WBJ #03 2012

The z∏oty strengthens – finally

Who was in the cockpit during the 2010 Smolensk plane crash?

KBC has sold its Polish insurance unit for €770 million 3

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7, 20

Since 1994 . Poland’s only business weekly in English

VOLUME 18, NUMBER 3 • JANUARY 23-29, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

REAL ESTATE

COURTESY OF FACE MEDIA

Lokale Immobilia

Interview: Rafa∏ Grupiƒski

COURTESY OF CIVIC PLATFORM

• TriGranit in Poznaƒ • Plac Unii financing • Record office demand 15-18

Retirement plan The prime minister’s proposal to raise the retirement age is meeting plenty of resistance, but Poles may have no other choice than to accept it 11, 12-13

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

Tusk changes tune Prime Minister Tusk has threatened not to sign the EU’s proposed fiscal union treaty 3

Well-oiled expectations Now it’s not just shale gas – geologists think Poland has significant shale oil deposits

SHUTTERSTOCK

After a series of downgrades, more calls for a “European” ratings agency 4

SHUTTERSTOCK

Poor ratings

COURTESY OF KPRM

The leader of the ruling party’s parliamentary caucus sees challenges on the horizon 8-9

NEWS

www.wbj.pl

z∏.70 billion was the total value of the shares held by private pension funds (OFE) at the end of 2011, z∏.11 billion less than in 2010.

43,600 is the amount of cargo in metric tons that passed through Warsaw Chopin airport in 2011, 6.7 percent more than in 2010.

2,000 is the number of complaints that were filed against air carriers at Poland’s Civil Aviation Office in 2011. That’s almost 50 percent more than a year earlier.

24 million was the number of people who listened to the radio on a daily basis in Poland during 2011.

Quote of the Week

Left to right: Romney, Gingrich, Santorum As WBJ went to press, international attention was focused on the US state of South Carolina where the next, and possibly decisive, Republican Party presidential primary was scheduled to take place. Former Massachusetts Governor Mitt Romney hoped the contest would solidify his lead over the Republican field. Mr Romney ran for president in 2008 and put in a good performance in the two primaries that have already taken place this year. Governor Romney was originally declared the winner of the January 3 Iowa caucuses. Last week that decision was reversed, with officials saying Senator Rick Santorum had actually won by just 34 votes.

Mr Romney easily carried New Hampshire a week later, taking 39 percent of the popular vote. Mr Romney has been considered the most likely candidate to secure the Republican nomination since the beginning of the primary season. Several polls have indicated that he has the best chance of beating President Barack Obama in the general election on November 6. But Mr Romney’s lead seemed tenuous as WBJ went to press, with some polls in South Carolina putting former Speaker of the House Newt Gingrich ahead of the frontrunner. The hard-hitting campaign has taken its casualties. On January 19, Texas Governor Rick

Perry – originally hailed as the Republicans’ darling – was forced to withdraw from the race. He endorsed Mr Gingrich. On January 16, former Utah Governor Jon Huntsman also dropped out, endorsing Mr Romney soon after. Earlier, two other major Republican presidential hopefuls, Congresswoman Michele Bachmann and Georgia businessman Herman Cain halted their campaigns. Florida and Nevada are the next states to hold Republican presidential primaries, on January 31 and February 4 respectively. On March 6, 10 states will hold primaries – an event that is commonly referred to in US politics as “Super Tuesday.”

“The Polish z∏oty remains undervalued. … But whether it sustains the next wave of turbulence in Europe – God knows.” National Bank of Poland president Marek Belka speaking to journalists in Moscow last week.

Figures in focus Baltic barbarism Average homicide rate per 100,000 population, 2007-2009, selected European countries 10 8 6 4 2

Adam Zdrodowski

TVP expects z∏.60 million loss Polish public broadcasting corporation Telewizja Polska expects to end the current financial year with a net loss totaling some z∏.60 million. The predicted loss will partly be caused by the cost of broadcasting Euro 2012 and the London Olympics. ●

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Polish-Japanese artist Koji Kamoji Israeli Foreign Minister Avigdor Lieberman was in Warsaw on January 15-16 for a two-day working visit. Mr Lieberman met Polish Foreign Minister Rados∏aw Sikorski to discuss the current situation in the Middle East, including the consequences of the Arab Spring, as well as the issue of Iran and its nuclear program and tensions in the Persian Gulf.

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On WBJ.pl

Israel’s FM visits Warsaw

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The new film by acclaimed Polish film director Agnieszka Holland has been placed on the shortlist for Best Foreign Film at this year’s Academy Awards. “In Darkness,” tells the true story of Leopold Soha, a Pole who risked his own life to shelter Jewish citizens in the sewers of Lviv, Ukraine (then part of Poland) during its Nazi occupation. Ms Holland’s film is one of nine foreignlanguage films on the shortlist.

The Republican Party presidential primaries

Po la

‘In Darkness’ on Oscar shortlist

Numbers in the News

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Action-film star Chuck Norris is set to become the new face of Polish lender Bank Zachodni WBK, replacing Spanish actor Antonio Banderas, who featured in a campaign for the bank last year. Speaking about the choice of Mr Norris for the bank’s campaign, Artur Sikora, head of corporate communication and marketing for BZ WBK said “Chuck Norris is very popular in Poland. He’s a living legend, a nexus between generations. … He fits our brand. He’s energetic, dynamic, fair and righteous – always on the good guys’ side in his roles.”

IN THE SPOTLIGHT

Lit

Chuck Norris endorses BZ WBK

JANUARY 23-29, 2012

Tokyo-born artist Koji Kamoji has lived in Poland for over 50 years and his art, which is shaped by both his Japanese roots and his Polish upbringing, is truly unique. To find out more about his latest exhibition and how he ended up in Warsaw, log onto WBJ.pl.

Source: Eurostat

Company index AEW Europe ..............................17 Goodman Poland ........................6 Nordea Bank Polska..................15 APA Kury∏owicz & Associates

Grupa Orlen................................17 PA Nova ......................................16

Studio ........................................16 Grupa TP ....................................17 PGI’ ..............................................5 Atrium ........................................17 HDI Asekuracja TU ......................6 PGNiG ....................................5, 16 Bank Millennium........................13 HDI-Gerling Zycie TU ..................6 PKN Orlen ..................................20

DATELINE

January/February JANUARY 24-27 BUMASZ Event:

Location: Web:

This trade fair is a unique opportunity for manufacturers and suppliers of machinery and construction equipment to establish new contacts and maintain existing relationships with decision makers in the industry. Poznaƒ International Fair bumasz.pl/en/

FEBRUARY 3-5 MTT WROCLAW 2012 Event:

Location: Web:

This event bills itself as the largest trade exhibition in Poland devoted to the travel and tourism industry. It will feature a wide range of products and services relating to the industry as well as major industry players. Hala Stulecia, Wroc∏aw mttwroclaw.pl/en

Bank Pekao ................................16 Heitman......................................17 PKO Bank Polski..........................7 Bank Zachodni WBK ............7, 15 Helical Poland............................15 BBI Development ......................16 HYPO NOE ..................................15 Biedecki........................................8 IKEA ............................................15

BRITISH-POLISH PPP FORUM

Event:

Web:

Entitled “Wroc∏aw for partnership – experience, plans and prospects for cooperation” this event will feature several discussion panels on public-private partnership in Poland and around the world. Hosted by economist Robert Gwiazdowski Hala Stulecia, Wroclaw ppp.gov.pl

SHOPPING CENTER BUSINESS FORUM

DM BZ WBK ................................5 KGHM ....................................8, 20

Now in its 14th edition, this event is an opportunity to meet tenants and developers of commercial real estate. The organizer provides access to web-based business appointments between participants. Hilton Warsaw Hotel scbf2012.retailnet.pl

DTZ ............................................15 LG ..............................................23

Location:

Event:

Location: Web:

Blackstone ................................17 IMS Health ..................................8

PPG ............................................18 Raiffeisen Bank Polska ............15 Rodamco ....................................17 Société Générale........................13

BRE Bank ..................................15 Invesco........................................17 Standard Life Investments ........15 Budimex ....................................16 Jeronimo Martins ........................5 Talanx Group ................................6 BZ WBK ..................................2, 17 Jones Lang LaSall ....................17 Tauron ..........................................5 CA Immo ....................................17 JW Construction Holding ..........15 The Boston Consulting Group ....7 Cushman & Wakefield ..............17 JW Wind......................................15 TriGranit ....................................15 D&B Poland ..............................12 KBC ..............................................6 TUiR Warta ..................................6 Deka ..........................................17 KBC Securities ............................5

ECE ............................................17 Liebrecht & Wood ......................16 Edenred Poland ..........................6 Mazowiecka Spó∏ka

Unibail ........................................17 Union ..........................................17 Vsf Creative Architectural Studio ..................16

Emmerson..................................18 Gazownictwa ..............................16 Warbud ......................................16 Emperia........................................5 Meyer Bergman ........................17 Warsaw Stock Exchange ............4 Ernst & Young ............................17 Millennium Dom Maklerski ........7 X-Trade Brokers ExxonMobil ..................................5 Miller, Canfield, W. Babicki, A.

Dom Maklerski ..........................20

Friendly Integration ..................23 Chelchowski & Partners ..........13 Xelion..........................................13 Ghelamco ..................................15 native union................................23 XTB Hungary ................................4

NEWS

JANUARY 23-29, 2012

www.wbj.pl

European fiscal union

Tusk: Poland may not sign fiscal union treaty

A change of attitude? “I know from sources who were at the fiscal treaty negotiations that Poland feels it has been snubbed and ignored,” said Maciej Golubiewski, an expert in European politics at the Sobieski Institute. “Add to this the changing

that he now needs to play it tougher,” he added. However, even the prime minister admitted that Poland has a weak bargaining position within the EU. “We don’t have too many allies on this issue – that’s the truth. Some non-euro countries aren’t interested in joining meetings of the euro group and most euro countries back the [exclusive] model,” Mr Tusk said.

Franco-German ‘monopoly’

Mr Tusk is “playing it tougher” with Paris and Berlin mood in the country concerning Polish sovereignty that has been fostered by the right –

Smolensk findings

Government refuses to reopen Smolensk investigation Air Force General Andrzej B∏asik may not have been in the cockpit of the doomed Smolensk flight during its final descent Prime Minister Donald Tusk has resisted calls for the investigation into the Smolensk catastrophe to be reopened after new findings by a team of researchers in Kraków brought into question the claim that Polish Air Force General Andrzej B∏asik was in the cockpit of the presidential Tupolev Tu154 when it crashed on April 10, 2010. A team of forensic experts from the Jan Sehn Institute of Forensic Sciences in Kraków studied recordings from the cockpit and came to the conclusion that a voice considered by Russian investigators to belong to Mr B∏asik is, in fact, not his.

The official Russian report into the crash, which claimed the life of President Lech Kaczyƒski and 95 others, placed some of the blame for the disaster on the shoulders of General B∏asik. In the report, the Russians said he exerted psychological pressure on the pilots during the descent with the intention of making them land the plane, despite conditions for doing so being extremely unfavorable. The report even suggested the general was drunk. The official Polish report, meanwhile, said that Mr B∏asik spoke in the cockpit during the flight’s final minutes, although it did not go as far as to say that he exerted psychological pressure on the pilots. By comparing earlier recordings of Mr B∏asik’s voice to speech recorded from within the cockpit, however, the experts from the Jan Sehn Institute reached the conclusion that

the general did not in fact speak during the descent, thus contradicting the conclusions of both the Russian and Polish reports.

‘All over again’ The new findings led Jaros∏aw Kaczyƒski, leader of opposition party Law and Justice (PiS) and the twin brother of the late president, to say that the Polish investigation needed to “be started all over again.” But after a meeting between Jerzy Miller, the former interior minister who headed the Smolensk investigation on the Polish side, and Mr Kaczyƒski, a government spokesperson said there was no need to reopen the investigation, since “the findings of the Institute of Forensic Sciences in Kraków don’t bring into question the main thesis of the report regarding the cause and circumstances of the catastrophe.” Gareth Price, Remi Adekoya

which is saying Poland is pandering to EU demands – and Mr Tusk has probably realized

Mr Tusk also honed in last week on his concerns over what he sees as a German and French “monopoly” on EU reforms. “The fact that Chancellor Merkel and President Sarkozy have taken the reins is obvious. But this should not become a permanent political

monopoly. We can’t leave Europe to two capitals,” he said in an interview with Italian newspaper Corriere della Sera. “We shouldn’t criticize the activism of Paris and Berlin – but we should be more present and not leave all the initiative to them,” he added. Poland, he continued, should be able to have a say on the future of the euro zone, even if it isn’t given voting rights at euro-zone summits. “The chief of the International Monetary Fund is present at the meetings. Today this is Christine Lagarde of France. In the future, an American or a Chinese person might fill the post. There is no reason to exclude other Europeans,” he said. Gareth Price

Pop star Doda fined for criticizing Bible Doda, one of Poland’s most famous pop stars, was ordered to pay a z∏.5,000 fine by a district court in Warsaw last week after she said the authors of the Bible were “wasted on wine” and had “smoked some herbs.” Doda, who’s real name is Dorota Rabczewska, made the remarks in a 2009 interview. The singer’s defense team argued that her comments were protected by her freedom of speech, while also insisting that she had not intended to offend anyone and that the tone of her interviews were often light-hearted and frivolous. But on Monday, the judge in the case, Agnieszka Jarosz, ruled that the artist’s statements could not be defended by an appeal to freedom of speech. She said Ms Rabczewska had the right “to assess [the content of the Bible] in the context of scientific discovery but had no right to insult” the religious text. In August 2011, Adam “Nergal” Darski, the former

COURTESY OF DODA/FACEBOOK

Prime Minister Donald Tusk said last week that Poland may refuse to sign the EU fiscal treaty if it is not allowed to participate in euro-zone summits. The latest draft of the treaty envisages that meetings held by euro-zone countries will exclude EU member states who are not part of the currency bloc. Mr Tusk criticized the draft, telling a press conference, “Our efforts aim at a fiscal agreement the shape of which does not make the division of Europe into two clubs – the euro zone and countries outside the club – more lasting than is safe in our opinion.”

EU finance ministers are due to meet this week to discuss the issue of the exclusive euro-zone summits. “Whether Poland joins the fiscal pact or not depends on their resolution,” Mr Tusk said. The statement comes as something of a surprise given Mr Tusk’s stolid response earlier in January when it first emerged that Poland might be excluded from euro-zone summits. “You can’t win them all,” he said at the time. COURTESY OF KPRM

The prime minister wants a more inclusive deal

Doda was fined z∏.5,000 for comments made in 2009 boyfriend of Ms Rabczewska and lead singer of the Polish metal band Behemoth, was found not guilty of offending religious feeling after he had been filmed tearing pages out

of a Bible during a concert in Gdynia in 2007. Mr Darski had also referred to the Catholic religion as a “criminal sect.” David Ingham

PiS calls for Lech Kaczyƒski statue in Gdaƒsk Politicians from Poland’s main opposition party, Law and Justice (PiS), have called on the city of Gdaƒsk to build a statue of former Polish President Lech Kaczyƒski, who died in the 2010 Smolensk tragedy. PiS MEPs Anna Fotyga and Andrzej Jaworski told a press conference on Monday that the late president deserved to

be recognized for his contribution to his home town. “To this day we do not have a dignified commemoration of the late President Lech Kaczyƒski in the city of Gdaƒsk, the city with which he was associated, where he worked, where he was vice chairman of Solidarity, where he helped the shipyard workers

during strikes,” said Ms Fotyga, who served under Mr Kaczyƒski as head of the Chancellery of the President. Mr Jaworski said that the city’s authorities were reluctant to agree to a statue commemorating Mr Kaczyƒski despite being aware of the important role he played in Gdaƒsk’s history.

