WBJ #19 2012

Tech Eye takes you through the specs of the latest Samsung smartphone

Interview: Jacek Saryusz-Wolski One of Poland’s leading MEPs discusses the country’s role in Europe 8-9

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VOLUME 18, NUMBER 19 • MAY 14-20, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

Future unknown Election results in France and Greece have produced more questions than answers for the European economic crisis. WBJ looks at the politics and the macroeconomics, and asks what the future holds

EYE ON THE FUTURE A special section on trends shaping the future of Poland’s economy 11-14

LOKALE IMMOBILIA REAL ESTATE COURTESY OF CHRISTIAN KEREZ

4, 10, 11, 13

• Museum dispute • New Warsaw Hilton • Starachowice mall 15-18

In this issue

SHUTTERSTOCK

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . . . . .10 Eye on the Future . . . . . . . . . .11-14 Lokale Immobilia . . . . . . . . . . .15-18 The List . . . . . . . . . . . . . . . . . . . . . .19 Markets . . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Under pressure

Pension protest

European leaders threaten a boycott of Euro 2012 matches in Ukraine amid the Yulia Tymoshenko saga 3

Unions protested outside parliament, but the government has finally pushed through its pension reform

NEWS

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is the estimated annual cost of vehicle accidents in Poland.

66% is how many Polish residents think the country is a safe place to live, according to a study by CBOS.

€728 million was the value of commercial real estate sales in Poland in Q1 2011 according to Jones Lang LaSalle.

10%

US President Barack Obama’s statement last week that he believes homosexuals should have the right to marry each other instantly thrust the controversial issue into the public spotlight. Mr Obama is the first American president in office to publicly state his support for gay marriage. His stance is expected to have an impact during this November’s elections, when he goes up against likely Republican candidate Mitt Romney, who is opposed to same-sex marriage. The issue of same-sex unions could soon be in the public eye in Poland since the two leftist parties in parliament, Palikot’s Movement (RP) and the Democratic Left

Alliance (SLD), have prepared legislation to sanction such unions. Civil-union legislation has not been debated in parliament yet and while it is safe to assume that the conservative Law and Justice (PiS) and Polish People’s Party (PSL) will be against the idea, it is still unclear how the ruling Civic Platform (PO) party will act on the issue. PO is an eclectic party with both liberal and conservative politicians, such as Justice Minister Jaros∏aw Gowin, who has publicly declared that he would “never” support such legislation. It thus remains to be seen if Prime Minister Donald Tusk (who seems not to be personally averse to the

idea) will risk creating a serious rift in his party by implementing party discipline on such a sensitive issue. The PM might however be swayed by public opinion, which has shifted significantly on the issue in the past few years. In 2002 a CBOS poll revealed that only 15 percent of Poles supported allowing same-sex civil unions. But a TNS OBOP survey from 2011 put the number of Poles supporting such a bill at 54 percent. Full-fledged marriage would probably enjoy less support and would certainly be opposed by the Catholic church, which holds great sway in Polish society.

is the amount by which the salaries of CEOs of WSElisted construction companies increased in 2011. The highest annual salary in the sector was z∏.2.3 million.

Quote of the Week ““Europe is watching us, austerity can no longer be the only option.” French President-elect Francois Hollande on his proposed focus on economic growth.

Figures in focus Debt ratings Government debt as a percentage of selected EU27 countries’ GDPs, 2011 200 *Highest in EU27

150

**Lowest in EU27

Remi Adekoya 100

On WBJ.pl

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Sp ain Po la Cz nd ec hR ep ub lic Es ton ia* *

This week Warsaw Insider takes you around the central, yet often overlooked Mirów district. Log on to WBJ.pl for a tour including the capital’s long-running market Hala Mirowska, a flagship communist housing project, ˚elazna Brama, the heart of pre-war Jewish life, Plac Grzybowski, and much more.

Ire

Colorful Mirów

Polanski to make film about Dreyfus affair Polish director Roman Polanski plans to begin filming his new project, a political thriller about the Dreyfus affair, in Paris later this year, several media have reported. The Dreyfus affair was a political scandal that divided France in the 1890s and early 1900s. Alfred Dreyfus, a French man of Jewish descent, was accused of passing French military secrets to the Germans. However, his subsequent trial was based on false testimony, which gave rise to a political crisis in France. “I have long wanted to make a film about the Dreyfus affair,” Mr Polanski said in a statement. ●

z∏.30 billion

About 64% of Poles are opposed to the introduction of the euro in Poland. The proportion of skeptics has increased by 22 percentage points over the year, according to a report by the Warsaw School of Economics. People opposing the introduction of the euro have become gradually more numerous since 2009. The number of opponents of the single currency exceeded the supporters for the first time last year, but this year’s increase in opponents was the highest ever, the report said.

Same-sex marriage

Ita

Most Poles oppose euro adoption

Numbers in the News

Poland’s biggest opposition party, Law and Justice (PiS), has called for Education Minister Krystyna Szumilas to be dismissed. According to the party, Ms Szumilas is “the worst Polish education minister in history” and changes she proposes “threaten the collapse of the Polish education system and cause enormous chaos.” PiS pointed to the closing down of schools as well as cuts in the number of history classes as evidence of her incompetence.

IN THE SPOTLIGHT

Gr ee

Education minister under pressure

MAY 14-20, 2012

SHUTTERSTOCK

Source: Eurostat

Company index Acron ............................................5 Ernst & Young ..............................6 Pekao............................................6 Acteeum Central Europe ..........16 Eurocash ......................................6 Peter Nielsen & Partners ..........6 Apple ..........................................23 Fiat Auto Poland ..........................5 PGE ......................................12, 14

DATELINE

May

Location: Web:

This event is considered one of the best forums for discussions on Europe’s future. It features speeches and participation in panels of high-profile politicians and businesspeople. Katowice eecpoland.eu

POLAND & CEE STRUCTURED PRODUCTS

Event:

Whether you’re looking to enhance your presence in the CEE market, structuring products for OTC or distribution to retailers, involved in risk assessment and pricing or simply looking to learn about the CEE market, this event is for you. Warsaw eelevents.co.uk

Location: Web:

24-25 GROWING UP & OUT Event:

At this conference regional and international entrepreneurs and investors will share their views and experience on building teams, grow-

Areva ..........................................12 Getin Noble Bank ........................6 PKN Orlen ..................................12 Arka BZ WBK Fundusz Rynku

Hays Polska ................................5 PKO BP ..................................6, 20

NieruchomoÊci 2 FIZ ................18 Hilton Group ..............................17 Polska Telefonia Cyfrowa ............6

Web:

ing companies and going beyond borders. Warsaw ceed-global.org

TRADE & INVESTMENT CONFERENCE

Event:

This conference brings together British and Polish business leaders to discuss the prospects of enhancing investment flows between the two countries and will mark the 20th anniversary year of the British Polish Chamber of Commerce. Warsaw bpcc.org.pl

14-16 EUROPEAN ECONOMIC CONGRESS Event:

Ardom ........................................16 GE Hitachi ..................................12 PGNiG ........................................14

Location:

Aster ............................................4 Horse Concept Poland ................7 PwC ..............................................3 Auchan ........................................7 HSBC ............................................7 PZL Mielec ..................................9 Azoty Tarnów ................................5 HTC ............................................23 PZU ..............................................5 Balmain Asset Management ....16 Iberdrola ....................................12 Rockspring Property

Location: Web:

Bank Pocztowy ..........................13 Jones Lang LaSalle ..............2, 18 Investment Managers................18 Bank Zachodni WBK....................7 Jones Lang LaSalle Hotels ......17 RWE ............................................12 BZ WBK ......................................11 JSW ............................................20 S+B Gruppe ................................17 CBRE ..........................................18 KGHM ........................................14 Samsung ....................................23 CBRE Global Investors ..............16 Kulczyk Investments..................12 Sedna Yachts................................9 Citi Handlowy ..............................6 LOT ..............................................6 Selvaag Eiendom AS ..................15 Claybark ....................................16 Lotos ............................................4 Skoda Auto ..................................5 CMS Corporate

Marriott ......................................17 Tauron ........................................20

Management Services ................4 Mermaid Properties ..................15 Total ..............................................7

28-29 POLISH REAL ESTATE FORUM

Colliers International ..........16, 18 Multi Corporation ......................15 Turkish Airlines............................6

Event: The forum provides independent, professional and reliable knowledge about the processes that occur on the property market in Poland. This unique event aims to share insights and opinions on the functioning of the market over the past year. Location: Sopot Web: nowyadres.pl

Cushman & Wakefield ..............16 Multi Development Poland ........15 Unibep ........................................15 Decathlon ....................................7 Multimedia ..................................4 Unidevelopment ........................15 DEME..........................................12 Nautiner Yachts ..........................9 Volkswagen ..................................5 DiS ................................................3 NBGI Private Equity ..................16 W. P. Carey ................................18 DM IDMSA ....................................6 Nippon Sheet Glass Group ........18 Warsaw Stock Exchange ..4, 5, 14 Dong Energy ..............................12 Opas∏y Tom Piw..........................22 Westinghouse ............................12 EDF ........................................7, 12 Opel ..............................................5 White & Case ............................11 EDPR ..........................................12 Orange..........................................6 Wola House ................................15 Elea Immochan............................7 Orbis ..........................................17 X-Trade Brokers DM ..................20 Emperia........................................6 Panattoni ....................................18 Yareal Polska..............................15

NEWS

MAY 14-20, 2012

Foreign affairs

EU leaders threaten to boycott Euro 2012 games in Ukraine

Ukraine has suffered a series of embarrassing snubs just weeks ahead of the country’s joint-hosting of the high-profile UEFA European Football Championship this June. Numerous European leaders have threatened to boycott Euro 2012 soccer matches in Ukraine unless authorities there free jailed opposition leader Yulia Tymoshenko. Ms Tymoshenko, a former prime minister, was sentenced to seven years in prison in October 2011 for abuse of power while she was in office when she signed a natural-gas agreement with Russia in 2009. Most Western observers have described the sentence as being politically motivated. Ms Tymoshenko went on hunger strike from April 20 to May 8, after she was allegedly beaten by her jailers. German Chancellor Angela Merkel said recently that along with her cabinet, she would not attend any games in the country unless the regime headed by President Viktor Yanukovych improves the country’s human rights situation. European Commission President José Manuel Barroso and Justice Commissioner Viviane Reding are also set to boycott the tournament in Ukraine.

Own goal?

Former PM Yulia Tymoshenko was sentenced to seven years in prison

Yalta off Ukraine was also forced last week to cancel a summit of Central European leaders that had been due to take place in Yalta on May 11-12 because only four presidents, Poland’s Bronis∏aw Komorowski included, were set to participate. Fourteen leaders refused to attend, mainly in response to the allegedly harsh treatment of Ms Tymoshenko and human rights issues related to the treatment of other prisoners. David Ingham, Gareth Price

Many EU leaders won’t be at games in Ukraine (pictured: Metalist Stadium in Kharkov)

Polish tech exports flourishing The value of Polish IT companies’ foreign sales amounted to approximately z∏.5.5 billion last year, up 10% y/y, Rzeczpospolita reported, citing a report by research firm DiS. “I believe we’ll be able to maintain double-digit growth in exports in 2012,” said Andrzej Dy˝ewski, CEO of DiS. According to data from the company’s report, Polish IT companies mainly export computers and computer components, as well as electronics and telecoms equipment.

Firms to get FDI support

COURTESY OF WIKIMEDIA COMMONS

In Poland Jaros∏aw Kaczyƒski, the leader of main opposition party Law and Justice (PiS), has gone a step further by

declaring that the final should be moved to Warsaw from Kiev. “Flagrant human rights violations in Ukraine is the effect of disadvantageous political changes we are observing there, and proof of Ukraine’s growing dependence on Russia,” Mr Kaczyƒski wrote on his blog. Mr Kaczyƒski had earlier suggested that Ukraine should be stripped of its right to host the tournament. Both President Bronis∏aw Komorowski and Prime Minister Donald Tusk have, however, spoken against doing anything that could jeopardize the tournament. Mr Tusk told journalists that Mr Kaczyƒski’s statements amount to an “own goal” for Poland. Mr Komrowski, however, has urged Ukraine to scrap laws that allow politicians to be jailed for political decisions they make in office. He said that calls for a boycott “would not have happened if outdated regulations that contradict European standards by allowing prison sentencing for political decisions were phased out in time.”

SHUTTERSTOCK

The country was also forced to cancel a Central Europe summit after numerous leaders refused to attend

www.wbj.pl

According to PwC, the value of direct foreign investments made by Polish companies exceeded $7 billion last year. Now, Polish firms that are trying to enter developing markets will get government backing, in the form of promotional activity and diplomatic support, Parkiet reported. ●

NEWS

www.wbj.pl

The shareholders of Polish television and internet service provider Multimedia will soon put the company up for sale, two unnamed sources told Puls Biznesu. “Multimedia’s owners are expecting a similar price to UPC’s acquisition of Aster, which is around z∏.3 billion,” a source said.

Lotos won’t pay dividend Members of the management of oil refiner Lotos say the company will not share last year’s profits with shareholders, even though its strategy for this year included paying a dividend amounting to 30 percent of profits, Parkiet reported. “We will recommend to our main owner to keep profits within the company because of its expansion project,” said Pawe∏ Olechnowicz, the group’s president, while presenting Lotos’s Q1 results. ●

MAY 14-20, 2012

European politics

Political changes send shockwaves through markets in Poland, Europe The anxiety caused by the results of the French, and especially Greek, elections has not left Poland unaffected, but Francois Hollande’s victory could result in better relations Election results in Greece and France sent tremors shooting through global financial markets, including Poland’s, as their outcomes threaten the fragile political consensus that has kept the euro zone intact through more than two years of crisis. The Greek results were the most worrying since no political party won enough votes to form a government, leaving the immediate future of the country in doubt. Moreover, radical leftist and rightist parties, all completely opposed to the austerity measures being imposed on Greece, together won roughly a third of the vote. Greece is being required to implement certain budgetcutting measures in order to receive financial aid. “If Greece ends the reform process it has undertaken, then I can’t see that the next tranches [of aid] can be paid out,” German Foreign Minis-

ter Guido Westerwelle said. His country’s finance minister, Wolfgang Schauble, told reporters that “if Greece does not decide to stay in the euro zone we can’t force them to stay in it.” Last week, Greece’s eurozone partners agreed to release just €4.2 billion in financing, holding back €1 billion at least until June. That would be paid only if Greece keeps to pledges it made to secure the bailout in the first place.

Hollande good for Poland? Meanwhile, in France, President-elect Francois Hollande is a critic of the country’s austerity program and wants to boost government spending. This has also caused additional worry for markets. Mr Hollande’s victory is nevertheless being viewed positively by Polish President Bro-

Media patronage

Meetup of entrepreneurs from Central & Eastern Europe CEED’s 6th Regional Conference will take place on May 24-25 in Warsaw On May 24 and 25, the Center for Entrepreneurship and Executive Development (CEED) will hold Growing Up & Out, its 6th annual conference, in the Polish capital. CEED offers entrepreneurs in Albania, Armenia, Bosnia, Bulgaria, Kosovo, Macedonia, Montenegro, Romania, Serbia and Slovenia access to mentors, networks, knowledge and capital. The group comprises over 1,000 active members and has already assisted over 10,000 CEE entrepreneurs. The organization’s annual event, held this year at the Novotel Warszawa Centrum Hotel, brings together over 150 fast growth entrepreneurs from Central and Eastern Europe to inspire and offer regional business networking opportunities. At the conference, regional and international entrepreneurs and investors will have the chance to share their views and experience on team-building, and on company growth and expansion beyond borders. Networking is an important part of the conference, and the event will feature prearranged one-on-one meetings as well as

other networking opportunities organized for building new business relationships. The conference will feature keynote presentations by a number of high-profile speakers, including Jerry Colonna, an early investor in Twitter who has been named as one of the 100 Most Influential People for the New Economy by Upside Magazine. Others will include Johan Gorecki, an entrepreneur who has worked with the founding team of Skype, Hubertus van der Vaart, co-founder of Small Enterprise Assistance Funds, Jacek B∏oƒski, CEO of Lewiatan Business Angels, Robert Kwiatkowski, deputy director in the Market Development Department at the Warsaw Stock Exchange, and Bogus∏awa Cimoszko-Skowroƒska, founder of CMS Corporate Management Services. Speakers will explore ways to find unique business synergies in the CEE region, a diverse grouping where each country has comparative advantages and provides unique opportunities. Among the topics that will be covered during the two-day event are What does it take to make it in Poland? Leveraging Polish economic growth to expand business, Becoming an entrepreneur & CEO that can manage and induce change, as well as discussion panels held with mentors and entrepreneurs. ●

Francois Hollande nis∏aw Komorowski, who met with then-candidate Mr Hollande in March this year. “It is a good result for Poland,” Roman Kuêniar, foreign policy adviser to President Komorowski, told reporters. He said he expected “better presidential-level contacts” following Mr Hollande’s election.

