will have stopped broadcasting by the end of July. Fans of US sports in Poland will therefore be left without a place to watch their favorite games live. ESPN America carried NFL, NHL and MLB games as well as various NCAA events, and other ESPN programming. It’s still to early too tell if any station available in Poland
SHUTTERSTOCK
The food and drinks producer wants to conquer global markets with its flagship energy drink and a famous pugilist
COURTESY OF FOODCARE
FoodCare to take a swing at Red Bull
ESPN America is due to go off the air in Europe by July 31 will pick up any ESPN programming rights. American football in the past has been broadcast on Canal Plus and Polsat Sport Extra, although only the Super Bowl has been shown live. Polsat had previously played one game a week, but usually with a one-day delay. Major League Baseball will have a hard time finding a new broadcaster in Poland, as it is relatively unpopular in the country. The NHL could have an easier time, since it has
Blacked out Events that fans of US sports could miss this year, with ESPN America ending broadcasts in July: The beginning of the NCAA football season
S i g n u p f o r a 2 - w e e k f r e e - t r i a l ! w w w. p o l a n d a m . p l G e r m a n v e r s i o n : w w w. p o l e n a m m o r g e n . p l
August 29
The beginning of the NFL season
September 5
The beginning of the NHL season
October
The MLB World Series
October 23-31
Traditional NFL Thanksgiving Day games
November 28
NCAA football bowl games
December
periodically been broadcast on Polish TV since the mid-1990s, when selected playoff games were shown on TVP. ESPN America did not show NBA games, as Canal+ has the right to broadcast those in Poland. Most fans’ best legal option will be to switch to watching games on the internet. All of the major US leagues provide an option to watch the games streamed through special internet services or mobile applications. However, availability depends on the region and subscriptions are expensive. Last year, prices for the NFL’s Game Pass service started from $110 for the option to view a single team’s 16 regular season games. ESPN also provides online streaming services: NCAA games and the X Games can be viewed on the ESPN player. Jacek Ciesnowski
FINANCE & ECONOMICS
MAY 20-26, 2013
Economic growth
www.wbj.pl
7
Inflation
Poland’s CPI inflation rate slows to Q1 GDP growth lower than 1%, but higher than forecast already pessimistic forecasts under At 0.8 percent, the
Poland’s gross domestic product grew by a mere 0.4 percent year-on-year in the first quarter of 2013, statistics office GUS said in a flash estimate. Compared to the last quarter of 2012, Polish GDP grew by 0.1 percent. The market had expected growth of 0.7 percent y/y. The figures are the worst since Q1 of 2009, when the Polish economy grew by 0.4 percent y/y as well. Through-
out the whole of 2009, Poland’s GDP grew by a mere 1.9 percent. This year, most economists expect it to grow by 1.5 percent or less. GUS is due to publish revised Q1 GDP growth data on May 29. The office’s vice president Halina Dmochowska said that she did not expect the revised figure to be much different from the flash estimate. “There is still economic slowdown and these results are not a surprise,” she said. This was the first time the statistics office revealed a flash estimate of GDP figures. The report only included information on overall GDP growth without a breakdown of the various sectors and other
details. “Thus, it is hard to explain the direct causes of the surprisingly weak GDP reading,” chief economist for Poland at Nordea Bank Piotr Bujak wrote in an analysis. “Possibly domestic demand was even weaker than in our pessimistic forecast (we were below consensus for both fixed investments and private consumption), but it could also be that [a] positive contribution of net exports proved smaller than estimated,” he said. Some analysts are saying the data will convince Poland’s Monetary Policy Council (RPP) to cut interest rates further, after a cut of 25 basis points in May. KW, AK
2009, all over again? Poland’s GDP growth (quarterly, y/y), Q1 2007-Q1 2013 8 7
*Flash estimate
6 5 4 3 2 1
Q1 20 Q2 07 20 Q3 07 20 Q4 07 20 Q1 07 20 Q2 08 20 Q3 08 20 Q4 08 20 0 Q1 8 20 Q2 09 20 Q3 09 20 Q4 09 20 0 Q1 9 20 Q2 10 20 Q3 10 20 Q4 10 20 1 Q1 0 20 Q2 11 20 Q3 11 20 Q4 11 20 Q1 11 20 Q2 12 20 Q3 12 20 Q4 12 2 Q1 012 20 13 *
0
Source: Central Statistical Office
Interest rates
Rate setters weigh in on possible June cut Members of the NBP’s interest rate-setting committee hint at the possibility of a cut in June After two more negative numbers for Poland’s economy came out last week – weakerthan-expected flash GDP figures and inflation well below the National Bank of Poland’s 1.5-3.5 percent target range – members of the National Bank of Poland’s Monetary Policy Council (RPP) held several interviews in the media. While their views on whether to remain hawkish or dovish differed, all seemed to indicate that a June rate cut was at least possible, if not probable. The RPP cut the National Bank of Poland’s benchmark interest rate by 25 basis points at its May sitting, setting it at a record-low level of 3 percent. RPP member Adam Glapiƒski said another interest rate cut in June could not be
ruled out. “Personally, I am very cautious and conservative in this situation,” he said, but added that the RPP as a whole may decide to reduce rates. Meanwhile, RPP member El˝bieta Chojna-Duch told business station TVN CNBC that there is no reason to expect an economic rebound yet, but that the RPP should not make any radical moves. “We expected a higher level [of GDP growth],” Ms Chojna-Duch said, commenting on the statistics office’s flash estimate of 0.4 percent growth for Q1. She said that an improvement in the economy could be expected possibly no sooner than in 2014. When it comes to the RPP’s June meeting, Ms Chojna-Duch said that the decision on rate cuts will be difficult to make. She mentioned the European Central Bank’s policy and the demand for Polish treasury bonds (which has been high) as additional factors to be considered.
When asked whether a 50 basis-point interest rate cut was possible, Ms Chojna-Duch said, “I’m not sure if radical actions would be justified at this time.” Yet another RPP member, Anna Zieliƒska-G∏´bocka, told TVN CNBC that there is still space for interest rate cuts, but not very much. The RPP does not want to lower real interest rates to zero, she stressed. “If cuts are to be made, I am in favor of making them very quickly and then moving to a stabilization policy,” Ms Zieliƒska-G∏´bocka said. She added that inflation would remain below the RPP’s target of 2.5 percent until the end of this year. It may go below 0.8 percent for one or two months and then start growing slowly, she said. The central banker added that the RPP should focus on the longterm prospects and from that point of view, inflation was no hazard to the Polish economy. KW, AK
figure was higher than expectations, but still well below the NBP’s target range The prices of goods and services in Poland rose by just 0.8 percent year-on-year in April, Poland’s statistics office GUS announced last week. The rise was less than the 1.0 percent recorded in March but was just slightly above the market consensus forecast of 0.7 percent. The inflation rate remains well below the target range of 1.53.5 percent set by the National Bank of Poland’s rate-setting Monetary Policy Council (RPP). Though the figure was higher than the market had forecast, analysts said that was no reason for the RPP to stop cutting interest rates, which it did in May, after pausing in April. Since November, the RPP has cut its benchmark interest rate by 1.75 percentage points, as Poland’s economic slowdown shows no signs of easing. On Tuesday, GUS released its first ever set of “flash” gross domestic product growth rate estimate, and the reading was
grim. Poland’s GDP grew by just 0.4 percent in the first quarter of 2013, compared to the same period a year previous. That was its worst yearon-year growth since the first quarter of 2009. The low inflation rate along with the ugly GDP figure makes an interest rate cut in June of 25 basis points “highly probable” said Marcin Kiepas, director of the analysis division at Admiral Markets. The inflation figure “should support market expectations for more NBP rate cuts and, given Q1 GDP data, the RPP may indeed trim rates by a total of 25-50bps during next
two meetings,” said analysts from BZ WBK in an e-mailed comment. The sector that saw the biggest price drops were communications, which recorded a 7.3 percent drop year-on-year, reflecting Poland’s highly competitive mobile telephony market. Also seeing large drops were clothing and footwear (down 5.1 percent y/y) and transport (down 2.2 percent y/y). The sectors that saw the biggest price rises were alcoholic beverages and tobacco (a rise of 3.6 percent), as well as recreation and culture (2.6 Andrew Kureth percent).
Steep slide Poland’s CPI inflation rate (%), April 2011-April 2013 5
4
3
2
1
0 Ap r. Ma '11 y Jun '11 .' Jul 11 Au . '11 g. Se '11 p. Oc '11 t. No '11 v De . '11 c. Jan '11 . Feb '12 . Ma '12 r. Ap '12 r. Ma '12 y Jun '12 .' Jul 12 Au . '12 g. Se '12 p. Oc '12 t. No '12 v De . '12 c. Jan '12 . Feb '13 . Ma '13 r. Ap '13 r. ' 13
GUS’s first “flash” forecast disappointed, showing Poland’s economy grew at a rate of just 0.4 percent in the first quarter
Source: Central Statistical Office
8
INTERVIEW
www.wbj.pl
MAY 20-26, 2013
Security and defense
Janusz Onyszkiewicz, who twice served as Poland’s defense minister, is now the Chairman of the Executive Council of the Euro-Atlantic Association. He sat down with WBJ to talk about security policy in Poland and NATO Ewa Boniecka: You were the defense minister when Poland entered NATO, a development that many felt hugely bolstered the country’s security. Yet now some politicians question Poland’s security. Former deputy foreign minister and member of the opposition Law and Justice party, Witold Waszczykowski, said recently that Poland is a secondary member of NATO. What is your reaction to such comments? Janusz Onyszkiewicz: First of all, I want to stress that I strongly disagree with Mr Waszczykowski’s remark, because it is completely incorrect. And when it comes to Poland losing its sense of security, I believe that other European countries would also notice if we were facing any real threat. It is most likely a reaction to the instability in many parts of the world. I am convinced that our country’s accession to NATO was an historic event for Poland. It made our country more secure and it solidified our place within a powerful democratic military alliance. We obtained a guarantee that we would never be in danger of losing our independence and territorial integrity again. We are now safe because we have the might of the entire alliance behind us. However it has become apparent, particularly in
recent years, that although we are in no way threatened by any large-scale conflict, there is a hypothetical danger of a conflict on a limited scale. It could be the result of a solitary strike by one missile or an attack from a guerrilla group. This begs the question of how NATO would respond to such an incident, whether it would consider it sufficient cause to invoke article V [of the treaty establishing the alliance] and if so, how it would react. And here I can point to a recent incident in Turkey which received a single military blow from currently unstable Syria. In that case NATO did not consider it a situation justifying a response under article V. Turkey itself had to deal with it. This shows that in a rapidly changing world, where new types of dangers continue to appear, the problem of security requires constant monitoring, and this leads to changes in NATO strategy and in the character of the alliance. While NATO’s main policy is the collective defense of its members and their territory, the alliance also conducts military operations outside its territory. What impact does that have on NATO security policy and on the military capacity of its members? NATO was established to defend its members from any
military attack from an outside state. During the Cold War it seemed that such an attack could come from the Soviet Union and take place in Europe. But in fact the attack that we feared was on the US soil and came not from a country, but from a terrorist organization: Al-Qaeda. The September 11, 2001 attack on the US triggered article V and NATO’s military operation in Afghanistan was the response to that attack, with the goal of eliminating the source of the aggression. So the changes in NATO’s character and defense strategy are a response to new types of threats and attacks, which may come from various terrorist organizations, some of which are outside of the control of any state, or from smaller aggressive countries, with aspirations for developing and using weapons of mass destruction. Such situations call for the reorientation of, and technological changes in, NATO members’ military forces and for closer military cooperation between them. Changes in NATO strategy were made at its 2012 summit in Chicago, where the decision to build a missile defense system in Europe was also finalized. Its ground-based installations will be placed in Romania and Poland. Why, in light of this decision, has Poland decided to build its own national air-defense system? Those are two separate things. NATO’s missile shield is meant to protect Europe and
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How safe is Poland?
