Warsaw Business Journal vol. 17, no. 29-30, July 25-August 8, 2011
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VOLUME 17, NUMBER 29-30 • JULY 25 – AUGUST 8, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127 The Polish psyche Poles are happy with their careers, but less so with their private lives, a new report suggests. Psychology professor Janusz Czapiƒski, explains the findings 8-9 Since 1994 . Poland’s only business weekly in English WWW.WBJ.PL On the right track? Poles are among the most disgruntled rail users in the EU. Privatization could improve service, but that train has only just left the station 12-13 Greece’s new bailout Polish finance minister Jacek Rostowski has said the Greece problem has now been “solved” following a new agreement to bail out the debt-stricken country 3 SHUTTERSTOCK 5 4 Gdaƒsk’s Euro 2012 stadium is ready, but the contractor could face heavy fines for missing the deadline Poland’s planned high-speed rail network will cost an estimated z∏.18 billion News . . . . . . . . . . . . . . . . . . . . . . .2-4 Industry News . . . . . . . . . . . . . . . . .5 Business Environment . . . . . . . . . .6 Listed Firms . . . . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . .12-13 Company Focus . . . . . . . . . . . . . . .14 WBJ Business Breakfast . . . . . . .15 Lokale Immobilia . . . . . . . . . .16-19 Markets . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23 In this issue REAL ESTATE Lokale Immobilia • Financing for foreigners • Marvipol’s big plans • Port Praski revamp 16-19 COURTESY OF TELEWIZJA POLSAT A guide to Polish business and industry Przewodnik po polskim biznesie i gospodarce Largest Business Schools 20
Transcript
VOLUME 17, NUMBER 29-30 • JULY 25 – AUGUST 8, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127
TThhee PPoolliisshh ppssyycchhee Poles are happy with their careers, but less so
with their private lives, a new report suggests.
Psychology professor Janusz Czapiƒski,
explains the findings 8-9
Since 1994 . Poland’s only business weekly in English
WW
W.W
BJ.P
L
On the right track?Poles are among the most
disgruntled rail users in
the EU. Privatization
could improve service,
but that train has only
just left the station 12-13
GGrreeeeccee’’ss nneeww bbaaiilloouutt Polish finance minister Jacek Rostowski has
A guide to Polish business and industry Przewodnik po polskim biznesie i gospodarce
Largest Business
Schools 20
%
10
20
30
40
50
PolandSlo
vakia
FranceUK*
Latvia
Switze
rland
Luxem
bourg
*Provisional data
43
22
17.5
Germany
8.7
Estoni
a
15.9
Austria
10.57.0
5.8
1.2 0.1
JULY 25 – AUGUST 8, 2011NNEEWWSS2 www.wbj.pl
Kraków bombs
target the
wealthy
A 65 year-old man who
lives in an affluent
Kraków neighborhood,
was severely injured in a
bomb blast in mid-July.
This was the fourth such
incident in Kraków within
a three-week period.
Investigators suspect
that at least three of the
incidents were motivated
by hatred towards the
rich, Dziennik Gazeta
Prawna reports. The
most recent bomb was
triggered when the man
picked up a piece of a
plastic pipe that lay on
his driveway.
PO leading
in survey
Forty-seven percent of
respondents to a recent
CBOS opinion poll said
that the ruling Civic
Platform (PO) party
would be re-elected into
government after the fall
elections, while 11
percent are of the opinion
that the opposition party,
Law and Justice (PiS),
will take the helm. Of
those who answered in
favor of PO, 28 percent
said they believed that
the party would rule
independently and 19
percent believed they
would govern in a
coalition.
Plans for
€400 million
theme parkCentral Europe’s largest
theme park will be built
in Grodzisk Mazowiecki,
40 km from Warsaw.
Work on the project is set
to begin in spring 2012,
Rzeczpospolita reported.
An international
consortium of private
investors based in
Luxembourg will spend
€400 million on the
scheme, which will
include roller coasters,
water slides and wave
machines. Adventure
World Warsaw will take
up 240 hectares.