“France might now be more open to the opinions, sensitivities and needs of other countries,” he said. Mr Kuêniar also announced that Mr Komorowski and Mr Hollande would hold a bilateral meeting on the sidelines of the upcoming NATO summit in Chicago this month. The Polish president has also invited Mr Hollande to visit

Warsaw. Mr Kuêniar said that Mr Hollande had expressed his interest in bolstering the Weimar Triangle, an intergovernmental group created to boost cooperation between Poland, Germany and France but which played a low-key role during Nicolas Sarkozy’s presidency. Remi Adekoya

Domestic politics

Sejm passes controversial pension reform legislation Donald Tusk has successfully pushed through a change to the retirement age amidst protests from labor unions and the opposition Last Friday the Sejm, Poland’s lower house of parliament, approved the government’s pension-reform package, including the controversial move to incrementally raise the retirement age in Poland to 67 for both men and women. Prior to the reform Polish men could retire at 65 and women at 62. The reform will be gradual however, with men retiring at 67 by 2020 and women by 2040. The reform allows for earlier retirement if certain conditions are fulfilled. Men can go on early retirement at 65 if they have worked for at least 40 years (and made their social security payments). Women can retire at 62 if they have worked for 35 years. The earlier pension will be roughly 50 percent of the value of the full pension the person would have been entitled to if he or she had worked until 67.

COURTESY OF KPRM

Potential z∏.3 billion Multimedia sale

COURTESY OF FLICKR/FRANCOIS HOLLANDE

Prime Minister Tusk in parliament after the vote ‘A barbaric act’ “A barbaric act has just been passed,” Jaros∏aw Kaczyƒski, leader of opposition party Law and Justice (PiS), told reporters after the vote. He added that Prime Minister Donald Tusk’s proposal that people could go on earlier retirement in return for half of the pension they would otherwise receive was “condemning people to starvation.” Another change in Poland’s pension system regards uniformed personnel. Up until now uniformed personnel such as police could retire after 15

years of service irrespective of their age. Following the government’s reform, those who join a uniformed service after 2013 will be able to retire at 55 if they have 25 years of service under their belt. The reform package has already cost the ruling Civic Platform (PO) in the polls. It is not yet clear if more damage will be done to Donald Tusk’s party now that the legislation has passed. A TNS poll taken in May showed that PiS has caught up with PO. Both parties now enjoy 34 percent suppRemi Adekoya port.

BUSINESS

MAY 14-20, 2012

www.wbj.pl

Manufacturing

Foreign investment

Polish car production falls by nearly 30 percent

Poland becoming a service center hub

A lack of demand in the euro zone is behind the drop

Business service centers in Poland now employ 86,000 people

expected to hit a record high in 2012. Volkswagen subsidiary Skoda Auto has played a major role in the Czech car market’s improved fortunes, with the firm selling a record 875,000 cars last year. Automobile production currently accounts for about 7 percent of Poland’s industrial output, with more than 98 percent of all cars produced in the country exported abroad. In 2011 total production in Poland reached 825,000. In the first four months of 2012 total production amounted to about 249,000 cars, 19.95 percent fewer than for the same period of last year. David Ingham

COURTESY OF FIAT

Polish car production fell significantly last month as the ongoing financial crisis caused a drop in demand in the euro zone. Poland produced 53,823 passenger cars in April, a 27.78 percent year-on-year fall, and 16.48 percent less than in March, according to market research institute Samar. “The demand in Europe remains meager, which of course must impact the production in European factories, also on Poland,” Samar said in a statement. “Producers have revised their production plans, but these reductions may not suffice.” The country’s top three car manufacturers – Fiat Auto Poland, Opel and Volkswagen – all saw significant drops in production figures in April. Opel was the worst hit with a 24.4 percent decline, followed by Fiat (16.8 percent) and Volkswagen (9.5 percent). This is unsurprising given the fact that the number of

new cars sold in Europe also fell significantly in Q1. According to the European Automobile Manufacturers’ Association (ACEA), the number of newly registered passenger cars decreased by 7.7 percent year-on-year in the first quarter. Demand for vans decreased at an even stronger rate of 9.7 percent. It is not only Poland’s automotive industry that is feeling the pinch. In Germany, Europe’s largest automotive market, April production fell by 10 percent year-on-year, according to Polish daily Rzeczpospolita. In contrast, car production in the Czech Republic is

Poland produced 53,823 cars in April

Poland is becoming an increasingly popular location for companies from the EU and US to open business service centers, according to a new report by the Association of Business Service Leaders in Poland (ABSL) and the Polish Information and Foreign Investment Agency (PAIiIZ). These service centers now employ 86,000 people in Poland, with ABSL estimating that the total number of people employed in this sector will increase to 100,000 by the end of this year. “According to some reports, Poland is third in the world, after India and China, in terms of the number of business service centers. In other reports it only falls two places, making it fifth, behind the Philippines and Brazil,” Jacek Levernes, CEO and cofounder of ABSL, told the conference. Most commonly, those who are employed in such

PZU to spend z∏.25 million on rebranding Insurance giant PZU is refreshing its image to become more attractive for customers and to highlight the changes the company is undergoing. On the second anniversary of its debut on the Warsaw Stock Exchange last week PZU presented its new logo. It is similar to the old one when it comes to colors and design, but devoid of ornaments.

centers are graduates who majored in economics, administration, IT, and engineering or are technical or foreign-language specialists. Jadwiga Naduk, head of the market research and consultancy at Hays Polska, said the reason Poland is an attractive place for investors from the business service sector is that it has lower costs of employment than Western countries, fewer cultural differences between investors and employees than in the case of China or India, and skilled graduates. “In the coming years, Poland’s business service sector will be developing further and attracting more investors and Poland will be able to specialize in business services,” said ABSL vice president Marek Grodziƒski. Between 2009 and 2011, the number of jobs offered in service centers in Poland grew by 50 percent. It is estimated that next year, combined sales of all service centers operating in Poland will increase from z∏.12 billion to z∏.15 billion.

Russians eye Polish chem sector Russian mineral fertilizer giant Acron is seriously considering participating in the privatization process of the Polish chemical sector. Apart from Azoty Tarnów, it is also considering acquiring stakes in the Pu∏awy and Tarnów groups. Jerzy Marciniak, CEO of Azoty Tarnów, is not delighted at the prospect of Russian entities becoming shareholders in his company, but also sees the potential positives, Puls Biznesu wrote. ●

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BUSINESS

www.wbj.pl

PKO BP plans dividend payout PKO BP has recommended a payout of z∏.1.6 billion in dividends from its 2011 profits, equaling z∏.1.27 per share, the bank announced last week. “We want to consistently reward our shareholders with a share in the profits to the extent allowed by the current, good capital position and liquidity of the bank,” wrote CEO Zbigniew Jagie∏∏o in a statement. PKO BP’s 2011 net profit was z∏.3.95 billion.

T-Mobile grows on smartphones Polska Telefonia Cyfrowa (PTC), operator of the TMobile network, had a good Q1. The company’s revenue reached z∏.1.747 billion, 0.6% more than in the same period a year before and more than Orange, the market leader, whose revenues only rose by 0.3%. The company said that one of its successful tactics has been marketing linked to smartphones.

Retail trade grows According to the most recent report published by Eurostat, the volume of retail trade in Poland increased in March by 1.5% y/y and by 2.6% m/m. The latter was the second-best result in the entire European Union, after Bulgaria’s increase of 3.9%. ●

MAY 14-20, 2012

Airline industry

LOT breaks passenger record The Polish airline carried some 405,000 passengers in April Poland’s state-owned air carrier LOT Polish Airlines transported 405,000 passengers last month, a record for April, and 5 percent more than in the same period of last year. “We saw in April a record increase in the number of passengers on all flights. The number of people carried by LOT, whether traveling in business class or economy is 405,000. Never has LOT carried so many people in April,” company spokesperson Leszek Chorzewski said in a statement. Mr Chorzewski stated that 75 percent of total seats were

used in all LOT flights during this period, with this figure at 85 percent for long-haul flights. “In the case of our domestic connections we also recorded a rise in the number of passengers. In April, [seats filled] was almost at 75 percent, compared to 69 percent in the same period of 2011,” he added. Mr Chorzewski said the improved results were down to the implementation of a strategy aimed at making the company more profitable. Talks are currently at an advanced stage between LOT and Turkish Airlines over the proposed privatization of the former company. Turkish Airlines’ president

COURTESY OF WIKIMEDIA COMMONS/ADRIAN PINGSTONE

LOT’s passenger numbers were up 5 percent year-on-year in April Hamdi Topcu said in a statement last week that the company would make a final decision on whether to purchase LOT in June. “I think we will reach a stage of making a decision within a month. LOT’s high-

ranking officials are coming to Turkey in the upcoming days,” Mr Topcu told reporters. In 2011, LOT made a z∏.145.5 million loss, compared to a z∏.163.1 million loss a year earlier. This year the company hopes to register a profit of

some z∏.52.5 million. Turkish Airlines is currently the world’s eighth-largest airline. In 2011 it won the award of “Best Airliner in Europe” at the 2011 World Airline Awards held by Skytrax. David Ingham

Banking

A strong Q1 for Polish lenders The sector’s overall net profit grew 10.5 percent in the first three months of 2012 A slew of first-quarter earnings reports released last week paint

a positive picture for Poland’s banking sector, with Citi Handlowy, Pekao and Getin Noble Bank all recording strong annualized profit increases. Moreover, the Financial Supervision Authority (KNF)

Leaps and bounds Selected Polish banks’ Q1 2011 and Q1 2012 net profits, in z∏oty millions 1,000 800 Q1 2011 Q1 2012

600 400 200 0 Bank Pekao

Citi Handlowy

Getin Noble Bank Source: banks' financial reports

Contact: Miros∏aw Stefanik ms@pnplaw.pl

In the upcoming days a draft of a new act on waste, based on the directive no. 2008/98/EC, which is the basic legal act concerning waste management in the European Union, is to be discussed in the Sejm. The provisions of the new act set forth the obligations of producers, owners and administrators of waste, sellers and agents in the waste trade, and public administration authorities. The draft of the act has been developed with new definitions such as: seller of waste (dealer) and agent in the trade of waste (broker). Some definitions, valid hitherto, will be changed significantly, such as definitions of: recovery, recycling, waste treatment and waste storage. The new act will clearly indicate that the costs of waste management are to be borne by the original producer of the

ed for the same period of last year. The sale of bond portfolios was the main driver behind the bank’s strong earnings. Meanwhile Pekao, Poland’s second-largest lender, saw its profit rise 10 percent y/y in Q1 to an above-forecast z∏.711 million on growth from interestbearing products. Getin Noble Bank’s Q1 net profit rocketed 66 percent to z∏.166 million, as its strategy of reducing mortgage lending in favor of higher margin products with shorter maturities (including consumer credit) started to pay off. Looking ahead, the Monetary Policy Council’s decision to hike the main interest rate to

4.75 percent last week is expected to help banks’ profitability, although volumes aren’t forecast to grow by much. “We have already seen a deceleration in the sale of mortgages, and this could carry over into the next few quarters, especially as we are having quite a lot of national holidays and Euro 2012 is coming up,” Mr Sobolewski said. These factors, he explained, could convince Poles to postpone making decisions about taking out credit. “Overall, we can expect Q2 to be comparable to Q1,” Mr Sobolewski added. Gareth Price

Contractual dispute

Legal News

New act on waste

released figures showing that the banking sector’s overall net profit grew 10.5 percent yearon-year in Q1 to stand at z∏.4.23 billion. “Interest rates were at a high level [4.50 percent] which helped banks, while volumes, despite growing at a slower pace, were still positive,” explained Micha∏ Sobolewski, analyst at DM IDMSA. “In Q1, there were also several cases of very good trading results, with Citi Handlowy doing excellently in this area,” he added. Citi Handlowy made a net profit of z∏.244 million in the first three months of the year, 34 percent more than it record-

waste and by the current or previous owner of the waste.

Working conditions for foreigners from outside the EU At the end of April, an amendment to the act on foreigners was passed to the president for his signature. The amendment, which has already been accepted by parliament, concerns conditions that relate to citizens from countries outside the EU who come to Poland to work in professions which require higher education. The amendment is just the first from a whole package of directives concerning the acceptance of economic migrants by EU member states. The amendments will come into force 14 days after they have been signed and announced by the president. ●

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Emperia files z∏.431 million suit against Ernst & Young The professional services firm says Emperia’s position is unfounded One of Poland’s largest trading companies, Emperia, has filed a lawsuit against Ernst & Young in the Arbitration Court in Warsaw. Emperia is asking for more than z∏.431 million in damages it says it suffered due to a breach of contract, the company announced in a statement last week. The case dates back to a transaction between retailer Eurocash and Emperia that eventually saw Emperia offload its distribution company, Tradis, to Eurocash. Ernst & Young was hired to make calculations on the value of Tradis, which were to be

used as a basis for the transaction. Emperia claims E&Y accepted the valuation methodology the two companies proposed. But after a few months, the auditor asked to be exempted from responsibility for the results of its work, Zbigniew Drzewiecki, a partner at Drzewiecki, Tomaszek & Partners, the law firm representing Emperia in the case, told Parkiet. E&Y also allegedly asked for higher remuneration than was originally agreed upon and that it be allowed to use its own calculation methodology. “After many meetings, the auditor [E&Y] refused to complete the contract,” said Mr Drzewiecki. This, he said, put the deal in jeopardy.

Lacking an independent valuation for Tradis, Eurocash and Emperia were stuck with their own, different valuations, creating a conflict that eventually led them to court. In the end, the parties reached an agreement for the sale of Tradis, but Emperia claims in a statement that it suffered losses because of the incident. Ernst & Young says it hasn’t received any official court documents regarding the lawsuit. “Thus, we refrain from commenting on this matter,” Ernst & Young spokesperson Barbara Górska told WBJ. “Having said that – we consider the claims presented by Emperia Holding in the media so far as groundless and having no legal merit,” she added. Gareth Price

FINANCE & ECONOMICS

MAY 14-20, 2012

www.wbj.pl

Poland good at spending EU money

Interest rates

Poland hikes headline rate Poland’s Monetary Policy Council (RPP) last week raised the country’s headline interest rate for the first time since June 2011, as inflation continues to exceed the central bank’s target. Last Wednesday the RPP announced that it had hiked the main interest rate by 0.25 basis points to 4.75 percent, its highest level since January 2009. Most economists had expected rates to be left unchanged, although the hike is not a complete surprise since policy markers had warned a rise was a possibility. The hike comes at a time when central banks the world

over are choosing to keep interest rates low, in an effort to encourage spending and stimulate economies. Polish central bank chief Marek Belka told reporters that the RPP can afford to pursue “a conventional monetary policy,” underscoring Polish rate-setters’ confidence in the country’s economy. “Our decision today was more of a step towards normalization of monetary policy rather than a sign of tightening,” he added. The RPP said in a statement that it had made the decision based on recent strong retail sales growth, indications of improved business sentiment and expectations of continued higher inflation. The inflation rate has exceeded Poland’s 2.5 percent

target for the last 18 months, despite falling in March to 3.9 percent on the year. Inflation is expected to remain at around 4 percent over the next few months before falling later in the year. The move to hike rates met with sharp criticism from Poland’s Deputy Prime Minister Waldemar Pawlak. “Unfortunately the council stabbed our development processes in the back by totally unnecessarily and totally over-zealously raising interest rates,” Mr Pawlak told the Polish Press Agency (PAP). “Another wave of the crisis is possible, and raising rates in this situation is a dramatic mistake. I hope that it will be possible to correct this decision if inflation begins to fall in the next couple of months,” he added.