“[Russia] still adheres to the concept of balance of power. Unfortunately, we have to play this game by the same rules.”
the US from long-range ballistic missile attacks from Iran. American technology, as well as its means for implementing the program on European territory, are of prime importance, while some parts of the shield will also be located in Alaska and California.
Janusz Onyszkiewicz
Providing our continent with protection against shortor medium-range missiles is another thing entirely, and it requires creating an integrated NATO air-defense system. While some European NATO members, for example Germany and the Netherlands,
already have modern airdefense installations, Poland has to build its own national system, because our present defense is very outdated and soon it will no longer be operational. As a country that lies on NATO’s border, we need a
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INTERVIEW
MAY 20-26, 2013
modern system that will be a part of the alliance’s integrated air-defense shield. A decision to create one was made, and now it has to be implemented in 2014-2023. Russia is dead-set against the construction of the NATO missile-defense shield in Europe and locating parts of it on Polish territory. Can the deadlock be broken? Moscow has opposed the construction of the missile shield in Europe from the very beginning. While Russians know very well that locating parts of it in Poland poses no danger to them, they continue to protest against it for purely political reasons. Generally, they do not want the Americans to develop the missile shield, because they are afraid that their own strategic missile forces would lose importance. Their diplomatic trick is to propose building a common system of European defense together with NATO. Obviously, that is an unacceptable solution, as it would allow Russia to be involved in shaping the alliance’s security policy and give it access to very advanced and sophisticated American missile technology. How can the deadlock be broken? I think that in the end the Russians will have to accept the fact that the shield will be built. The only remaining question is whether it will be seen as a political failure for Moscow or whether Russia will wisely deal with it without losing face. Why is Poland so eager to have a missile-defense shield and American soldiers on its territory? We welcome the presence of the NATO shield and the American contingent because they provide additional, physical evidence of NATO and US engagement in our security. I want to point out here that due to our history we are very sensitive when it comes to matters of national security and we are doing a lot to strengthen it. There is still some uneasiness in Poland about our security. This comes partly from our difficult and tragic history, partly because we are a border member of NATO, and partly because of the political unpredictability of the zone beyond our eastern border. No one can claim that we are facing any danger of attack from that direction, yet it is unclear how the situation in some of those countries, for instance in Belarus, will develop. History is full of examples of dictators who used military threats to secure their own rule at home. Looking at our big neighbor, Russia, we want it to be a great democratic country, which respects the rights of other states, but whether that
will happen is unclear. So we have to develop our military potential. Military strategy should be based not on the best-case scenario or even the most likely scenario, but on the worst-case scenario. Finally, our eastern neighbor is not building its security policy on the basis of transparency, cooperation, interdependence and confidence, but still adheres to the concept of balance of power. Unfortunately, we have to play this game by the same rules. How do you asses the present condition of our armed forces? Our army has changed radically in recent years in terms of its professionalism, training, military equipment and also integration with the armies of our allies. I think that our participation in the operations in Iraq and even more so in Afghanistan show our ability to cooperate with other NATO forces. This has strengthened our credibility as a reliable member of the alliance. Our armed forces are highly valued in NATO and treated seriously because of their professionalism, continuous modernization, ambitions and the ability of our soldiers. In 2013-2022 Polish military forces will undergo further modernization and z∏.130 billion will be spent on that task, among which z∏.20 billion will be provided for building our missile shield. Let’s point out that not every military unit has the most cutting-edge equipment. Taking into account the pace of technological development of military equipment, there is not an army in the world which can keep all their equipment up-do-date all the time. In Poland we now have a kind of mix: some of our equipment is old and some is new. Polish law requires that every year funding equivalent to 1.95 percent of GDP is earmarked for defense. Meanwhile other EU members are cutting their military spending. There were once voices, including in Poland, that the EU should be building a European army to deal with conflicts on the continent and in its neighborhood. How do you look at the idea of creating a common European army? Let’s look at it realistically. The European Union does not have the formal capability to perform the role of a military alliance. It is true that there were voices promoting the idea of building a European army, which in my opinion is still very premature. Who would command such an army? To build its own army, the EU should also create its own government, which at present is completely unrealistic. Besides, there are also neutral countries in the EU: Ireland,
Finland, Sweden, Austria. There are also countries looking to join the EU which also want to preserve their neutral status. But, naturally, there is close cooperation between the EU and NATO and this is an important element of European security. Nevertheless, that does not mean that the European Union does not want to have the capacity to deal with some crises on the European continent and in its neighborhood, when the conditions for NATO involvement are not met. So members of the EU are developing their military cooperation, also creating some joint combat forces. Poland is very active in that process. We are a member of a military group consisting of Germany and France and now we are in the process of creating the Visegrad Battle Group, where Poland will be the leading nation. The purpose of these groups is to respond in case of necessity, but I have to say that until now, despite the fact that there have been some situations where military response was viewed as necessary, no European battle group has ever been deployed. Perhaps the whole concept should be reviewed. Usually the main problem with the use of military force is lack of political will. I hope that the Visegrad Battle Group, which will begin operation in 2016, will not be a passing phenomenon, but a permanent one, fostering stronger military cooperation among the participating nations. And the fact that it involves close military cooperation of the countries from our region will also further our integration and increase our region’s role in the EU. Considering the NATO missile shield, the presence of American soldiers on Polish territory, the decision to build a national air-defense system and the modernization of the Polish army, Poles should feel relatively safe, shouldn’t they? I think that all those factors increase our sense of security. I would like to recall a certain episode a few years ago, which went almost entirely unnoticed. When information came to light that the Russians were installing nuclear weapons in the Kaliningrad region, Poles received this news relatively calmly. I believe we would have been greatly alarmed had we not been a member of NATO. Sometimes we do feel some uneasiness about Russia’s activities, sometimes even a little bit of fear. And even though I cannot see any political reason for Russia to embark on a serious military mission against a NATO country, caution may seem justified, considering our history and geographic location. ●
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OPINION & ANALYSIS
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MAY 20-26, 2013
Europe’s outreach to Ukraine Stratfor
In
the next six months, the competition between the European Union and Russia over Ukraine will intensify, particularly as an EU Eastern Partnership summit regarding Ukraine’s integration with the European Union draws near. Lithuanian Foreign Minister Linas Linkevicius said in an interview published May 13 that the European Union has given Ukraine until November – when the Eastern Partnership summit will occur in Vilnius – to meet EU terms for signing an association agreement with the bloc. The European Union’s original deadline for Ukraine was May. Lithuania, along with Poland and Sweden, is one of the main proponents of bringing Ukraine closer to the European Union and drawing it out of Russia’s orbit. However, several complications remain. A November summit in Vilnius will be an important gauge of how serious Ukraine is about further integration with the bloc.
Ukraine has been negotiating with the European Union for several years over closer integration with the bloc. The association agreement – which includes bringing a country’s judicial, electoral and legal processes in line with EU norms – is the political arm of the integration process, while the Deep and Comprehensive Free Trade Agreement embedded within the association agreement represents the economic component. These agreements serve as the primary platform for the European Union to bring countries not yet ready to begin formal accession – whether for economic or political reasons – closer to the bloc. This is especially true for former Soviet countries in the European Union’s eastern periphery that the bloc has targeted with the Eastern Partnership Program, including Ukraine, Belarus, Moldova and the three Caucasus states of Georgia, Armenia and Azerbaijan. Of these countries, Ukraine is the most important for the European Union. With the largest population and economy of the former Soviet Union after Russia, Ukraine is a significant industrial and agricultural producer and offers the Europeans a sizable market. Moreover, Ukraine’s strategic location and its role as a key transit state for Russian energy exported to Europe makes close coordination between Brussels and Kiev important. The two sides have been discussing EU participation in projects to upgrade and modernize Ukraine’s aging energy infrastructure. And given that Ukraine has a stronger Western orientation than stalwart Russian allies within the Eastern Partnership program like Belarus and Armenia, the European Union has a greater chance of success with Kiev than with most of the other target states.
Obstacles to integration However, there have been several complications in bringing Ukraine closer to the European Union. Although Ukrainian President Viktor
SHUTERSTOCK
Negotiations
Viktor Yanukovych Yanukovych has made EU integration one of his official foreign policy objectives, he has shown greater interest in consolidating power domestically. This consolidation process has included sidelining political opponents – particularly former Ukrainian Prime Minister Yulia Tymoshenko, who was imprisoned shortly after Mr Yanukovych came to power in 2010. The Europeans have seen this as a major breach in democratic practices, and Mr Yanukovych’s consolidation of power has been the largest impediment to progress on the association and free trade agreements. While Ukraine was set to sign these agreements back in 2011, it was only able to get the European Union to initial the agreements, with a signature pending until Ms Tymoshenko’s release and demonstrable progress in other areas of reform. There are other impediments beyond Ukraine’s domestic political sphere. First, the European Union has had to compete with Russia, which has its own designs on Ukraine and has an interest in undermining any Ukrainian efforts
at Western integration. Second, the European Union is divided on the issue. Countries like Lithuania and Poland, which have historical and strategic interests in the country, are strong advocates of Ukraine’s integration into the bloc, but other
“The European Union has a greater chance of success with Kiev than with most of the other target states.” countries in Western Europe – particularly Germany, which has a strong economic relationship with Russia – have been more lukewarm. Therefore, the preference over the speed and method of integrating Ukraine into the European Union is not uniform throughout the 27member bloc.