“No one today disputes the merits of President Lech Kaczyƒski and what he did for Gdaƒsk. … And this is the thing that is permanently inscribed in the history of our city,” he said. Ms Fotyga also urged city mayor Pawe∏ Adamowicz to agree to a commemorative act for Anna Walentynowicz, a

founding member of the Solidarity trade union, who also died in the Smolensk disaster. Ms Fotyga said that plans to erect a plaque outside Ms Walentynowicz’s former home were insufficient and that one of the city’s streets should be named after her. The mayor of Gdaƒsk’s spokesperson, Antoni Pawlak,

said Mr Adamowicz was not against the plans but that this was a grassroots issue. Mr Pawlak added that councilors had previously agreed that the best place to remember the victims of the Smolensk disaster who had a connection with Gdaƒsk would be the former shipyard, after it undergoes redevelopment. David Ingham

NEWS

www.wbj.pl

Poland and China forge closer trade ties The Pomeranian Special Economic Zone (PSEZ) has signed an agreement with Chen Honghui, the deputy mayor of the city of Zhuhai in Guangdong province, China, to develop a partnership between the ports of Gdaƒsk and Gdynia and the Chinese port of Gaolan. “We are opening two gates,” Teresa Kamiƒska, the president of the management board at PSEZ, told Puls Biznesu.

Foreign investments create automotive jobs In 2012, the automotive sector is expected to be the industry in Poland which receives the largest amount of foreign investment, according to the Polish Information and Foreign Investment Agency (PAIiIZ). In midJanuary, PAIiIZ was processing 29 automotive investments worth a total of more than z∏.1.9 billion. ●

JANUARY 23-29, 2012

Ratings agencies

More downgrades, more problems As ratings agencies continue to downgrade European sovereign debt, calls are again emerging for a European alternative Ratings agency Standard & Poor’s last week downgraded its long-term credit rating of the European Financial Stability Facility (EFSF), the organ established by the EU to help bail out troubled euro-zone economies. The move brought the EFSF’s rating down to AA+ from AAA and follows the agency’s downgrade of France and Austria’s long-term credit rating from AAA to AA+ on January 13. S&P said the move to lower the EFSF’s rating followed from the downgrade of its guarantor countries. “The EFSF’s obligations are no longer fully supported either by guarantees from EFSF members rated ‘AAA’ by Standard & Poor’s, or by ‘AAA’ rated securities,” the agency said in a statement, adding, “We consider that credit enhancements sufficient to offset what we view as the reduced creditworthiness of

guarantors are currently not in place.” Market reaction in Poland was muted. On Monday, the day the move was announced, the Warsaw Stock Exchange’s main index, the WIG, ended up 0.62 percent. In a statement following the decision, the EFSF noted that it retained the highest credit rating from both Moody’s (Aaa) and Fitch (AAA). It added that S&P’s downgrade would not affect lending capacity, and pointed out that its short-term rating remained at S&P’s top level. “The downgrade to ‘AA+’ by only one credit agency will not reduce EFSF’s lending capacity of €440 billion,” said EFSF CEO Klaus Regling. “EFSF has sufficient means to fulfill its commitments under current and potential future adjustment programs until the ESM [European Stability Mechanism] becomes operational in July 2012,” he added.

Calls for a ‘European’ agency Nevertheless, the recent downgrades have spurred renewed calls for a “European” rating

agency that ostensibly would be more independent than the “Big Three” credit-rating agencies, Moody’s, Fitch and S&P. Moody’s and S&P’s parent companies are both headquartered in New York, while Fitch’s parent company, FIMALAC, is headquartered in Paris. German Foreign Minister Guido Westerwelle said Sunday that the time had come for Europe to create independent credit ratings agencies. “It is time for Europe to prove capable of facing up to the credit ratings agencies,” Mr Westerwelle told reporters. “The markets are barely given time to breathe,” before the ratings agencies’ decisions are thrown back into uncertainty, he said. “It is very important we give the agreements and pacts a realistic chance. … This is the only way we can bring trust back into the markets,” added Mr Westerwelle. Michael Meister, a lawmaker from Germany’s Christian Democratic Union, said new legislation should be put in place that would require banks and insurers to provide their own ratings on their invest-

ments instead of relying on rating agencies. “We as politicians should put ourselves less into the hands of rating agencies,” Mr Meister told reporters on January 14. “We as lawmakers should in the future refer less to ratings and ask the individual financial players to provide more ratings of their own.” Analysts reacted skeptically, however. “The importance and reputation of the main rating agencies have diminished as they are responsible for some bad calls made in the last few

years,” said Adam Narczewski, managing director of XTB Hungary. “Creating new, ‘European’ rating agencies might only worsen the situation, allowing more institutions to rate debt,” he added. “If that happens, I see ‘Europe’ and the ‘US’ competing with each other to prove which one is worse. … But it could be an ugly fight. The more rating agencies, the less deciding power they have. At the same time, they can cause more confusion with their decisions.” Andrew Kureth

COURTESY OF WIKIMEDIA COMMONS

Germany’s FM Guido Westerwelle said Europe should face up to ratings agencies

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BUSINESS

JANUARY 23-29, 2012

www.wbj.pl

Retail

PGNiG cutting investments

Biedronka to spend z∏.2 billion on expansion, image building The retailer is looking to tighten its grip on the discount grocery market top spot Biedronka, the largest grocery retail network in Poland, plans to spend z∏.2 billion on expansion and brand development this year with a series of investments that will include the opening of at least 200 new stores. The no-frills retail network, which belongs to Portuguese group Jeronimo Martins, operated 1,873 stores at the end of 2011, but wants to increase that number to 3,000 in 2015. It also plans to launch a revamped logo and to introduce new layouts in many of its outlets. Poland has a relatively low density of grocery stores, offering 97 sqm of supermarket and discount store space per 1,000

inhabitants in 2011, according to Planet Retail data. That’s compared to 285 sqm in neighboring Germany. “It will be easy for Biedronka to grow organically in Poland as the retail market here is far from saturated,” said Tomasz Soko∏owski, an analyst at DM BZ WBK. Biedronka, whose share of the Polish grocery market amounts to around 11 percent, is already far ahead of its nearest competitors and is considered the most active player in a market that is moving towards consolidation. “Right now people are economizing on their food purchases, and due to its aggressive expansion Biedronka is able to offer cheaper and better quality goods than most of its rivals,” said Kamil Szlaga, an analyst at KBC Securities.

A number of potential rivals which would normally have the financial clout to vie for the top spot have recorded disappointing figures in their home markets recently, limiting their ability to invest in foreign markets such as Poland. “The UK’s Tesco and France’s Carrefour have huge problems in their home markets which will limit their ability to compete against Biedronka in the Polish market,” said BZ WBK’s Mr Soko∏owski. While Biedronka, which has 90 percent brand recognition in Poland and saw sales at its stores rise 20.4 percent to €5.8 billion last year, is able to grow organically, its potential to acquire other retail holdings is likely to be limited by the competition watchdog, which is wary of its dominant market position, the analysts said.

Polish gas monopoly PGNiG has brought a halt to all of its new investment projects in response to the Energy Regulatory Agency’s prolonging of the procedure to raise gas tariffs. Vice president Miros∏aw Szka∏uba said that the lack of a new, higher tariff is hurting the company, Parkiet reported.

Space for growth Supermarkets and discount stores (sqm per 1,000 inhabitants in 2011) 300

285

250

222

200

166 133

150

97 100 50 0

Germany

France

Spain

Portugal

Poland Source: Planet Retail

They added that this rules out the possibility of it buying the retail arm of FMCG firm Emperia, which is being sold by that company for around z∏.900 million. The sale is expected to be completed by the end of

March, after which many analysts expect Emperia to shutter its operations. Private equity funds are considered the most likely to snap up Emperia’s retail assets. Gareth Price

Unconventional fuel

Evidence of shale oil surfaces in Poland ExxonMobil owns a number of concessions where large volumes of the fuel may lie, preliminary maps show

which are focusing on areas in the Lubelskie, Mazowieckie and Warmiƒsko-Mazurskie voivodships. The results of their study are due to be published by the end of the first quarter. Preliminary shale-oil deposit maps drawn-up by the researchers suggest that the largest deposits may be found in areas near Warsaw, Elblàg and Radom, mainly on concession areas belonging to US company ExxonMobil. Shale oil production is similar in complexity and cost to the extraction of shale gas. The fuel

is released as a petroleum-like liquid when oil shale rock containing kerogen is heated using chemicals. Given the current high price of crude oil and Poland’s heavy dependence on Russian oil, the discovery of major volumes of shale oil beneath Poland’s surface would be a significant boon to the country. However, with PGI’s analysis being one of the first major studies into potential volumes, concrete forecasts are scarce. “As far as the potential volumes of shale oil goes, it is still

too early to say,” said ¸ukasz Cioch, general director of the Centre for Energy Studies at Tischner European University. However, he said, despite the huge cost of exploration in Europe and the investment risks, investors are approaching the search with “cautious optimism.” “Drawing on experience from the US, we know that it is not profitable when it comes to a given area to focus on shale gas alone – a combination of different identification methods are also being used to identify the correct kind of shale

rock for shale oil extraction,” Mr Cioch added. The news of the potential for shale-oil extraction came in a week when Bulgaria announced that it was banning hydraulic fracturing, a technique used in the exploration and extraction of shale oil and gas. The decision was made by the Bulgarian government due to environmental concerns over hydraulic fracturing. It makes Bulgaria the second country in Europe after France to have banned the practice.

Tusk: fuel prices ‘disastrous’ Polish Prime Minister Donald Tusk told reporters on Wednesday that in order to stop the rise in gasoline prices in Poland, the z∏oty would have to maintain a certain exchange rate, particularly against the US dollar. Mr Tusk stated that rising fuel prices are a “fairly disastrous coincidence for consumers” created by an unfavorable exchange rate, high oil prices, and the need for an excise tax that met the level set by the EU.

Kraków to launch PPP tenders

European Commission: Poland’s SMEs face hurdles

Kraków is preparing 12 public-private partnership (PPP) project tenders whose value amounts to just over z∏.700 million. Referring to the planning, building and management of multifamily residential buildings worth z∏.92 million, Przemys∏aw Chwa∏a from the city’s authorities told Puls Biznesu, “We’re hoping that we will sign our first contracts by the end of the year.” City spokesperson Joanna Dubiel said, “We will probably announce the tender in mid-February.”

SMEs face an uphill battle with bureaucracy and government policy, says the EC

Tauron’s z∏.632 million wind farm

Geologists have mapped out areas in the north and east of Poland where they think significant deposits of shale oil may lie. The potential volume of the resource, which is a substitute for crude oil, is being analyzed jointly by geologists from the Polish Geological Institute (PGI) and the US Geological Survey, both of

Gareth Price

Entrepreneurship

Entrepreneurship is generally developing in Poland, but there are plenty of hurdles along the way – more so than in the rest of the European Union, according to a recent report from the European Commission. Almost half of Poland’s nonentrepreneurs say they would prefer self-employment over a traditional career if given the choice, and more than a third believe it is feasible to become an entrepreneur.

Nevertheless, only a small number of those surveyed – 10 percent – actually have any intention to start a business. Still, the small and mediumsized enterprise (SME) sector holds strong potential for improving the country’s labor market. According to the EC, approximately 85 percent of net new jobs in the EU between 2002 and 2010 were created by SMEs. In 2010 alone, 20.8 million SMEs provided employment for close to 87 million people in the European Union. In Poland, the cost and length of time it takes to start a business are just some of the roadblocks that make it harder

to do business in Poland. Compared to the EU average, “it currently takes twice as long and it is three times more expensive to start a company in Poland than in the EU,” the report says. Property transfers, which require approximately 152 days in Poland compared to 34 in the EU, present another significant hindrance, said the report. It also cited Poland’s burdensome tax administration system. Polish entrepreneurs also fail to take advantage of e-commerce opportunities, with only 7 percent of Polish businesses – compared to 13 percent of SMEs in the EU on average – selling their goods and services

online. Business activity is also too limited to the domestic market, with few Polish entrepreneurs active outside Poland’s borders.

Innovation needed Innovation, largely lacking among Polish enterprises, has some support from the government, with new programs aimed at improving conditions. Legal changes, which came into effect in May 2011, now provide business owners incentive to implement new technology with an “innovation bonus” that is worth up to 70 percent of the costs incurred, the report pointed out.

Entrepreneurship is increasingly helping to improve employment prospects, especially in the face of tougher economic times, making it all the more urgent for Poland to eliminate its obstacles. “We see small enterprises delivering and confirming their role as main generators of new jobs,” said Antonio Tajani, vice president of the European Commission responsible for industry and entrepreneurship. “Their significant share in job creation highlights the greater than ever economic relevance of SMEs and the need to support them at all levels.” Ella Pa∏ka

Tauron, one of the leading energy suppliers in Poland, has signed a z∏.632 million contract with the energy company Iberdrola for the construction of an 82 MW wind farm in Marszewo, Zachodniopomorskie voivodship. The investment is expected to be completed within 20 months, the company said in a statement. ●

BUSINESS

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JANUARY 23-29, 2012

The global economy

World Bank: prepare for downturn This year will be a true test for both developed and developing economies as the euro-zone “contagion” could spread even further, according to the World Bank The World Bank has significantly cut its growth forecasts for both the developed and developing worlds in 2012, warning that there is a significant chance of a global economic downturn. In a report released last week, the World Bank said it predicts global economic growth of just 2.5 percent in 2012 and 3.1 percent in 2013,

compared to the 3.6 percent growth previously predicted for both years. In 2012, the euro-zone region, which may already be in recession, is expected to register negative growth of some 0.3 percent, the report said.