Poland has spent over z∏.200 billion in EU funds in the last five years, which amounts to three quarters of the EU funds allotted to the country in the 2007-2013 budget. This makes it one of the biggest spenders of EU money in the bloc, according to Dziennik Gazeta Prawna. The majority of the money was spent ont infrastructure improvments.

COURTESY OF THE EUROPEAN PARLIAMENT

The move was criticized by Poland’s deputy PM and finance minister

Mr Pawlak said the hike was a “dramatic mistake” Finance Minister Jacek Rostowski also questioned the RPP’s decision. “The constitution guarantees the full independence of the Monetary Policy Council – but it does not

guarantee its infallibility. I hope that the Council’s decision will not prove wrong in a couple of months,” Reuters reported Mr Rostowski as saying. Gareth Price

Polish industry weakened in April, sign of a slowdown Poland’s manufacturing Purchasing Managers’ Index (PMI) reading eased to 49.2 points in April, below analysts’ forecasts and nearly a point lower than the previous month’s 50.1-point reading. The reading below 50 points suggests a contraction

of Poland’s manufacturing sector took place last month. Readings above 50 points indicate expansion. HSBC wrote in a report that driving the overall deterioration in operating conditions in April was a decline in new business, a factor which

lead to a near-stagnation of production at the start of the second quarter. “The economy is slowing as marked most recently by very poor industrial production growth in March,” said Agata Urbaƒska, economist at the Central & Eastern Europe

Media patronage

Training with horses Bilans Consulting Development trains managers through innovative methods Over the last four years Bilans Consulting Development, under the leadership of founder and director Zaneta Poirieux, has been pioneering an innovative method of manager and leadership training. Horse Concept Poland starts from the premise that over 70 percent of human communication is non-verbal. By interacting with horses under the guidance of the firm’s skilled trainers, managers learn to develop their emotional intelligence, which in turn helps them better communicate and collaborate in their work environment. Horses are very sensitive and reactive to human behavior, and in this training, they become a mirror that allows managers to adjust their attitudes in real time, in a real situation. Horse Concept actively cooperates with French companies in Poland, and firms that have taken advantage of their original training include Auchan, Decathlon, EDF, Elea Immochan and Total. A recent manager training with current and potential clients of BCD held at the Chojnów horse stable, a few kilometers south of Warsaw, illustrates the functioning of Horse Concept. In the first part of the presentation, a certified trainer explained the main ele-

ments of horses’ behavior. Participants then moved on to one-on-one exercises with a horse, where they had to try to communicate orders. The goal was that the horse recognize the trainee as the leader, and choose to cooperate with him or her voluntarily. For some participants, this proved to be easier said than done, as horses reacted to lack of confidence by carelessly running around the horse arena. But participants who succeeded in overcoming their own fears, regaining confidence to show initiative, creativity and ability to compromise were rewarded with gaining the horse’s trust, and these animals started to obediently follow directions. In the last stage of the exercise, trainers debriefed with participants, going through each stage of the exercises and explaining how the skills required to successfully communicate with horses can apply to and help in a professional career. Although still somewhat mysterious compared to more conventional leadership training methods, training with horses is gaining in popularity across Europe as its focus on effective relationships based on mutual respect and trust helps decision makers in managing the development of their firms and their teams. ● For more information, log on to horseconcept.com.pl

division of HSBC. “The negative drag comes from the external environment with the new export orders underperforming the new orders index in the second half of last year and both falling to a lowest level since mid-09 in April,” she added.

Poland’s PMI has come in below 50.0 three times in the past six months. “We think the data confirms the expected slowdown in the Polish economy,” analysts at Bank Zachodni WBK wrote in a research note. Gareth Price

GDP to grow by 2.9% in 2013 The government has projected a growth in Poland’s gross domestic product of 2.9% in its 2013 draft budget. The average annual inflation rate is expected to stand at 2.7%. The announcement added that in 2013, economic growth will be 0.4 percentage points higher than this year. Assuming a stabilization of prices in commodity markets, inflationary pressures will decrease in subsequent years, although they will still be high in 2012. ●

INTERVIEW

www.wbj.pl

MAY 14-20, 2012

Poland in the EU

A question of leadership Ewa Boniecka: How do you see the fact that Poland’s European policy emphasizes Germany as being its most important ally? Does this mean Poland’s central focus is on improving cooperation with the biggest Western players in the EU, rather than with smaller CEE members? Jacek Saryusz-Wolski: I do not agree with the suggestion that while promoting close cooperation with Germany, we are at the same time neglecting our important aim of building coalitions with members from our part of Europe. Moreover, I do not see any contradiction between those two lines of Poland’s foreign policy. Germany is the biggest member state, the biggest economy, but Germany and France alone are not sufficient to carry Europe ahead. Yet Germany’s responsibility is the biggest and Polish Foreign Minister Rados∏aw Sikorski was right when he stressed Germany’s responsibility and obligation to carry out the rescue operation in the EU. However, Germany itself has a problem in defining its role in Europe. So when people come to ask who should lead Europe, some say Germany, others say France and Germany, others Germany, France, Britain, or Germany, France and Poland. My answer is: Brussels, via a strengthened “community method,” a strengthened European Commission as the executive and a stronger European Parliament as the democratic legislator and legitimizing controller. The Union is a community that will soon comprise 28 member states. In

order to advance and harmonize certain common interests among the small, medium and big, the south, the north, the west and the east, we need common structures rather than intergovernmental subgroups. Nevertheless, Poland is talking to the bigger and smaller players, and trying to be as “big” of a player as it can. Poland being a leader in the Visegrad Group (Czech Republic, Hungary, Poland and Slovakia) or Visegrad Plus (with Bulgaria and Romania) creates a synergy; the bigger our role in the region the better our relations with the biggest in the EU, and viceversa. Overall, what is needed is strong leadership by EU institutions and a “variable geometry” in European policies. That means coalitions based on substantial matters rather than on lasting “marriages.” Yet it seems that the Weimar Triangle (Poland, Germany, France) is not playing the role we would wish of it. Why is this? I perceive the Weimar Triangle as being a very useful instrument for closer cooperation, which allows Poland to gradually strengthen its role in Europe. Yet we should not have the illusion that we are an equal member of the Weimar Triangle. I think that we should invest in the Weimar Triangle as much as possible. It is useful in various contexts although we should restrain ourselves from believing that it is more than it actually is. One cannot decree the equality of partners, since the economic potential of its members is dif-

ferent, as is their military and political potential. How do you assess the influence and potential of the Visegrad Group? We have a common history, common experiences of transformation from communism to democracy and from a centrally controlled economy to a market economy, and we share many common interests as members of the European Union. We are very much involved in strengthening the Eastern Partnership Policy and policy towards Russia, and have significant influence in shaping the overall European Neighbourhood Policy. We are fighting hard to develop a common energy security policy and to defend cohesion policy. We should exploit this useful platform of cooperation and enlarge it. We have created the “Visegrad Plus Initiative” in the European Parliament, co-opting Bulgaria and Romania. This framework has proven very successful, in relation to the Neighbourhood Policy and in running the EURONEST Parliamentary Assembly of Eastern partnership. Why not exploit these synergies between partners even further? Do you think the recent remarks by Law and Justice (PiS) leader Jaros∏aw Kaczyƒski to the effect that Poland’s foreign policy betrays its national interests and that some of its political leaders are responsible for the Smolensk tragedy, could have any impact on Poland’s standing in Europe? There are two ways of looking at this situation: From the Warsaw point of view and from the Brussels point of view. The European Union and European politicians were with us at the time of this great tragedy and showed a lot of compassion towards us during

that difficult period. But they do not follow the present internal disputes in Poland on the subject and do not engage in any other disputes concerning the Smolensk catastrophe. They do not treat these disputes as representing successes or failures in Poland’s foreign policy, and they therefore do not have an impact on the standing or the position of Poland in Europe and in international relations. How do you view Lithuania’s rejection of Poland’s invitation to participate in a meeting of Poland and the Baltic states for preparing a common position ahead of the the end of May? I don’t think this is a normal diplomatic incident. I see it as counterproductive and believe Lithuania should reflect on it. Despite bilateral differences, Poland participates in missions to protect the air space of Lithuania and the other two Baltic republics. So despite Polish-Lithuanian relations not being good at the moment, I think that this should not have an impact on important multilateral problems like our common security. Moving on to economic matters, some are saying the collapse of the euro zone is just around the corner, and that instead of using bailouts to solve the Greek problem, that country should instead reintroduce its national currency. What is your assessment of these lines of thinking? First of all, I would like to clarify that we are not facing a crisis of the euro as a currency. The euro is in quite good shape. We have a debt crisis in some countries that belong to the euro zone. This is a considerable difference. However, countries that don’t belong to the currency bloc, such as Latvia not so long ago and NATO summit in Chicago at

COURTESY OF JACEK SARYUSZ-WOLSKI

MEP Jacek Saryusz-Wolski, vice president of the European People’s Party (EPP) and member of the Foreign Affairs and Budget committees of the European Parliament, talks to WBJ about Poland’s role in Europe, the European financial crisis and immigration

MEP Jacek Saryusz-Wolski says Germany and France cannot lead Europe alone Hungary today, are also facing debt problems. So the crisis is a crisis of excessive debt, not of the euro. The solutions which are being applied are first of all short-term solutions composed of various forms of bailouts, rescue funds and capital injections that together amount to €2 trillion. This is a huge sum of money. These solutions heal the wounds in the short term, but they do not solve the roots and causes of the problems, which are structural in nature. The EU’s economies, some to a greater degree, mainly the southern ones, suffer from a structural imbalance and lack of competitiveness. They spend too much, consume too much and save too little. Their populations don’t work for long enough and they have overdeveloped welfare states and social benefit systems. As far as competitiveness with the outside world is concerned, they are in a losing position. Bailouts and rescue funds will not solve these problems in the longer term. So what is

needed, apart from short-term operations, is not only austerity and fiscal discipline, which have been introduced through the Six-Pack and the not-yetratified Fiscal Pact, but a deep process of reform. In some cases, like in Greece, this is being guided by external institutions such as the IMF, the European Central Bank and the European Commission. But at the end of the road we need stronger EU-level economic governance and a fiscal union. So you reject the notion that it would be better for the EU and for Greece if Greece were to withdraw from the euro zone and reintroduce the drachma? If letting Greece leave the euro zone was a solution to the crisis in Europe, it would have happened a long time ago. But it is not. Greece remains a European problem and responsibility, whether in or out of the euro zone. It is a geo-strategically important country on the southeastern flank of the EU, a member of

INTERVIEW

MAY 14-20, 2012

NATO which has a serious impact on security issues. Europe cannot afford to lose Greece. It is true that Greece is defaulting on its debt, but this is happening within the euro zone, under a controlled “healing process,” not a disorderly one involving social unrest and violence, or in the worst possible case, via an overthrow of the democratic system. Europe cannot afford this. The costs of rescuing Greece are smaller than the overall political costs that would have to be borne if Greece were to leave the euro zone. The economies of EU member states are interdependent and as many studies point out, the dismantling of the euro zone would provoke a huge fall (of between 20 percent to 50 percent) in the GDPs of other EU countries. Everyone would suffer. How could the EU avoid such a scenario and get itself back on the road to economic growth? In political terms we should promote a policy of solidarity and of strengthening the weaker and problematic parts of the EU system. The problem is that there is not enough determination and that reaction times are not quick enough. We should have quicker and deeper solutions when it comes to economic

governance, a quicker ratification of the Fiscal Pact and common, institutional solutions such as the introduction of eurobonds. We should mutualise debt, enforce common rules and as a next step, create a transfer union. A union of such interdependence as the one we have in the EU needs a budget not of 1 percent of its GDP but of some 5 percent. The political will to find common solutions to improve EU governance is linked to finding long-term structural economic solutions and looking for different ways to fight the crisis. Due to the fact that countries with the euro as their currency are so closely linked to other member states who have not yet introduced the common currency, eurobonds should be introduced in all EU member states. So Poland, as one of the 25 members that have signed the fiscal compact and has won the right to participate in some meetings of euro-zone members, should continue to fight for preventing deeper divisions of the EU into a twospeed union. Poles who live and work abroad are often referred to in Western media as troublesome immigrants, yet, for instance, Britons who work in Spain, France or Italy are never referred to in this manner. We all have European

RISTORANTE SAN LORENZO

passports and the EU is based on the single-market principle, so why are Poles categorized differently? We are wrongly perceived as being immigrants. We are European citizens with equal rights to live, work, be granted social care and benefits in all EU members states. The problem is fundamentally political and administrative, and has its roots in the mentality of some countries and their political elites. The free movement of people from one EU country to another is one of the fundamental pillars of the single market enshrined in EU treaties. ... We should demand that European law and equal treatment is fully applied. We have the necessary legal and political instruments to do that. Does Poland do enough to protect the rights of Poles moving to Western European countries? I think that first of all we should stop calling them immigrants. Poles and others who move to various EU countries to live and work have equal rights, and are EU citizens. I believe that in legal and diplomatic terms Poland is doing exactly what it should. But the perceptions held by political elites and societies still need to be changed and EU standards more energetically implemented by the European Commission. ●

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Media patronage

PAIiIZ talks up eastern Poland at Dubai conference Promotion of Poland’s five easternmost voivodships was the primary focus for the Polish Information and Foreign Investment Agency (PAIiIZ) at the Annual Investment Meeting expo and conference on emerging market investments held in Dubai, UAE, at the beginning of May. At the agency’s large stand in the expo hall, several companies and regions shared space promoting their various opportunities and wares. Among the companies showing off for investors were PZL Mielec (makers of the S-70i Black Hawk helicopters), Leopard Automobile (a firm also located in Mielec that makes hand-crafted roadsters), as well as yacht-makers Sedna Yachts and Nautiner Yachts. Kielce, the capital of Âwi´tokrzyskie voivodship, had a large presence as well, with representatives from the city, the Kielce International Airport, the Targi Kielce conference center and Kielce Technology Park all talking up investment opportunities. When asked why choosing to focus on eastern Poland, PAIiIZ representatives were keen to emphasize some of its investment advantages. “Eastern Poland is a special macro region,” said Bo˝ena Czaja, PAIiIZ’s deputy president responsible for eastern Poland. She added that the five eastern voivodships – Lubelskie, Podkarpackie, Podlaskie, Âwi´tokrzyskie and WarmiƒskoMazurskie – which comprise nearly a third of Poland’s area and 30 percent of Poland’s

AL. JANA PAWŁA II 36

population, have several advantages, including a young and highly skilled labor force, the lowest labor costs in Poland, ecofriendly conditions and a location close to Poland’s eastern border. PAIiIZ representatives also pointed out that 31.8 percent of the population of eastern Poland is below the age of 25. The region features 53 universities, with some 33,000 students. Priority sectors for investment in eastern Poland, according to PAIiIZ representatives, include aviation, BPO and IT, business tourism, food, furniture, metals and machinery, and yacht production. Ms Czaja said that the industries that had met with the most interest from potential investors include the food and tourism industries, as well as luxury products, mining and property. Other Polish representatives at the conference repeated well-worn slogans about Poland’s investment attractiveness, including its distinction as not having had a single quarter of negative economic growth during the global financial crisis. “Investors are looking for economic and political stability – and those are things that are in short supply in Europe. But Poland can provide both,” said Marek ¸y˝wa, deputy president of PAIiIZ responsible for foreign investment. Andrzej Dycha, undersecretary of state in the Ministry of Economy, called Poland an “engine of growth in Europe.” ●

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OPINION & ANALYSIS

www.wbj.pl

MAY 14-20, 2012

A misguided search for growth Daniel Gros

few months ago, 25 of the 27 members of the European Union solemnly signed a treaty that committed them to enshrining tough deficit limits in their national constitutions. This so-called “fiscal compact” was the key condition to get Germany to agree to increase substantially the funding for the euro zone’s rescue funds, and for the

“There is rather little that Europe can do to create growth” European Central Bank to conduct its €1 trillion “long-term refinancing operation” (LTRO), which was essential to stabilizing financial markets.

tion for continued austerity. About 15 years ago, Europe endured a similar cycle. In the early 1990s, when the plans for the European Monetary Union (EMU) were drawn up, Germany insisted on a “Stability Pact” as a price for giving up the Deutsche Mark. When Europe fell into a deep recession after 1995, attention shifted to growth, and the “Stability Pact” became the “Stability and Growth Pact” (SGP) when the European Council adopted a resolution on “growth and employment” in 1997. The need for growth is as strong today as it was 15 years ago. In Spain, the unemployment rate then was as high as it is now, and in Italy, it was higher in 1996 than it is today. Politically, too, the background is the same: the “G” was inserted into the SGP under pressure primarily from a new French administration (at the time headed by Jacques Chirac). Today, France has again given the political impetus for a shift to growth.