Israeli PM to
visit Poland
Israeli Prime Minister
Benjamin Netanyahu is
planning to make a quick
stop in Poland on July 27,
in an attempt to dissuade
the Polish government
from supporting the
recognition of an
independent Palestinian
state, Gazeta Wyborcza
reported, citing unnamed
sources in Israel. ●
Alpine Bau....................4
Apple ..........................23
ATEbank ......................7
Atlas Estates ..............17
Atlas Group ................17
Baltis Investment
Group..........................17
Bank Gospodarstwa
Krajowego ....................7
Bank Zachodni WBK....6
Citigroup Global
Markets ........................6
COVEC ..........................4
Dom Kredytowy
Notus..........................19
DWR Finance ............19
Efect Doradztwo
Finansowe ..................19
EFG
Eurobank Ergasias ......7
Enea ............................7
Eurovia Polska ............4
Eviro............................19
Expander ....................19
Gold finance ..............19
Hochtief Polska..........19
Home Broker ............18
HP ..............................23
Hydrobudowa ..............4
Ideum ........................23
Itella Group ................14
JEMS
Architekci studio ........16
Layetana Developments
Polska ........................18
Marvipol......................17
Neocity Group ............18
Open finance ..............19
Österreichische
Volksbanken-AG ..........7
PBG ..............................4
PGE ..............................4
PKO Bank Polski..........7
PKP ........................5, 12
PKP Cargo..................12
PKP Energetyka ........12
PKP Intercity ..............12
PKP PLK ....................13
PricewaterhouseCoopers 7
Real Finance ..............19
Salomon Finance 18, 19
Samsung ....................23
SCALA IRP
Capital Partners ........16
SGI Baltis ..................17
Transport Consultant’s
Group..........................13
Unidevelopment ........19
Warsaw Stock
Exchange................7, 17
X-Trade Brokers ..........3
Xelion..........................19
ZenithOptimedia ..........5
Brutal weather continued tobatter Poland in July as violentstorms left one person deadand five others injured. Tor-rential rain and gale-forcewinds damaged hundreds ofhouses in the most severelyaffected regions.
In the Mazowieckie voivod-ship, a torn roof crushed a 30-year-old woman, who diedinstantly due to head injuries.Broken and uprooted treescaused further problems, injur-ing one person in Warsaw andthree others in the Gi˝yckoregion (Warmiƒsko-Mazurskievoivodship). In total more than1,000 trees were uprooted.
Broken wires and damagedutility poles also caused powerfailures, leaving certain areaswithout electricity for days.There was also extensiveflooding in many of Poland’s
streets and houses, and even inthe capital’s subway stations.
Water levels in many riversrose to dangerously high lev-els. In four voivodships (Dol-noÊlàskie, Ma∏opolskie, Mazo-wieckie and Lubelskie) thesurge of water reached alarmlevels, while in three others(Kujawsko-Pomorskie, Wiel-kopolskie, Âwi´tokrzyskie)there were states of alert.
The most recent stormscame after a tornado hitMazowieckie and ¸ódzkievoivodships earlier in July,damaging 790 roofs, fellinghundreds of trees and tearingdown power lines.
Prime Minister DonaldTusk subsequently visited thevillage of Sady-Kolonia inMazowieckie and promised tohelp victims, reassuring themthat reconstruction of housing
will be financed by the state,regardless of whether theproperties were insured.
Law and Justice (PiS) partyleader Jaros∏aw Kaczyƒskireacted by saying his partywould be “very heavilyinvolved” in helping the affect-ed regions. He also appealedto Mr Tusk to take advantageof every opportunity to helpthe storm’s victims.
The Ministry of Interiorand Administration has sinceallocated money to help thetwo provinces. The Mazo-wieckie and ¸ódzkie voivod-ships each received z∏.1 mil-lion to help repair damage,while the ¸ódzkie voivod-ship, which was the mostseverely affected, received anadditional z∏.3.6 million, onJuly 21.
BBaarrbbaarraa GG´́ddeekk
€109 billionis the cash injection the EU and IMF’s new bailout
program will give Greece
€400 million is the amount a group of investors from Luxembourg
are looking to spend on the construction of a massive
amusement park in Grodzisk Mazowiecki
2%was the year-on-year growth rate of industrial
production in Poland recorded for June, much lower
than expected
23%is how many Polish companies are planning to hire
new employees in H2 of 2011
“Poland is doing very well in this unstablelandscape.”
Piotr Marczak, a department director at the ministry of finance, expressed his
satisfaction after the Polish Treasury sold z∏.3 billion in long-term bonds despite
continuing market jitters due to the euro-zone crisis.
Quote of the Week
Poland’s Cambridge professor
Last week, Polish-born scientist and newly appointed vice-chancel-lor of Cambridge University, Sir Leszek Borysiewicz, took part in theEuropean Entrepreneurs Forum at the Warsaw School of Econom-ics. He talked to WBJ.pl about science and education in Poland andwhat Polish universities can do to be able to match a university suchas Cambridge.