Europe’s continuing efforts Still, this has not prevented the advocates of Ukraine’s EU integration to continue trying to bring Kiev closer to
the bloc. Lithuania, which will hold the EU rotating presidency beginning in July, has made the signing of Ukraine’s association agreement during the November Eastern Partnership summit in Vilnius a priority of its presidency. Vilnius therefore has relaxed the requirements and timeline for Kiev to show progress toward this goal. Lithuania’s move comes as Ukraine has shown signs of progress, including the parliament’s adoption of a package of anti-corruption legislation in line with the EU requirement of economic-structural reforms and the release of another major Yanukovych political opponent, former Interior Minister Yuri Lutsenko, from prison. Ukraine is also in the process of reforming its energy sector in line with EU norms; a parliamentary vote on the issue is scheduled within the next two weeks. Kiev has also sought to strengthen its energy ties to certain European countries such as Poland, Hungary and Slovakia. However, Germany has continued to press for the release of Ms Tymoshenko before the association
and free trade agreements are signed – something Mr Yanukovych’s administration has so far been unwilling to do. The extension given to Ukraine opens the possibility for movement on the Tymoshenko issue; indeed, Kiev recently has indicated that it might be willing to consider pardoning the former prime minister before the Vilnius summit. However, Mr Yanukovych is not likely to give in on the politically sensitive issue unless the European Court of Human Rights rules that she should be released or the Europeans increase economic pressure on Ukrainian officials in the coming months. These dynamics, and the Ukrainian government’s decision on how to move forward, will make the next six months crucial in determining the future of Ukraine’s relationship with the European Union and, consequently, its ties with Moscow. ● This edited version of “Europe’s continuing outreach to Ukraine” is republished with the permission of Stratfor. Stratfor.com.
OPINION & ANALYSIS
MAY 20-26, 2013
www.wbj.pl
11
Debt without drowning Paul De Grauwe
S
ber states is needed in order to ensure that less credit-worthy countries compensate, at least partly, their more economically sound counterparts. Finally, a supervisory authority must be established to monitor governments’ progress toward achieving sustainable debt levels – and to create clear consequences for those that break the euro zone’s budgetary rules. The Padoa-Schioppa group recently proposed that rule-breaking governments should gradually lose control over their own national budgetary processes. Opponents of debt mutualization, especially in northern Europe, often argue that, in the absence of political unification, it amounts to putting the cart before the horse. But what other measures could be taken to bring the euro zone closer to a political union? Military force – so often used in the past to unite diverse nations under a single political umbrella – is out of the question. And simply waiting will have no effect. The only practical approach is to take small, sequential steps, starting with debt pooling.
ince the 1970s, economists have warned that a monetary union could not be sustained without a fiscal union. But the euro zone’s leaders have not heeded their advice – and the consequences are becoming increasingly apparent. Europe now faces a difficult choice: either fix this fundamental design flaw and move toward fiscal union, or abandon the common currency.
Baby steps
Pooling debt To overcome this fundamental design flaw, government debts must be pooled. This would protect the weakest economies from destructive,
“Dismantling the euro zone now would trigger profound economic, social and political upheaval throughout Europe.”
Hamiltonian approach
SHUTTERSTOCK
Choosing the latter option would have devastating consequences. Indeed, while the desirability of establishing a monetary union may have been open to question in the 1990s, dismantling the euro zone now would trigger profound economic, social and political upheaval throughout Europe. To avoid this outcome, Europe’s leaders must begin designing and implementing strategies aimed at bringing the euro zone closer to a fiscal union. To be sure, a fiscal union such as that in the United States is a distant prospect that euro zone leaders should not expect to achieve any time soon – or even in their lifetimes. But that does not mean that establishing a fiscal union is a chimera. Small steps in the right direction now can make a significant difference. A successful strategy would have to address one of the euro zone’s main design flaws: member governments issue debt in euros, a currency that they cannot control. As a result, they cannot provide a guarantee to bondholders that the cash will be available to pay them at maturity. The mistrust and fear that this elicits in the bond markets can lead to liquidity crises that, creating a selffulfilling prophecy, drive countries closer to default. They are then forced to implement austerity programs that lead to deep recessions and, ultimately, to banking crises. While austerity measures are appropriate in countries that have overspent in the past, the austerity that panic-stricken financial markets force upon a country can trigger a major social and political backlash. In fact, several southern European countries – such as Greece, Italy, Portugal, and Spain – are currently experiencing exactly that.
panic-fueled movements in financial markets, which, in theory, can hit any member country – even those that are strongest today. In developing a strategy for pooling government debt, Europe’s leaders must address the possibility of moral hazard (the temptation for weaker countries to relax their debtand deficit-reduction efforts in response to the increased credibility conferred by stronger countries). Indeed, given stronger economies’ unwillingness to be exploited in this
way, the risk of moral hazard is the most significant obstacle to pooling debts in the euro zone. But it is not the only obstacle. A debt-pooling scheme must also address the fact that the strongest countries will inevitably face higher interest rates on their own debts when they become jointly liable for the debts of less credit-worthy governments.
Three requirements To overcome these obstacles, a euro
zone debt-mutualization scheme must satisfy three crucial requirements. First, the share of government debt that can be pooled must be strictly limited, leaving each country responsible for a significant portion of its national debt, and therefore motivated to maintain sound public finances. (Several initiatives have aimed to achieve this, notably Jakob von Weizsäcker and Jacques Delpla’s 2010 Blue Bond proposal.) Second, an internal transfer mechanism between euro zone mem-
In fact, Alexander Hamilton adopted this approach more than 200 years ago, when he decided to mutualize the debts that individual US states had incurred during the Revolutionary War – a decisive move toward further political integration. Rather than wait for political union to happen, Hamilton took action that eventually helped the US to become a fullfledged monetary, fiscal, and political union. The euro zone is gripped by an existential crisis that is slowly, but inexorably, destroying the monetary union’s very foundations. The only way to stem the erosion is to take determined action that convinces financial markets that the euro zone is here to stay. A debt-pooling scheme that satisfies the requirements outlined here would signal that the euro zone member countries are serious about sticking together. Without this gesture, further market turmoil is inevitable – and the euro zone’s collapse will become only a matter of time. ● Paul De Grauwe is head of the European Institute at the London School of Economics. Copyright: Project Syndicate, 2013. Project-syndicate.org
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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COVER STORY
www.wbj.pl
MAY 20-26, 2013
The Polish economy
Counteracting the crisis WBJ sat down with Henryka Bochniarz, a former trade and industry minister, and now head of the Polish Confederation of Private Employers (PKPP) “Lewiatan” to discuss ways to fight Poland’s economic slowdown
So you agree then with Finance Minister Jacek Rostowski, who says Poland needs even lower interest rates? On the one hand we should try to keep the Monetary Policy Council (RPP) as independent as possible. I’m against the finance minister telling the RPP to lower interest rates because it suits him. We haven’t fought to have an independent RPP only to have the finance minister shape its policies in the end. I expect the council to make its own independent decisions based on economic data and not by heeding to the instructions of one party or another. Otherwise the RPP will soon become another battleground for political parties – and that would mean we all lose. Still, I would like to see the Finance Ministry and the RPP cooperate, which does not mean they should start poaching on each other’s territory. They make decisions based on the signals they receive from
the Polish and the European economies – decisions that are to keep our country from “blowing up” but still manage to somehow stimulate economic growth. Theoretically lower interest rates should stimulate consumption. Some say, however, that cutting interest rates is unfair towards those who save money in the bank rather than borrow it. Naturally, we have to consider both sides of the equation. We have a relatively stable economy and lower interest rates are vital signals for people who want to take out mortgages. We know very well that our residential market is completely in shambles. On the one hand we have a vast supply of finished apartments that remain empty, on the other we have a lot of people who cannot afford mortgage loans. Again, we have to lower interest rates very carefully, as we know what happened in Spain a few years ago. Still, the construction industry provides vital stimuli for the economy and we are still a long way from creating a credit bubble. Interest rates are lower than ever, yet our economy is still slowing down. Unemployment is above 14 percent. What do you think of the government’s initiatives to counteract the economic slowdown so far? This is a particularly worrying matter because the problem is of our own creation. Knowing there is no way we could shield ourselves from what was happening in Europe and in the world, and that our “green island” would sooner or later stop being so green, we wanted to have tools available for counteracting this crisis. [Back in 2007] the tripartite commission [comprising the government, trade unions and employers’ associations] managed to negotiate a so-called crisis package which included a lot of solutions, such as flexible working hours and various
“I think cutting interest rates is indeed absolutely necessary.“ COURTESY OF PKPP “LEWIATAN”
Beata Socha: The Monetary Policy Council has cut interest again this month, to another all-time low of 3 percent. What is your view on interest rate cuts? Dr Henryka Bochniarz: When we look at the level of our interest rates, and at the same time at the ever-lower inflation, it’s hard to justify keeping interest rates high. I believe that our Monetary Policy Council (RPP) has been very cautious with its decisions so far. And even before it made the cuts, the market had already had time to internalize these changes. I think cutting interest rates is indeed absolutely necessary. The finance minister says that the RPP should be even more radical. The RPP itself says it will consider the ministry’s stance. I think their decisions have thus far been very rational. If the RPP doesn’t want the economy to slow down even more, they have to watch the situation closely.