Risks from abroad When it comes to Poland, the

main economic risks will come from abroad, Andrew Burns, the report’s author, said at a press conference. He pointed out that imports into the EU have dropped 17 percent since August. Mr Burns also said the euro-zone “contagion” was already visible in emerging economies that had been waxing strong before August last year. He added that developing countries are particularly at risk and that a significant downturn now would be

potentially more dangerous to them than the 2008-2009 crisis had been. Many developing countries currently have reduced fiscal space, with short and long-term debt maturing in 2012. Demand for exports is expected to weaken, commodity prices to fall and remittances to continue shrinking. The World Bank has lowered its 2012 growth predictions for developing nations from 6.2 percent to 5.4 percent, while Poland itself is

expected to grow between 2.5 and 2.9 percent. “The downturn in Europe and weaker growth in developing countries raises the risk that the two developments reinforce one another, resulting in an even weaker outcome,” the World Bank said in the report. When asked by WBJ what steps needed to be taken in order to improve the global economic picture, Mr Burns replied that actions currently being undertaken are “the way to go.” Specifically, he

said governments should work on fiscal consolidation, the creation of institutional structures to support the banking system and increasing the liquidity of the European Central Bank. Mr Burns added that developing countries need to prepare for the possibility of a significant downturn, that they need to stress test their domestic banking sector and identify new long-term drivers of growth. David Ingham, Remi Adekoya

Insurance

The deal results from KBC’s agreement with the European Commission to repay Belgian state aid Last Friday German insurer Talanx announced that it had agreed to buy Belgian KBC Group’s Polish insurance unit TUiR Warta for €770 million. The transaction is expected to be finalized in the second half of 2012, following regulatory approval. Once the transaction is

completed, Talanx will be the second-largest insurance group in Poland, according to Polish Financial Supervision Authority data. Herbert Haas, CEO of Talanx Group, said in a statement, “We plan to invest further in the business, maintaining each of the subsidiaries and further improving the service and product offering to the clients.” Jan Vanhevel, KBC Group CEO, said, “Even in an extremely challenging macroeconomic environment and in very volatile market circum-

stances, we have succeeded in ... obtaining an attractive price.” KBC was given €7 billion in state aid from the Belgian government during the financial crisis and has agreed with the European Commission to divest assets in order to pay the money back. To this end, it is selling Polish lender Kredyt Bank as well as Warta. For the first three quarters of 2011, Warta recorded a net profit of z∏.164 million. The insurer has around 1.5 million clients on its books and has an especially strong market posi-

tion in marine and aviation insurance. Talanx, Germany’s thirdlargest insurance firm, is not a newcomer to the Polish market, having been operating in the country through HDI Asekuracja TU and HDI-Gerling Zycie TU, which work in the motor, general liability, property and life insurance markets. Earlier in the week, it had been reported that KBC was extending its deadline for bids, after receiving offers that did not meet its expectations. Gareth Price

COURTESY OF WIKIMEDIA COMMONS

KBC sells Warta in €770 million deal to Germany’s Talanx

KBC headquarters, Antwerp, Belgium

Prepaid services

Edenred’s employee gift benefits growing in Poland Vianney du Parc, managing director of Edenred Poland, talks to WBJ about the company’s products and services, and the ways prepaid services can save businesses money and instill loyalty in their employees Ella Pa∏ka: What services do you provide in Poland? Vianney du Parc: We design and deliver solutions to make the lives of employers and employees easier. In Poland, the market of employee benefits is very strong thanks to the Social Fund to which most companies with 20 employees or more contribute to. Today we have gift solutions – gift cards and gift vouchers – which answer to Poland’s strong tradition of companies giving gifts to employees at Christmas or Easter time. Are gift cards your most popular product in Poland? This is the most popular one, but we also have a very fastgrowing product called Ticket Restaurant which is a meal solution. It has a very advantageous tax scheme for compa-

nies which can provide their employees with a z∏.190 allowance per month, which is totally social-charge free for employers and employees. It’s not well-known in Poland but we can see it’s growing quickly. Recently, we launched Meal Cards which we reload at the client’s convenience. This avoids the administrative burden of vouchers and offers greater choice thanks to our partnership with MasterCard, which gives access to a network of around 50,000 restaurants and food establishments. Who are your biggest clients? Confidentiality is part of the deal, but I can tell you that we have won some major public tenders and some prestigious international companies, especially in the telecoms and

finance sectors. Most of the international companies served by Edenred in other countries are interested in working with us in Poland. But we were also able to attract some Polish companies, very big ones and SMEs. Are you going after specific industries or sectors in Poland? There is no specific sector, they are all interesting, but on the meal solution there is special prevention legislation for employees who work in difficult conditions where the employer is obliged to provide employees with a meal solution … and this is a market we are attacking strongly because we are convinced it’s much easier for employers and employees to get a meal card than to organize the delivery of sandwiches or a meal from a canteen. When did you notice that demand for your services was starting to rise? Was it

because of the crisis? It’s booming for two reasons. First, because we started to advertise and inform the market. Second, the uncertain economic context is pushing companies to optimize everything they can, including their tax schemes and rewards for employees.

Poland is a fantastic prospect for Edenred. It is the largest country in Central Europe, with more than 38 million citizens and a resilient economy. This enthusiastic market is expecting a digital transition and we have good solutions for it.

Do you plan to bring the variety of the services you offer in other countries into Poland? And what growth prospects do you see here in the future? Our strategy is to assess the opportunity, to roll out our existing solutions in the 40 countries we operate. But it needs some adaptation to respond properly to market expectations. Growth will be mainly on the ticket restaurant, it will be our main driver and the gift card will for sure contribute. Finally, we are going to launch new products which should be very successful if we believe in market surveys and in our intuition.

Enjoy Tuscanyas the natives do!

Do you plan to expand further east of Poland? Russia, Belarus and Ukraine are on the horizon, but these markets are more complicated because services for employee benefits take longer for these governments to understand. ●

We offer rooms with all of the most modern creature comforts: WiFi, minibar, satellite TV, and bathrooms with all the amenities. There's a pool, too.

We also offer delicious Tuscan cuisine and wines! For more information, visit www.tuscanyrural.com, or call us at +39 056 456 7488

FINANCE & ECONOMICS

JANUARY 23-29, 2012

Banking

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Labor market

Employers ‘starting to cut’ CEE banks among world’s most solvent jobs as slowdown looms

Emergency funding Nevertheless, despite the strong outlook for CEE banks’ solvency ratios, the Vienna

Gareth Price

Slowing growth in wages and employment is evidence of firms preparing for tougher times

The H2 2011 trend of gradually falling monthly employment levels and moderate wage growth was evident in the final month of last year, indicating that employers are continuing to respond preemptively to an expected economic downturn. Private-sector employment fell by 0.2 percent on the month, dragging the annual rate of growth down to 2.3 percent from 2.4 percent the month before. “We may assume that enterprises – taking into account the coming economic slowdown in Poland and abroad – started to cut employment,” Bank Zachodni WBK analysts wrote in a market report. Analysts expect that, for the foreseeable future, December will be the final month in which

employment grows above an annualized 2 percent. Wages in the private sector, meanwhile, grew by a belowforecast 4.4 percent year-onyear in December, compared to consumer price inflation of 4.6 percent in the same month. In m/m terms, wages grew by 9 percent, mainly due to the payment of bonuses, to stand at z∏.4,015.37. “These data are still sup-

portive for consumer demand,” BZ WBK wrote. Despite this, prospects for the labor market in 2012 are not optimistic, given the expected continued cooling of demand from Poland’s main European trading partners. “We expect stagnation of employment and clear deceleration of wages to the level of annual CPI,” BZ WBK wrote. Gareth Price

Earnings report Average gross wage in private sector (z∏.) 4,500

4,000

3,500

3,000

be r Jan 2010 ua ry Feb 20 rua 11 ry 2 Ma 011 rch 20 Ap 11 ril 20 Ma 11 y2 0 Jun 11 e2 01 Jul 1 y Au 2011 gu s Se pte t 201 mb 1 er Oc 201 tob 1 e No r 20 vem 11 b De er 2 cem 011 be r2 01 1

Initiative group of regulators and policy makers said in a statement last week that international lenders like the IMF should “stand ready to provide external assistance and financial support to banks” in Eastern Europe. The risk of “excessive and disorderly deleveraging [of Western parent companies] as well as a credit crunch” looms over Eastern Europe, they said. However, in Poland, whose banking sector is around 70 percent foreign-owned, a largescale injection of international cash would only be required if the situation were to deteriorate significantly, said Marcin Materna, an analyst at Millennium Dom Maklerski. “Financing Polish banks is profitable. Owners have control, so for them the investment is more secure than many other alternatives right now,” he said.

cem

The capital adequacy ratios of banks in Central and Eastern Europe are expected to be among the highest in the world following the implementation of the Basel III international capital reserve requirements. The Boston Consulting Group (BCG) researched 145 financial institutions globally to evaluate the likely effects of the regulations, which are being implemented to reduce the dangers posed to the wider economy by banks’ excessive risk-taking. Under the requirements, banks are obliged to increase the amount of capital they hold against their losses in order to reduce the amount of money on their balance sheets and therefore their ability to take large risks. They have until 2019

to implement the changes. After the rules have been fully implemented, BCG expects CEE banks’ aggregate capital adequacy ratios to shrink by around 2.6 percentage points, but still remain at a relatively healthy 11.4 percent. This is the highest level in the world, alongside Nordic banks. According to the consultancy, CEE banks’ healthy condition results from strong regulatory policies implemented by governments in the region. In Poland, aggregate banking sector earnings in the last three years exceeded z∏.35 billion, but at the request of the Financial Supervision Authority, most of that money was not paid out as dividends, thereby boosting banks’ capital holdings and reducing incentives for risk-taking.

But the threat of Western parent companies withdrawing capital from the region looms large

Source: Central Statistical Office

COURTESY OF THE EUROPEAN PARLIAMENT

Z∏oty rises as Hungary’s Orban relents under pressure from EU

Mr Orban said Hungary was ready to comply with some EU requirements

The z∏oty strengthened last week, gaining ground against the euro after it seemed more likely that Hungary would receive an international bailout. Hungary’s currency, the forint, had been hit hard in recent weeks as its government showed recalcitrance in the face of EU demands that it

back down from some of the more authoritarian elements in recent legislation in return for financial assistance. However, last week Hungarian Prime Minister Viktor Orban told the Bild newspaper that his country was ready to comply with some of the EU’s requirements. Markets reacted positively, with the forint

rising 1 percent against the euro. While Poland’s economic performance has differed significantly from Hungary’s, some big international investors still tend to group the z∏oty together with the forint. “If the forint advances, the same happens to the z∏oty,” Joanna Bachert, an analyst at

PKO Bank Polski in Warsaw, was quoted by Bloomberg as saying. “While most people on the market don’t put the two countries in the same basket, the biggest global banks do.” Last Friday, the z∏oty was trading as low as z∏.4.3026 to the euro, its strongest showing in nearly three months. AK

INTERVIEW

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State to benefit from KGHM vote? Shareholders in Polish state-controlled copper giant KGHM voted last week against the buyback plan proposed by the company’s management board in mid-November. Analysts say the state voted as it did to ensure that the entity remains a cash cow for Warsaw, FT.com reported. The government needs revenue from the miner’s large dividends – expected at z∏.3 billion this year – and from a proposed metals extraction tax to help it lower the budget deficit and public debt.

Contraceptive sales down Poles are buying fewer contraceptive aids, according to data obtained by ACNielsen and IMS Health. Between November 2010 and October 2011, condom sales in Poland fell by 10%, with hormonal contraceptive sales falling by 3.2%, reported Puls Biznesu. ●

JANUARY 23-29, 2012

Civic Platform

New term, new challenges Rafa∏ Grupiƒski, the chairman of Civic Platform’s (PO) parliamentary caucus, talks to WBJ about his party’s parliamentary strategy, legislative priorities and his views on the current political and economic situation in Poland Ewa Boniecka: Since Prime Minister Donald Tusk’s presentation of his planned reforms, the government has found itself on the defensive, particularly in relation to the current prescription-drug law crisis. How do you assess the situation? Rafa∏ Grupiƒski: I think this situation will be resolved in the near future and the wellbeing of patients will be assured. The most important thing is that the list of reimbursable medicines will be periodically modified according to particular needs. I regret that this unfortunate crisis has brought worry to patients, but I believe that now the most important thing is the need to calm emotions among all the parties involved and to make a joint effort to ensure that the health-care system works efficiently.

According to the prime minister, the first batch of major reforms should be presented to the Polish parliament later in January, yet it now looks as if some of them could be delayed. What is your view on this? So far everything is going according to plan and the first projects will be presented in January, after social consultations have taken place. For example, consultations about the proposed reforms to the retirement age for people in the uniformed service are currently taking place. As a result, people entering services such as the police force, fire service, military and prison service, after the draft bill is accepted, would have to work for 25 years – 10 years more than now, and would retire at the age of 55. Also in January, the proposals for prolonging the

working age for men and women to 67 and changes in health-care payments for farmers should be presented to the Sejm. In the first quarter of this year other projects will include: dealing with changes in pro-family tax benefits, liquidation of benefits for newborn children of rich families and a new mineral tax. Your coalition partner, the Polish People’s Party (PSL), is against PO’s proposal of prolonging the retirement age to 67, especially for women, and is also opposed to proposed changes to KRUS (the social insurance system for farmers). As a result, do you expect Civic Platform to have problems passing the planned legislation in parliament? I have already discussed some details of our proposals with PSL’s parliamentary causus, while they will also be discussed within the coalition government. … However, I am certain that PO and PSL will be able to find some compromises in dealing with the details of the government’s proposals.

Some of the proposed reforms will be difficult for certain groups within society, especially those who are less affluent. With rising food and electricity prices, as well as public spending cuts, the government may be a target for criticism. How do you view this playing itself out? We are not trying to conceal difficult problems, but we have

government of PO and PSL is conducting a just and well-balanced social policy, supported by all our members in parliament. Do you envisage the possibility that some of the reforms could face protest from certain groups of society? I think that generally Poles are aware of the impact of

“This struggle will go on ... I do not see a bright spot on the horizon” in mind some principles of social justice to protect the poorest groups. I want to point out that the biographies of the majority of PO’s parliamentary causus attest to our activity in the Solidarity trade union movement, and so we understand peoples’ needs and social rights. I also see that during the present crisis there is an evolution in the approach to social problems from Donald Tusk, so I would say that without slogans or bold statements the

the European crisis on Poland, which means they are ready to accept the need for social and economic reforms. So far the greatest controversy is related to our proposals for prolonging the retirement age, and here there could be strong opposition from trade unions. Many people do not look at it as a way to secure retirement benefits for future generations, they only think about the here and now. On the other hand the younger generations

Legal Forum

Collective redundancy procedure Katarzyna Zwierz-Wilkocka Attorney at law Due to potentially unfavorable economic conditions, a number of Polish companies may in the future be forced to adjust and reduce their business operations and conduct restructuring processes. In practice, a restructuring most often means a reduction in employment, which usually assumes the form of a collective redundancy. A collective redundancy takes place when an employer who employs 20 or more persons dismisses a specific number of employees within a period of 30 days. This number varies depending on the total number of workers employed at a particular organization (in either the public or private sector) and amounts to respectively: (i) 10 employees if the employer employs fewer than 100 persons; (ii) 10 percent of employees if the employer employs from 100 to 299, or (iii) 30 employees if the employer employs at least 300. Furthermore, a collective redundancy should be carried out for reasons that are not related to employees per se, such as liquidation of a

workplace, reorganization, technological changes, a bad financial situation, or liquidation or bankruptcy of the employer. In the above-mentioned circumstances, the Redundancy Act of March 2003, which outlines the collective redundancy procedure, shall apply.