The key elements of a growth strategy discussed among Europe’s leaders these days are actually the same as in 1996-1997: labor-market reforms, strengthening of the internal market, more funding for the European Investment Bank (EIB) for lending to small and medium-size enterprises (SMEs), and more resources for infrastructure investment in poorer member states. The last two, in particular, attract a lot of attention because they involve more spending. But circumstances are also quite different today. The EIB’s business model would have to be radically changed to make it useful to promote growth, because it lends only against government guarantees, whereas southern Europe’s fiscally stressed sovereigns cannot afford further burdens. Moreover, contrary to a popular misconception, the EIB cannot lend directly to SMEs. The EIB can only provide large banks with funding to lend to local SMEs. But the ECB is essentially already doing this with its three-year LTRO loans. There is also talk about a “Marshall Plan” for southern Europe. Fifteen years ago, there was a clear need for better infrastructure there. But, since then, the southern countries have had a decade of rather high infrastructure

Shifting focus Today, however, the euro zone’s attention has shifted to growth. This is a recurring pattern in European politics: austerity is proclaimed and defended as the precondition for growth, but then, when a recession bites, growth becomes the precondi-

Growth strategy Making growth a political priority is uncontroversial. (After all, who could be against it?) But the real question is: What can Europe do to create growth? The honest answer is: rather little.

investment – more than 3 percent of GDP in Greece, Portugal and Spain. As a result, most countries in the EU’s south probably have a sufficient stock of infrastructure today. In fact, more infrastructure investment would actually make most sense in Germany, where infrastructure spending has been anemic (only 1.6 percent of GDP, or half the rate of Spain) for almost a decade. That is why Germany’s famous Autobahnen are notoriously congested nowadays. But one does not need European funding to finance infrastructure in Germany, where the government can raise funds at negative real cost. At the rates that it is paying today, the German government should be able to find many investment projects that yield a positive social rate of return. Given that Germany is close to full employment, more infrastructure spending there would probably suck in imports (and attract unemployed construction workers from Spain), contributing to much-needed rebalancing within the eurozone. Unfortunately, this is unlikely to happen, because infrastructure spending runs up against popular opposition. Indeed, such spending is decided at the local and regional level, where grass-roots opposition to

any large project is strongest (it took more than 20 years, for example, to push through the modernization of Stuttgart’s railway station).

Doing something The urge to be seen to be “doing something” is leading Europe’s policymakers to rely on the few instruments with which the EU can claim to foster growth. But they should recognize that today’s growth crisis is different. The real bargain should not be austerity plus a Marshall Plan for the south, but rather continued austerity plus labormarket reforms in the south, combined with more infrastructure investment in Germany and other AAA-rated countries like the Netherlands. Deep service-sector reforms in Germany would also help to unlock the country’s productivity potential and open its market to services exports from southern Europe. That way, the south would have a chance to find jobs for its rather well-educated young people, whose only choice now is between unemployment and emigration. ● Daniel Gros is Director of the Center for European Policy Studies. Copyright: Project Syndicate, 2012. project-syndicate.org

Europe’s opportunity in Hollande Martin Schulz

arely has an election resonated so widely across the European Union as the French presidential ballot has done. Rarely has a leadership change in one EU member state created expectations of a real policy shift.

A fresh chance Remarkably, a new European demos and public sphere are emerging from the economic crisis. Europeans are recognizing how interdependent they are. One country’s failures can threaten the entire European economy, and can call into question the fruits of 60 years of integration. Peace, solidarity, and prosperity are not irreversible achievements; only 27 countries working together can guarantee them. Francois Hollande’s victory is a fresh chance for Europe. It should spell the end of a policy oriented exclusively towards austerity, which has paralyzed our economies and divided the EU. The new French president’s commitment to a European growth policy has brought hope to citizens, and should not alarm anyone – certainly not the financial markets.

Mr Hollande’s plans for a growth initiative fall on fertile ground, especially in the European Parliament, which has repeatedly called for such measures. I am delighted that this message is increasingly echoed by the political mainstream, including most recently by European Central Bank President Mario Draghi. Likewise, the European Commission is working on a “growth pact” to be discussed by EU leaders in June. Indeed, Europe needs a master plan to avoid a tailspin of recession, growing unemployment, and weakening banking systems. Fiscal discipline remains essential, as are deep structural reforms. The growth pact can be properly financed by new sources of revenue, such as a financial-transaction tax and joint project bonds for infrastructure investment, or by curbing tax evasion and tax fraud and eliminating tax havens, as well as by more efficient and intelligent use of structural funds.

The road ahead What is to be done? First, targeted investment should be given priority. The European Investment Bank

would be a good vehicle – in addition to new project bonds – to boost spending on major infrastructure projects (for example, in the energy sector). The EIB could be given significantly more resources to boost its loan programs. In the longer-term, we should revisit the idea of joint Eurobonds. Channeling EU structural funds towards innovation is essential, given that spending on research and development is alarmingly low compared to our global partners. Fundamental reform of the Common Agricultural Policy should not remain a taboo. Indeed, the CAP is ensuring neither sustainable agriculture nor decent incomes for all farmers. Undoubtedly, tough negotiations lie ahead on this front, including with Mr Hollande. Second, young people must be a top priority. Our responsibility here is twofold: to put growth back on track, but also to respond immediately to the human tragedy that has hit our youth. The euro zone’s unemployment rate, at 10.9 percent, is at its highest level since the euro was introduced, and young people everywhere, as the first

to suffer the consequences of the crisis, are paying a disproportionally high price. Youth unemployment in Spain, for example, is above 50 percent. We cannot afford to sacrifice a generation, or, rather, risk creating a lost generation that could destroy Europe’s social fabric and stability. We need an immediate contingency plan: invest to finance job training, improve educational opportunities, and, crucially, create incentives for employers to hire young people. The ECB has been offering longterm loans to banks at a favorable rate. This money should be loaned out to small and medium-size enterprises, which are the lifeblood of Europe’s economy. The EU also needs common initiatives to replace piecemeal bilateral agreements on tax evasion and tax havens, which undermine the goal of a fair society. Third, member states should not cut the EU budget indiscriminately during negotiations on the Union’s long-term spending plan for 20142020. If we are serious about a master plan for growth, we need to provide the necessary means. The EU budget

is an investment vehicle that boosts economic growth and creates jobs. It finances crucial pan-EU transport and energy links. It helps to foster innovation and boost research and development. The EU budget leverages investment, allows for economies of scale, and cannot run a deficit.

Not too late The EU’s lack of solidarity, imagination, courage, unity, and vision in recent years has made Europe a symbol of division for some, if not many. Mr Hollande’s election now offers us a valuable opportunity to meet the challenges that the EU faces. Alternatively, we can allow growing poverty, fear, and anger to give rise to xenophobia and racism. But let us be optimistic. It is not too late. The EU is changing direction at last, and Europe’s leaders will find an energetic partner in the European Parliament. ● Martin Schulz is President of the European Parliament. Copyright: Project Syndicate, 2012. project-syndicate.org

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

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WBJ presents a special supplement on the trends and events shaping the future of the Polish economy as the European Economic Congress in Katowice gets underway

• WSE’s regional leadership • Energy diversification • Sino-Polish relations

EYE ON THE FUTURE W a r s a w B u s i n e s s J o u r n a l ’ s s p e c i a l s u p p l e m e n t o n t r e n d s s h a p i n g P o l a n d ’s e c o n o m i c f u t u r e

MAY 14-20, 2012

Economics

Europe turns against austerity Where is the Old Continent heading, and what does it mean for Poland?

COURTESY OF THE EUROPEAN COMMISSION AND FRANCOIS HOLLANDE

Like many countries in Europe, Poland has adjusted its policies to fit what until recently appeared to be a Europe-wide focus on austerity. The recent changing of the political guard in France and political uncertainty in Greece has, however, served to muddy the waters about the direction Europe is taking to respond to the economic crisis. France’s president-elect, the socialist Francois Hollande, has vowed to reduce the speed and depth of austerity measures being implemented in his country. “Europe is watching us, austerity can no longer be the only option,” he said. Mr Hollande has promised to increase stimulus spending in France to nurture growth. He also wants to renegotiate the German-backed rules for deficit reduction that European leaders agreed to in December. The European Commission has jumped at the chance

Winds of change?

Have the battle lines been drawn between Mr Hollande and Angela Merkel? to suggest pro-growth measures, re-floating proposals for a €10 billion capital increase for the EU’s investment bank. “We are seizing the

reporters. In Greece, meanwhile, the two main pro-budget-cutting, pro-bailout parties did not win enough votes to form a coali-

moment of advancing our previous proposals now in the new political climate,” EU Economic and Monetary Commissioner Olli Rehn told

tion in the May 6 legislative election, raising doubts about the country’s ability to avoid bankruptcy and remain in the euro zone.

Whether the prevailing winds are now truly blowing in favor of pro-growth measures is nevertheless unclear. German Chancellor Angela Merkel, who worked closely with Mr Hollande’s predecessor, Nicolas Sarkozy, says Europe’s Stability and Growth Pact “is not negotiable,” while the direction France takes will depend in significant part on the composition of its parliament following elections in June. Moreover, France’s ability to spend its way to growth is debatable, since its public debt is approaching 90 percent of GDP. “To spend more, you need more,” said Maciej Reluga, chief economist at BZ WBK. “There is no room for an increase in spending in France.” European Commission President Jose Manuel Barroso has said European member states should implement the fiscal policies they have agreed to. A meeting of EU leaders in June to discuss the fiscal pact Continued on p. 13 ➡

Unconventional energy

Shale gas: In need of a strategy Hopes for Poland’s shale gas potential only started gaining traction a few years ago. Now 19 firms are busy exploring over 100 concessions in a shale gas exploration industry that is already gaining international recognition. Nevertheless, today we are none the wiser on whether shale gas will prove, in the words of Zbigniew Pisarski, president of the board at the think tank Casimir Pulaski Foundation, to be the next Scandinavian dream or the next IT bubble. Evaluation of the progress made and forecasts

COURTESY OF KPRM

Poland’s nascent shale gas industry may be generating a lot of buzz, but the country still has to decide on a concrete plan for its development

PM Tusk’s government is hard-pressed to regulate the emerging shale gas industry for the future varied among experts at a conference organized by the foundation

last week. There seemed to be a consensus, however, on the fact that the Polish gov-

ernment has so far failed to devise a comprehensive strategy for this new industry. This, said experts, is the main task ahead. Conflicting reports have emerged on the country’s potential shale gas reserves. With drilling activity set to increase from this year, concrete knowledge – including the profitability of production – is on its way. According to Andrzej Szcz´Êniak, editor-in-chief of NaftaGaz.pl, contrary to “irresponsible promises made,” Poland doesn’t stand much chance of becoming an exporter of shale gas. “We would have to drill 10,000 boreholes a year, and the burden on society and the environment would be too big,” said Mr Szcz´Êniak. In 2011 there were 22 wells drilled around the country in search for shale gas.

The Environment Ministry expects that 49 new wells will be drilled in 2012, and by 2017, around 250. “I think 200 boreholes by 2015-2016 would be a huge success, but I’m not certain it’s achievable. The basic limitation is the density of population,” said Mr Szcz´Êniak. In the meantime, the Polish government has yet to define the regulatory environment in which prospecting companies would operate should shale gas production be possible on a commercial scale. “It doesn’t matter how much gas we have,” said Tomasz Chmal, energy expert and partner at White & Case. “Regulation should be in place whether we are a gas Eldorado or only cover domestic production. Of course, everything may go wrong,” he added, pointing to issues such as environment protection and taxation.

Dangers “There needs to be a strategy. Despite declarations from the country’s highest office, Poland doesn’t have a proper strategy for shale gas,” said Andrzej Szcz´Êniak. One major issue on which clear answers are needed from Continued on p. 14 ➡

In this supplement European economics and Poland . . . . . . . . . . . . . . . . . .11, 13 Shale gas in Poland . . . . . . . . . .11, 14 Energy diversification . . . . . . . . . . .12 Polish-Sino relations . . . . . . . . . . . .13 WSE regional leadership . . . . . . . .14

EYE ON THE FUTURE

www.wbj.pl

MAY 14-20, 2012

Energy

Shifting course

Nuclear: Poland to build its first nuclear plant Prime Minister Donald Tusk’s government has committed itself to building two plants by 2035, and neither Japan’s Fukushima disaster or Germany’s decision to phase out its own nuclear power plants have deterred these plans. Poland’s first nuclear power plant is now scheduled to be operational around 2025. Its cost is estimated at up to z∏.50 billion, and it will generate 3,000 megawatts (MW) of electricity. The combined operational capacity of the two plants will be 6,000 MW. In due course, nuclear power is forecast to hold a 20 percent share in Poland’s energy mix. In the meantime, the country does not have the technology to carry out its nuclear project on its own, and is set to choose a technological supplier – in a contract described as one of the biggest in the history of modern Poland – this year. Among contestants are French firms

Areva and EDF, GE Hitachi (a joint venture of General Electric and Hitachi), and Toshiba’s US-based unit Westinghouse. Several groups have voiced doubts about the soundness of the Polish government’s plans, including inhabitants who live near to sites proposed to host Poland’s first nuclear plant. Three towns on the Baltic coast, ˚arnowiec, Choczewo and Gàski, have been proposed, with the final decision scheduled to be made in 2013. To counter negative sentiment, the Ministry of Economy has launched a two-year, z∏.18 million-communication campaign, promoting the positive aspects of the nuclear project and emphasizing its safety and potential economic benefits. Opposition has also emerged in neighboring Germany, but the European Union has stated it would defend each EU member state’s right to make their own LN, AT decision on nuclear.