financing options [where the state subsidized part of employees’ pay] aimed at keeping employment high. The purpose of the anti-crisis package was to give us the ability to anticipate crisis and be ready for when it hit. The crisis did come eventually, though later than we expected. Unfortunately, by the time economic slowdown reached us, the anti-crisis package had already ceased to be in force. The government could not prolong it beyond 2011, even though we pushed for this very strongly. I don’t know why, I suppose there could have been some political elements at play. Anyway, once the package was out, we were left without any means with which to fight the crisis. And that’s when we started frantically looking for other instruments. So you’re saying the current economic slowdown could have been prevented? At least partially. It’s like in a household budget. When income is good, we can afford to splash out but when money
is scarce, you sit down and think what can be streamlined. That’s what a rational family does. And the same relates to companies. When there are many contracts, employment rises, as well as spending. And that’s what happened here. The job cuts that happened in the banking sector and in many big companies occurred because there comes a time when you have to face reality. The bigger the company, the bigger the cuts must be. In smaller companies the streamlining goes much more smoothly and there are hardly any layoffs. But in big companies these layoffs are spectacular, say, 1,000 people are made redundant all at once – and that’s when we get the feeling that everything is crumbling around us. Even today, in this time of crisis, wages are rising. What does this mean? It means that employers realize, even when faced with a really difficult situation, that if they want to keep their workers and want them to be loyal and not live in
fear, they have to offer them higher pay. How can Poland fight growing unemployment? In my opinion the problem of unemployment in Poland is somewhat exaggerated. If we look at the instruments being introduced in countries where the economic situation is particularly harsh, we see that they all revolve around making the labor code more flexible. It merits a look at the German economy, where [thenChancellor Gerhard] Schröder had the courage to implement some reforms [consisting largely of cuts to the social welfare system and relaxing labor law]. Now the German economy is somehow managing to hold its own. That’s because when faced with a choice of either losing a job, or working part time or on a temporary contract, I think the choice is obvious. Fortunately, Poland has several forms of flexible employment, and because of that we don’t have the kind of problems that countries with a
more rigid labor code have. Still, even with wages relatively low, the costs of labor that the employer has to pay on top of our salaries are indeed high in Poland, which makes us far from competitive. This is a vast area where we need to look for compromise. What kind of compromise? We can either try dialogue between trade unions and employers or we’ll have workers out on the streets. The tripartite commission has been able to reach compromises in the past. Still, there are many issues to be resolved. But we, both employers and employees, must break away from stereotypes and introduce dialogue. We have to acknowledge the opposite party’s arguments and search for middle ground. If we remain stuck in our respective trenches, we won’t get anywhere. I believe that this myth of having a permanent employment contract is becoming a thing of the past. The labor market looks completely different than it did before, and it
COVER STORY
will continue to evolve in the coming years. In what way? Today we do a lot of work without seeing the employer at all. We sign contracts, send the work by e-mail and receive pay. I know several employers who hardly ever see their staff. There are a number of services that people provide in this way. They don’t go to the office, they sit with their laptops somewhere near a hotspot at Starbucks and that’s the way things will be done in the future. We need to bid farewell to the thinking that we’ll go to work, stay there from 9 to 5 and go home. We need to teach students today to deal with this market in its current form, that they will have several employers, some in France, others in Asia. There is no point in thinking of “a brighter future” as promised by the previous [communist] system, where Poland had full employment. We all had jobs and perfect job security back then, and look how it ended. The future that was supposed to be so bright, ended with the state going bankrupt. What changes in the labor law do you consider the most urgent and necessary? I think the most important ones are those concerning
flexible working hours. I think that the solutions we have now are completely unrealistic. We believe the work-time calculation period should be extended to 12 months. That would mean employers could shorten working hours to, say, seven hours a day, and then make up for the difference within 12 months, not just four months, as the rules stand now. A 12-month period is standard around the world, because it allows companies to manage workload fluctuations somehow and maintain liquidity through periods when there are fewer contracts. I sometimes hear that the employers’ associations are trying to implement a 12month calculation period just so that employers could make their staff work 24 hours a day and call them in on weekends for no good reason. That’s utter nonsense. The same goes for overtime pay. When we compare the overtime pay we have in Poland with that of other countries, we can see that ours is much higher. The standard solution is [an additional] 50 percent for the first hour and 25 percent for the following ones. In Poland it is [an additional] 100 percent and then 50 percent. Changing the labor code is
www.wbj.pl
COURTESY OF PKPP “LEWIATAN”
MAY 20-26, 2013
one way of reducing unemployment. Another one is public spending. The government is creating Polish Investments (PIR), a special-purpose vehicle aimed at boosting the economy with state-financed projects. What do you think of this initiative? There is an ongoing debate around the world as to which is more effective: stimulating the economy or cutting public spending and leaving the rest to the free market. We are a bit behind the rest of the
world on this debate, unfortunately. Right now, the American solution, which consists of actively stimulating the economy, seems more effective when it comes to fostering growth and reducing unemployment, than the European method, which is mostly about cutting public debt. I believe that there is no black or white solution here and we need to combine these two elements. Excessive cutting of public debt is natu-
rally harmful to economy’s development. But on the other hand, pushing money into the economy without any real program evidently skewers the market. I’m not against Polish Investments per se, but I view it with a lot of caution. I am far from advocating using public investment in the Polish economy, because we have never had a good experience with those. I’m afraid of the politicking involved in the decision-making.
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With public spending there is always the risk that a local government official will push for investments that are not justifiable market-wise but which will look good on his or her resume and in the next election campaign. I’d definitely prefer to encourage private companies to invest than advocate using public funds. We have had ample proof that private businesses calculate money more carefully and think twice before spending a dime on anything. I’m afraid the decisions on public investments will be made based on criteria which are far from objective. I also fear the investments will be too expensive, badly managed and insufficiently audited. We have seen one too many state-owned companies that were run very poorly. We are talking about big money here, and we don’t really know who will ultimately be responsible for allocating it: the treasury minister, the finance minister, the management board, or the supervisory board which has not been appointed yet and which will mostly comprise bureaucrats. I’d like to see the [Polish Investments program’s] supervisory board composed of people who have the courage to say no to state officials. Transparency is absolutely crucial here. ●
Jones Lang LaSalle’s Tomasz Trzós∏o explains why tenants are gaining the upper hand in Warsaw’s office market
Polish high streets are acquiring prestige and luxury retailers
17-18
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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
Apsys to manage Aerium shopping centers Development and asset management group Aerium has appointed real estate investor, developer and manager Apsys Polska as the property manager of its four shopping centers in Poland. Apsys will be responsible for Galeria Bemowo in Warsaw, Czy˝yny in Kraków, Guliwer in ¸ódê and Bielawy in Toruƒ, comprising a total of more than 100,000 sqm of leasable retail space. Apsys will take over the management of the shopping centers in H2 2013. ●
In this issue Dominikański construction . . .15 Nimbus cornerstone . . . . . . . . .15 Warsaw Spire plans . . . . . . . . .16 The capital’s high streets . . . . .16 Supersam sale . . . . . . . . . . . . . .16 Trzósło interview . . . . . . . . .17-18
Skanska launches Dominikaƒski construction It is the firm’s largest office scheme to date in Wroc∏aw, offering 40,000 sqm Skanska Property Poland has launched construction on its fourth and largest office project in Wroc∏aw so far. Called Dominikaƒski, the office building is located at the intersection of ul. Kazimierza Wielkiego and ul. Piotra Skargi, near the Plac Dominikaƒski square in the heart of the city. The seven-storey scheme will offer a total of 40,000 sqm. The first phase of the development, scheduled for completion in Q2 2015, will deliver 16,000 sqm of GLA. The investment will offer sustainable solutions and is expected to obtain LEED certification. It will be the fourth office building in Wroc∏aw delivered by Skanska to date. Also in the city, the company has built Grunwaldzki Center on Pl.
Grunwaldzki, work on which was completed in 2009, and two buildings in the Green Towers office complex on ul. Strzegomska. Skanska is currently constructing the seven-storey Green Day office building at the intersection of ul. Wyszyƒskiego and ul. Szczytnicka. Designed by Wroc∏awbased firm Maçków Pracownia Projektowa, the scheme will include 15,930 sqm of GLA as well as a two-floor underground parking lot capable of accommodating 218 cars. The developer hopes to complete construction by the first quarter of 2014. Skanska Property Poland, a part of the Skanska Group, has been operating in Poland since 1997. Investments completed by the company elsewhere in Poland include Deloitte House and Marynarska Point, both in Warsaw. Karolina Kowalska
The investment will offer sustainable solutions and is expected to obtain LEED certification
Office
Cornerstone laid for Nimbus The Nimbus office building in Warsaw’s Ochota district will deliver 19,000 sqm of GLA Vienna Stock Exchange-listed real estate investor Immofinanz Group held a cornerstone-laying ceremony for its Nimbus office building in Warsaw, scheduled for completion in August 2014. The scheme, which is valued at approximately €35 million, will deliver 19,000 sqm of leasable space. The Nimbus building is being developed on Al. Jerozolimskie in Warsaw’s Ochota district. The facility will fea-
ture sustainable solutions, with the investor aiming to secure a gold LEED certificate of energy efficiency and environmental performance for the structure. Porr Polska is serving as general contractor for the project, while Bose International Planning and Architecture designed the structure. The project features balconies and terraces. “The green aspect was important to us. We therefore decided in favor of a design that allows for natural light and a bright working atmosphere with its transparent glass elements and terraces,” said Marek Tryzybowicz, an architect at Bose International.
“Poland is one of Immofinanz Group’s key markets and counts as one of those Central European countries where we focus on development of high quality offices and retail projects,” said Eduard Zehetner, CEO of Immofinanz Group. “With almost 200,000 sqm of rentable space we are already one of the largest investors in Warsaw’s office market.” Immofinanz Group is focused on the retail, office, logistics and residential sectors in eight markets in Europe. In Poland, the company is currently also involved in developing the Tarasy Zamkowe shopping center in Lublin. Karolina Kowalska
COURTESY OF IMMOFINANZ
Poland’s government approved the “Mieszkanie dla M∏odych” (“Apartments for the Youth”) subsidies program, scheduled to start in 2014. Funding from the state budget will amount to z∏.3.3 billion within five years. In the first year, the state will spend z∏.600 million on the program. The government estimates that about 115,000 Poles will benefit from the subsidies. The program is directed to married couples and single persons under the age of 35. The state will subsidize their purchases of new apartments.