Redundancy Act In case the employer employs fewer than 20 persons or when the number of employees who are to be made redundant is lower than the number stipulated in the Redundancy Act, only provisions of the Labor Code shall apply. Thus, the employer is not obliged to conduct a collective redundancy procedure. Moreover, the employer is not obliged to pay employees a redundancy allowance if they are dismissed outside of the collective redundancy procedure. The stages of the collective redundancy are, in chronological order: 1. Negotiations or consultation by the employer with trade unions or – if there are no trade unions at a

given employer – employees’ representatives, in order to agree on the conditions of collective redundancy and the rules which govern it. At this stage the employer is obliged to notify in writing trade unions or employees’ representatives about the reasons for redundancy and other information required by the Redundancy Act. 2. Notifying the relevant district labor office about the planned collective redundancy and providing it with the relevant information specified in the Redundancy Act. 3. Concluding with trade unions an arrangement that governs the terms and conditions of the redundancy, or the drawing up by the employer of its own rules to govern the redundancy. 4. Providing the relevant labor office with a second notification detailing the scale of the collective redundancies and the nature of the arrangements that have been made following consultations with trade unions or employee representatives. 5. Dismissing individual employees affected by the collective

redundancy by giving them written notices or executing agreements of termination of employment. Notice of employment termination may be given and employment may – at the earliest – end 30 days after the day the labor office has been given the second notice (stage 4 above). In general, dismissals under the collective redundancy procedure follow the rules applicable to standard dismissals. Thus, the same notice periods apply, the notice should meet specific legal requirements and the employer should issue an employment certificate to the dismissed employee. The notice period may be unilaterally shortened by the employer to one month only if the reason for the redundancy is the liquidation or bankruptcy of the employer. Apart from the collective redundancy procedure, the Redundancy Act provides for some additional obligations, such as: payment of a dismissal allowance, obligations concerning the re-employment of

Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market. The content is created in consultation with Warsaw Business Journal's editorial staff.

employees who have been made redundant and prohibition of dismissal of certain groups of employees. In order to execute the collective redundancy procedure swiftly and within the law, employers should pay special attention to legally mandated deadlines, the correct use of documents, the grounds under which they can legitimately make employees redundant and the criteria they select as reasons for dismissing employees. These criteria should be objective so that the employer does not violate laws prohibiting discrimination in employment. The most important issues that relate to collective redundancy are the timing and execution of arrangements with trade unions, or determination of the collective redundancy rules with employees’ representatives. If the employer reaches this stage of the collective redundancy procedure smoothly, the procedure may be shortened and the redundancies themselves may take place earlier. ●

INTERVIEW

COURTESY OF CIVIC PLATFORM

JANUARY 23-29, 2012

Mr Grupiƒski said the government’s reforms are going according to plan think only about their present economic situation, so they do not care much about retirement reforms. Nowadays it is necessary to prolong the retirement age and in my opinion it will lead to a healthier society. But in approaching the problem of prolonging the working period for women, there is definitely a more conservative approach. Maybe it has some roots in the old tradition of Polish chivalry towards women, without people being aware that such an approach today is anachronistic because it lowers women’s chances for self-realization. In your approach to ethical matters there are divisions among members of PO and PSL. What are your predictions regarding parliamentary support for the bill for in vitro fertilization and particularly its financing from the state budget? There have always been differences in our parties’ approaches to ethical problems. In the case of in vitro fertilization there were two proposals put forward by our MPs during the previous parliamentary term. The liberal proposal was prepared by Ma∏gorzata KidawaB∏oƒska and the conservative one by Jaros∏aw Gowin. There were also other proposals presented in parliament. A very liberal approach from leftist MP Marek Balicki and a total ban proposed by Law and Justice (PiS) MP Boles∏aw Piecha. In my opinion, the best strategy for achieving a compromise would be to start by dealing with very radical proposals, both very liberal and very conservative ones, and gradually to soften these radi-

cal views and work out a “golden center,” which will mean finding a compromise. But whether it will happen, I cannot predict. You have taken over PO’s parliamentary caucus during a time when the coalition has a very small majority in the Sejm. Do you think that you will be able to obtain the support of other parliamentary groups to push through some of the government’s proposals? I am in talks with members of other clubs and I think that in certain matters we could obtain the support of Palikot’s Movement (RP) and the Democratic Left Alliance (SLD) … but we face aggression and totally negative opposition from PiS, who are now additionally competing on a hard right radical front with the new rightist parliamentary causus, Solidarity Poland. So the Polish-Polish war will continue in parliament? In my opinion we have to be prepared that in the next three to four years, this parliamentary struggle will go on, as I do not see a bright spot on the horizon. There is a sharp confrontation between the government and PO on one side and PiS on the other, because PiS has now not only strengthened its euroskeptic stance but it has also started to raise its opposition to Poland adopting the euro. The chairman of the commission investigating the death of Construction Minister Barbara Blida, SLD’s Ryszard Kalisz, concluded that Jaros∏aw Kaczyƒski and Zbigniew Ziobro should be called before a state tribunal

for their alleged political responsibility in connection to Ms Blida’s death. But Mr Kalisz claims PO is avoiding the subject in parliament. What is your response to this accusation? We are not hiding from this issue and a group of PO MPs is dealing with this and in time they will make their conclusions and present them to the PO leadership. It is a very serious political issue, but we think that the motion presented by Mr Kalisz is too narrow, related only to Ms Blida’s death, so we will also have to take into consideration the conclusions of other parliamentary special committees which have investigated the issue. And only after analyzing other reports is it possible to decide whether there are legally valid findings to prepare the motion to bring to trial leading PiS politicians. Finally, how do you assess the current situation of PO’s parliamentary caucus? PO’s politicians are on the front line of Polish politics, fighting to push through difficult reforms, presenting our European policy at a time of crisis in the EU and dealing with a new situation in Polish politics where there are now four opposition parties in the Sejm. Our coalition partner, PSL, which has fewer seats than before, is also acting more nervously than during the previous term. But I think that PO’s parliamentary group is more stable than before and there are fewer internal divisions, so we are currently working quite efficiently. ●

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OPINION & ANALYSIS

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JANUARY 23-29, 2012

Behind the ECB’s wall of money Benedicta Mazinotto

Unlimited support In his early December address to the European Parliament, ECB President Mario Draghi stressed his commitment to unlimited support of banks to avert the risk of a credit crunch. The wall of money unleashed by the ECB just before Christmas should be seen as a measure matching that commitment. Mr Draghi left it up to national banks to decide whether to use the liquidity to buy high-yield government bonds. French President Nicolas Sarkozy and France’s central

loans go to creditworthy customers. This means that, like credit provided by Italian and Spanish banks over the last several months, most of the new cash will be lent locally to safe households and large established firms. That will allow bank markets to continue functioning, but it is unlikely to inject the type of stimulus that European economies now require.

bank (a member of the ECB) were less timid; they urged Italian and Spanish banks to buy their governments’ debt.

Rational decision The political logic behind such a plea is straightforward. If the banks proceed with purchases of their own government bonds, all public debt will be progressively renationalized, along with loans to the private sector, which undercapitalized banks have recently been providing only locally. The so-called “Sarkozy carry trade” is no solution to the systemic consequences of a sovereign-debt meltdown, but it would resolve a politically delicate situation, in which vulnerable eurozone governments hold foreign banks in just few countries to ransom. Greece taught France a lesson. Worryingly, the evidence so far is that banks have not used the cash, instead parking it at the ECB. The bank’s overnight deposit facility rose from €250 billion to €400 billion just after the extraordinary refinancing operation – and to €480 billion in recent days. That behavior reflects banks’ uncertainty, but leaving the SHUTTERSTOCK

hroughout the crisis period, the European Central Bank’s behavior has been conditioned by the tension between what it can do and what it is allowed to do. The ECB is the only institution in the European Union that is able to provide unlimited funding to governments, but its governing statute prohibits government bailouts. Nonetheless, the ECB has provided large amounts of liquidity to the financial system, indirectly softening the pressure on government debt refinancing. For 18 months, it has been buying government bonds – worth more than €200 billion ($254 billion) – on secondary markets under its Securities Market Program. Moreover, it has provided loans to the banking sector, recently launching a three-year refinancing operation that generated demand from euro-zone banks for €489 billion.

Bank buy back The alternative is the one urged by Mr Sarkozy and the Banque de France: purchases by Europe’s banks of their countries’ government bonds. Of course, it is difficult to imagine that banks will use all of the money to buy the same assets that some of them have been trying to sell over the past few months. But that does not mean that they won’t buy any of them. In fact, some of the €489 billion already has been used for that purpose. This should not come as a surprise. Italian and Spanish banks, which received funds from the ECB at a very low rate, can profit greatly from the high yields that their gov-

“The ECB’s wall of money is likely to support the real economy only mildly” money with the ECB is a loss-making operation that cannot be sustained indefinitely. Sooner or later, the banks will use the cash. The question is how. Banks’ immediate interest is to adjust to the new capital requirements and restore their balance sheets to financial health, which implies that they will use the ECB money in a way that enables them to meet this objective most cost-effectively. So, for example, if they use the cash to continue financing the private sector, they will ensure that

ernments’ bonds now offer. These investments can stabilize financing for governments while strengthening banks’ balance sheets. There is a caveat, though. Banks have bought only short-term assets, mainly with maturities of about three years (to match their liabilities with the ECB). This means that there is no appetite for supporting governments beyond what the ECB itself is willing to do. More importantly, the ECB is de facto the lender of last resort, while foreign banking systems are sharply reducing their exposure to risks abroad. The ECB’s wall of money is likely to support the real economy only mildly. By contrast, if banks use the money now parked at the ECB to continue buying short-maturity government bonds, that wall of money would have a large impact on eurozone countries’ financial inter-linkages. Instead of falling on foreign banks in just a few exposed countries, a default would land mostly on the ECB’s balance sheet, whose losses are distributed to all euro-zone central banks – a soft form of debt socialization that may well prepare the ground for Eurobond-type solutions. Benedicta Marzinotto is a research fellow at Bruegel and lecturer in Political Economy at the University of Udine. Copyright: Project Syndicate, 2012.project-syndicate.org

Global oil supply and tight oil – much ado about … something? Bartosz WiÊniewski

t’s little wonder that the security of the global oil supply so easily makes it onto the front pages and into the headlines. Some 87 million barrels of crude oil are consumed every day, and nearly half of it is shipped, with key maritime routes either originating in volatile regions of the globe, or leading through vulnerable transit chokepoints.

“While it is still something of an enigma, tight oil is here to stay” Last year, we were reminded of this once the anti-Gaddafi revolt broke out, and the world market was left without some two million barrels of daily output from Libyan oilfields. This shortfall was quickly made up for by increased production from other regions. However, 2012 began with mounting tension in the Persian Gulf, with Iran threatening to cripple

the flow of nearly one-fifth of the world’s oil supply by shutting down the Strait of Hormuz. Growing turmoil in Nigeria could put even greater stress on markets. One of the familiar themes in light of these and other events has been increased talk about increasing the effectiveness of the way in which oil is consumed, tapping into new deposits or expanding power generation from other resources. That was the case back in the 1970s, when the world’s top consumers and importers of oil were forced to adapt to the reality shaped by the OPEC-administered embargo. This time around, arguably the biggest beneficiary of this mechanism has been the so-called “tight oil” member of the unconventional oil family (see story, p. 5). Throughout 2011, upbeat reports have heralded a fundamental shift in the balance of power on the global oil market, away from producers and in favor of consumers and importers, with tight oil playing the role of the game-changer. While this may be somewhat too optimistic, there are good reasons to pay attention to tight oil. Its ultimate

potential is still unknown, and estimates of reserves are woefully imprecise – the only preliminary surveys were made in the United States, which are said to hold anywhere from 5 billion to 34 billion barrels of oil. Granted, that’s not particularly impressive given the roughly 230 billion barrels of Saudi oil. However, what has caught the attention of energy-market analysts was the dynamics of tight oil production in the US. According to the International Energy Agency, it rose twofold between 2010 and 2011, and is projected to surge by a further 300 percent in the next four years. By 2016, it is expected to amount to one quarter of the total domestic production of oil in the United States. Longer-term forecasts are even more bullish.

Oddly familiar By now, this may sound oddly familiar. After all, didn’t America go through a similar process a few years ago, when it took its first steps towards tapping unconventional gas, most notably shale gas?

Indeed, tight oil is nothing more but a side-product of the shale revolution. Tight oil is crude oil locked in layers of rock with low permeability, whose porosity needs to be mechanically enhanced to allow the resource to get out. In order to reach it, you need roughly the same technology that is necessary to extract shale gas, i.e. horizontal drilling and hydraulic fracking. Tight oil became economical because of advancements in these technologies, and thanks to sustained high oil prices on the world market. How important a role could tight oil play in the long run? No one can reasonably expect it to make any country self-sufficient in terms of crude-oil supply, be it the United States or any other net importer. For one thing, oil is a global commodity, so the balance of worldwide supply and demand will continue to affect everyone. What follows is that no one can become genuinely insulated from price spikes spurred by the instability in the Middle East or uncertainty about the security of the sea lanes. Moreover, there probably isn’t enough of the resource to put the

Saudis, the Iraqis or the Venezuelans out of business. However, while it is still something of an enigma, tight oil is here to stay, especially considering the inevitable increase of global oil demand. The latest World Energy Outlook, an annual go-to report of the IEA, forecasts an increase of demand from the current levels to 99 million barrels by 2035. Most of this is going to be covered by increased production in the Persian Gulf, especially following the depletion of the less productive oil fields, but tight oil is seen as contributing as much as 10 million barrels a day. By that time, it’s unlikely that only the United States will be reaching out for tight oil, which is why these estimates could turn out to be too modest. If the shale gas revolution has taught us anything, it’s that what began as a fairly limited operation quickly became a global phenomenon. ● Bartosz WiÊniewski is a research fellow at the Polish Institute of International Affairs. pism.pl

OPINION & ANALYSIS

JANUARY 23-29, 2012

www.wbj.pl

Paris and Berlin are working hard to increase Polish euroskepticism Remi Adekoya

would be difficult to find a government on the continent that has taken a more pro-EU stance than Poland’s. Throughout the country’s six-month presidency of the EU, Prime Minister Donald Tusk and Foreign Minister Rados∏aw Sikorski repeatedly voiced their commitment

“The Polish right said Mr Tusk would get nothing for playing the nice guy” to the 27-nation bloc, saying the solution to the continent’s sovereign-debt crisis was “more Europe, not less.” Mr Sikorski even advocated the creation of a European federation under the leadership of Germany during a much-publicized speech in Berlin last year. Mr Tusk and Mr Sikorski were criticized and ridiculed by right-wing politicians and media in Poland for being ready to give up the country’s

at the meetings. His critics sneered with doubt, and the eurozone’s decision-makers are now proving them right. When it was revealed by the media last week that the latest draft of the fiscal union treaty did not envisage non-euro countries like Poland being allowed to attend euro summits, Mr Tusk admitted defeat. “You can’t win them all,” he said. “We told you so,” his critics gloated. Most Poles just wondered why Paris and Berlin seemed to want to marginalize such a staunch ally.

sovereignty in return for nothing but a pat on the back by their “German masters.”

Told you so Indeed, Mr Tusk received lavish praise from European politicians for his stance, with the current European Parliament president Martin Schultz (a German) saying the Polish presidency was “one of the very best presidencies we have had.” The Polish right, which tends to view praise for Polish politicians by their German or French counterparts as a sure sign that they are not protecting Warsaw’s interests, said Mr Tusk would get nothing for playing the nice guy. When the PM said Poland would definitely join the proposed fiscal pact and contribute to the IMF fund meant to assist troubled euro-zone countries, the same critics said he was silly to sign up for a deal whose content no one knew yet. But since decisions made at eurozone summits would affect non-euro EU members, Mr Tusk promised he would fight for Poland to be allowed to participate (not necessarily vote)

Fighting spirit Since then, it seems Mr Tusk has regained his fighting spirit, saying after a meeting with the Italian Prime Minister Mario Monti that cooperation between Rome and Warsaw would “serve well to complement the political initiatives by Paris and Berlin at a time when the new rules in the European Union are being worked on.” Even more of an outright challenge to France and Germany were his words to Italian newspaper Corriere della Sera that “Europe should

not be left to two capitals” and he did not want “exclusive clubs” in the EU. The latest draft of the treaty now says that non-euro nations can attend the summits once a year. That would probably amount to Poland being invited to the summits where no important decisions are made. Although Mr Sikorski has said the negotiations are still ongoing and that “the latest drafts are going in the direction of Poland’s postulates,” the final treaty might still turn out to be an embarrassment for the Polish government. Mr Tusk’s critics now feel vindicated. They say if he had been tougher from the beginning, Poland would have gotten all it wanted. That, of course, is nonsense. When the rightwing Law and Justice (PiS) was in power from 2005-2007, they practiced the kind of politics PO’s critics are advocating, banging their fists on the table any time they didn’t get their way. What did that get Poland? Precious little.