Renewable energy: Wind in its sails

SHUTTERSTOCK

COURTESY OF WIKIMEDIA COMMONS

As Poland tries to reduce its reliance on polluting coal it is seeking to diversify its energy sources. While many questions about shale gas remain, renewable energy and nuclear energy offer promising alternatives

Coal: A steady flow of investments Poland’s rock is rich in cheap, polluting coal, with which it produces around 90 percent of its electricity. Although the country is actively looking for alternative energy sources, coal is set to remain the dominant fuel for electricity production in the coming years. In conjunction with its efforts in the nuclear, renewables and shale gas sectors, Poland is currently in the process of replacing several of its old coal-fired plants with new, more efficient ones. Almost a quarter of the current generation capacity will have to be phased out by 2015 and Polish energy consumption, still low in comparison to Western Europe, is also forecast to grow significantly in the coming years. Poland’s electricity consumption is set to increase by 30 percent by 2030. Up until 2025, the Polish energy sector is therefore expected to see new investments generating nearly 30,000 megawatts of capacity, with a total value of z∏.220 billion, according to research firm PMR. Poland’s first two nuclear power plants account

for the bulk of the sum, but one-third of the new projects are hard-coal-fired units, leading to investments totaling several billion z∏oty and a new capacity of thousands of megawatts of coal power in the next few years. Many of the planned investments are replacement schemes and should have higher energy efficiency than the old plants. According to lobby group Central Europe Energy Partners (CEEP), new technologies will enable a 45 percent hike in energy efficiency, leading to a reduction of CO2 emissions by about 30 percent, close to levels seen at gas-powered plants. On average, coal still emits over twice as much CO2 as natural gas in electricity generation, and environmentalists are protesting against these massive new investments. But both the Polish government and industry argue that Poland needs to exploit its available coal energy resources in order to remain economically competitive. This position seems to enjoy strong support among the Polish public, as surveys show that Poles are the strongest supporters of BM, AT coal in the EU.

Poland is one of the biggest emitters of CO2 in Europe. In the face of more stringent EUwide emission-reduction plans, the country is looking for alternatives to coal. Perhaps contrary to widespread perception, Poland is spending big on environmental protection, with the National Fund for Environmental Protection and Water Management estimating that between 1989 and 2010, it concluded over 16,000 contracts allocating over z∏.30 billion for financing environmental projects. The fund estimates that in the past two decades, greenhouse gas emissions and untreated sewage discharged into water or on to the land have been reduced, respectively, by 63 and 90 percent. But more needs to be done, and a green technology that seems to be gathering particular momentum is wind. A 2011 report by Ernst & Young ranked Poland 10th in the world for its wind energy potential, and major investments are being carried out and announced this spring. Among them is Polska Grupa Energetyczna (PGE)’s z∏.14.6 billion plan to build three offshore wind farms, which received the green light from Poland’s Ministry of Transport, Construction and

Maritime Economy in April. By 2020, PGE wants the wind farms to have a total capacity of 1,000 MW, the same energy capacity as a coal-fired power station. According to calculations by daily Rzeczpospolita, investments in offshore wind farms to the tune of around z∏.680 billion are in the works. The paper, citing unnamed sources, reported that the Polish government is currently processing 54 applications from investors who are seeking to develop wind power projects. Domestic firms that have submitted applications include utility PGE, smaller rival Energa, oil refiner PKN Orlen and Kulczyk Investments. Foreign firms that have expressed an interest in building offshore wind farms in Poland include Belgium’s DEME, Portugal’s EDPR, Spain’s Iberdrola and Danish Dong Energy. Meanwhile in May, German utility RWE said it had started construction of its fourth wind farm in Poland, a €60 million project with a scheduled capacity of 39 megawatts. It is due to be completed in the first half of 2013. Poland currently has around 1,900 megawatts of wind energy installed, which represents some 6 percent of the power system’s total AT capacity.

EYE ON THE FUTURE

MAY 14-20, 2012

Foreign policy

A new chapter in Sino-Polish relations

During his visit to Warsaw in April, Chinese premier Wen Jiabao announced a $10 billion credit-line for Eastern Europe to support the development of infrastructure, new technologies and a sustainable economy, as well as a $500 million fund to assist Chinese investments in the region. Poland and China also signed agreements regarding cooperation between Polish and Chinese SMEs, cooperation in the field of sustainable infrastructure and cultural exchanges between both countries. “It is very important that our political relations are now deeper. This is the prerequisite to being able to do good business with China,” said Dominik Konieczny, analyst at the Poland-Asia Research Center (CSPA). Mr Konieczny said that China is apparently set on increasing its presence in Europe. “Poland is a good gateway for them. The labor costs are still lower than in Western Europe and it offers

access to all the EU markets,” he said. Andrzej Kaczmarek, an expert on China at consultancy KPMG, said he thinks the Polish infrastructure sector will probably be of interest to the Chinese. “I also think we are entering into the era of Chinese consumer products, I mean products under Chinese brands, not just produced in China. Poland is a good place to start from in that area,” he added. Meanwhile, Mr Konieczny said he thinks Polish chemical and food companies have a

good chance in China. He added, however, that the real results of Chinese Premier Wen Jiabao’s visit will be known only in one to two years’ time. China wants to double the current trade volume with Eastern Europe to $100 billion by 2015. The trade volume between Poland and China was valued at roughly $13 billion in 2011, of which $2 billion were Polish exports to China while the rest were imports from China. That was an annualized increase in trade volume of 16.6 percent. Remi Adekoya

COURTESY OF KPRM

The Chinese premier’s recent visit to Poland was more than a courtesy call; agreements were signed, money was pledged. What more lies in store?

Poland and China signed several agreements during Premier Wen’s visit in April

Europe turns against austerity ➡ Continued from p. 11 is expected to provide a clearer picture of the consensus in Europe. But until that point there is likely to be more market volatility. “It will be interesting to see to what extent the consensus we have seen so far on the fiscal pact will continue after June,” Mr Reluga said. “For Poland, in the short term, we could perhaps expect a weaker z∏oty or slightly higher bond yields.”

Anti-austerity for Poland? Maciej Golubiewski, an expert in European politics at the Sobieski Institute, said that since Poland has no major problems with budgetary discipline, a shift to anti-austerity on the European level could be a

good thing. Poland, he says, does not have the same need to limit spending as, say, Greece or Spain. “Poland does not need this corset, it needs to expand its economy,” he said. “Anti-austerity changes the mood, so there is a chance that countries such as Poland which don’t need to reduce spending will now not get such a big dose of austerity as others,” he added. Monika Kurtek, chief economist at Bank Pocztowy, however, said the fiscal pact in its present form suits Poland well. “Generally, Poland is on track to tighten its fiscal policies, so the fiscal pact is presently consistent with Polish policy, it is good for Poland.” Gareth Price

A tough nut Following GDP growth of 4.3 percent last year, recent economic data suggest the Polish economy is starting to lose steam in part thanks to the ongoing European crisis. Despite all the uncertainty, however, Poland’s hardwon reputation as being a stable country to invest in is expected to help it weather any potential storms. “In the case of our government bonds, if the situation globally is not good, then our bonds actually strengthen,” said Bank Pocztowy economist Monika Kurtek. “Poland is in a good fiscal condition, we are a reliable country for foreign investors.” ●

www.wbj.pl

EYE ON THE FUTURE

www.wbj.pl

MAY 14-20, 2012

Warsaw Stock Exchange

Leading the region The Warsaw Stock Exchange fared better than competitors in a slow first quarter while shoring up revenues with a new commodities exchange. Now it is gearing up for a trading-platform upgrade later this year

year. Vienna saw 23 percent, while its partner exchanges in Budapest and Prague took 11 and 10 percent respectively (see chart).

into commodities trading would pay off. TGE’s March revenues accounted for 10 percent of the WSE’s consolidated quarterly revenues. According to Mr Sobolewski, if TGE’s full-quarter income were included, it would have accounted for some 23 percent of the WSE’s revenues. Over the whole year, Mr Sobolewski said he expected TGE to account for about a 20 percent share of the WSE’s revenues, depending on activity in the capital market.

Adding power The Warsaw Stock Exchange maintains a tight grip on its leadership position in the Central and Eastern Europe (CEE) region, after it fared better than competitors and looks set to benefit from new commodities trading capabilities and a partnership with NYSE Euronext. Net profits reached z∏.33.5 million for the first quarter, marking a 13.2 percent drop in comparison with a year earlier. However, the figure was 33.6 percent higher than the WSE’s profits in the fourth quarter of 2011. The exchange put the y/y fall in profits down to lower trade turnover, which was not limited to the Warsaw Stock Exchange alone. According to the World Federation of Exchanges, turnover within the Europe, Middle East and Africa region (EMEA) dropped 21 percent overall. For the Warsaw Stock

Exchange, the drop was somewhat less drastic, at 16 percent. Ludwik Sobolewski, president of the Warsaw Stock Exchange, said the company was “satisfied” with the results, taking into context the insecurity and volatility on capital markets around the world. Among major stock markets in Europe, only Deutsche Börse saw a lower drop in turnover, at 12 percent. NYSE Euronext (which includes the Paris bourse) and London Stock Exchange Group saw drops in turnover of 25 percent and 18 percent over the quarter respectively. The WSE’s main rival in the region, the Vienna Stock Exchange, saw turnover plummet by 40 percent. In terms of the share of turnover in the region, the Warsaw Stock Exchange dominated, taking a full 54 percent over the first quarter of the

So far this year the WSE’s biggest move was its takeover in March of the Polish Power Exchange (TGE). Though it pushed up operating costs for the first quarter, which rose by nearly 13 percent over Q1 2011, WSE officials were confident that its diversification

New platform, cooperation with NYSE On November 2 the WSE will go live with its new trading platform, which it is implementing in cooperation with NYSE Euronext. The system will be the same as the one that is used on the NYSE, company officials said, and is expected to be a significant upgrade. Mr Sobolewski called its implementation “easily the biggest event of the year” for the stock exchange.

Mr Sobolewski also said that the WSE’s partnership with NYSE Euronext will be “richer than involving just technology.” When pressed for details, he said that one of the initiatives he could mention was cooperation along the lines of information distribution – NYSE Euronext would help WSE plug in to systems that would allow more investors to find information on shares listed in Warsaw. Andrew Kureth

Regional dominance

Steady profits

Share of exchanges in the region in share turnover, Q1 2012

Quarterly profits of the Warsaw Stock Exchange, Q1 2011 – Q1 2012 (in z∏. mln)

10%

38.6

Warsaw Stock Exchange

CEESEG Vienna

33.5

32.9

35 11%

38.1

30 24.5

25 54%

CEESEG Budapest

23%

20 15

CEESEG Prague Remaining exchanges (Bulgaria, Romania, CEESEG Slovenia, CEESEG Slovakia)

10 5 0

Q1 2011

Q2 2011

Q3 2011

Source: WSE, FESE

Q4 2011

Q1 2012 Source: WSE

Shale gas: In need of a strategy ➡ Continued from p. 11 the Polish government is taxation, said Agnieszka DurlikKhouri, economic and legal expert at the National Chamber of the Economy of Poland. At the beginning of April, Deputy Environment Minister Piotr Woêniak announced that the first draft of a new tax on shale gas production would be presented within weeks. Changes to the law governing hydrocarbon extraction are “necessary to improve conditions for investment and to reduce the risk borne by the state associated with long-term mining activities on a significant scale in the country,” Mr Woêniak said in a statement. At the beginning of May no further information had surfaced, however. Despite the fact that Mr Woêniak assured the levy “will not be high, because it takes into account the capital intensive nature and investment risks of the extraction of hydrocar-

bons,” some experts at the conference warned the the government should be careful not to kill the nascent industry with heavy taxation.

Environmental concerns Another potentially thorny issue for the industry is the environment, since shale gas exploitation uses new technologies (such as fracking) that have so far generated their fair share of controversy. In a widely publicized move, France banned fracking in 2011. Closer to Poland, Bulgaria has imposed a moratorium on shale gas exploration, and there are talks of Romania and the Czech Republic also doing the same. EU law states clearly that individual countries are independent regarding their energy policies, but the EU’s strong commitment to environmental issues has led to fears that Brussels could find ways to block the development

of Poland’s shale gas industry. But the wind might be changing direction in Europe. Angel Angelov, economic and commercial counselor at the Embassy of Bulgaria, said talks are now under way to repeal the moratorium, which should be lifted by the end of the year.

director of UK trade and investment at the British Embassy in Warsaw. Another potential partner for Poland, this time in terms of investments, might be China. The country, also potentially rich in shale gas reserves, has already developed an “excellent” mastery of

“Regulation should be in place whether we are a gas Eldorado or only cover domestic production” Poland has also found a partner in the UK, whose energy agency gave its green light to fracking in April. “I think the two countries have a common growth-driven agenda, and the UK can be a partner for Poland in Brussels for shale gas and nuclear energy. We will have to convince Brussels,” said Martin Oxley,

fracking, and adopted an interesting model for the sector’s development, said Mr Szcz´Êniak. One obvious player which has been strangely silent so far, is Russia. “No Russian representatives accepted invitations to the conference, although they are main players in the gas market and are

directly concerned,” said Mr Pisarski.

What next? Another challenge facing the industry in upcoming months and years will be to improve communication both between the industry and the government, and between firms and the Polish population. A corruption scandal involving Polish government officials over the granting of licenses for the exploration of shale gas, which emerged in January and led to the arrest of seven people, “created a lot of bad blood in the industry,” according to Mr Chmal. “It seems to me there is very little communication and trust between the government and the industry.” Meanwhile a recent survey by the Tischner European University Centre for Energy Studies showed that many of the 19 firms that hold concessions in Poland don’t have a website section in Polish, fail

to include contact details or even basic activity profiles. Regardless of how successful the stakeholders are in facing these challenges, experts predict significant M&A activity among firms that hold concessions in Poland, as smaller companies strike deals with larger ones, and others simply sell. State-owned companies including gas monopoly PGNiG, utilities Enea and Tauron, energy provider PGE and copper and silver miner KGHM, are also expected to come to a final agreement for jointly exploring and potentially extracting shale gas in June. “The truth is that private companies are more effective, but we depend on gas and it will be difficult for the government to give that away. I think it will be difficult to convince the government to completely open the market,” said Ms Durlik-Khouri. Alice Trudelle

A newly established partnership has announced its first regional Polish mall scheme

S+B Gruppe will develop a new Hampton by Hilton hotel in downtown Warsaw 16

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

Developer Mermaid Properties has announced it plans to invest z∏.50 million in new projects in Poland in 2012. The company is interested in plots of land with building permits or covered by zoning plans, as well as in well-located existing structures with potential for renovation and transformation into modern commercial space. “We are currently looking intensively for new projects,” Rados∏aw Sieroƒ, president of Mermaid Properties’ management board, said in a statement.

Mokotowska Square gets BREEAM certificate The Mokotowska Square office building in Warsaw has obtained BREEAM certification of energy efficiency and environmental performance. The sevenstorey facility, which offers 8,645 sqm of office space and 1,286 sqm of retail area, was developed by Yareal Polska. “[The] BREEAM certificate crowns a long process and marks another success of the Yareal team and the Mokotowska Square building itself,” said Eric Dapoigny, president of Yareal Polska’s management board. ●

In this issue New Unidevelopment scheme . . . . . . . . . . . . . . . . . . . . .15 Warsaw museum conflict . . . .15 Forum Radunia project . . . . . . .15 Starachowice mall . . . . . . . . . . .16 Max mall sale . . . . . . . . . . . . . . .16 Ogrody extension . . . . . . . . . . .16 Property-related stocks . . . . . .16 New Warsaw Hilton . . . . . . . . .17 Hotel report . . . . . . . . . . . . . . . .17 Industrial report . . . . . . . . . . . . .18 New Panattoni warehouse . . .18

Office

Unidevelopment acquires new office project in Warsaw The scheme is scheduled to be completed in H1 2014 Warsaw-based developer Unidevelopment has acquired a 100 percent stake in Wola House, a special-purpose vehicle established to build an eponymous office project in the Polish capital, from Norwegian Selvaag Eiendom AS. Following the transaction, the developer now has perpetual usufruct rights to 4,964 sqm of land located on Al. Prymasa Tysiàclecia in Warsaw’s Wola district on which it plans to build an office facility with approximately 20,000 sqm of space. The price of the transaction has not been revealed. “Before signing the deal, we analyzed the demand for an office investment on Al. Prymasa Tysiàclecia, near Al.