Office
COURTESY OF SKANSKA
Gov’t approves new subsidy program
MAY 20-26, 2013, LI 18/19
The investor is touting the scheme’s environmental solutions as well as terraces and transparent glass elements
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LOKALE IMMOBILIA – REAL ESTATE
www.wbj.pl
MAY 20-26, 2013
Office
Ghelamco hopes the square where its Warsaw Spire project is located will become a popular new public area in the capital
cial and business development director at Ghelamco. The area is located between ul. Towarowa, ul. Grzybowska, ul. Wronia and ul. ¸ucka next to the Hilton hotel and near a planned subway station at the Rondo Daszyƒskiego roundabout. The subway station is scheduled for completion in Q3 2014. “The square was designed to provide commuters with unencumbered passage from the subway station to ul. Grzybowska, ul. Wronia and ul. ¸ucka,” Mr Zagórski said. Since the scheme is being constructed in accordance with BREEAM certificate outlines of sustainability and environmental performance, Ghelamco is searching for materials to be used for the surface area of the square. Granite, the most adequate for the Polish climate, is per-
As work progresses at the construction site of Warsaw Spire, which with a total of 100,000 sqm of GLA is set to be the biggest office building in Warsaw, the investor behind the project, Ghelamco, says that it wants the area where the scheme is located to become a publicly accessible area with green spaces and jet-fountains. “We want the nearly 4,000sqm square to become a new favorite meeting place for Varsovians, where they could spend their Sundays and where they would meet to further explore the city,” said Jaros∏aw Zagórski, commer-
ceived as less eco-friendly, since its extraction is damaging to the environment. Two lower buildings of the Warsaw Spire project, valued at approximately z∏.1 billion total, are scheduled to be completed next year, while the tower is due in 2015. Ghelamco has already secured EU border guard agency Frontex as a tenant for approximately 14,600 sqm of space in Warsaw Spire and is currently in talks with another five companies. “We are currently in talks with potential tenants for 80,000 sqm in building A. The negotiations with Frontex took us 19 months and we don’t expect the negotiations with these to take less, since they are major companies from the IT and financial sectors,” said Mr Zagórski.
COURTESY OF GHELAMCO
New office scheme in Warsaw aspires to become a meeting place
The 4,000-sqm area will allow for unencumbered passage for commuters to the subway station
Karolina Kowalska, Marta Mardosz
Retail
Retail
Luxury retailers are increasingly attracted to top shopping thoroughfares in the capital, such as ul. Chmielna
ul. Marsza∏kowska and ul. Mokotowska. Following the revitalization of a number of historic buildings and the development of several new schemes, the supply of retail space in the area has been increasing in recent years. The attractiveness of high streets in the heart of the Polish capital should grow further after the second subway line is delivered in Q3-Q4 2014, the Jones Lang LaSalle report said.
COURTESY OF LHI
As many as 233,000 people per week and nearly 12 million annually visit ul. Chmielna, one of Warsaw’s prime locations for high-end stores, located in the heart of Warsaw. In a survey of visitors to the street by Millward Brown, approximately 55 percent of those polled said they were doing some shopping in the area, while 30 percent of them said shopping was their primary goal. Some 23 percent of visitors to ul. Chmielna said they chose it because they were planning to eat out. The study was prepared for real estate fund LHI, the investor behind the Nowy Dom Jab∏kowskich shopping center and the Chmielna 25 project, which is scheduled for completion in Q3 2013. The visitors said they expect that new stores will expand the area’s retail offer. Warsaw high-street locations are increasingly perceived as attractive by international luxury goods producers, such as LVMH, which is to open its first Louis Vuitton
boutique next month, at the intersection of Al. Jerozolimskie and ul. Bracka. According to LHI, the survey shows ul. Chmielna’s significant retail potential. The street is within a 15-minute walk for 22,000 residents in the area as well as for 175,000 people working in the neighborhood. In a recent report, real estate advisor Jones Lang LaSalle also named ul. Chmielna one of the areas in the capital with major growth potential, along with the neighboring ul. Nowy Âwiat,
The Chmielna 25 project is to deliver another 1,800 sqm of retail space on ul. Chmielna in Warsaw
KEK
COURTESY OF GRIFFIN GROUP
Polish high streets Supersam in Katowice changes hands growing in prestige
The three-storey scheme will comprise 21,000 sqm of GLA
Griffin Group has bought a planned shopping center from Centrum Development & Investments Griffin Group has acquired a shopping mall project in its planning stage from Centrum Development & Investments. The project is set to replace the existing Supersam retail facility in Katowice. The new scheme will be located on ul. Piotra Skargi 6 in the heart of Katowice and in close proximity to the bricklayered coach station building. The project is scheduled for completion in 2015, with Hochtief as the general contractor. The three-storey scheme, comprising 21,000 sqm of GLA, was designed by Konior design
studio. The development’s design combines elements of traditional Silesian architecture with modern features, such as a glass-layered facade. The new scheme will be anchored by an Aldi supermarket. It will comprise over 100 retail units and a large entertainment area with a Multikino movie theater. Some 60 percent of its area has already been pre-leased. Among its tenants are an Empik bookstore, a Smyk children’s toys and clothes store, a Coffee Heaven café, a Kari shoe store, a Camaieu clothes store and watch retailer Swiss. The demolition of the existing scheme should be launched in two months. The total value of the investment is estimated at some €50 million. Supersam, designed by renowned architect Stefan
Bry∏a, has served as a retail center since the 1930s. In 1988 the scheme was expanded with an office building adjacent to the shopping facility and in 2002-2005 the investment was modernized and turned into a retail center. “We are convinced that the new Supersam, built in a place that has been associated with shopping for many years, will attract customers from Upper Silesia,” Przemys∏aw Krych, Griffin Group CEO, said in a statement. “Griffin’s strategy is to invest in strategic retail locations in city centers with a shopping tradition. We already own the nearly 100year-old DH Renoma shopping center in Wroc∏aw and the historical Hala Koszyki in Warsaw, which we are planing to redevelop,” Mr Krych Karolina Kowalska added.
MAY 20-26, 2013
LOKALE IMMOBILIA – REAL ESTATE
www.wbj.pl
17
Office
A tenant’s market for office space on the cards for Warsaw
Karolina Kowalska: The latest JLL report shows that there is already 1 million sqm of office space available in Warsaw’s southern Mokotów district. Is there an oversupply of office space in Warsaw? Tomasz Trzós∏o: Some say there is already too much office space, others still see great opportunities in the market. In our opinion, the truth lies somewhere between the two extremes. We expect neither drama, nor an unlimited development potential. I think that this market has a great potential but the pace of the development is limited. The market potential can only be realized in the longer term, because leasing demand needs time to increase. There is a number of development projects still at the planning stage. With the design, building permits and architectural plans ready, the developers will be looking to secure leases with major tenants before the construction can start. If a major tenant cannot be found, the projects simply won’t go ahead. That is mostly because the risk would be too big, but also because no banks would finance on a speculative basis.
There are very few development companies that can afford to build without debt financing. This mechanism will prevent an uncontrollable oversupply. I would also like to highlight that over 60 percent of the development pipeline expected to be completed in the coming months is already pre-leased. Our estimates predict, however, that with the number of projects currently under construction, the amount of unleased space will increase, and so will the vacancy rate. Still, high vacancy is more likely in second-hand buildings. And so, while there is no reason to expect market conditions will worsen substantially, there is certainly no reason for excessive optimism, either. The Warsaw office market will definitely be a tenant’s market for a while. Does this mean that smaller companies will have a chance to move their offices to prestigious buildings in the center of Warsaw? There has always been a certain group of companies that want to be located in the city center. This comes from a range of reasons, including the prestige, visibility or accessibility for clients. However, there are some companies which may be tempted to look for savings, and they may decide to move out to non-central locations. This is not a new trend. We have been observing it for the last five to 10 years. If several companies decide to move out of the center, this will certainly create an oppor-
tunity for smaller companies looking to upgrade their offices by moving to more prestigious buildings in the center of Warsaw. Is such a trend of companies moving out of the center expected on a wider scale here? Well, typically there comes a moment of reflection for companies when they need to decide whether it is important for them to lease office space in the center and pay above €20 per sqm/month, or if they can move their offices outside of the city center, to locations such as the Mokotów district, where they will pay €15, or to the Ochota district near Al. Jerozolimskie, Wola, ˚oliborz or other non-central districts, where you can also save a good few euros on rent in comparison to the center. The Wola district is becoming particularly interesting for tenants. It is close to the central business district and it is possible to reach ul. Prosta and ul. Grzybowska [major streets in Wola] from the central railway station within just 10 minutes. The Wola district will certainly be appealing to some tenants, especially those who prefer to be located in the center or close to the center, but are very keen on reducing their occupancy costs. And so with such increasing tenant interest, Wola will see more office developments being completed in the next years. On the other hand, Wola still requires quite a lot of investment. Yes, there is the Hilton hotel and Warsaw
COURTESY OF JONES LANG LASALLE
Lokale Immobilia sits down with Tomasz Trzós∏o, managing director and head of capital markets Poland at Jones Lang LaSalle, to talk about the situation on the Polish office market.
Tomasz Trzós∏o Trade Tower, but if someone who is checking into the hotel wants to have a walk around in the evening, they will not be particularly impressed. However, the neighborhood is developing rather quickly. With the help of the Warsaw Spire development, Wola Center, a new office project planned by Skanska, the construction of the second subway line, or the Concept Tower, the whole area is currently undergoing a substantial
change, and so within the next five to 10 years it could turn into one of the most elegant parts of the city. There has been speculation over the 220-meter Warsaw Spire building currently being constructed by Ghelamco. Some say there is no room for a project so big in the Warsaw office market. There was also some controversy over the Supreme Administrative Court’s ruling confirming that
other persons have a claim to the land. How do you see Warsaw Spire’s future? I don’t know about the ruling and so I can’t comment on it, but I believe that Ghelamco had acquired the land in good faith and on the day of the acquisition there were no third-party claims disclosed in the land and mortgage register. In such a case the restitution claims of former owners have nothing to do with the Continued on p. 18 ➡
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➡ Continued from p. 17 current owner and can be satisfied only by compensation from the State Treasury or city authorities, and so it should have absolutely no impact on the timetable for the development of Warsaw Spire. As for the leasing potential of the project, I believe in it. Ghelamco has so far been the most active developer in the office market in Warsaw and they have leased materially more square meters of office space in Warsaw than any other developer. Warsaw Spire is an exceptional project, and given the leasing track record of Ghelamco so far, there is no reason not to believe in its successful lease-up. The only limit is the market in terms of tenant demand. It is clearly a sizable project and Ghelamco will need some time to find tenants and sign the leases for most of the space. It might have been easier before the euro zone crisis. Does Wola have a chance to become the next Mokotów Business Park, only betterconnected by the means of transport? Mokotów isn’t that badly connected. There are tramways, buses and recently, a new train line leading to Warsaw Chopin Airport has been introduced that stops at the [nearby] PKP S∏u˝ew station. Also a subway line goes nearby. Although there have always been problems with public parking in this
LOKALE IMMOBILIA – REAL ESTATE part of town, there are convenient commuting opportunities by public transportation. If more people used them, the morning car congestion would also ease. Still, the main streets of Mokotów are famous for their car-unfriendliness – ul. Post´pu, ul. Konstruktorska and ul. Suwak are some of the most congested streets in the city. The lack of parking spaces is a problem for the entire city of Warsaw and it is even bigger in the center. The meaningful advantage of the center is that it’s more easily accessible than Mokotów in terms of public transportation, so fewer people go there by car. In the city center there is the subway, trams, buses or trains, and so it is more natural to use public transport. In Mokotów it is a bit more difficult, so more people choose to use their cars to get to work. However, the southern ring road is almost completed and connected to ul. Marynarska. Once opened in the second half of 2013, it will no doubt help with the traffic situation. Moreover, the issue you highlighted does not seem to be much of a concern to tenants, anyway. Let’s look at the new developments in Mokotów. The projects that commenced in the last months are renting well. T-Mobile signed a significant lease in
Ghelamco’s Marynarska 12 project and will move there from Al. Jerozolimskie, Mokotów Nova project is almost entirely leased, HB Reavis is doing well with Konstruktorska Business Park and has already leased 50 percent of it, the Ambassador project by Kronos leases very well, same was the case with GTC’s Platinium Business Park V. The overall vacancy rate in Mokotów remains at the lowest level among all sub-markets in Warsaw, including the CBD and the city center, and that is a clear sign of the popularity of this sub-market for tenants. We expect this to continue. And what are the prospects for Wola? Wola, as an alternative location to Mokotów, would have the same issues in terms of car accessibility, but it would have an advantage of being more central, and having a bit better access to the subway. However, it will be an advantage only for the buildings located right next to the subway stations, so perhaps just a few projects. In comparison with Mokotów, Wola has more expensive sites and therefore developers will have to try to negotiate higher rents. If we agree that the convenience of regular workers is better in the Wola district than in Mokotów, companies will have to decide whether they want to take on such costs.