On WBJ.pl
Numbers in the News
Company index
RE
PO
RT
ER
4 CHARITY VOLLEYBALL TOURNAMENTEvent: The main aim of the “Together Better” chari-
ty volleyball tournament is to raise moneyfor the purchase of special medical beds atthe Centrum Zdrowia Dziecka institute and tofulfill some wishes of terminally ill children. Location: La Playa Music Bar, Warsaw Contact: [email protected]
4-7 MARINE BOAT SHOWEvent: “International exhibition of the water sports
and recreation industries.” The exhibition willfocus on advanced equipment and technolo-gies related to water sports.Location: Warsaw International Expocentre
EXPO XXI, Warsaw, Poland
5-7 ARABIAN HORSE DAYSEvent: The Polish National Show is one of the most
competitive displays of superlative qualityequines to be found anywhere. Location: Janów Podlaski Studwww.prideofpoland.pl
20 GOLF & COUNTRY BUSINESS MIXEREvent: The British Polish Chamber of Commerce is
holding a business mixer with a golf tourna-ment, providing an opportunity to promotebusiness interests throughout Poland.Location: Kraków Valley Golf and CountryClub, Paczó∏towice
August
DATELINE
Poland’s storms
IN THE SPOTLIGHT
Figures in focus
A closed society
Percentage of the population made up of foreign citizens in 2010,
selected European countries
Source: Eurostat
JULY 25 – AUGUST 8, 2011 NNEEWWSS www.wbj.pl 3
NATO ruled out martial law intervention NATO has declassified a num-ber of documents that show itwas not prepared to intervenemilitarily if the Soviet Unionhad invaded Poland during theperiod of martial law in theearly 1980s.
The authoritarian People’sRepublic of Poland introducedmartial law on December 13,1981, in an attempt to quellanti-government protests.Many in the West feared thatthe Soviets would invade if thePolish government did notmanage to subdue the opposi-tion.
NATO, however, had noplans to launch a counter-strike to repel a possible Sovi-et invasion.
Speaking on national tele-vision, Polish foreign ministerRados∏aw Sikorski said thedocuments reveal that NATO“did not want to take risks” forthe Poles who fought for free-dom.
NATO’s rationale, accord-ing to Mr Sikorski, would havebeen that because the organi-zation is merely a defensivealliance, it did not have a man-date to intervene in the Soviet
cerning NATO policy towardsPoland from 1980-1985 weredeclassified.
“The aim was to declassifymaterials covering the years1980-1985 about the possibleUSSR intervention in Poland,the introduction of the martiallaw in Poland and NATO’sreaction to these develop-ments,” Poland’s foreign min-istry wrote in a statement.
Martial law was lifted onJuly 22, 1983.
GGaarreetthh PPrriiccee ,, BBaassiiaa GG´́ddeekk
Uncertainty reigns overfuture of Swiss francAs doubts about the future ofa number of indebted Euro-pean economies continuednear the end of July, so too diduncertainty about the futuredirection of the Swiss franc.
The Swiss currency hasrecently become something ofa bellwether for the state ofthe European economy. Aseconomic troubles have con-tinued to flare, risk aversionhas increased and investorshave sold assets they perceiveas risky, such as the z∏oty,flocking to the franc andboosting its value.
Coming from an all-timehigh against the z∏oty in mid-July, the Swiss currency hadcooled down somewhat by thetime details of the €109 billionbailout package for Greeceemerged on July 22. Neverthe-less, many reckon the francwill resume its upward courseif the euro zone’s problems arenot fully resolved.
“Uncertainty still remains,”said Adam Narczewski, a cur-rency expert at X-Trade Bro-kers.
However, if investors viewthe bailout as a moment of
decisive action taken by Euro-pean leaders to tackle Europe’scurrent financial woes thenconfidence could return to themarket.
“Risk aversion woulddecline and investors wouldmove away from the ‘safe’ Swissfranc to invest in more riskyassets,” Mr Narczewski said.
If this proves to be the case,the CHF/PLN would declinesteadily over the coming monthsto the z∏.3.2-3.3 mark, Mr Nar-czewski added. As WBJ went topress, the Swiss franc was valuedat z∏.3.35. TTaarraa TTaayylloorr
Euro zone crisis
GGrreeeekk pprroobblleemm ‘‘ssoollvveedd’’??Euro zone leadershave reached a dealover Greece that seemsto have assuagedinvestor worries, atleast for now
Following weeks of uncertaintyand anxiety in financial mar-kets, euro-zone leaders havefinally agreed on a new €109billion bailout program forGreece, as well as measuresaimed at preventing the coun-try’s debt crisis from spreadingacross Europe and doing moredamage than it already has.
The latest package forGreece means the euro zone(via its bailout fund) and theInternational Monetary Fundwill lend the country roughly€109 billion over the next threeyears at an interest rate of 3.5percent. The interest rate onthe bailout packages for Portu-gal and Ireland will also bereduced to 3.5 percent, fromaround 6 percent previously.
The plan will also involvethe private sector. French Pres-ident Nicolas Sarkozy an-nounced that private lenderswill contribute a total of €135billion for Greece by 2019.