German Chancellor Angel Merkel and French President Nicolas Sarkozy have treated Donald Tusk. Mr Tusk’s actions seemed perfectly reasonable. He showed his intention to join the fiscal union and chip in for the IMF fund, in order to be able to “participate” at euro summits. But the powers that be – especially France, if reports are correct – seem to think that is asking too much. They have humiliated Mr Tusk, making him seem naïve and gullible. This debacle will now make the prime minister more wary of Berlin and Paris. No strong relationship can be built on mistrust. What’s the big deal about attending euro summits anyway? Are there secret, major decisions going to be made there that Paris doesn’t want Warsaw to know about? If not, then doing everything to shut Poland and other non-euro members out of participating in euro summits doesn’t make much sense. ● Remi Adekoya is politics editor of Warsaw Business Journal. Read his blog “The business of politics” at wbj.pl

Once bitten … But it is not surprising that this view is gaining traction, considering the way

A higher retirement age: it’s not a choice Andrew Kureth

raise Poland’s retirement age or not? Listening to some of Poland’s politicians debate the issue, it’s as if Poland didn’t have a huge demographic crisis looming. Except it does. Poland, like most other European countries, isn’t producing enough people to replace the ones it has. According to the CIA’s World Factbook, it has a negative population growth rate of -0.062 percent. There are 1.3 children born to every woman – it ranks behind European colleagues such as Sweden and Denmark, and even CEE countries like Hungary and Slovakia on this count. China has a one-child policy, and still ranks higher than Poland in both population growth and fertility rate. Poland’s median age is about 37 years old and like the rest of the developed world, life expectancies in Poland are increasing. Quite simply, there are very soon going to be many more people who are retired, and fewer who will be working to support them.

The numbers don’t work Now, consider Poland’s finances. While still in better shape than those of many other EU countries, they aren’t inspiring. The deficit for 2011 was around 5.6 percent of GDP – far above what the EU considers “safe” at 3 percent – while Poland just barely managed to keep debt below 55 percent of GDP. Trying to support a significantly higher population of retirees would unquestionably have a negative effect. Next, remember the relatively low pensions that retirees already receive. Poles who retire in the future will be expecting much more than their parents or grandparents are getting now. And because of those longer life expectancies, they’ll be receiving those higher pension payments for longer. While no one wants to be forced to work for longer than they’d like, there simply is no other choice than to raise the retirement age. Two additional years (from the age of 65 to 67 for men) seems a small price to pay in

order to keep the country from going bankrupt. Indeed, women will have it slightly tougher under the government’s plan, with their retirement age going up seven years from the age of 60 to 67 – but that will be implemented over a period 20 years longer than for men. The plan seems fair. Leszek Balcerowicz, a former finance minister, central bank governor, and the architect of Poland’s post-communist reforms – and often a vocal critic of the Tusk government – has praised the reforms.

Non-starters Of course, that hasn’t stopped Mr Tusk’s political foes from opposing the plan (see cover story, pp.12-13). The Law and Justice party wants to put its head in the sand, and pretend no changes need to be made. The flailing leftist party Democratic Left Alliance wants to hold a referendum. Even the Polish People’s Party – the coalition partners of Mr Tusk’s Civic Platform in government – have come up with an alternative plan. They

would like to see the retirement age for women reduced by three years for every child they have. Not only would this make it harder to save money on pension payouts, it raises all sorts of difficult questions: What about single dads who raise their children? What about families who adopt children? Why should only childbearing women be favored in this way? A referendum is also a nonstarter. Of course raising the retirement age is unpopular. But so is cutting other entitlements and raising taxes. A combination of all of these will probably have to be implemented to get Poland’s finances on the straight-and-narrow, but none of them would pass a referendum. Sometimes, the job of politicians is to implement unpopular policy for the good of the people. California puts many such measures to a referendum – look at where it’s got that state’s finances. The state is currently considering both budget cuts and

rises in taxes in order to fill a hole of $9 billion. We can tinker with the specifics. There may be ways to make Mr Tusk’s plan more politically palatable

“Poland isn’t producing enough people to replace the ones it has” while keeping the savings in place – but the core idea is one that Poles cannot run away from. The retirement age must be raised. Better to do it now than later, when more draconian measures may be necessary. ● Andrew Kureth is editor-in-chief of Warsaw Business Journal. Read his blog “From the editor” on wbj.pl

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COVER STORY

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Production growth above expectations

Pension reform

Proposed pension reforms unpopular, facing obstacles

Industrial production in Poland grew by 7.7% y/y in December 2011, according to data from the country’s Central Statistical Office (GUS). This was significantly higher than the market consensus of 6.5%. However, in month-onmonth terms, output decreased by 4.9%. Growth of 7.6% y/y was recorded in mining and quarrying output, with the export-oriented furniture and metals industries also seeing particularly strong growth – of 22.9% and 15.5% respectively.

Remi Adekoya

The prime minister has said he wants to increase the retirement age in Poland, but will he have the political muscle to make it happen? When Prime Minister Donald Tusk addressed parliament last November setting out his government’s plans for the next four years, he listed a slew of reforms he was planning to implement. None of them, however, raised more controversy than his plan to increase the retirement age in Poland to 67 for both men and

Polish firms strong Despite the turmoil in the global economy, Polish businesses performed strongly in 2011, a study indicates. According to a report by research firm D&B Poland on 300,000 businesses, small companies employing up to nine people recorded the most significant improvement last year. Medium-sized companies improved their rating by only 3.9% y/y. However, large companies enjoyed the best results, with 67.1% rated good or very good.

women. Mr Tusk said that Polish men, who currently retire at 65, will have to work two years longer, following several incremental increases, by 2020. More controversially, women, who can currently retire at 60 in Poland, will also have to work until they are 67, albeit by 2040. The gradual increas-

ing of the retirement age is planned to begin next year. Although economists have been arguing for years that increasing the retirement age in Poland is necessary, Mr Tusk’s announcement still came as a surprise to many. The PM is known for playing it safe, for not risking the ire of voters by proposing reforms that deal with prickly issues such as pensions. A TNS OBOP opinion poll taken after Mr Tusk’s speech

Used-car sales up

left no doubt as to what Poles think about the idea: 80 percent of those polled said they opposed an increase of the retirement age. But Donald Tusk had little choice. He needed to make an announcement that financial markets would receive positively. Besides, the problem of a social security system threatened by bankruptcy is one which many other European countries are having to face up to as well, due to aging populations across the continent. Indeed, the painful truth that retirement ages need to be increased is no longer news elsewhere in Europe. Back in 2007, Germany decided to raise its retirement age to 67; Denmark did the same a year earlier, while the UK announced in 2010 that its citizens will have to work until they are 68. Even Italy, a nation which prides itself on “working to live, not living to work,” has increased its retirement age to 67. Next month, the European Commission is due to publish a white paper on pension systems in Europe, in which it will stress the need for countries to raise their retirement ages in order to meet the twin threats of unfavorable demographic changes and the debt crisis. So what are the chances that Mr Tusk will manage to implement his proposed reforms successfully, and how much money will it save?

Road blocks

COURTESY OF WIKIMEDIA COMMONS

A total of 725,000 used cars were imported to Poland last year, significantly more than the 280,000 new cars that were sold in the country in the same year. However, the number of imported second-hand cars was still lower than the record 1.1 million vehicles imported in 2008, reported Dziennik Gazeta Prawna. As a result of this high demand for used vehicles and a drop in interest in new vehicles, Polish car dealers are becoming increasingly likely to develop second-hand sales networks. ●

JANUARY 23-29, 2012

A recent opinion poll showed 80 percent of Poles oppose Mr Tusk’s pension reform plans

Labor Minister W∏adys∏aw Kosiniak-Kamysz, who is responsible for preparing the legislation, told the media this month that the law will be ready “very soon … during this winter.” But the government will

have to overcome significant road blocks before it will be able to pass its proposal. Its coalition partner, the Polish People’s Party (PSL) has come up with its own proposals, saying that for each child a woman has, she should be able to work three years fewer. So, for example, if a woman has two children, she would be able to retire when she is 61 years old, according to PSL’s proposal. Mr Kosyniak-Kamysz, who is himself from PSL, has said he “likes” his party’s proposal. This puts the senior coalition partner, Mr Tusk’s Civic Platform (PO), in a tough spot, since its own coalition partner is now publicly offering an alternative reform that would almost certainly be more popular with the public. The biggest opposition party, Law and Justice (PiS), has said it is completely opposed to increasing the retirement age. It is still not clear yet where Palikot’s Movement (RP), the thirdlargest party in parliament, stands on the proposal. Meanwhile, last week the Democratic Left Alliance (SLD) has called for a referendum on the matter, arguing that on such an important issue Poles should be able to decide whether the government’s proposal is to be implemented. The move is supported by major labor unions such as Solidarity, which is currently attemping to collect the 500,000 signatures that are needed for petitioning parliament to call such a referendum. However, the chances of a referendum on the issue are remote, because a parliamentary majority would be required to sanction one. The

COVER STORY

JANUARY 23-29, 2012

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Legal Eye

Poland’s pension system Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com Prime Minister Tusk’s government has recently called for an increase in the retirement age to 67 for both men and women, as well as to do away with most early retirement perks reserved for specific professions, such as the uniformed services and miners. The current regulations generally permit a male employee to collect retirement benefits from age 65, while a female employee may retire five years earlier, at age 60. An increase in the retirement age, argues the Prime Minister, coupled with scrapping the special treatment currently afforded to miners, police officers and farmers, would save the budget nearly 10 billion zloty per year.

SHUTTERSTOCK

History

Poland’s looming demographic crisis leaves its policymakers with no choice but to reform the pension system, experts say government’s junior coalition partner, while having its own suggestions, is unlikely to go as far as to support such a move, which would amount to open defiance of the prime minister. But does reducing the number of years women have to work relative to the number of children they have make economic sense? Some experts think it’s a pro-active policy that gets to the heart of dealing with the looming demographic issue. But Grzegorz Maliszewski, chief economist of Bank Millennium doesn’t agree. “This would be introducing a complication to the system. Any exception to the general rule is not positive, the simpler the law, the better,” he said. Mr Maliszewski stressed that raising the overall retirement age in Poland is a much-needed move. “This reform supports our fiscal consolidation in the long

term. It also reduces the increasing of debt and should bring significant results,” he added. The Labor Ministry has said that although it expects savings amounting to hundreds of millions of z∏oty within the first few years of the introduction of the pension changes, by 2020 the reforms should have saved the state over z∏.10 billion and after 2020 it should be saving at least that much every year.

More workers, more unemployment? Piotr Kuczyƒski, chief analyst for the financial advisory firm Xelion, wrote on his blog that “it seems obvious that if we increase the supply of workers artificially by increasing the retirement age while the demand for work doesn’t change, then unemployment must rise. Also the cost of work, meaning our salaries, could drop,” he wrote.

But Kaspar Richter, senior economist for Poland at the World Bank, disagrees. “We had this argument in the 1980s. It was believed then that allowing people to retire earlier would keep unemployment down, well it hasn’t,” he said. Mr Maliszeswki shares Mr Richter’s view. “Looking at other countries which have increased their retirement ages, there is no evidence that it increases unemployment and even if there is such an effect, it will only be in the short term,” he said. Jaros∏aw Janecki, chief economist at Société Générale, meanwhile, believes that from the macroeconomic point of view, any negative effect on the labor market would be offset to a larger extent by the increased disposable income that senior workers would have, due to them having remained on the labor market for longer.

A tough sell, but doable Prime Minister Donald Tusk is almost certainly going to have a tough time ensuring that the final piece of legislation remains consistent with the reforms he suggested in his November speech. Moreover, his popularity is likely to dip, at least in the short term. To win over the hearts and minds of the electorate he will need to explain more clearly what the advantages are of working longer. Employees can spend more years earning for their retirement, the government will spend less in benefits, and the budget will be in better shape. All of this, he will need to emphasize, should help the economy to grow. If he also points out that other Europeans will eventually have to follow the same path, Poles may slowly come around to the idea that retiring later might not be such a terrible thing after all. ●

The current discussion over Poland’s retirement system follows more than five years of legal debate and judicial rulings. On October 23, 2007, the Constitutional Tribunal declared a portion of Poland’s retirement system unconstitutional due to the different treatment of men and women with respect to the conditions under which a person could seek early retirement and draw a public pension. Specifically, the Tribunal objected to the fact that a male employee had to prove a disability to qualify for early retirement at age 60, while a female employee did not have to provide evidence for any disability in order to seek early retirement at age 55, finding that the requirement violated Article 33 of the Constitution. The Tribunal was careful to avoid ruling on the larger issue of whether the use of different retirement ages for men and women was itself constitutional, and instead limited its ruling to the criteria used in qualifying for early retirement. Three years later, in 2010, the Constitutional Tribunal finally took up the issue of whether the use of different retirement ages for men and women was constitutional. The ruling at the time surprised many legal scholars. On July 15, 2010 the Constitutional Tribunal upheld Poland’s use of different statutory retirement ages for men and women. At the

same time, however, the Tribunal issued a press release stating that the use of two different statutory retirement ages for men and women, although legal, was not an “optimal” solution and urged the government to eventually equalize the retirement age for both sexes.

Current retirement system Poland’s current retirement system is divided into two systems: Old and New. The Old System applies to all workers born before 1949. The New System applies to those born after. Under the Old System, a male worker may generally retire at age 65 following at least 25 years of work and a female worker may retire at age 60 following at least 20 years of work (maternity leave is included in this calculation). In many cases the retirement age may be lowered. For instance, a female worker may retire as early as age 55 if she has worked for a period of 30 years. A male worker, however, may only retire early at age 60 following 25 years of work and he is declared disabled. The Constitutional Tribunal found this specific condition unconstitutional in its 2007 ruling, but despite the ruling this provision remains as is. The New System eliminates the option of early retirement permitted under the Old System, but still maintains the age of retirement for men at 65 and 60 for women. Under the New System, the right to collect a retirement benefit is not tied to the number of years worked as under the Old System, but rather is determined by the total amount of contributions paid into the system by each worker throughout his or her career, in effect creating an incentive for each person to work longer in order to maximize his or her retirement benefit.

Government proposal The government’s proposal to increase the retirement age for all workers to age 67 would appear to be in line with the Constitutional Tribunal’s recommendation for Poland to eventually equalize the retirement ages for men and women. ●

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The Plac Unii mixed-use high-rise project in Warsaw has received financing, a contractor and a key tenant 16

The portfolio of the Arka BZ WBK Fundusz Rynku NieruchomoÊci FIZ property fund is up for sale

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

Mokotów Nova phase II opens Developer Ghelamco Poland has finished construction on the second of two phases of its Mokotów Nova office project in Warsaw, delivering an additional 15,000 sqm of space to the capital’s Mokotów district. The complex is located on Warsaw’s ul. Wo∏oska and is, with its total of 40,000 sqm of class-A office space, one of the largest office developments in that part of the city. The investment is expected to be BREEAM-certified by the end of Q1 2012. ●

In this issue TriGranit in Poznań . . . . . . . . . .15 Galeria Jagiellońska mall . . . . .15 Goodman’s plans . . . . . . . . . . . .16 Plac Unii financing . . . . . . . . . . .16 Budimex builds for PGNiG . . . .16 Galeria Miodowa scheme . . . .16 Property-related stocks . . . . . .16 Warsaw office market . . . . . . .17 CE investment . . . . . . . . . . . . . .17 Arka portfolio sale . . . . . . . . . . .17 PPG in Russia . . . . . . . . . . . . . . .18 New residential schemes . . . .18

TriGranit secures financing for its largest Polish project The company has officially launched construction on a new Poznaƒ shopping center scheme Real estate developer and investor TriGranit has obtained €119 million in bank financing from a consortium of banks comprised of Bank Zachodni WBK, Raiffeisen Bank Polska, Nordea Bank Polska, BRE Bank and HYPO NOE for its Integrated Transport Center in Poznaƒ. The mixed-use development, whose total value, including tenants’ investment, will amount to some €250 million, will comprise a railway station, a bus station and a shopping mall. Construction on the latter structure was officially launched during a ground-breaking ceremony last week. The investment, which is scheduled for completion in Q4 2013, is being realized in

The Integrated Transport Center will take a total of some €250 million to build partnership with Polish State Railways, which has provided four hectares of land. TriGranit is responsible for all devel-

opment activities pertaining to the construction of the scheme. “Poland has always been

our flagship destination for property development activity. Our investment in Poland has reached around €1 billion and

the total completed development area is over 500,000 sqm,” TriGranit CEO Árpád Török said in a statement. He added that in the case of the Poznaƒ project the company is using the experience in transforming railway stations into new city centers that it gained during the development of schemes including WestEnd City Center in Budapest. Hungarian-majority owned TriGranit was established 15 years ago and is currently present in seven countries in Central and Eastern Europe. The company’s pipeline includes mixed-use developments valued at over €4 billion, as well as a number of public-private partnership investments. In Poland, TriGranit’s completed projects include the Silesia City Center shopping center in Katowice, the Bonarka City Center shopping mall in Kraków and the first phase of the B4B office project in the latAdam Zdrodowski ter city.