Some companies may choose to do so, others won’t. This cost difference will speak in favor of Mokotów, but on the other hand a number of companies may not be deciding between Wola and Mokotów, but between Wola and the Central Business District – these companies may be very tempted to go to Wola because it will be very close to the CBD, but noticeably cheaper. And what about older buildings? Older buildings should be able to find their tenants as well. Of course, they will have to offer lower rents, possibly substantially below what the newer and technologically more advanced buildings charge. However, particularly those older buildings which are located in the center have a good potential to form a solid cheaper alternative to tenants who prefer to be in the center but cannot afford the rents. All this means that the real estate market in Poland has matured quickly and we are now getting to a market which offers significantly more diversified options for office tenants, with a wide range of options in terms of cost, quality and locations. And that is good! Jones Lang LaSalle was named the Company of the
Decade 2003-2013 at the 10th CEE Real Estate Quality awards gala. Your company was also awarded two out of four agent awards in the CEE region for the company’s performance in 2012. The firm was named the Agent of the Year in CEE for Capital Markets – for the third time in a row – and also claimed the Office Agent of the Year award. Which of these awards do you think is the most important distinction? I think the Company of the Decade title was the most important one, because it was voted on by all of the guests at the gala event, over 600 property professionals. The voting was held in two rounds and monitored by an independent consulting company – Deloitte. It was, obviously, subjective, but proves that our company is not only praised by the real estate professionals but is also liked, which is very important – especially since the category included leading companies of all types, with top developers and investors. Of course, the Decade award is also an acknowledgment of our contribution to the real estate industry’s growth in the CEE region. Jones Lang LaSalle contributed significantly to the 2012 real estate transaction volume in Poland that amounted to €2.7 billion, didn’t it?
MAY 20-26, 2013
Last year we participated in all major transactions in the investment market – we advised Union Investment in the purchase of the Manufaktura ¸ódê shopping mall for €390 million from Euris/Rallye Group and Apsys. We also advised CA Immo and Pramerica Real Estate Investors on the sale of Warsaw Financial Center for €210 million, Globe Trade Centre on the sale of Platinium Business Park in Mokotów for €139 million. We also advised on the sales of International Business Center and Marynarska Business Park. However, our share in the transaction volume is hopefully not the only reason JLL was named the Capital Markets Agent of the Year at CEEQA 2013. It is also a matter of the level of involvement in the transactions, and the prestige or importance of specific deals. Most of the transactions we have participated in involved our full marketing, underwriting and negotiations advisory service, and these were also milestone transactions in the market, like Manufaktura, Warsaw Financial Center or Platinium Business Park. I am happy to see how much trust our clients have placed in us. This bodes well for the future, because it means that customers appreciate working with us. ●
THE LIST
MAY 20-26, 2013
www.wbj.pl
19
Financial Services
Investment Banks and Advisors Ranked by total capital raised in 2012 A guide to Polish business and industry
www.bookoflists.pl
Przewodnik po polskim biznesie i gospodarce
Rank
Activities
Company name Address Tel./Fax E-mail Website
Programs completed as Total value of Number of issue lead manager in Total capital 2012: name of raised (z∏. mln) securities issued programs transaction, (z∏. mln) value (z∏. mln), date
Programs completed as member of consortium in 2012: name of transaction, value (z∏. mln), date
Organizing Private primary / placement / secondary issues Asset M&A advisory in 2012: name of on capital market / securitization/ Selling and Mergers and transaction, distribution / acquisitions / value (z∏. mln) Trading on Creation of risk secondary management market instruments
Asset management / Advice and consultation / Merchant banking
Total number of employees / Year founded in Poland
Ownership: Polish / Foreign
Top local executive / Title
WND UniCredito Italiano
Luigi Lovaglio
2012 / 2011 / 2010 / 2009
Bank Pekao SA ul. Grzybowska 53/57, 00-950 Warsaw 1 22 656-0000/22 656-0004 info@pekao.com.pl www.pekao.com.pl
6,900.0 4,340.0 WND 1,000.0
6,900.0 4,340.0 WND 1,093.0
108 93 WND 48
PGNiG - bonds, 2,500, PKN Orlen - bonds, June 2012; Kraków 1,000 February 2012; City Hall - bonds, 300, Energa - bonds, 1,000, April-October 2012 October 2012
PKO Bank Polski ul. Pu∏awska 15, 02-515 Warsaw 2 22 521-8440/22 521-8470 prasa@pkobp.pl www.pkobp.pl
5,857.5 4,864.4 5,006.3 WND
10,984.5 10,187.9 9,821.2 WND
125 110 139 WND
Raiffeisen Bank Polska SA ul. Pi´kna 20, 00-549 Warsaw 3 22 585-2001/22 585-2585 wnd@wnd.pl www.raiffeisenpolbank.com
710.2 882.4 813.0 WND
2,201.2 1,491.0 1,620.7 1,764.0
50 45 29 28
Bank Zachodni WBK SA ul. Rynek 9/11, 50-950 Wroc∏aw 4 61 856-4017/61 856-4015 rzecznik.prasowy@bzwbk.pl www.bzwbk.pl
416.0 1,113.0 1,100.2 1,192.0
587.3 1,113.0 1,100.2 1,192.0
6 9 15 19
ABB Eurocash - 366, September 2012; Nokaut (IPO) - 31, March 2012
ABB Eurocash - 366, September 2012; Nokaut (IPO) - 31, March 2012
1.0 13.5 25.2 WND
1.0 13.5 25.2 WND
1 2 2 WND
WND
Eurus Capital Sp. z o.o. ul. Filtrowa 28, 02-032 Warsaw NR 22 621-0991/22 621-0991 warsaw@euruscapital.com www.euruscapital.com
WND WND WND WND
WND WND WND WND
WND WND WND WND
WND
ING Bank Âlàski SA ul. Sokolska 34, 40-086 Katowice NR 801-222-222 mampytanie@ingbank.pl www.ingbank.pl
WND WND WND WND
WND WND WND WND
WND WND WND WND
PGNiG - 2,500, June 2012; ING Bank Âlàski - 565, December 2012
Carnelian Partners Sp. z o.o. ul. Rac∏awicka 146, 02-117 Warsaw 5 22 572-5660/22 572-5669 carnelian@carnelian.pl www.carnelian.pl
Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The Lists was conducted in March 2013. Number of employees and ownership structure are as of March 2013. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.
WND WND WND
WND WND WND WND
WND WND WND
WND 1929
Zak∏ady Azotowe w Poland - 217; PKO BP (ABB) - 3,087, Tarnowie-MoÊcicach - Asseco Zak∏ady Azotowe w July 2012; Rovese - 1,544, January 2013; Tarnowie-MoÊcicach 579, December 2012 ZE PAK - 682, October 1,544 2012
✓ ✓ ✓
✓ -
✓ ✓ -
WND 1919
Polska ˚egluga Morska Wydawnictwa Szkolne Dobroplast/AFG - 135, June 2012; i Pedagogiczne Arbonia-Foster-Holding J.W. Construction 151.8, September - WND; Kisielice Holding - 95, April 2012 24MW - 117.2 2012
✓ ✓ ✓
✓ ✓ ✓
✓ -
6,633 1991
None Raiffeisen Bank International - 100%
Kredyt Bank takeover by BZ WBK - 4,343; Zelmer takeover by BSH - 600
✓ ✓ ✓
✓ ✓ -
✓ -
WND 2001
WND Banco Santander
WND
Gruppo Trade Service 16; Promotion Intrade - 4.1
-
✓ ✓ -
✓ -
8 2006
Edyta Skoczyƒska 68%; Agnieszka Robinson - 22% None
WND
WND - 100; WND - 150
-
✓ ✓ -
✓ ✓
12 2004
WND WND
Yves MoussonLestang
WND
✓ -
✓ -
-
8,687 1989
WND - 25% ING Bank - 75%
Ma∏gorzata Ko∏akowska
PKN Orlen - 1,000, February 2012
WND
CEO
Treasury - 31.4%; Aviva OFE - 6.7%; ING Zbigniew Jagie∏∏o OFE - 5.2% President None
Piotr Czarnecki President
Mateusz Morawiecki President
Edyta Skoczyƒska President
President
President
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. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to +48 22 257-7500, or via e-mail to mbrysiak@wbj.pl. Copyright 2013, 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.