Jerozolimskie,” Zbigniew GoÊcicki, president of the management board of Unidevelopment, said in a statement. “The information that we have gathered confirms that the Wola House investment should meet with considerable interest on the part of potential tenants,” Mr GoÊcicki added. Unidevelopment touts the planned project’s proximity to major transport routes and its easy access to Warsaw Chopin Airport. The Wola House development already has a building permit with construction scheduled to launch in Q4 this year and finish at the turn of the first and second quarters of 2014. Construction company Unibep will be the general contractor of the scheme. Adam Zdrodowski

COURTESY OF MADE IN PR

Mermaid to invest z∏.50 mln

MAY 14-20, 2012, LI 17/19

The Wola House project will deliver approximately 20,000 sqm of space

Architecture

Multi, Gdaƒsk agree on Warsaw dissolves contract with Forum Radunia project

Museum of Modern Art architect The City Hall says the architect was incapable of fulfilling his end of the deal Warsaw City Hall has dissolved a contract with the architect of the planned new building of the Museum of Modern Art, Christian Kerez. Mr Kerez, who is from Switzerland, was to design the facility after his initial plan won an international architectural competition in 2007. During a press conference last week, Jacek Wojciechowicz, deputy mayor of the city of Warsaw, told journalists the reason for the dissolution was “Mr Kerez’s incapability

of changing the competition concept into a realistic building design.” Other reasons given by the Warsaw authorities were that the 25-meter-tall building did not meet fire-safety requirements. City Hall also accused Mr Kerez of failing to design a transportation system around the museum. Mr Wojciechowicz said that overall, Mr Kerez had failed to meet deadlines while asking for more money. He added that in April, Mr Kerez issued a letter to the City Hall in which he demanded to be paid more and said if his demands were not met, he would break the contract.

In an interview with tvnwarszawa.pl, Mr Kerez denied all the allegations. He said that requirements were met and added that designing the transportation system would be a job in itself, and that the City Hall should have offered more funding if it had expected him to design it. City Hall demanded that Mr Kerez pay z∏.5,439,608 for failing to fulfill his side of the contract. Mr Wojciechowicz announced that there will be a new competition for the design of the museum. He added that the facility is a priority and that it will be built. Izabela Depczyk

A consortium of Multi Development Poland and Multi Corporation has signed an agreement with the Municipality of Gdaƒsk concerning the development of the Hay and Crayfish Markets area in the city. The deal allows the consortium to go ahead with its Forum Radunia mixed-use project that apart from commercial space will include a museum of the Pomerania region and a new stop of Gdaƒsk’s Fast Urban Railway. The scheme is expected to significantly reshape the city’s downtown area. “Gdaƒsk has been our target since Multi started in Poland. It is a place of great potential that deserves a unique public space where history and modern times are

woven together in harmony,” Tomasz Matusiak, managing director of Multi Development Poland, said in a statement. The Forum Radunia investment, for which Multi was selected by the city of Gdaƒsk out of 12 bidding companies, will be developed in two phases, the first of which is scheduled to be completed in 20152016. The whole project is expected to be ready by 2020. The first phase of the scheme will involve the construction of a shopping center with a leasable area of approximately 45,000 sqm, a multistorey car park and public infrastructure including the museum. In the second phase, an office park will be delivered. Adam Zdrodowski

LOKALE IMMOBILIA – REAL ESTATE

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MAY 14-20, 2012

Three investors team up on Ogrody mall closer to extension new Starachowice mall scheme The land in question is zoned for a shopping center of approximately 17,600 sqm. The investment is meant to be the first in the joint venture’s planned portfolio of hypermarket-anchored shopping centers located in small Polish cities. “Thanks to our experienced and capable partners the joint venture allows us to expand our growing real estate portfolio in Poland into the retail sector,” James Huckle, investment director at NBGI, said in a statement.

“We are looking forward to delivering what we hope will be the first of several similar scale projects across Poland with our joint venture partners,” stated Harvey Curtis, managing partner at Claybark. The investors are planning to spend approximately €25 million on the Starachowice project. Construction is scheduled to launch in March next year, with the mall expected to open in the autumn of 2014.

sion of the 17,500-sqm mall. “The administrative process is proceeding according to schedule,” Tomasz Szewczyk of Acteeum Central Europe which is dealing, on behalf of CBRE Global Investors, with the process of

COURTESY OF MEDIADEM CONSULTING

Private equity and venture capital investment firm NBGI Private Equity, retail property investor, developer and manager Balmain Asset Management and developer Claybark have announced their first joint project in the Polish market. The newly formed joint venture has acquired a plot of land in Starachowice in Âwi´tokrzyskie voivodship on which the partners are planning to build a retail investment anchored by a Tesco hypermarket.

CBRE Global Investors, the owner of the Ogrody shopping center in Elblàg, WarmiƒskoMazurskie voivodship, has obtained an environmental decision that allows the company to apply for a building permit concerning the exten-

Adam Zdrodowski

expanding Ogrody, said in a statement. “The obtaining of the environmental decision is another step towards expanding the center, which is scheduled to launch in September this year,” Mr Szewczyk added. The expanded Ogrody mall is expected to open in the second quarter of 2014. Following the investment, whose value is estimated at €55 million, the leasable area of the Ogrody shopping center will more than double, to 43,500 sqm. The number of parking spaces in the mall, which is expected to be BREEAM-certified, will also be increased. Adam Zdrodowski

COURTESY OF ON BOARD PUBLIC RELATIONS

Max shopping center for sale

Investors are planning to spend €25 million on the Starachowice project

The Max shopping center in Hrubieszów, Lubelskie voivodship, is now on sale. Cushman & Wakefield will represent the mall’s owner, Ardom, in the process of offloading the over 4,400-sqm facility. Located on ul. Kolejowa in downtown Hrubieszów and delivered in 2000, Max is the largest retail scheme in the southeastern Polish town. The mall is fully leased out, with major tenants including a Car-

Expert’s opinion

Small is beautiful Hadley Dean Managing Partner, Eastern Europe, Colliers International

Retail trends in small cities in Central and Eastern Europe It is not a secret that big agglomerations are not always the main focus of retailers. High rental rates, limited retail space, competition hiding just round the corner – no wonder more and more retailers are moving to smaller cities. But what opportunities are really waiting there? The retail markets in Central and Eastern Europe in terms of demand and supply, retail formats and development opportunities in secondary and tertiary cities show a strong degree of diversity. Looking at the CEE market overall the four markets including Warsaw, Zagreb, Moscow and St Petersburg are prime targets for new retailers entering the markets. However we are now seeing the retailers being more attracted to the smaller cities. The Russian retail market continues to develop vigorously intensifying competition in the retail markets of large cities (Moscow and St Petersburg) and this has captured the attention of developers who are now exploring smaller cities with populations of 300,000500,000 such as Magnitogorsk, Surgut, Sochi and Tver. Nine shopping centers are planned for commissioning in these cities in 2012. A similar trend can be observed in Roma-

nia, where some anchor tenants opened shops in smaller cities (100,000-150,000 inhabitants) to address a segment of demand not yet covered. Development activity in secondary cities in Bulgaria is concentrated mainly in Burgas, where two projects are expected to open in 2012. Croatia has also witnessed a shift in developers’ interest towards secondary and tertiary locations, with 52 percent of all retail stock now being located outside Zagreb. Retail developers in Poland are gradually turning to local markets. They are especially interested in medium-sized and smaller cities, where the majority of planned retail schemes are in the pipeline. Currently modern retail space in these cities constitutes 45 percent of the total supply in Poland and this share is systematically increasing. Investors are looking for retail gaps in Poland, namely cities with lack of modern retail space available in order to take advantage of the requirements of retailers in these markets. The business strategies of many developers are focused on markets in secondary cities , which are generated by the expansion plans of retailers. More and more retail chains, which are already present in major agglomerations, are seeking new opportunities of further expansion in smaller cities. ●

BROUGHT TO YOU BY COLLIERS INTERNATIONAL

refour hypermarket. The development could be extended and modernized in the future, with the current owner having already come up with an architectural concept envisioning increasing the size of Max to a total of some 7,100 sqm. The potential investment is in line with the current zoning plan for the area. “It is an attractive investment product for investors

intending to benefit from the existing leases and those who would like to enhance the property’s value through its extension,” Anita Rajchelt, an associate at the capital markets group of Cushman & Wakefield, said in a statement. “The strong advantages of this scheme are its stable tenant mix and prime location offering high footfall,” Ms Rajchelt added. Adam Zdrodowski

Property-related stocks Security

Closing price on May 10

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

81.00

1.31

64.00

104.50

-22.86

25,530,098

2,067.94

CELTIC

12.76

0.00

12.95

22.70

-30.65

34,068,252

434.71

DOMDEV

35.40

-2.48

23.50

50.80

-23.87

24,670,397

873.33

ECHO

3.75

-0.79

3.05

5.55

-26.47

420,000,000

1,575.00

ELBUDOWA

106.70

-4.73

87.00

165.00

-34.94

4,747,608

506.57

ENERGOPLD

1.80

0.00

1.79

4.00

-54.77

70,972,001

127.75

ERBUD

15.39

-3.81

14.15

31.77

-56.38

12,644,169

194.59

GANT

7.35

-3.16

5.85

13.59

-47.61

20,499,953

150.67

GTC

6.77

-3.15

6.10

19.99

-67.10

219,372,990

1,485.16

HBPOLSKA

0.51

-10.53

0.51

2.35

-76.82

210,558,445

107.38

JWCONSTR

5.28

-4.17

4.36

15.40

-65.89

54,073,280

285.51

LCCORP

1.45

-2.03

0.85

1.56

-7.64

447,558,311

648.96

MARVIPOL

7.66

-2.79

6.20

9.95

-6.93

36,923,400

282.83

MIRBUD

1.17

-11.36

1.14

4.14

-71.32

75,000,000

87.75

MOSTALWAR

13.03

-1.88

11.30

36.48

-67.18

20,000,000

260.60

MOSTALZAB

1.22

-2.40

1.07

2.89

-53.26

149,130,538

181.94

ORCOGROUP

12.09

-9.78

12.09

37.40

-67.01

17,053,866

206.18

PBG

24.50

-5.95

22.50

154.80

-83.77

14,295,000

350.23

PLAZACNTR

2.56

1.59

1.80

5.15

-48.59

297,174,515

760.77

POLAQUA

5.78

-1.20

4.53

18.93

-67.53

27,500,100

158.95

POLIMEXMS

1.14

11.76

0.78

3.53

-63.81

521,154,076

594.12

POLNORD

13.80

-1.78

11.03

29.80

-56.19

23,798,439

328.42

RANKPROGR

11.93

-1.73

8.60

16.97

-8.16

37,145,050

443.14

ROBYG

1.41

2.92

1.04

2.05

-30.20

257,390,000

362.92

RONSON

0.97

-4.90

0.77

1.50

-37.42

272,360,000

264.19

TRAKCJA

1.15

5.50

0.65

3.25

-66.18

232,105,480

266.92

ULMA

55.75

0.00

55.25

87.00

-35.92

5,255,632

293.00

UNIBEP

4.99

-3.11

4.47

7.30

-28.71

33,927,184

169.30

WARIMPEX

4.06

-1.69

2.95

10.15

-60.54

54,000,000

219.24

ZUE

7.20

-1.91

5.07

12.85

-42.40

22,000,000

158.40

LOKALE IMMOBILIA – REAL ESTATE

MAY 14-20, 2012

Hospitality

Another Hilton for Warsaw Warsaw. Presently under construction is a four-star Double Tree by Hilton in the Wawer district, whose investor is Polaris Hospitality Enterprises, as well as an economy Hampton by Hilton near the Warsaw airport,

whose investor is Port-Hotel. In May 2011, S+B Gruppe acquired the unfinished 55-meter-tall building on ul. Wspólna, which has been in a shell-and-core condition since 2009.

Austrian developer S+B Gruppe will convert a 17Izabela Depczyk storey property it owns on ul. Wspólna in central Warsaw into a Hilton hotel. “We signed the contract with the Hilton Group. We will be developing the property on ul. Wspólna, and the hotel will be ready by September 2013,” Izabella Kieler, head of marketing at S+B Gruppe’s Polish office, told Lokale Immobilia. The hotel will be a three-star Hampton by Hilton hotel. Ms Kieler said full information about the transaction, as well as details about what is planned for the hotel, will be disclosed in the coming weeks. Currently there is one five-star Hil- A preliminary architectural concept for the property on ton hotel in ul. Wspólna that S+B Gruppe revealed in 2011

Report: Poland’s hotel market a top performer in Europe The Polish hotel market was one of the best-performing in Europe in 2011 with hotels in Warsaw having seen an 8.3 percent y/y increase in revenue per available room in the period, according to recent research by Jones Lang LaSalle Hotels. “Warsaw, in particular, has seen an impressive rebound in hotel performance since the dip in 2009,” Angus Wade, executive vice president CEE, Jones Lang LaSalle Hotels, said in a statement. Higher occupancy and average room rates were behind hotel trading growth in 2010-2011, Mr Wade added. The Polish hotel market is

still relatively immature compared to other major European markets, with branded hotels accounting for a small share of the total bedrooms stock. However, operators including Marriott, Hilton and Orbis are all planning new openings, the study said. “The supply in pipeline is still comparatively limited and we are likely to see an increasing number of major international brands enter one of Europe’s most dynamic hotel markets,” stated Christoph Härle, CEO continental Europe, Jones Lang LaSalle Hotels. The investment market

saw an impressive comeback in 2011 with the transaction volume amounting to €125 million that year. The sales of the Jan III Sobieski and the Le Méridien Bristol in Warsaw were some of the largest deals in the sector in the period. In 2012, investment in Polish hotels is expected to increase due to factors including the continued strength of the Polish economy. “We expect a continued interest from foreign investors in Poland, with a focus on quality assets in key cities such as Warsaw and Kraków,” Mr Wade said. Adam Zdrodowski

Bed bonanza New Warsaw hotels scheduled to open in 2012-2013 Facility

Rooms

Stars

Due date

Operator/Owner

Ibis

170

May 2012

Orbis Hotel Group (Accor)

Ibis Budget

163

May 2012

Orbis Hotel Group (Accor)

Holiday Inn Express

124

November 2012

IHG

365

2013

Polaris Hospitality Enterprises

Hampton by Hilton

116

2013

Hilton

Renaissance Chopin Airport

225

2013

Marriott

Doubletree by Hilton Conference Centre and Spa

Source: Jones Lang LaSalle Hotels

COURTESY OF S+B GRUPPE

The developer behind the project says it will be ready by September 2013

www.wbj.pl

CBRE named Alfa Centrum manager CBRE has been named property manager of the Alfa Centrum shopping center in Olsztyn, Warmiƒsko-Mazurskie voivodship. The company, which currently manages approximately 850,000 sqm of commercial property across CEE, will manage both retail and office space in the project. Owned by British fund Rockspring Property Investment Managers, the mall is the largest shopping center in the region.