Commercialization underway on Józef Wojciechowski’s latest commercial project DTZ is looking for tenants for the planned Galeria Jagielloƒska shopping center project which JW Wind and Jagiellonia Bia∏ystok Sportowa will construct in the eastern Polish city of Bia∏ystok. JW Wind belongs to Polish billionaire Józef Wojciechowski, who is also the main shareholder in developer and contractor JW Construction Holding. The firm is the new investor in the Galeria Jagielloƒska development in which the Irish Investment Group was originally involved.

After the original investor pulled out, the concept of the planned mall, which is to be located between Bia∏ystok’s ul. Jurowiecka and ul. Pi∏sudskiego, was re-assessed. Instead of the previously planned 200 stores, the project is now expected to host some 150 tenants on its 50,000 sqm of GLA. Apart from shopping opportunities, the investment will offer entertainment facilities including a multiscreen movie theater. Part of the revenues from the shopping center’s operations will support

the Jagiellonia Bia∏ystok sports club. “The planned investment will, thanks to its scale and multifunctional character, become the dominant project in Bia∏ystok,” Piotr Wasilewski, retail spaces team director at DTZ, said in a statement. The architectural concept of the Galeria Jagielloƒska project has been provided by the Chapman Taylor architectural firm. Construction on the mall is scheduled to launch in the second half of this year. Adam Zdrodowski

COURTESY OF DTZ

Retailer IKEA has acquired 2.2 hectares of land in Opole from retail developer Helical Poland. The land is adjacent to the city’s Turawa Park 40,000-sqm shopping center and retail park which was developed by Helical and was subsequently sold to Standard Life Investments. “We are very pleased that IKEA has bought land next to our shopping center. We hope that soon a large IKEA [store] will be developed here, reinforcing this part of Opole as the premier retail destination,” Jonathan Tinker, managing director of Helical Poland, said in a statement.

JANUARY 23-29, 2012, LI 17/03

Mixed-use developments

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IKEA buys land

•

Galeria Jagielloƒska will host some 150 tenants

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LOKALE IMMOBILIA – REAL ESTATE

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Investment financing

Goodman to develop 200,000300,000 sqm of space in 2012

Plac Unii development still on track, thanks to bank financing

Industrial developer Goodman Poland plans to develop from 200,000-300,000 sqm of logistics space in 2012. The total value of the investments is estimated at approximately €70 million-€120 million. The new developments will most likely be held by the Goodman European Logistics Fund (GELF). GELF raised €350 million of capital in December and Poland is one of the investment fund’s target markets. “One of our main goals for 2012 is to build a logistics

COURTESY OF BBI DEVELOPMENT

BBI Development has received a €105 million loan from Bank Pekao to help pay the contractor

Closing price on Jan 19

of sites for further projects is being planned. “Additionally, we plan to acquire sites with an area of five to 20 hectares [each] where we will be able to develop up to 100,000 sqm of warehouse space,” Mr Ciesielczak said. Currently, the developer has plots across Poland which will enable it to build a total of some 875,000 sqm of new space. The two main areas in which the company is planning to acquire more land are Upper Silesia and Poznaƒ. Adam Zdrodowski

Plac Unii’s three buildings will be linked by a glass roof 30 meters above the ground had secured a key tenant to occupy nine floors in the Plac Unii tower and retail premises on the ground floor, totaling some 10,300 sqm. A spokesperson for BBI would not disclose the name of the tenant when contacted by Lokale Immobilia, but said it was a well-known firm operating in the banking and insurance sector.

The completed Plac Unii project will consist of three buildings connected by a glass roof at a height of 30 meters above the ground. In addition to offering around 40,000 sqm of office space and 16,000 sqm of retail and commercial space, the development will also contain restaurants, cafes and various service points. Veronika Joy

Property-related stocks Security

park in Upper Silesia which is one of the last regions in Poland where we do not yet have a presence,” B∏a˝ej Ciesielczak, Goodman’s country manager for Poland, said in a statement. He added that the company will also launch construction and commercialization of the Pomeranian Logistics Centre in Gdaƒsk in the first half of this year. With its target area of 500,000 sqm, the project is Goodman’s largest investment in the country. Moreover, the acquisition

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

78.00

-0.51

64.00

109.20

-22.77

25,530,098

1,991.35

CELTIC

16.51

-1.73

15.55

24.89

-15.33

34,068,252

562.47

DOMDEV

29.54

4.23

23.50

50.80

-37.68

24,560,222

725.51

ECHO

3.80

6.74

3.05

5.55

-18.98

420,000,000

1,596.00

ELBUDOWA

102.00

3.24

87.00

168.60

-39.10

4,747,608

484.26

ENERGOPLD

1.99

-2.45

1.81

4.10

-45.92

70,972,001

141.23

ERBUD

18.55

-4.87

14.65

53.20

-65.71

12,644,169

234.55

GANT

8.18

7.77

5.85

17.00

-52.74

20,499,953

167.69

GTC

8.84

10.64

7.91

21.95

-59.82

219,372,990

1,939.26

HBPOLSKA

0.95

3.26

0.70

2.79

-67.01

210,558,445

200.03

JWCONSTR

6.86

5.54

4.36

15.50

-51.17

54,073,280

370.94

LCCORP

1.01

5.21

0.85

1.69

-32.67

447,558,311

452.03

MARVIPOL

9.13

2.01

7.22

10.09

-10.84

36,923,400

337.11

MIRBUD

2.26

7.11

1.94

4.75

-49.33

75,000,000

169.50

MOSTALWAR

17.11

5.36

15.40

52.70

-68.31

20,000,000

342.20

MOSTALZAB

1.60

13.48

1.07

3.00

-44.25

149,130,538

238.61

ORCOGROUP

15.48

1.98

14.00

40.00

-45.87

17,053,866

263.99

PBG

79.50

-3.52

56.05

208.00

-61.58

14,295,000

1,136.45

PLAZACNTR

2.50

0.40

1.80

5.15

-43.82

297,174,515

742.94

POLAQUA

5.05

-5.61

4.53

20.60

-72.70

27,500,100

138.88

POLIMEXMS

1.73

-2.81

1.23

3.89

-54.59

521,154,076

901.60

POLNORD

15.40

6.65

11.03

33.55

-53.32

23,798,439

366.50

RANKPROGR

9.99

2.99

8.60

13.60

-7.41

37,145,050

371.08

ROBYG

1.19

-2.46

1.04

2.13

-37.04

257,390,000

306.29

RONSON

0.92

8.24

0.77

1.58

-37.84

272,360,000

250.57

TRAKCJA

1.23

17.14

0.65

4.00

-68.86

232,105,480

285.49

ULMA

60.00

-6.76

57.00

88.00

-27.71

5,255,632

315.34

UNIBEP

5.97

3.83

4.47

9.94

-40.00

33,927,184

202.55

WARIMPEX

3.45

9.52

2.95

10.89

-63.72

54,000,000

186.30

ZUE

7.16

17.38

5.07

14.54

-48.86

22,000,000

157.52

COURTESY OF NBS COMMUNICATIONS

Developers BBI Development and Liebrecht & Wood have received a €105 million loan from Bank Pekao for a specialpurpose investment vehicle (SPV). This will enable the SPV to complete payment for the construction of the third of three buildings in the mixeduse Plac Unii development. Construction of the 90meter tower, which is located on a triangular plot between ul. Waryƒskiego, ul. Pu∏awska and ul. Boya ˚eleƒskiego, is set to be completed by October 2013. Funding for the entire investment had not been settled prior to the developers receiving the loan – they had previously only had enough to pay contractor Warbud until March this year. “We have the money to pay for Warbud’s construction and to have the project ready by October 2013,” said Micha∏ Skotnicki, CEO of BBI Development. BBI also announced that it

JANUARY 23-29, 2012

The Pomeranian Logistics Centre will be Goodman’s largest investment in Poland

Budimex to build mixed-use complex for PGNiG subsidiary PowiÊle Park, a company belonging to the PGNiG Capital Group, has selected construction firm Budimex as the general contractor of an officeretail-residential complex that will be built near the intersection of ul. Kruczkowskiego and ul. Ksià˝´ca in Warsaw’s central district. The value of the agreement amounts to z∏.173 million, with

construction expected to launch in the upcoming weeks and finish after 24 months. The details of the investment, including its size and architectural design, are to be revealed later this year. For now, it is known that the planned development, which has been designed by the APA Kury∏owicz & Associates studio, will include a class-A

office building and a complex of residential buildings with upper-standard apartments. The planned office building will house Mazowiecka Spó∏ka Gazownictwa, another company from the PGNiG Capital Group, and will feature modern eco-friendly architectural solutions and technologies, PowiÊle Park has revealed. Adam Zdrodowski

Construction launches on PA Nova’s Galeria Miodowa mall Developer PA Nova has recently launched construction on its Galeria Miodowa shopping center in Kluczbork, southwestern Poland. The 11,000 sqm investment, the concept of which was designed by the Vsf Creative architectural studio, will feature a single-level mall and a 4,000 sqm retail park. “The concept features a predominantly timber and steel facade to emphasize both the modern and natural attributes of the scheme,” Vsf Creative wrote in a statement. Anchored by a Tesco food

store, the Galeria Miodowa mall and retail park will fea-

ture nearly 30 stores, as well as GP parking for 350 cars.

COURTESY OF VSF-CREATIVE

Galeria Miodowa will feature a mall and a 4,000 sqm retail park

LOKALE IMMOBILIA – REAL ESTATE

JANUARY 23-29, 2012

www.wbj.pl

Office space

Record demand for office space in Warsaw in 2011 Take up in Poland’s capital beat the record levels set a year earlier Demand for office space in the Polish capital continues to impress, with a record-breaking level of 573,000 sqm of take-up last year, according to a report released last week by Jones Lang LaSalle. That represented an increase of 4 percent on 2010, the previous record-setting year. Pre-lease deals made up 21

percent of the take up in 2011. The biggest lease deal in terms of area was incumbent telecom Grupa TP’s lease of 43,700 sqm in the under-construction Miasteczko Orange complex in the capital’s Ochota district, according to the Warsaw Research Forum. Next on the list was the renegotiation of a leasing contract for Ernst & Young involving 11,000 sqm in the Rondo 1 building, followed by a lease contract for Grupa Orlen for

ural result was a rise in rents. Prime office space in the Warsaw city center now goes for €22-25 per sqm per month. Indeed, the report said that some triple-A buildings quote rents even higher than that. Meanwhile, the best non-central locations, such as Mokotów, are being leased at €15-15.50 per sqm per month.

space totaling 9,100 sqm in the Senator building. “We are of the view that the situation on the demand side in Warsaw will remain positive throughout 2012,” JLL analysts said in their report. The study pointed to stable vacancy of 6.7 percent in Warsaw (6.1 percent in the CBD, 7.1 percent in the city center outskirts and 6.7 percent in non-central locations), and with a record low delivery of supply, at 120,000 sqm, the nat-

kets as well, with Kraków and Wroc∏aw taking a “clear lead” in terms of occupier activity. In just the first three quarters of 2011, demand in Poland’s regional cities had outstripped that of the entire year 2010. The annual take-up in regional markets reached nearly 280,000 sqm, with 50,000 sqm of that coming in the fourth quarter.

In terms of supply in secondary cities, 74,000 sqm was brought to the market in Q4, 2011, the most since Q2 2010. However, the authors noted that some 50 percent of that came from just three buildings. Interestingly, Kraków has become the first regional city where modern office stock exceeds 500,000 sqm. Andrew Kureth

Regions resilient The report pointed to a strong year for Poland’s regional mar-

Warsaw

Kraków

Wrocaw

Tri-city

Katowice

Poznaƒ

¸ódê

Total Stock (sqm)

3,597,000

501,400

372,700

349,650

253,800

243,800

228,800

Completions in Q4 2011 (sqm)

31,850

20,800

3,500

20,900

3,600

6,500

16,200

Under Construction Q4 2011 (sqm)

592,000

48,050

97,250

66,850

40,800

53,500

27,000

Vacancy Rate Q4 2011 (%)

6.7

8.0

3.4

8.4

11.5

9.5

19.1

Source: Jones Lang LaSalle

Investment market

Central European real estate investment volumes double in 2011 Poland boasted the largest volume but the Czech Republic saw the biggest growth Investment activity in Central Europe more than doubled year-on-year in 2011 with a total of €6.1 billion invested in the core markets of Poland, the Czech Republic, Slovakia, Hungary and Romania last year, according to a recent report by Cushman & Wakefield. Approximately €2.9 billion was invested in the region in 2010, the study showed. With €2.5 billion invested in the country in 2011, Poland remained the region’s leader, but it was the Czech Republic that saw the largest y/y increase in investment volumes, from €479 million to €2.2 billion. The first and third quarter of last year saw signifi-

cant investment activity in Central Europe, but in Q4 momentum was lost as the latest euro-zone crisis emerged. Sector preferences remained largely unchanged with retail, office and industrial investment accounting for 40 percent, 37 percent and 15 percent of the total investment volume, respectively. CA Immo, AEW Europe, Atrium, Unibail Rodamco, Heitman, Deka, Union, Invesco, ECE, Meyer Bergman and Black-

stone were among the most active players. “Most CE markets in 2011 experienced a significant increase in activity due to much improved investor appetite and a reasonable supply of quality assets. … Given the more difficult financing environment, we don’t expect 2012 volumes to match the previous years; our forecast is around €5 billion,” Charles Taylor, partner at Cushman & Wakefield, said in a statement.