20
MARKETS
www.wbj.pl
MAY 20-26, 2013
Stocks report
world stock indices DJIA
NASDAQ
15,233.22 (May 16 close)
S&P500
3,465.24 (May 16 close)
1.00% (for the week)
FTSE100
1,650.47 (May 16 close)
1.64% (for the week)
DAX
6,687.80 (May 16 close)
1.46% (for the week)
1.44% (for the week)
The bulls are back
NIKKEI 8,369.87 (May 16 close)
15,037.24 (May 16 close)
1.30% (for the week)
5.96% (for the week)
CHANGE: 13.57% (year to May 16)
CHANGE: 11.34% (year to May 16)
CHANGE: 12.86% (year to May 16)
CHANGE: 10.96% (year to May 16)
CHANGE: 7.60% (year to May 16)
CHANGE: 40.69% (year to May 16)
52-week high: 15,302.49
52-week high: 3,485.95
52-week high: 1,661.49
52-week high: 6,714.50
52-week high: 8,401.28
52-week high: 15,155.72
52-week low: 12,035.09
52-week low: 2,726.68
52-week low: 1,266.74
52-week low: 5,229.76
52-week low: 5,914.43
52-week low: 8,238.96
Andrew Nawrocki WBJ market analyst It was another strong week for Polish equities, with most of the gains coming in the first few days of last week. Unlike most of Europe, which traded with little change on Monday, Polish equities took off in the afternoon. Driving the mid-cap mWIG40 higher were shares of Polimex, which closed nearly 15 percent higher. Warsaw’s main WIG index and blue-chip WIG20 index both closed with gains of about 0.7 percent. The bulls continued to drive Polish stocks higher on Tuesday, despite disappointing GDP figures for Q1 2013 in both Germany and Poland. Indeed, investors continue to trade higher on the bet that central banks will maintain stimulus measures that support market gains. Tuesday saw the WIG
Major indices WIG
45,992.03 (May 16 close)
WIG20
2,390.32 (May 16 close)
16.05
15.05
14.05
13.05
10.05
09.05
08.05
07.05
06.05
02.05
30.04
29.04
17.04
16.05
15.05
14.05
13.05
10.05
09.05
08.05
07.05
06.05
2,200 02.05
43,000 30.04
2,260
29.04
43,800
26.04
2,320
25.04
44,600
24.04
2,380
23.04
45,400
22.04
2,440
19.04
46,200
18.04
2,500
17.04
47,000
26.04
52-week low: 2,035.80
25.04
Change year to May 16: -8.98%
24.04
52-week low: 36,653.28
23.04
52-week high: 2,628.36
Change year to May 16: -4.40%
22.04
Change for the week: 1.76%
19.04
52-week high: 48,222.72
18.04
Change for the week: 2.33%
Top 5 ONE2ONE SEKO BIOTON ATREM ECARD
Closing 0.31 5.20 0.05 4.46 0.33
% change (week) 52-week high 40.91 0.90 26.83 6.10 25.00 0.10 24.93 6.20 22.22 0.47
52-week low 0.14 2.24 0.03 3.15 0.15
Top 5 PEKAO PKNORLEN PGE PKOBP SYNTHOS
Closing 161.15 51.20 17.48 34.50 5.04
% change (week) 6.97 5.13 4.98 4.55 3.70
52-week high 173.10 57.40 19.54 38.50 6.00
52-week low 123.29 31.44 15.11 28.93 4.29
Bottom 5 TRAVELPL CITYINTER KBDOM PRESCO YAWAL
Closing 2.85 17.90 0.04 7.70 5.55
% change (week) -30.49 -20.30 -20.00 -19.12 -18.14
52-week low 2.60 16.56 0.03 6.95 3.90
Bottom 5 BORYSZEW KGHM GTC PZU EUROCASH
Closing 0.39 140.50 7.50 433.50 57.50
% change (week) -4.88 -4.42 -3.85 -3.56 0.00
52-week high 0.67 194.80 10.25 454.30 60.69
52-week low 0.38 92.14 5.13 272.07 36.59
52-week high 7.50 28.90 0.19 11.20 7.97
Currency report
Z∏oty follows EUR/USD
Other indices sWIG80
10,976.80 (May 16 close)
Change year to May 16: 4.23%
WIG-Banki
6,559.17 (May 16 close)
16.05
15.05
14.05
13.05
10.05
09.05
08.05
07.05
06.05
02.05
30.04
29.04
17.04
16.05
15.05
14.05
13.05
10.05
09.05
08.05
07.05
06.05
02.05
6,100 30.04
30.0 29.04
6,200
26.04
30.4
25.04
6,300
24.04
30.8
23.04
6,400
22.04
31.2
19.04
6,500
18.04
31.6
17.04
6,600
26.04
52-week low: 5,163.30
25.04
Change year to May 16: -2.44%
24.04
52-week low: 30.57
23.04
52-week high: 6,723.16
Change year to May 16: -7.31%
22.04
Change for the week: 5.09%
19.04
52-week high: 39.36
18.04
Change for the week: -2.38%
32.0
Adam Narczewski X-Trade Brokers DM SA
16.05
15.05
14.05
13.05
10.05
09.05
08.05
07.05
06.05
02.05
52-week low: 8,984.43
30.04
25.04
24.04
17.04
16.05
15.05
14.05
13.05
10.05
30.79 (May 16 close)
52-week high: 11,245.80
SOURCE: WSE
NewConnect
09.05
08.05
07.05
06.05
10,200 02.05
2,400 30.04
10,360
29.04
2,480
26.04
10,520
25.04
2,560
24.04
10,680
23.04
2,640
22.04
10,840
19.04
2,720
18.04
11,000
17.04
2,800
23.04
52-week low: 2,147.52
22.04
Change year to May 16: 6.68%
19.04
Change for the week: 2.45%
18.04
52-week high: 2,740.12
29.04
2,740.12 (May 16 close)
Change for the week: 4.18%
26.04
mWIG40
gain 1.25 percent and the WIG20 up 1.38 percent. Wednesday saw further increases for Polish equities, most coming in the last 60 minutes of trading, as across the pond the S&P 500 reached new all-time highs. The WIG managed to gain 0.72 percent, while the WIG20 added nearly a percent. A slew of poor corporate earnings throughout Europe – including Poland – cast a cloud over equities on Thursday, bringing investors down to earth. Shares of Synthos and Asseco were amongst the biggest losers. The WIG shed a quarter of a percent, while the WIG20 lost 0.7 percent. On Friday the WIG20 closed nearly flat, up just 0.03 percent, but the WIG did better, closing up 0.19 percent. ●
Vacation time is coming but the situation in the currencies market is becoming increasingly interesting. The main topic on the market is the Fed’s approach to its quantitative easing program. Macroeconomic data from the US published this week disappointed, giving a good reason for the EUR/USD to rebound. It seems as though the market is ignoring the worse data, and the main currency pair remained in its downward trend, falling from $1.30 all the way to just above $1.28. This past week the z∏oty remained strongly correlated to the EUR/USD despite mixed macroeconomic data. CPI and core CPI inflation slightly increased, which might cause the Monetary Policy Council (RPP) to stay on hold with further interest rates cuts.
On the other hand, the statistics office’s first-ever flash (preliminary) year-onyear GDP data for the first quarter showed the economy grew by just 0.4 percent. I have a strong feeling the RPP will not cut rates in June, but the chance for more cuts is still high. The EUR/PLN, affected by the gaining US dollar, climbed to a weekly high of z∏.4.19 in order to give up some gains on Friday and finish the week around z∏.4.17. The more volatile USD/PLN advanced all the way to z∏.3.25 (from z∏.3.19). Taking into account the negative outlook for the EUR/USD, the Polish z∏oty could be under pressure in the upcoming weeks and its weakening process will speed up if US stock markets begin their corrective movements. ●
currency rates 3.1688 17.05
SOURCE: NBP
3.1730 16.05
15.05
3.1575
3.1564 14.05
3.1425 10.05
17.05
16.05
3.14
3.1496
0.1035
0.1034 0.1027 15.05
14.05
0.1023 13.05
0.1023
0.1019 10.05
3.3570
3.3633 17.05
0.101
PLN-100JPY
3.18
13.05
PLN-RUB
0.104
16.05
3.3349 15.05
3.3549 14.05
13.05
3.3244 10.05
4.9464
4.9516 17.05
3.0
3.3441
PLN-CHF
3.5
16.05
4.9277 15.05
4.8974 14.05
13.05
4.9087 10.05
3.2521
3.2520 17.05
4.7
4.9265
PLN-GBP
5.0
16.05
3.2340 15.05
3.1998 14.05
13.05
3.1861 10.05
4.1822
4.1834 17.05
3.0
3.2051
PLN-USD
3.5
16.05
4.1725 15.05
4.1606 14.05
13.05
4.1417 10.05
4.1
4.1570
PLN-EUR
4.2
SPORTS
MAY 20-26, 2013
www.wbj.pl
21
Soccer
Eagles fall to Giants
Dark days coming for Polonia It looks like the Warsaw side won’t be allowed to play in the country’s top league next season
The Warsaw Eagles missed out on a chance to gain ground in the North Division by falling 97 to the Giants in rainy Wroc∏aw on May 11. The Eagles made a strong fourthquarter comeback, but were unable to convert on any of the three field goal opportunities that would have given them the points needed for victory. A significant downpour on Friday evening left the Olympic Stadium field a gooey mess, and the rain continued throughout the day on Saturday. Still, the home fans were in good spirits as the newest Giant, London Olympics bronze medalist in wrestling Damian Janikowski, took the field for the opening kickoff. The Eagles gained nearly 60 yards on the opening drive, but they were eventually held to a 42-yard field goal attempt that flew wide of the post. The Giants scored twice in the second quarter, cracking the scoreboard first with a field goal and following it up with a 1-yard touchdown run
COURTESY OF ¸UKASZ SKWIOT/ WWW.SKWIOT.PL
Too many mistakes and not enough field goals for Warsaw gave it a narrow 9-7 defeat in Wroc∏aw
The Giants’ Mark Philmore runs with the ball in Wroc∏aw’s 9-7 win over the Warsaw Eagles by quarterback Bartosz Dziedzic. That touchdown came after the Eagles turned the ball over at their own 20yard line. Mark Philmore then had a big run for Wroc∏aw to set up the Dziedzic plunge. Warsaw played better in the second half. They held the Giants without a first down in the third quarter, and nearly cut into the lead as well, driving down to the Wroc∏aw 5yard line. They were stopped there, and kicker Marcin ¸ojewski’s second field goal attempt of the afternoon again missed the target, keeping the Eagles scoreless. Warsaw finally broke
through in the fourth quarter, when Shane Gimzo’s long pass to Filip MoÊcicki resulted in a 60-yard touchdown that brought Warsaw to within a field goal of victory. That field goal proved too difficult to manage, as Warsaw missed from the 25-yard line. In other games over the weekend, the Wroc∏aw Devils snapped the Gdynia Seahawks’ 15-game winning streak with a 34-25 win in Wroc∏aw, while Koz∏y Poznaƒ earned a 39-7 victory over the visiting Zag∏´bie Steelers in Poznaƒ and the Warsaw Spartans lost 19-6 to the AZS Silesia Rebels in Chorzów. Alex Zarganis
Last week the Polish Football Association announced its decisions about who will be awarded a license to play in the top-tier division of Polish soccer: the T-Mobile Ekstraklasa. The last couple of weeks have been tough on several Polish clubs. To avoid difficulties in receiving the license, teams were looking high and low for money to pay off their debts. Contracts were cut, deals to postpone overdue payments were signed, loans were taken out. But for some of the clubs, that wasn’t enough. Polonia Warszawa was hit hardest, though it came as no surprise. After being taken over by businessman Ireneusz Król before the current season started, the “Czarne Koszule” (“Black Shirts”) were facing dire financial straits. Media reported that in 2013, the team’s players haven’t received a dime from their contracts and that Mr Król’s debt amounted to at least z∏.5 million.