JLL manages Dom Handlowy Dukat Jones Lang LaSalle has become the manager of the Dom Handlowy Dukat retail project in Olsztyn, WarmiƒskoMazurskie voivodship. The property is owned by Arka BZ WBK Fundusz Rynku NieruchomoÊci 2 FIZ, which bought it in 2009 and then modernized it. Jones Lang LaSalle currently manages 51 projects in Poland. ●

LOKALE IMMOBILIA – REAL ESTATE

MAY 14-20, 2012

Logistics

Optimistic forecasts for Poland’s industrial space market Construction increased nearly sixfold in the first quarter More than 194,000 sqm of modern warehouse space was delivered to the Polish market in the first quarter of 2012, an almost sixfold increase on the same period of last year, according to a recent report by Colliers International. More than 394,600 sqm was leased in Q1, a slight decrease on the first quarter of 2011. Approximately 230,000 sqm of warehouse space is

now under construction, of which over 70 percent has already been leased out, the study said. “The high level of activity in the industrial market gives hope that this year will be as successful as the previous one in which we leased over 550,000 sqm of space for our clients,” Maciej Chmielewski, partner at the industrial and logistics agency of Colliers International, said in a statement. The vacancy rate decreased by nearly 0.4 pp q/q in the first quarter of 2012, to 11.1 per-

cent. According to Colliers International, a further decline in the vacancy rate is in the offing due to the large amount of under-construction space that has already been commercialized. The company expects demand for warehouse space to remain stable in most regions. Rental rates, which remained unchanged in most markets in Q1, could in some places show an upward trend in response to the dropping vacancy, Colliers International said in its research.

Making room Selected major lease transactions in the Polish industrial market, Q1 2012 Tenant

Area (sqm)

Building

Pilkington Automotive

35,000

Panattoni BTS Tarnobrzeg

DHL

33,837

Prologis Park Dàbrowa

ID Logistics

14,817

PointPark Mszczonów

Rhenus

13,759

Prologis Park Szczecin

Flexlink

12,200

Tulipan Park Poznaƒ

Media Expert

12,000

Panattoni Park ¸ódê East

DSV

11,167

Prologis Park Poznaƒ II

Raben

11,000

Panattoni Park Stryków

Adam Zdrodowski Source: Colliers International

W. P. Carey provides financing for new Panattoni warehouse in Poland W. P. Carey, a global investment management company specializing in corporate sale and leaseback and single-tenant construction financing, will provide a €20 million construction financing package for Nippon Sheet Glass Group (NSG Group).

The financing will deliver 100 percent of the funds needed for the construction of a 35,000-sqm warehouse facility in Tarnobrzeg, Podkarpackie voivodship, that is being developed by Panattoni Europe and which will be leased by a Polish subsidiary of NSG Group.

The facility is located adjacent to a new glass processing plant of NSG Group that is currently under construction and is expected to more than double the company’s production in Poland. The value of that investment is estimated at €80 million.

“In the current global financing markets, particularly in emerging markets, the ability of corporations and developers to obtain financing remains challenging,” Jeffrey Lefleur, managing director of W. P. Carey, said in a statement.

“Our ability to fund 100 percent of the capital needed to complete the development of new facilities highlights how we can provide alternative financing solutions for developers and their corporate clients,” Mr Lefleur added. Adam Zdrodowski

THE LIST

MAY 14-20, 2012

www.wbj.pl

Financial Services

Investment Banks and Advisors Ranked by total capital raised in 2010

www.bookoflists.pl

Total value of Total capital securities raised (z∏. mln) issued (z∏. mln)

Number of issue programs

completed Programs completed Programs as member of as lead manager consortium (2010-2011): (2010-2011): name of transaction, name transaction, value (z∏. mln), date value of (z∏. mln), date

M&As Advisory (2010-2011): name of transaction, total value (z∏. mln)

PKO BP, 2,250, November Getin Noble Bank, 250, June 2011; Bank Gospodarstwa 2011; BRE Bank Hipoteczny, Krajowego, 500, October 200, June 2011 2011

WND

Tauron Polska Energia, 4,300, October 2011; Credit Agricole Bank Polska, 2,000, August 2011

WND

M&As / Asset management / Advisory

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

Capital raising / Restructuring / Privatization

Rank

Activities

Other

Total employees / Year founded

Ownership: Polish / Foreign

Top local executive / Title

WND WND WND

WND

4,643 1986

WND Commerzbank - 69.8%

Cezary Stypu∏kowski

WND WND WND

WND

WND WND

WND

WND 1991

BRE Bank - 100% None

State Treasury - 41.0%; Bank Gospodarstwa Krajowego - 10.3%; other shareholders - 48.8% None

1st half of 2011 / 2010 / 2009 / 2008

BRE Bank SA ul. Senatorska 18, 00-950 Warsaw 1 22 829-0000/22 829-0033 info@brebank.pl www.brebank.pl

8,041.0 7,730.0 8,058.0 8,009.0

11,455.0 11,654.0 12,315.0 14,369.0

81 74 69 72

ING Bank Âlàski SA ul. Sokolska 34, 40-086 Katowice 2 32 357-7000/32 357-7507 mampytanie@ingbank.pl www.ingbank.pl

6,029.0 7,539.0 4,758.0 5,959.0

8,061.0 9,074.0 18,352.0 31,814.0

67 54 49 47

Dom Inwestycyjny BRE Banku SA ul. Wspólna 47/49, 00-684 Warsaw 3 22 697-4710/22 697-4820 brebrokers@dibre.pl www.dibre.pl

5,696.0 6,163.0 1,632.3 161.7

5,740.0 17,277.0 7,583.4 161.7

2 10 7 3

Kruk - IPO, 369, April 2011; PZU - IPO, 8,069, May 2010; ZUE - IPO, 90, September JSW - IPO, 5,371, June 2010 2011

WND

✓ ✓

562.4 5,006.3 WND WND

8,096.0 9,821.2 WND WND

36 139 WND WND

PGNiG - debt securities, PZU - IPO, 8,069, May 2010; 5,000, July 2010; Tauron JSW - IPO, 5,371, June Polska Energia - debt 2011 securities, 4,300, December 2010

WND

✓ ✓ ✓

WND

26,490 1991

1,218.8 1,100.2 1,192.0 2,579.0

1,218.8 1,100.2 1,192.0 2,757.0

17 15 19 13

Warsaw City shares in SPEC KSG - IPO, 108, April 2011; Kruk - IPO, 369.0, April sale, 1,441; Ovostar - IPO, 93, June 2011; Kulczyk Oil Ventures - Zak∏ady Chemiczne 2011 IPO, 314.0, April 2010 Police 52% share sale, 451.4

✓ ✓ ✓

✓ ✓

WND

8,877 2001

WND

Raiffeisen Bank Polska SA ul. Pi´kna 20, 00-549 Warsaw 6 22 585-2001/22 585-2585 moje.pytania@raiffeisen.pl www.raiffeisen.pl

549.0 813.0 WND 631.0

1,752.0 1,620.7 1,764.0 3,483.0

32 29 28 41

Ronson Europe bonds, 150, BRE Bank Hipoteczny bonds, WND; TF Skok bonds, 100, 1,000, WND; Warsaw City WND bonds, 994, WND

Netia, 944

✓ ✓ ✓

✓ ✓

WND

2,743 1991

None Raiffeisen Bank International - 100%

Piotr Czarnecki

Carnelian Partners Sp. z o.o. ul. Rac∏awicka 146, 02-117 Warsaw 7 22 572-5660/22 572-5669 carnelian@carnelian.pl www.carnelian.pl

13.5 25.2 WND WND

2 2 WND WND

Eko-Park takeover, 180.0; Kamsoft and Global Services merger, 150

✓ ✓ -

✓ ✓

WND

5 2006

Edyta Skoczyƒska - 68%; Agnieszka Robinson - 22% None

Edyta Skoczyƒska

WND WND WND WND

WND

✓

✓ ✓ ✓

Start-up investments; venture capital; private equity; MBO; LBO

15 2004

WND

PKO Bank Polski ul. Pu∏awska 15, 02-515 Warsaw 4 22 521-8440/22 521-8470

prasa@pkobp.pl www.pkobp.pl

Bank Zachodni WBK SA ul. Rynek 9/11, 50-950 Wroc∏aw 5 61 856-4017/61 856-4015 rzecznik.prasowy@bzwbk.pl www.bzwbk.pl

Eurus Capital Sp. z o.o. ul. Filtrowa 28, 02-032 Warsaw NR 22 621-0991/22 621-0991 warsaw@euruscapital.com www.euruscapital.com

Notes: Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in November 2011. Number of employees and ownership structure are as of October 2011. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

PGNiG, 7,000, November 2011; PGE Polska Grupa Energetyczna, 10,000, November 2010

WND

President

Ma∏gorzata Ko∏akowska President

Jaros∏aw Kowalczuk President

Zbigniew Jagie∏∏o President

Mateusz Morawiecki President

President

Yves Mousson-Lestang President

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. 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

MAY 14-20, 2012

Stocks report

world stock indices DJIA

NASDAQ

S&P500

FTSE100

DAX

Markets react to elections

NIKKEI225

12,855.04 (May 10 close)

2,933.64 (May 10 close)

1,357.99 (May 10 close)

5,544.00 (May 10 close)

6,518.00 (May 10 close)

9,009.65 (May 10 close)

-3.12% (for the week)

-4.12% (for the week)

-3.16% (for the week)

-3.72% (for the week)

-2.87% (for the week)

-3.95% (for the week)

CHANGE: 3.69%

CHANGE: 10.76%

CHANGE: 6.34%

CHANGE: -2.74%

CHANGE: 7.28%

CHANGE: 5.25%

(year to May 10)

52-week high: 13,359.60

52-week high: 3,134.17

52-week high: 1,422.38

52-week high: 6,084.10

52-week high: 7,523.53

52-week high: 10,255.20

52-week low: 10,362.30

52-week low: 2,298.89

52-week low: 1,074.77

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,135.79

Andrew Nawrocki WBJ market analyst Poland’s main WIG index experienced marked volatility last week, catching up after light volumes in between May Day and Poland’s Constitution Day the week before. Setting the tone for markets were elections in both France and Greece, which caused investor concern in most of Europe. The WIG opened lower last Monday, though managed to regain losses after better-than-expected German macroeconomic data improved sentiment. Both the WIG and blue-chip WIG20 managed to close slightly higher. Tuesday saw sharp declines throughout Europe, as growing fears of a Greek pullout from the euro zone spooked investors. Polish stocks were not even helped

Major indices WIG

39,404.16 (May 10 closure)

WIG20

2,187.54 (May 10 closure)

10.05

09.05

08.05

07.05

04.05

02.05

30.04

27.04

26.04

25.04

13.04

10.05

09.05

08.05

07.05

04.05

02.05

30.04

27.04

26.04

2,100

25.04

2,140

39,000

24.04

39,600

23.04

2,180

20.04

40,200

19.04

2,220

18.04

2,260

40,800

17.04

41,400

16.04

2,300

13.04

42,000

24.04

52-week low: 2,089.84

23.04

Change year to May 10: -0.30%

20.04

52-week low: 36,549.47

19.04

52-week high: 2,903.61

Change year to May 10: 2.83%

18.04

Change for the week: -1.73%

17.04

52-week high: 50,025.61

16.04

Change for the week: -1.77%

Top 5 QUANTUM POLJADLO IGROUP MOSTALEXP NORTCOAST

Closing 9.00 0.61 0.50 0.74 0.46

% change (week) 52-week high 23.12 11.22 17.31 1.36 16.28 0.86 15.63 1.86 12.20 1.39

52-week low 6.51 0.49 0.16 0.52 0.35

Top 5 POLIMEXMS TPSA BZWBK BRE ASSECOPOL

Closing 1.14 17.11 235.00 287.20 47.11

% change (week) 11.76 4.20 0.43 0.24 0.23

52-week high 3.55 19.19 240.00 349.00 55.45

52-week low 0.77 14.30 190.10 203.30 34.50

Bottom 5 IFCAPITAL JAGO ANTI WISTIL RESBUD

Closing 4.29 0.11 0.82 19.04 19.93

% change (week) -29.79 -26.27 -25.45 -20.63 -19.90

52-week low 0.45 0.09 0.56 5.33 2.88

Bottom 5 LOTOS PBG KGHM CEZ TVN

Closing 26.38 24.50 130.00 119.00 8.90

% change (week) -8.21 -5.95 -5.80 -5.56 -3.89

52-week high 47.80 156.00 199.60 155.00 17.50

52-week low 21.30 21.31 102.40 116.10 8.62

52-week high 14.97 0.75 2.49 33.02 70.00

Currency report

RPP hikes interest rates

Other indices sWIG80

9,681.38 (May 10 closure)

Change year to May 10: 12.52%

NewConnect

40.16 (May 10 closure)

52-week high: 12,779.22

WIG-Banki

In a somewhat surprising move, the Polish Monetary Policy Council (RPP) hiked Poland’s main interest rate by 25 basis points to 4.75 percent last Wednesday. Hawkish statements from RPP officials over the last month should have prepared the market for such a move, but on the other hand we have been observing decreasing inflation and worse activity reports from the Polish economy. The RPP’s move was criticized by Deputy Prime Minister Waldemar Pawlak as a “dramatic mistake” that could have negative consequences in the future. The move could be considered too nervous a statement, taking into consideration the euro-zone slowdown, with an alternative option being to wait and see

5,631.26 (May 10 closure)

Change for the week: -1.83%

52-week high: 57.39

Change for the week: -2.01%

52-week high: 7,129.35

Change year to May 10: -3.21%

52-week low: 40.12

Change year to May 10: 1.59%

52-week low: 4,944.19

42.0

Adam Narczewski X-Trade Brokers DM SA

10.05

09.05

08.05

07.05

04.05

02.05

30.04

27.04

26.04

52-week low: 8,218.71

25.04

20.04

13.04

10.05

09.05

08.05

07.05

04.05

02.05

30.04

9,600 27.04

2,300

26.04

9,720

25.04

2,340

24.04

9,840

23.04

2,380

20.04

9,960

19.04

2,420

18.04

10,080

17.04

2,460

16.04

10,200

13.04

2,500

19.04

52-week low: 2,076.52

18.04

Change year to May 10: 9.16%

17.04

Change for the week: -2.45%

16.04

52-week high: 2,959.86

24.04

2,390.90 (May 10 closure)