“Investor sentiment remains positive for Poland and the Czech Republic but everyone is looking hard at Hungary to see if this will be the next EU domino to fall and if it does, whether it takes others in CE countries down with it or instead turns the pressure up on Western markets like Austria and Greece, whose banks are heavily exposed to the region,” Mr Taylor added. Adam Zdrodowski

Building investments CE investment volumes, 2010-2011 (in € million) Sector

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Office

225

381

176

320

844

146

717

600

Retail

107

221

484

637

245

310

1,262

629

Industrial

541

100

196

Other

116

118

332

Source: Cushman & Wakefield

COURTESY OF BRANDLAB

A review of Poland’s main office markets

Miasteczko Orange, Warsaw’s biggest office deal in 2011

BZ WBK TFI puts portfolio up for sale The BZ WBK TFI investment fund is selling the portfolio of the Arka BZ WBK Fundusz Rynku NieruchomoÊci FIZ closed real estate fund due to the planned liquidation of the latter entity later this year. Arka BZ WBK Fundusz Rynku NieruchomoÊci FIZ was established in 2004 and the process of building its portfolio ended three years later. Currently the portfolio controls property worth a total of z∏.1.1 billion and the value of its assets amounted to z∏.532 million as of October 31, 2011. The portfolio comprises 12 commercial properties, two developer projects and four plots earmarked for residential development. The schemes include Alfa Centrum in Olsztyn, Trinity Business Park I in Warsaw, Red Tower in ¸ódê and Alfa Plaza in Gdynia. Two of the fund’s properties – Ujazdowskie 10 and Jutrzenki Business Park in Warsaw – have already been sold. Cushman &

Wakefield is now looking for buyers for 10 of the remaining properties with the other projects expected to be sold directly or with the help of other advisors. “The properties to be sold are leased to many reputable tenants whose loyalty is the best evidence of the high quality of the offered property portfolio,” ¸ukasz Maciak, commercial investment director at BZ WBK TFI, said in a statement. “It will be the first Polish property portfolio to be sold as single assets or selected subportfolios. We are also looking for investors who might be willing to buy all the properties on offer,” stated Piotr Szmilewski, senior surveyor in the capital markets group of Cushman & Wakefield. “There is a dearth of attractive investment products in the market and, therefore, we expect considerable interest from foreign and Polish investors,” Mr Szmilewski added. Adam Zdrodowski

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Residential development

Fewer new schemes on Warsaw market in Q4 Total supply, however, remains “recordbreakingly high” The number of projects which entered the Warsaw residential market fell on a quarterly basis in the last three months of 2011, but the capital nevertheless continued to offer the highest number of total available residential projects among major Polish cities, according to a new report by real estate company Emmerson. A total of 26 new investments were made available to buyers on Warsaw’s primary

residential market in Q4 last year – five fewer than in Q3. A downward trend was also observed in Poznaƒ and Gdaƒsk, while q/q growth of newly available residential projects was noted in Kraków, ¸ódê and Wroc∏aw. The report found that by the end of the fourth quarter there were close to 400 residential developments providing homes for sale in Warsaw. In Kraków, potential home buyers had close to 300 new housing developments to choose from, with almost 200 available in Wroc∏aw. In Q4, the largest invest-

Capital slowdown Number of new residential projects that entered the market in Poland’s major cities, Q1-Q4 2011 City

Warsaw

Kraków

¸ódê

Wroc∏aw

Poznaƒ

Gdaƒsk

16 Source: Emmerson

ments in terms of number of units were found in Warsaw, where the average number of dwellings per new project stood at 135. In Gdaƒsk, the number was 116, in Wroc∏aw and Poznaƒ 92, and in Kraków 77. While the number of new developments that entered the capital’s residential market dropped off in Q4, overall supply remains strong. “Supply is record-breakingly high that should fuel downward pressure on prices in 2012, especially when we take into account the fact that there are no other factors, except price declines, which could stimulate demand this year,” Marcin P∏aziƒski, an analyst at Emmerson, told Lokale Immobilia. Moreover, despite the bloated supply, many developers are expected to hurry to launch projects in the first quarter of this year because on April 28, the Real Estate Purchaser Protection Act is due to be implemented. This is expected to increase the cost for the developer of building new housing stock. Veronika Joy, Gareth Price

JANUARY 23-29, 2012

PPG to start huge residential project in Moscow region

COURTESY OF CISZEWSKI MSL FINANCIAL COMMUNICATIONS

PPG is now building Rezydencja Naruszewicza in Warsaw’s Mokotów district Warsaw-based developer Platinum Properties Group (PPG) is finishing talks with local authorities concerning its planned Svetly Dali large-scale residential complex near Moscow. It expects construction on the investment to launch in the middle of this year. The Svetly Dali scheme will involve the development of 60,000-90,000 sqm of usable space over the next five to eight years. By the end of this quarter the company wants to decide on a financing option

for the scheme. One of the alternatives it is considering is to team up with a Russian partner. “The value of the first phase is estimated at approximately $140 million, with the profit on the whole investment forecast to amount to $170 million,” Gustaw Groth, vice president of the management board of PPG, said in a statement. PPG is now building the Rezydencja Naruszewicza residential project in Warsaw and

is planning to start construction on a 10,000-sqm office scheme in Poznaƒ at the beginning of 2013. The company also wants to acquire at least one new project this year. The developer, which is currently listed on the NewConnect alternative market, plans to shift to the main market of the Warsaw Stock Exchange later this year. The company is now waiting for its prospectus to be accepted by the Financial Supervision Authority. Adam Zdrodowski

THE LIST

JANUARY 23-29, 2012

www.wbj.pl

IT & Telecoms

Internet Providers Ranked by revenue from internet services in 2010

www.bookoflists.pl

Rank

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

Revenue from internet services (z∏. mln)

Total revenue (z∏. mln)

Net profit (z∏. mln)

1st half of 2011 / 2010 / 2009 / 2008

Terrestrial links

Radio links

xDLS links

Total velocity of operator links

Domain name registration / Collocation of equipment / Central VoIP / Telephone

TV / Public IP / IP v6 / BGP

WND

✓ ✓ ✓ ✓

✓ ✓

✓ ✓ ✓ ✓

✓ ✓ ✓

WND 1990

Mobile Web / Total Disk image / employees / Technical Year founded maintenance

Ownership: Polish / Foreign

Top local executive / Title

WND

Maciej Witucki

Number / Min velocity (Mb) / Max velocity (Mb)

Grupa TP (1) ul. Twarda 18, 00-105 Warsaw 22 527-0000/22 527-0127 biuro.prasowe@telekomunikacja.pl www.tp.pl

744.0 1,549.0 1,592.0 1,475.0

7,519.0 15,715.0 16,560.0 18,165.0

1,184.0 108.0 1,282.0 2,190.0

WND WND WND

174,000 WND WND

2,158,000 0.512 80

Netia SA ul. Poleczki 13, 02-822 Warszawa 22 352-2000/22 352-2001 info@netia.pl www.netia.pl

222.0 410.0 339.0 233.0

798.0 1,569.0 1,506.0 1,121.0

52.0 56.0 -7.0 -123.0

3,420 0.128 1,000

1,330 0.128 64

609,149 0.128 20

WND

✓ ✓ ✓ ✓

Telefonia DIALOG SA Pl. Jana Paw∏a II 1, 50-136 Wroc∏aw 71 781-1601/71 781-1600 info@dialog.pl www.dialog.pl

49.1 95.9 97.0 97.0

251.5 518.3 509.0 558.0

18.2 76.0 7.0 -287.0

147,887 1 100

3,993 1 4

WND WND WND

WND

✓ ✓ ✓

✓ ✓ ✓ ✓

✓ -

913 1997

Netia None

home.pl Sp.j. Pl. Rod∏a 9, 70-419 Szczecin 801-885-555/91 432-5555 info@home.pl www.home.pl

32.4 56.9 48.2 39.3

11.1 15.4 14.2 10.0

5 155 10,240

WND WND WND

✓ -

✓ ✓ -

✓

199 1997

Stefan Jurczyk - 40%; Krystian Stypu∏a - 30%; Piotr Kapcio - 30% None

ATM SA ul. Grochowska 21A, 04-186 Warsaw 22 515-6100/22 515-6600 info@atman.pl www.atman.pl

13.5 29.3 32.7 29.6

169.3 401.8 286.5 267.4

10.6 21.4 9.9 8.9

2,800 1 10,000

280 1 300

WND WND WND

WND

✓ ✓ -

✓ ✓ ✓

✓

172 1994

WND

Roman Szwed

Ogicom Sp. z o.o. ul. Arcybiskupa Antoniego Baraniaka 88, 61-131 Poznaƒ 61 622-2500/61 622-2525 bok@ogicom.pl www.ogicom.pl

WND 9.1 9.2 8.9

WND 9.1 9.2 9.2

WND 0.4 0.4 1.5

WND WND WND

WND

✓ ✓ -

✓ -

✓ ✓

30 2002

WND

Agnieszka Dwernicka-Piasecka

1.6 3.1 2.7 2.2

1.7 3.3 2.8 2.3

0.2 0.7 0.6 0.3

7,500 2 10,000

100 0.5 1,000

✓ ✓ ✓ ✓

✓ ✓

35 1997

Tymoteusz Bi∏yk - 80.8% None

Tymoteusz Bi∏yk

WND WND WND NA

WND 1 10,000

WND 1 1,000

✓ ✓ ✓ ✓

✓ ✓

WND 2009

WND None

Norbert Szczepaƒski

Crowley Data Poland Sp. z o.o. ul. Stawki 2, 00-193 Warsaw NR 22 427-3000/22 427-3003 info@crowley.pl www.crowley.pl

WND WND WND WND

WND 105.3 100.9 98.7

WND WND WND WND

WND 1 10,000

WND 1 300

WND 0.5 20

100

✓ ✓ ✓

✓ ✓

160 1998

Grupa Netia WND

Grzegorz Esz

dcenter.pl Al. Jerozolimskie 81, 02-001 Warsaw NR 22 292-0000/22 292-0001 info@dcenter.pl www.dcenter.pl

WND WND WND NA

WND 1 10,000

WND 1 1,000

WND 1 100

100

✓ ✓ ✓ ✓

✓ ✓

WND 2009

WND None

Rafa∏ KuÊmider

eFUZJA Sp. z o.o. Al. Jerozolimskie 81, 02-001 Warsaw NR 22 292-0999/22 292-0998 info@eFUZJA.pl www.eFUZJA.pl

WND WND WND WND

WND 1 10,000

WND 1 1,000

WND 1 100

100

✓ ✓ ✓ ✓

✓ ✓

WND 2006

WND None

Agnieszka ˚urek

Hetan Sp. z o.o. (2) Al. Krakowska 4/6, 02-284 Warsaw 36 22 886-5210/22 886-5211 info@hetan.pl www.hetan.pl

WND NA NA NA

WND WND WND

WND

✓ ✓ -

✓

WND 2011

WND

NASK instytut badawczy ul. Wàwozowa 18, 02-796 Warsaw NR 22 380-8080/22 380-8201 kontakt@nask.pl www.nask.pl

WND WND WND WND

49.8 89.5 85.8 83.9

7.6 3.1 -1.4 -0.6

WND WND WND

✓ ✓ ✓ ✓

✓ ✓ ✓

✓ ✓

321 1993

Treasury - 100% None

UPC Polska Sp. z o.o. Al. Jana Paw∏a II 27, 00-867 Warsaw NR 22 241-6822/22 241-6901 info.upc@upc.com.pl www.upc.pl

WND WND WND WND

WND 948.6 WND WND

WND WND WND WND

WND 5 150

WND WND WND

WND

✓ ✓ ✓

✓ ✓ ✓ ✓

WND ✓

1,230 1989

WND Liberty Global

Korbank SA ul. Nabyciƒska 19, 53-677 Wroc∏aw 71 723-4323/71 723-4329 info@korbank.pl www.korbank.pl Asean Telecom Sp. z o.o. Al. Krakowska 67C, 05-552 Warsaw

NR 22 292-8900/22 292-8901

info@asean-telecom.pl www.asean-telecom.pl

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in January 2011. Number of employees and ownership structure are as of December 2011. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed. Foototes: (1) Grupa TP includes: Telekomunikacja Polska, Polska Telefonia Komórkowa Centertel, Contact Center, Fundacja Orange, Integrated Solutions, Orange Customer Service, Otwarty Rynek Elektroniczny, Paytel, PTE, TP Edukacja i Wypoczynek, TP Invest, TP Teltech, Wirtualna Polska (2) Hetan Sp. z o.o. is a provider of satellite internet access

23,734 1991

President

WND Novator Telecom Operator - 31.3%; Third Miros∏aw Godlewski Avenue Management President 24.1%; SISU Capital 10%; Banca Akros 5.6%

Miros∏aw Godlewski President

Marcin KuÊmierz Managing Director

President

Jorg Schmolinski Managing Director

Micha∏ Chrzanowski Director

Simon Boyd President; General Director

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

MARKETS

www.wbj.pl

JANUARY 23-29, 2012

Stocks report

world stock indices DJIA

NASDAQ

12,623.98 (Jan 19 close)

S&P500

2,788.33 (Jan 19 close)

1.23% (for the week)

FTSE100

1,314.50 (Jan 19 close)

2.34% (for the week)

DAX

5,741.15 (Jan 19 close)

1.47% (for the week)

1.39% (for the week)

Bulls on top

NIKKEI225 6,416.26 (Jan 19 close)

8,639.68 (Jan 19 close)

3.84% (for the week)

3.03% (for the week)

CHANGE: 1.83%

CHANGE: 5.27%

CHANGE: 2.93%

CHANGE: 0.72%

CHANGE: 5.61%

CHANGE: 0.93%

(year to Jan 19)

52-week high: 12,876.00

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.77

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,404.49

52-week low: 2,298.89

52-week low: 1.074.77

52-week low: 4,791.01

52-week low: 4,965.80

52-week low: 8,135.79

Andrew Nawrocki, WBJ market analyst Last week was a strong one for most equity indices throughout Europe, with the WIG and WIG20 closing higher every day of the week. Investors shrugged off Standard & Poor’s downgrade of nine euro-zone countries, as well as lingering worries about an unruly default in Greece. On Monday, January 16, volume was thin, with US markets closed due to Martin Luther King Jr Day. Pushing stocks higher were strong reports from the automotive sector, with the WIG closing 0.62 percent higher. On Tuesday, January 17, markets continued their climb on the back of strong macroeconomic data from China and Germany. Oil and copper prices rose by more than 2 percent, pushing up shares of both KGHM (3.63 percent) and PKN Orlen

Major indices WIG

39,288.13 (January 19 close)

WIG20

2,244.38 (January 19 close)

19.01

18.01

17.01

16.01

13.01

12.01

11.01

10.01

09.01

05.01

04.01

03.01

02.01

19.01

18.01

17.01

16.01

13.01

12.01

11.01

10.01

09.01

2,100

05.01

36,000

04.01

2,140

03.01

36,800

02.01

2,180

30.12

37,600

29.12

2,220

28.12

38,400

27.12

2,260

23.12

39,200

22.12

2,300

21.12

40,000

30.12

52-week low: 2,089.84

29.12

Change year to January 19: 2.29%

28.12

52-week low: 36,549.47

27.12

52-week high: 2,932.62

Change year to January 19: 2.53%

23.12

Change for the week: 3.57%

22.12

52-week high: 50,371.74

21.12

Change for the week: 3.22%

Top 5 FOTA REINHOLD IZOLACJA ABMSOLID YAWAL

Closing 7.65 1.54 1.08 2.62 5.35

% change (week) 52-week high 60.71 17.25 54.00 6.19 42.11 1.78 37.17 15.10 30.17 14.95

52-week low 3.10 0.90 0.72 1.49 2.91

Top 5 LOTOS GTC PEKAO PKOBP PKNORLEN

Closing 24.14 8.84 150.00 33.39 36.95

% change (week) 10.73 10.64 7.45 7.16 6.79

52-week high 49.50 22.14 180.20 46.66 58.85

52-week low 21.30 7.86 115.10 27.95 30.33

Bottom 5 DSS ATLANTIS IQP PTI MISPOL

Closing 5.59 0.42 1.69 11.90 3.30

% change (week) -17.79 -17.65 -17.56 -14.82 -13.16

52-week low 5.22 0.35 1.60 6.51 2.72

Bottom 5 ASSECOPOL CEZ PGNIG PBG POLIMEXMS

Closing 45.77 128.90 3.91 79.50 1.73

% change (week) -5.63 -4.16 -3.93 -3.52 -2.81

52-week high 55.40 155.00 4.65 209.60 3.92

52-week low 34.50 116.10 3.25 53.70 1.19

52-week high 23.75 1.92 3.40 14.00 7.79

Currency report

Markets catch their breath

Other indices mWIG40

2,251.40 (January 19 close)

sWIG80

8,970.87 (January 19 close)

Change for the week: 2.29%

52-week high: 2,987.72

Change for the week: 2.63%

Change year to January 19: 2.79%

52-week low: 2,076.52

Change year to January 19: 4.26%

(3.47 percent). The WIG20 finished its strongest day, gaining 1.14 percent. The momentum continued on Wednesday, January 18, after stronger-than-expected bank earnings from several US banks brought renewed confidence to markets. Also helping the situation was the IMF’s move to increase its ability to fight the European crisis. The WIG closed 0.85 percent higher, with oil companies again seeing gains. Thursday, January 19 saw further increases, driven largely after Spain successfully sold more longer-term debt than had been hoped. Friday, January 20, saw both the WIG and WIG20 dip in early morning trading, with both eventually closing higher by 0.59 percent and 0.74 percent respectively. ●