COURTESY OF T-MOBILE EKSTRAKLASA/X-NEWS
American football
It looks like Polonia fans will be supporting their team in the fourth division next season As a result, the Polish Football Association refused to grant Polonia a license to play in the top league next season. The club will be relegated to the 1. Liga (the second-tier division), but with its current financial situation it is highly unlikely that the club will be allowed to play there, either. The most realistic scenario for Polonia, unless the team somehow manages find an investor to pay off all its debt in the next few weeks, is to play in the fourth-tier division. While Polonia was the only current T-Mobile Ekstraklasa club to be denied a license, most other clubs were penalized in some way. Six other teams received “provisional licenses,” meaning the Polish FA will supervise their finances
or infrastructure. Ten clubs haven’t been granted licenses to play in UEFA club competitions even if they manage to earn the right at the end of the season. This decision will hit Âlàsk Wroc∏aw the hardest; the club was nearly a lock to play in next year’s Europa League. Several other teams received fines and transfer bans. The decisions can be appealed. If the decision to oust Polonia is upheld, the team will be relegated to the last place in TMobile Ekstraklasa after the season is over, and only one other team will be relegated to the Polish 1. Liga, instead of the last two as is normally the case. The final decision will be announced by the Polish FA on May 29. Jacek Ciesnowski
22
LIFESTYLE
www.wbj.pl
MAY 20-26, 2013
Music festival
Polish modernism in London’s Saatchi
Star-studded spectacle
of futurism; his depictions of the toiling peasant and cartwheeling jester are an exasperated questioning of society now. By contrast, the use of strong outline in Wieczerzak’s paintings suggests a more modern optimism yet one perhaps diminished, by reflecting a
Polish art auctioneer Abbey House is holding an exhibition of contemporary Polish art at the Saatchi Gallery in London from June 3-10. The exhibition will showcase work by some of the country’s foremost contemporary artists. Through the event, Abbey House says it aims to increase international awareness of the burgeoning Polish art scene. Artists whose works will be exhibited include Szymon Artur Urbaƒski and Andrzej Cisowski, who are well-established on the Polish art scene, as well as recent graduates Maciej Wieczerzak and Jakub S∏omkowski. According to Abbey House: “Andrej Cisowski’s Kazanie Skargi large paintings use a range by Szymon Artur Urbaƒski of expressive but mannered methods that shift from the dampened saturated repetition photographic to the graphic to of sexual and gaming oblivion. create a composite of history S∏omkowski’s works are more through cartoon and art histori- reflective in appearance, giving cal reference. Urbaƒski’s paint- just as much emphasis to the ings suggest a medievalisation virtual space between the
forms as to the forms themselves to create balanced compositions.” Independent, Londonbased curator, author and art critic Sacha Craddock will be curating the exhibition. “I am delighted to be given the opportunity to research and select such a substantial exhibition from out of a solid and varied range of contemporary Polish Art,” she said in a press release. “My sense of discovery will, I hope, be reflected in the experience of members of both professional and lay audience as they gain a deeper, or perhaps initial, understanding of the thrilling level of artistic activity in Poland,” she added. Poland’s art market is one of the fastest growing in Central and Eastern Europe. Its artistic community is now attracting the attention of international collectors. Poland has become the leader in the art trade and auctions in the region, with a market estimated at some $100 million. COURTESY OF ABBEY HOUSE
Polish Art Now Saatchi Gallery Duke of York’s HQ, King’s Road, London, June 3-10
AK
SHUTTERSTOCK
Exhibition
Beyoncé Orange Warsaw Festival May 25-26 National Stadium Warsaw The days are getting longer and the weather is getting nicer: summer festival season is upon us. The series of Polish festivals will kick off this weekend with the Orange Warsaw Festival at the National Stadium. This edition, its sixth, will be the first in this new venue as organizers believe the festival has outgrown the previous location, Warsaw’s Pepsi Arena. To celebrate the move, organizers have pulled out the big guns and contracted Beyoncé to headline the first day of the festival. The new queen of pop will be playing in
Poland for the first time and her fans in Poland undoubtedly are keeping their fingers crossed that the health problems which forced Mrs Carter to reschedule her recent Antwerp show are behind her and all the single ladies (and gentlemen) will be dancing along to her hits on Saturday. The festival will be a truly eclectic event, showcasing musical stars from several different genres. On the first day, Beyoncé will be supported by OCN – a Polish band with global ambitions and who recently released an album in international markets – as well as UK rapper Tinie Tempah, and electro icons Basement Jaxx. The second day will have more of a rock vibe, with one
of the standout names being California Punk Rock veterans The Offspring. Since they’ve been on the scene for nearly 30 years, they shouldn’t have any trouble finding hits to play for their set. Along with them, the long-time Polish rocker Tomasz “Lipa” Lipnicki will perform with his band Lipali. Cypress Hill will no doubt enliven the audience with their unique hip hop/metal hybrid that helped them sell over 18 million albums worldwide. The final act of the festival will be Norman Cook – better known as Fatboy Slim. Tickets are priced from z∏.189 for the first day, z∏.129 for the second day and z∏.239 for the whole event. Jacek Ciesnowski
Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl
Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl
Simonis Gallery ul. Burakowska 9 www.simonisgallery.com
Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul. Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl
State Archaeological Museum in Warsaw ul. D∏uga 52 www.pma.pl
Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl Le Guern Gallery ul. Widok 8, www.leguern.pl Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl Pracownia Galeria ul. Emilii Plater 14 www.pracowniagaleria.pl
State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl
Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl
Rempex Art and Auction House ul. Karowa 31 www.rempex.com.pl
Wilanów Palace Museum and Wilanów Poster Museum ul. St. Kostki Potockiego 10/16 www.wilanow-palac.pl www.postermuseum.pl
Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl
Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl
Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl
LAST WORD
MAY 20-26, 2013
www.wbj.pl
23
Tech Eye
COURTESY OF IRIVER
This summer something amazing and unusual will happen, and we’re not talking about the grooming session we’ve scheduled for midJuly. While “amazing” is a good descriptor for a hygienification ceremony involving two dozen thirsty cats and one middle-aged man drizzled with cream and catnip, in our case it’s hardly “unusual.” No, this is something altogether different. This summer, for the first time in years, Techeye will be flying solo to the United States. Unaccompanied. Stag. No parenting duties, in other words. No child running around, handing socks to disgusted strangers. No child screeching “Poop carrots,
poop carrots, poop carrots!” at the top of his lungs for an hour. It’s going to be bliss. In fact, Techeye is so excited that we’re already buying new gadgets for the flight. Wonderful, fun gadgets that our funkyfingered offspring won’t be smearing with nose goblins. We ’ l l be able to listen to music for once, so we’re looking for a new digital music player. And the AK120 from South Korean consumer-electronics firm iriver (iriver.com) might be the one. Sold under the Astell&Kern brand, the AK120 is aimed at music afiThe AK120 cionados who loathe the loss of sound quality associated
with file compression formats like MP3. That’s not to say it can’t play MP3s – it can – but it also handles a veritable alphabet soup of other formats, such as WAV, FLAC, WMA, OGG, APE, AAC, ALAC and AIFF (DSD will soon be supported as well). If you’re looking for lossless compression options, it doesn’t get much better. In terms of hardware, the AK120 packs a 2.4-inch touchscreen, 64GB of builtin memory (expandable to 192GB) and dual digital-to-analog converter chips. There’s also a brushed-black metal volume control wheel offering a “sensitive analog feel.” That’s right, you get top-quality sound, a modern interface, plenty of memory and ... a sensitive knob. Worth the $1,300 asking price, if you ask us. Anyway, traveling alone means we’ll also be able to play games. No matter how many gaming devices we travel with, our beloved loinfruit always wants the one that’s in our hands. So with no one to steal our toys this time, we’ll be packing a Nintendo 3DS, a tablet, a smartphone and, for old-school keyboard-and-
COURTESY OF ACER
Flights of summer fancy
The Aspire R7 mouse gaming, probably also the Aspire R7 from Acer (Acer.com). This 15-inch laptop is attractive for a few reasons. For example, it features a 3rd-generation, 1.8GHz i5 processor 6GB of DDR3 memo-
ry (expandable to 12GB) and a capacious 500GB Serial ATA hard drive, together with a 24GB solidstate drive that offers quick read/write times. There’s also 128MB of dedicated video memory, which is a nice amount in a midrange computer. And of course there’s Windows 8, about which we’re fairly neutral. It’s the monitor that really sets the R7 apart, though. Its flexible (and patented) Ezel hinge means the laptop has four “modes”: notebook, “ezel mode” (where the screen is brought forward), tablet and display. The screen itself is touchcapable (pen/stylus input is possible) and it offers full HD image quality. At 5.3 pounds it’s not the lightest laptop out there, but at $999 it’s not the most expensive either. There’s one more thing we need to buy before we’re ready for the flight: sleeping pills. You know, just to be safe. Because with Techeye’s luck, we’ll be surrounded by a sea of sticky-fingered, sock-wielding brats and sleep may be the only escape. ●
Ever experienced the rough majesty of a feline-grooming session? Let us know: techeye.wbj@gmail.com
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