Change for the week: -1.37%

23.04

mWIG40

6,000 5,880

41.5

5,760

41.0

5,640 40.5

SOURCE: WSE

10.05

09.05

08.05

07.05

04.05

02.05

30.04

27.04

26.04

25.04

24.04

23.04

20.04

19.04

18.04

17.04

16.04

13.04

5,400

10.05

09.05

08.05

07.05

04.05

02.05

30.04

27.04

26.04

25.04

24.04

23.04

20.04

19.04

18.04

17.04

16.04

13.04

5,520 40.0

by – once again – strong macroeconomic data from Germany, with oil stocks hit particularly hard. On Wednesday, stocks more value as the fragility of Spanish banks and a political impasse in Greece exacerbated fears. Financial stocks, however, managed to close higher after PKO BP announced it would pay out higher-than-expected dividends to its shareholders. On Thursday, after the release of strong US jobs data, global stocks got some much-needed relief. Bluechips JSW and Tauron saw strong gains after strong financial results were posted by both companies. JSW led the pack with a 3.6 percent rise. Finally, on Friday, the WIG fell by 0.40 percent. ●

whether inflation keeps declining. The surprising increase in the cost of money in Poland did not cause an appreciation in the z∏oty, since external factors were far more influential. Markets tumbled at the start of the week after the results of the French presidential elections (though this was discounted by the market, as Hollande’s victory was no surprise) and the Greek parliamentary elections. Currency markets reacted strongly with the EUR/USD testing its four-month low at $1.29. Emerging-market currencies tumbled and the z∏oty depreciated to its lowest levels since January against the euro (z∏.4.24), the US dollar (z∏.3.27) and the Swiss franc (z∏.3.53). ●

currency rates 4.1087 10.05

4.1010

4.0686 09.05

11.05

4.0357 08.05

SOURCE: NBP

4.0467 07.05

04.05

3.9800

0.1087 11.05

10.05

09.05

08.05

3.5

07.05

PLN-100JPY

4.2

0.1084

0.1072

0.1073

0.1077

0.1078 0.1

04.05

3.5313 11.05

10.05

3.5014 09.05

3.4930 08.05

3.4959 07.05

04.05

3.4861

5.2697

5.2838 11.05

3.4

PLN-RUB 3.5286

PLN-CHF

3.6

10.05

5.2297 09.05

5.2010 08.05

5.1557

5.2104 07.05

11.05

10.05

5.1

04.05

3.2765

3.2735

3.2412

PLN-GBP

5.3

5.2

09.05

3.2238 08.05

07.05

3.1891 04.05

4.2379

4.2413 11.05

3.0

3.2279

PLN-USD

3.5

10.05

09.05

4.1949 08.05

4.1991 07.05

4.1

04.05

4.1880

4.2

4.2047

PLN-EUR

4.3

SPORTS

MAY 14-20, 2012

www.wbj.pl

Soccer

Âlàsk Wroc∏aw crowned Polish champions

Polish player set for Real Madrid move? ¸ukasz Piszczek could join the Spanish giants in a €10 million deal Borussia Dortmund’s Polish midfielder ¸ukasz Piszczek could be set to join Spanish champions Real Madrid in a multi-million transfer deal, according to reports in the Spanish press. The 26-year-old, who started his career with Polish club Gwarek Zabrze, plays for this

season’s German champions Borussia Dortmund and was last week selected alongside teammate and fellow Polish international Robert Lewandowski in the Bundesliga team of the season. The former Hertha Berlin player is known for his versatility, being equally good at going forward as he is at defending. And according to Spanish daily AS negotiations over a potential deal have been ongoing for sev-

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Polish players off to Turkey

Âlàsk Wroc∏aw won the Polish Ektraklasa soccer league earlier in May to claim its first title since 1977, following one of the closest title chases in recent years. Âlàsk beat last season’s champions Wis∏a Kraków 1-0 to ensure the title heads to southwestern Poland, after Slovenian defender Rok Elsner scored the only goal of the game and his first of the season to get the three

the table for long periods and it was in their hands whether they would claim their first title since 2006 right up until the penultimate game of the season when they lost 1-0 to Lechia Gdaƒsk. On the same day Âlàsk beat Jagiellonia Bia∏ystok 3-1 to move to the top of the table and ensure the Wroc∏aw side knew a win on the final day would secure the title. Legia finished third on 53 points, three points behind Âlàsk on 56, with Ruch Chorzów second on 55.

points needed to bring home the silverware. Elsner angled in a precise header from just inside the area at the 51minute mark to send the Âlàsk supporters, who had traveled in large numbers to Wis∏a’s Municipal Stadium, absolutely delirious. The win ensured they finished just one point ahead of Ruch Chorzów, who beat Lechia Gdaƒsk 2-1 away in their last game of the season. It was, however, Legia Warszawa fans who had been expecting to celebrate a title win this season. Legia had led

David Ingham

Euro 2012 roundup

Infrastructure investments not ready, Puyol could miss tournament

According to estimates by PL.2012, the body charged with preparing Poland for Euro 2012, projects worth some z∏.13 billion won’t be ready in time for the soccer tournament, which starts in June. That’s out of a total of z∏.94.1 billion in planned investments for Euro 2012. Not one of the roads in the government’s 2008 infrastructure plan will be built in full before the start of the tournament. “Only 40 percent of total planned road building will be

completed,” Janusz Piechociƒski, vice president of the lower house of parliament’s infrastructure committee was reported as saying by Rzeczpospolita. He added that none of the host cities will be connected directly with one another by new road or rail connections. In other news, the Spanish national team suffered a major blow ahead of Euro 2012 after their center-back Carles Puyol was forced to undergo knee surgery which could rule him out of playing in Poland and Ukraine this June. Puyol, who has 99 caps for Spain, will miss his club side Barcelona’s final game of the league season against Real Betis, as well as their Copa del Ray final match against Ath-

letic Bilbao on May 25. Gareth Price, David Ingham

COURTESY OF WIKIMEDIA COMMONS

Only 40 percent of planned road building work will be completed in time for the tournament

Carles Puyol

COURTESY OF WIKIMEDIA COMMONS

Âlàsk players celebrate their Ekstraklasa title win

The team from Wroc∏aw won its first league title since 1977

eral weeks. Former Polish international goalkeeper Jerzey Dudek played for Real Madrid between 20072011 but spent most of his time on the bench as a backup goalkeeper. But Piszczek, who has played a starring role in Borussia’s second consecutive Bundesliga title win, would have a much greater chance of playing regularly for coach Jose Mourihno’s side if the transfer does go David Ingham ahead.

¸ukasz Piszczek (center) with the Bundesliga trophy

Poland’s international soccer manager Franciszek Smuda has taken his players and their families on an integration trip to Turkey as he prepares his squad ahead of Euro 2012. “In Turkey, we will work primarily on our physical form. We also want to work out how best to develop tactics,” said Mr Smuda. This vacation is aimed at reinvigorating the players after a long season, with a second camp in Austria later in May set to provide a more intensive workout. ●

LIFESTYLE

www.wbj.pl

MAY 14-20, 2012

Exhibition

Concert

Living history

Musical melting pot

Faces and Hands Until May 20 Jewish Historical Institute ul.T∏omackie 3/5 Warsaw A fascinating exhibition by late Polish photographer Julia Pirotte is currently on display at Warsaw’s Jewish Historical Institute and is well worth seeing for anyone interested in recent European history. Ms Pirotte was a photographer unafraid of capturing on camera some of the darkest

episodes in modern European history, including a pogrom against Jews in Kielce in 1946 as well as the transportation of Jews to Auschwitz during World War II. Many of the photos in the exhibition also cover the period in the 1940s and 1950s when the artist lived in Marseille, France. As well as documenting the lives of ordinary people, Ms Pirotte also snapped celebrities, including famed French singer Edith

Piaf. Teresa Âmiechowska, the exhibition’s curator, said, “Julia Pirotte’s photography is the fruit of dedication and devotion, more a mission than an extraordinary skill. … Pirotte is in the company of heroic photographers, for whom ‘the face of another’ means a lot more than the face we merely see.” David Ingham

For more information, log on to culture.pl

Don’t judge a restaurant by its books WBJ’s restaurant review feature Opas∏y Tom Piw ul. Foksal 17 Warsaw The best thing about reviewing restaurants is discovering something a little bit out of the ordinary. And that’s precisely what happened when WBJ’s editorial team paid a visit to Opas∏y Tom Piw for lunch recently. Located on ul. Foksal, right in the heart of the city, just off the capital’s famous ul. Nowy Âwiat, Opas∏y Tom Piw certainly has lots of competition when it comes to attracting diners. But judging from our experience, the Kr´glicki family, who own the restaurant, needn’t worry about attracting customers. The restaurant itself doubles as a bookshop for the National Institute of Publishing, and in its previous incarnation as a cafe it was a haunt of Polish literary greats such as Antoni S∏onimski and Stanis∏aw Jerzy Lec.

But don’t be fooled by the bookish atmosphere – this is also a great place to try exquisitely tasting dishes prepared by skilled chefs. With a constantly changing menu and chefs who source the freshest and most seasonal ingredients to provide a new take on traditional Polish and European cooking, Opas∏y Tom Piw really is a cut above the majority of its local competitors. With cold starters such as baked eggplant with peanut butter served with a salad of chickpeas, pomegranate seeds and coriander (a beautiful, unique dish) the food really

does offer a new experience for the palates of even the most seasoned diners. Mains include the perfectly prepared beef fillet in juniper sauce with mashed barley, mascarpone and nuts, as well as the sea bass with Provencal thyme tarte. For desert, the halva mousse with raspberries is divine. All of which means that for both business and pleasure Opas∏y Tom Piw offers a truly top-notch dining experience. David Ingham

Reservations: (0 22) 621 18 81 opasly@kregliccy.pl

COURTESY OF WIKIMEDIA COMMONS

Orchestra band Pink Martini produces a unique combination of classical, jazz, Latin and French music-hall melodies, sure to offer those in attendance an entertaining evening. Formed in Portland, Oregon in 1994, the group, which is led by pianist Thomas Lauderdale and singer China Forbes, has released seven studio albums so far, the most successful of which was 2007’s

“Hey Eugene!” which reached number 30 on the US Billboard album chart. In total the group has sold more than 2.5 million albums worldwide and has collaborated on songs with the likes

of Rufus and Martha Wainwright, as well as filmmaker Gus Van Sant. Tickets for the concert are priced from DI z∏.110. For more information log on to Kongresowa.pl

Pink Martini singer China Forbes

Theater

Modern-day Dracula Nosferatu May 17,18 and 19, 7 pm Teatr Narodowy Pl. Teatralny Warsaw Inspired by Bram Stoker’s horror story “Dracula,” this modern interpretation of the vampire myth is a theatrical exploration of humanity’s fascination with fear. Director and writer Grzegorz Jarzyna’s multimedia extravaganza aims to highlight

how fears and obsessions materialize in social life over a period of time. The leading role in this drama is played by German actor Wolfgang Michael, who told Culture.pl that working with director Gzegorz Jarzyna was “like a flight to the Moon. He opens new spaces, almost new cosmic spheres in front of the actors; ones they never touched or experienced ever before. So when I got the

proposition to participate in “Nosferatu” I boarded that spaceship with no doubts whatsoever.” Premiering at Warsaw’s TR Warszawa theater back in October 2011, the play has since garnered rave reviews and is even set to be performed at London’s famed Barbican Theatre later this year. David Ingham

For more information, log on to narodowy.pl

Ballet

Beyond classic Ailey II May 25 Palace of Culture and Science Pl. Defilad 1 Warsaw Ailey II, one of the top modern ballet dance groups in the US, will perform in Poland for the first time on May 25, at the Palace of Culture and Science in Warsaw. The company, known for skillfully mixing classical ballet with modern music and contemporary choreography, stops in the Polish capital on its international tour, which will also take it around several German cities, as well as the capitals of Estonia, Latvia and Lithuania this summer. The performance is set to be a one-of-a-kind event and a must-see for those who love dance, but may be tired of classical routines. Ailey II is the Ailey School’s junior company in residence, and is aimed to serve as a step towards the professional dance world for young dance talents and emerging choreographers. Both the Ailey School and the Ailey II company spring

COURTESY OF AILEY II

COURTESY OF JEWISHINSTITUTE.ORG.PL

Pink Martini May 23 Sala Kongresowa, Plac Defilad 1 Warsaw

from the Alvin Ailey American Dance Theater, founded in the 1960s by dancer and choreographer Alvin Ailey. The project has been guided since its inception by a strong commitment to social justice and innovation, and in 2008, a US Congressional resolution designated the company as “a vital American cultural ambassador to the world” that celebrates the uniqueness of the African-American cultural experience and the preservation and enrichment of the American modern dance heritage. Today the Ailey School trains over 3,500 students annually, and the Ailey company has performed for

around 23 million people in 71 countries. On May 25 Poles will for the first time have the chance to see this acclaimed dance project in action. During their Warsaw performance, the group will dance to Shards, choreographed by Donald Byrd. The group will also perform Splendid Isolation II, The Hunt, and Revelations. The performance is sponsored by the Allegro Group. ID, AT

For more information log on to alvinailey.org Tickets, priced from z∏.50 to z∏.350, are available at pkin.ebilet.pl

LAST WORD

MAY 14-20, 2012

www.wbj.pl

Tech Eye

Here’s a short list of people that Techeye wants to lock in a room filled with lusty sea lions at the height of sea lion mating season: the local shop cashiers who moan whenever we don’t have exact change, everyone who has ever served as a reality TV show judge, Donald Trump, and Apple’s productnaming team. That last group would suffer the further ignominy of being slathered with sea lion pheromones and dead fish for their part in giving the new iPad the execrably awkward moniker “new iPad.” In contrast, Samsung and all of its employees are fully in Techeye’s good graces right now. No blubbery, fishy torment for those folks. Indeed, we’d like to treat the company’s product-

naming team to the fast food dinner of their choice. That’s because Samsung didn’t faff about with naming conventions for its new top-shelf smart phone. Rather than calling it “the new Galaxy” or “the Galaxy Next” or “the smart phone formerly known as Galaxy,” the Korean firm just slapped another roman numeral on the end. The Galaxy S III. Doesn’t that have a pleasant ring to it? Not an inventive name, but then the mobile phone industry is already a graveyard of perkily named but technologically bland handsets. The Galaxy S III is far from bland in terms of hardware, though it’s not the leap forward that many had

hoped for, either. With its 4.8-inch display, the S III has taken a noticeable step towards its girthy cousin, the Samsung Note, a 5.3-inch tabletwannabe. The iPhone 4S still packs more pixels per inch, but, given this bigger-is-better trend, Apple’s iconic product could start to feel insubstantial in comparison. Indeed, rumors indicate the iPhone 5 may have a 4point-something-inch display. Shape-wise, the S III harkens back to the original Galaxy S, rather than taking the squarish frame of its immediate predecessor. It’s slimmer and lighter than most of its rivals, with a 1.4 GHz quad-core Samsung Exynos processor that’s possibly faster than the competition.

Today’s smartest phones Display size Display type Processor Memory Storage Front camera Back camera Operating system Weight

Galaxy SIII 4.8-in Super AMOLED HD 1.4 GHz quad-core 1GB RAM 16/32/64GB* 1.9 MP 8 MP Android 4.0 133g

iPhone 4S 3.5-in Retina display hi-res 1 GHz dual-core 512 MB RAM 16/32/64GB VGA 8 MP iOS 5 140g

*expandable with SD card

HTC One X 4.7-in Super LCD2 1.5 GHz quad-core 1 GB RAM 32 GB 1.3MP 8 MP Android 4.0 153g

Galaxy SII 4.5-in Super AMOLED Plus 1.5 GHz dual-core 1GB RAM 16/32GB* 2 MP 8 MP Android 4.0 116g Source: manufacturers

In summary, the latest Galaxy phone boasts competitive high-end technical specs, but nothing spectacular. Instead, Samsung seems to be relying on software and under-the-hood changes to really sell its new phone. There’s a Siri-clone voice recognition system called “S-Voice” as well as an eye-tracking feature called “Smart Stay” which employs the front camera to detect whether you’re using the phone and, if so, prevents the display from shutting down. Not fancy, but a nice touch. There are also tweaks to the Android OS, a number of key applications and some stuff we can’t be bothered to mention. But in the end, the success of the Galaxy S III will come down to two things: user experience and the iPhone 5. If the phone

COURTESY OF SAMSUNG

A new Galaxy that’s not a “new Galaxy”

builds on the already strong user experience of its predecessors without compromising on battery life, it won’t disappoint. Also, the (expected) reveal of the iPhone 5 later this year, with (purportedly) next-gen features, will bring stiff competition. The Galaxy S III is due on May 29, giving Samsung a few months before the next iPhone hits shelves. Let’s just hope it’s not called the “new iPhone,” or else certain Apple employees may disappear in fishy circumstances. ●

Ever been slathered with sea lion pheromones? 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. pl Galeria 65 ul. Bema 65 www.galeria65.com Le Guern Gallery ul. Widok 8, www.leguern.pl Galeria Appendix 2 ul. Bia∏ostocka 9 Museum of www.appendix2.com Independence Aleja SolidarnoÊci 62 Galeria Asymetria www.muzeumniepodleglo ul. Nowogrodzka 18a www.asymetria.eu sci.art.pl Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl 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

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