52-week high: 12,932.00 52-week low: 8,218.71

WIG-Banki

19.01

18.01

17.01

16.01

13.01

12.01

11.01

10.01

09.01

05.01

04.01

03.01

02.01

30.12

29.12

28.12

27.12

23.12

22.12

19.01

18.01

17.01

16.01

13.01

12.01

41.13 (January 19 close)

5,640.58 (January 19 close)

19.01

18.01

17.01

16.01

13.01

12.01

11.01

10.01

09.01

05.01

04.01

03.01

02.01

19.01

18.01

17.01

16.01

13.01

12.01

11.01

10.01

09.01

5,200

05.01

39.0

04.01

5,300

03.01

39.6

02.01

5,400

30.12

40.2

29.12

5,500

28.12

40.8

27.12

5,600

23.12

41.4

22.12

5,700

21.12

42.0

30.12

52-week low: 4,944.19

29.12

Change year to January 19: 1.76%

28.12

52-week low: 40.23

27.12

52-week high: 7,387.49

Change year to January 19: -0.87%

23.12

Change for the week: 6.35%

22.12

52-week high: 61.53

21.12

Change for the week: -0.07%

SOURCE: WSE

NewConnect

11.01

10.01

09.01

8,200

05.01

2,100

04.01

8,360

03.01

2,140

02.01

8,520

30.12

2,180

29.12

8,680

28.12

2,220

27.12

8,840

23.12

2,260

22.12

9,000

21.12

2,300

21.12

Adam Narczewski, X-Trade Brokers Dom Maklerski SA It had been a long time since investors experienced something like what happened last week. Risk aversion declined as the European crisis seemed to ease. Better-thanexpected economic data from the US kept markets going higher, and the mixed Q4 results of US companies did not spoil the spreading optimism. Market players have to stay focused though. Macro data from China – the engine of the global economy – shows that its economy is cooling down, while talks about a restructuring of Greek debt continue. The problems in Europe are far from solved and this week we might see some profit-taking by investors with long (buy) positions. The EUR/USD rebound-

ed strongly from its yearly lows of just above $1.26 to go all the way to $1.30. Last Friday it gave up some of those gains, ending the week at $1.29. The z∏oty, influenced by positive external factors, continued to appreciate. Throughout the week, the EUR/PLN declined by 10 groszy all the way to z∏.4.31, with the way open to levels below z∏.4.30. The USD/PLN, the more volatile pair, tumbled from z∏.3.49 to z∏.3.34. The other factor helping the z∏oty is hawkish statements by members of Poland’s Monetary Policy Council (RPP). With inflation remaining at above 4 percent, instead of an interest rate cut as the market expected, an interest hike is possible. ●

currency rates 4.4288

4.3894

18.01

19.01

4.3442

4.4607 17.01

20.01

4.5306

SOURCE: NBP

4.4752

16.01

13.01

0.1068 20.01

0.1069

0.1077

PLN-100JPY

19.01

18.01

0.1085 17.01

16.01

0.1084 13.01

3.5912

3.5819 20.01

0.10

0.1092

PLN-RUB

0.12

19.01

3.5959 18.01

3.6136 17.01

16.01

3.6376 13.01

5.1996

5.1839 20.01

3.5

3.6443

PLN-CHF

4.0

19.01

5.2241 18.01

5.2584 17.01

16.01

5.2711 13.01

3.3678

3.3537 20.01

5.3324

PLN-GBP

19.01

3.4000 18.01

3.4215 17.01

16.01

3.4323 13.01

4.3391

4.3260 20.01

3.0

3.4798

PLN-USD

3.6

19.01

4.3491 18.01

4.3708 17.01

16.01

4.4040 13.01

4.4056

PLN-EUR

SPORTS

JANUARY 23-29, 2012

www.wbj.pl

Pivotal year for Poland’s sports stars

COURTESY OF WIKIMEDIA COMMONS

chasing her first Grand Slam title, but 2012 could be the year where she finally makes it

Justyna Kowalczyk Cross-country skier Justyna Kowalczyk is now one of the most decorated Polish athletes of all time, after capturing the 2011/2012 Tour de Ski title earlier in January. It was the third time in a row that

Ms Kowalczyk had won cross-country skiing’s most prestigious event, meaning she is now able to add another title to her impressive trophy case. She has already won two World Championship golds in both the 15km and 30km events, and an Olympic gold at the 2010 Vancouver Games. Ms Kowalczyk has a busy calender before she once again challenges for top honors at the World Cup in Sweden this March. And it would be difficult to bet against her taking home another medal in this event as well.

COURTESY OF WOJCIECH SZCZESNY/FACEBOOK

Unquestionably the biggest sporting story in Poland this year is Euro 2012, which offers Poland’s international soccer players the opportunity to become national heroes, should they progress through the group stages or even do the unthinkable and win the whole tournament. Arguably Poland’s two best players from the current batch are 23-year-old Borussia Dortmund striker Robert Lewandowski and Arsenal goalkeeper Wojciech Szcz´sny. Mr Lewandowski is cur-

rently enjoying a great second season in Germany’s Bundesliga, having scored 12 league goals in just 17 games this season, including a hat-trick in a

4-0 demolition of FC Augsburg. Mr Szcz´sny has had a more mixed season. Despite firmly establishing himself as Arsenal’s first-choice keeper at the tender age of 21, he has also made a number of highprofile mistakes this season, leading some to question whether he is ready for the challenges of regular Premier League and Champions League action. But if Poland is to have any chance of progressing through a first round group that includes the Czech Republic, Greece and Russia, it will definitely need both players to be in top form come June 8 – when the tournament’s opening match is scheduled to be held between Poland and Greece in Warsaw.

Robert Kubica One Polish sports star who is looking at a difficult 2012 is

Formula 1 driver Robert Kubica. In February last year the Kraków-born driver was involved in a horrific car accident while competing in the Ronde di Andora rally race. The crash left him with multiple fractures to his right arm and leg and a severe hand injury, ruling the Renault driver out of both the 2011 and 2012 seasons.

COURTESY OF WIKIMEDIA COMMONS

Kraków-born tennis player Agnieszka Radwaƒska is still

Wojciech Szcz´sny and Robert Lewandowski

COURTESY OF ROBERT LEWANDOWSKI/FACEBOOK

Agnieszka Radwaƒska

in the big time, with four majors up for grabs and the chance of an Olympic medal come August. The 21-year-old, who is ranked #8 in the world by the ATP, is currently making good progress at the Australian Open, the first Grand Slam of the 2012 calendar. Having beaten Bethanie MattekSands by two sets to one in the first round, she then overcame Argentina’s Paula Ormaechea with a comfortable 6-3, 6-1 win to reach round three, where she defeated Kazakhstan’s Galina Voskoboeva 6-2, 6-2. Ms Radwaƒska’s recent form suggests she has some chance of lifting the main prize, after a good start to 2012. She has already reached the semi-finals of the Sydney International tournament, becoming the first Polish woman to defeat a reigning world number one, when she beat Denmark’s Caroline Wozniacki in the quarter-final.

COURTESY OF WIKIMEDIA COMMONS

This could prove to be a landmark year for many Polish athletes with both the Euro 2012 soccer championships and the London Olympics set to offer the country’s sports stars a chance to write their names in history. WBJ takes a look at the Polish athletes currently making the news and assesses their chances of success over the next 12 months.

Then, on January 11 this year, more bad luck struck Mr Kubica when he slipped outside his Italian home and rebroke the same leg, further putting back his recovery date. It now remains to be seen whether he can make a full recovery and return to Formula 1 for the 2013 season, or if his career at the top level of motor sport is over. David Ingham

World Games

Wroc∏aw to host 2017 World Games A host of sports will entertain fans in the southwestern Polish city

dent of the International World Games Association. The World Games, which have taken place every four years since 1981, sees athletes compete in sports including squash, water skiing, body building, 10-pin bowling and rugby sevens, among many more. Each host city has the opportunity to choose five events that will be part of the games, but the full list for 2017 is not set to be announced until March this year.

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.

Marcin ¸ojewski

COURTESY OF WIKIMEDIA COMMONS

The Polish city of Wroc∏aw was chosen as the host of the 2017 World Games during an awarding ceremony at the Olympic Museum in Lausanne, Switzerland, on January 12. The capital of the DolnoÊlàskie voivodship was chosen ahead of Cape Town and Budapest to become the host of one of the biggest sports

tournaments in the world. And organizers predict more than 400,000 spectators will come to the event to watch some 3,500 athletes compete in a host of non-Olympic disciplines. “We are happy to present our sports in Wroc∏aw in the summer of 2017, and we are sure that we will be offered optimal conditions for our sportsmen and -women there. All the bids we received were of very high quality, and it was not easy for us to reach a decision,” Ron Froehlich, presi-

Wroc∏aw’s new Municipal Stadium is likely to host some of the game’s events

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

LIFESTYLE

www.wbj.pl

JANUARY 23-29, 2012

Film festival

Art and film unite Kinomamuseum February 3 – March 3 Museum of Modern Art ul. Paƒska 3 Warsaw

ki (“Rose”), and Phil Mulloy (“Goodbye Mister Christie”). As an added incentive for film buffs, the entrance hall of the museum will feature the original neon sign from Warsaw’s legendary Skarpa cinema, which was torn down in 2008. Entrance to all screenDI ings is free of charge. For more information artmuseum.pl

COURTESY OF SALA KONGRESOWA

The Museum of Modern Art in Warsaw will host a month of movie screenings this February, featuring the best of international film, as well as some lesser known gems. The event will open with a screening of acclaimed Bri-

tish director Steve McQueen’s new film “Shame” which premiered at last year’s Venice International Film Festival. The array of premieres also includes movies from international filmmakers such as Miranda July (“The Future”), Jan Švankmajer (“Surviving Life”), Wilhelm Sasnal (“It Looks Pretty from a Distance”), Wojciech Smarzows-

“Mocne Granie”

Dance COURTESY OF THE MUSEUM OF MODERN ART IN WARSAW

The Beatles & Queen – Valentine’s Day “Mocne Granie” February 11 PKiN Sala Kongresowa Plac Defilad 1 Warsaw This February, the music of two of the world’s most famous guitar bands will be united in a dance extravaganza

in Sala Kongresowa, in Warsaw’s Palace of Culture and Science. The performance, which is directed by Robert Balogh, is a collaboration between the Silesia Opera in Bytom and the Gliwice Music Theatre, and will see dancers perform modern ballet to classic hits including “She Loves You,” “Yesterday,” “All You

Need is Love,” “A Kind of Magic,” “We Will Rock You” and “We Are the Champions.” Tickets for the event, which aims to show how music can cross the boundaries between different generations, are DI priced from z∏.160. For more information log on to kongresowa.pl

Concert

Back to bassics Peter Hook & The Lights February 11 Proxima ul. ˚wirki i Wigury 99a Warsaw Peter Hook, a founding member and bass player of influential Manchester bands Joy Division and New Order, will

COURTESY OF PETER HOOK

The original “Skarpa” sign

Rock ‘n’ roll greats

Peter Hook

visit the capital with his new group “Peter Hook & The Lights” next month. Hooky, as he is affectionately known, is famed for his unique bass playing style on Joy Division and New Order tracks, as well as his involvement in the famous Haçienda night club.

This gig will see his new band play Joy Division’s 1979 album “Unknown Pleasures” in its entirety, as well as songs including “Love Will Tear Us Apart” from its second album, DI 1980’s “Closer.” For more information log on to klubproxima.com.pl

LAST WORD

JANUARY 23-29, 2012

www.wbj.pl

Tech Eye

and its freezer boasts a Smart Pull Handle, a feature presumably aimed at refrigerator owners who aren’t smart and have difficulty pulling. But the real selling point here is the Blast Chiller (pictured) – a separate drawer that cools a room-temperature can of beer in five to eight minutes. LG hasn’t revealed the price of this fridge, but it’s not going to be cheap and it’s too big for Techeye’s apartment, unless we knock down a load-bearing wall or two.

geometry teacher. Old lessons about degenerate polynomials and perturbed vectors instantly make a kind of horrible sense. You scramble, then fall up the stairs to your second-storey home, ready to quaff as many beers as necessary to erase sulfurous memories of a latexgarbed, spew-spattered mathemati-

TES YO

FN ATIV EU

COURTESY OF LG

NIO N

cian. But tragedy awaits you in the kitchen – the refrigerator is broken and your spouse has thrown its contents away. Including all the beer. That, dear readers, is the personal hell which Techeye visited last week. Suffice it to say that we’re looking for a new refrigerator, a talented therapist and possibly an exorcist. The only good news is that we’ve found a strong candidate for the former. Behold, the latest beer-storage unit from LG (lg.com). This is the Korean firm’s largestcapacity Frenchdoor refrigerator, with a

There exist things not meant for human eyes. Visions so horrific that they sear the mind. Imagine a pitch-black night full of ominous forebodings. A strange thickness in the air. And then – an obese transvestite spewing chunks down the side of your car. It gets worse. You recognize the transvestite as your high-school

respectable 31 cubic feet of space. Indeed, the fresh-food compartment alone can hold over 50 gallons of lager. The unit is energy efficient, has a “bonus drawer” (whatever that is)

Along with a new refrigerator, we’re also interested in the Play video memo from Native Union (nativeunion.com). Not because it’s awesome or extraordinarily well-crafted, but because it seems like an good way to remind

our wench that she should never throw beer away. Ever. The Play has a magnet on the back, so you can affix it at eye level for whomever you wish to remind not to throw away your beer (or cheese or whatever). It has a 2.4-inch color screen, holds up to three minutes of video and only has three buttons, making it a good choice for the Smart Pull Handle demographic. Cost: $60. And now for something completely different – iBallz, “the original universal tablet stabilizing & shock absorbing harness” from Friendly Integration (iballz.info). In essence, this is four rubber balls connected by a cord. The balls fit on the corners of your tablet, elevating it from potential spills and dirt, as well as protecting it from falls (on flat surfaces). It’s not a high-tech solution, but it eliminates a number of risks and only costs $20. On the other hand it introduces

COURTESY OF FRIENDLY INTEGRATION

Visions of hell and unseeing iBallz

the risk of ridicule. Consider what happens when you try to say “my iBallz” too fast – it becomes “myBallz,” that’s what happens. Who knows what snigger-worthy statements might come out in the heat of the moment. Things like “Darn, one of myBallz fell off again” or “Mom, the dog is chewing on myBallz!” perhaps. Consider yourself warned. Still, these iBallz will never betray you, never scar your psyche by seeing things which must not be seen. That’s definitely a point in their favor. ●

Ever seen something that made you want to stab your eyeballs out? Let us know: techeye.wbj@gmail.com

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

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

Galeria 022, DAP, Lufcik Królikarnia National ul. Mazowiecka 11a Gallery www.owzpap.pl ul. Pu∏awska 113a www.krolikarnia.mnw.art. Galeria 65 pl ul. Bema 65 www.galeria65.com Le Guern Gallery ul. Widok 8, Galeria Appendix 2 www.leguern.pl (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglo sci.art.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.we bsite.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

National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl

Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl

Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl

Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Pracownia Galeria Wilanów Palace ul. Emilii Plater 14 Museum and Wilanów www.pracowniagaleria.pl Poster Museum ul. St Kostki Potockiego Rempex Art and 10/16 Auction House www.milanow-palac.pl ul. Karowa 31 www.postermuseum.pl www.rempex.com.pl Royal Castle Pl. Zamkowy 4 www.zamekkrolewski.com.pl

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