Moreover, a number ofprivate creditors who holdGreek debt which is due tomature in the coming yearswill replace their bonds withnew ones that will maturefurther in the future. Severalbanks, including some ofGermany and France’slargest financial institutions,also offered to take new 30-year or 15-year Greek bonds.The plan is expected to pro-
vide a total of €50 billion ofdebt relief to Greece.
Expanded bailout fund“I strongly welcome the volun-tary contribution from thebanks. I believe that this is theright signal coming at a diffi-cult time,” said German Chan-cellor Angela Merkel.
In addition, in a preemptiveattempt to prevent furthermarket anxiety, the euro zone
leaders agreed to the expan-sion of a €440 billion bailoutfund established in May of lastyear.
Currently, the fund canonly be used as a last resort torescue a euro-zone countrywhose plight jeopardizes thestability of the euro project as awhole. Under the new plan,officials would be able to usethe fund to intervene on sec-ondary markets to buy up the
bonds of struggling debtorcountries. It could also be usedby officials to take preemptiveor “precautionary” action tonip a debt crisis in the bud, by,for example, agreeing to sup-ply credit to struggling euro-zone countries which wouldthen use the money to recapi-talize their banks.
Poland’s finance minister,Jacek Rostowski, was upbeatafter the euro zone announce-ment, emphasizing Poland’srole in the agreement.
“As the country holding thepresidency of the Council ofthe European Union, we sug-gested the idea of a significantreduction in the interest rateson the aid for Greece, Portugaland Ireland. I am happy theidea was accepted so quickly,”he said, adding that in his opin-ion, the “Greek problem hasbeen solved.”
Positive assessment Others, however, were morecautious in their reading of theeuro-zone agreement.
“The Greek problem hasnot been resolved, but I am tilt-ing towards a positive view-point. This time politicianshave taken the problem seri-
ously and addressed the coreissue, which is not liquidity andthe granting of loans, but sus-tainability,” said Przemys∏awKwiecieƒ, chief economist atX-Trade Brokers.
“Reducing Greece’s debtsand interest rate paymentsmeans its debt servicing costsand therefore its budgetexpenditures will fall, giving ita chance to increase its incomeand attain better fiscal bal-ance,” he added.
Mr Kwiecieƒ also said alack of time frames and condi-tions contained in the latestpackage would extend the peri-od of calm.
“If the euro-zone countrieshad attached, for example,quarterly strings to the aid,then in two months, anxietywould return. But the Greekshave been given a rather longperiod of comfort to sort outtheir problems. Of course,investors will be watchingGreece’s and other troubledcountries’ macroeconomicdata and they will be keeping aclose eye on Greece’s privati-zation process to see if they areserious about reforming theircountry,” he said.
RReemmii AAddeekkooyyaa
AF
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Euro zone leaders agreed on a €109 billion bailout program for Greece
JULY 25 – AUGUST 8, 2011NNEEWWSS4 www.wbj.pl
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However, the contractorcould be charged morethan z∏.200,000 a dayfor missing thedeadline for completion
Gdaƒsk’s stadium for theEuro 2012 soccer champi-onships, the PGE Arena, isfinally complete after buildinginspectors hired by the cityauthority gave the stadium thegreen light on July 19.
Its delivery came 18 daysafter the most recent deadline,with the stadium now set to
have its grand opening onAugust 6. The first match willtake place on August 12, whenLechia Gdaƒsk will take onCracovia Kraków.
“We are very satisfied that itwent according to plan, ofcourse we expected to take itover earlier, but the importantthing now is that the stadiumhas started working properly,”said Wojciech Rokicki, nationalcoordinator for stadiums atPL.2012, the Euro 2012 soccertournament’s organizing body.
The contract to build thestadium was worth z∏.427.7 mil-
lion for the Polish-Austrian con-sortium of Alpine Bau, PBGand Hydrobudowa that wascharged with completing theproject.
However, if the City ofGdaƒsk manages to provethat the delays in construc-tion were the contractor’sfault, the penalties could addup to more than z∏.200,000for each day that the projectwas late.
The stadium’s operator willhave to pay the city a fixed sumof z∏.10 million a year, as well as5 percent of all income earnedfrom operating the stadium.
Two more to goThe PGE Arena is the secondEuro 2012 facility to be com-pleted, following the MunicipalStadium in Poznaƒ.
The National Stadium inWarsaw is currently scheduledfor completion in November,while Wroc∏aw’s MunicipalStadium faces a race againsttime to be ready for the heavy-weight boxing showdown be-tween Tomasz Adamek andVitali Klitschko, set forSeptember 10.
DDaavviidd IInngghhaamm
Euro 2012
GGddaaƒƒsskk’’ss EEuurroo 22001122ssttaaddiiuumm ccoommpplleetteedd After initially agreeing
to the government’sterms, the companynow wants moremoney and more time
French-controlled contractorEurovia Polska has reversedits position in what is now thesecond week of negotiationswith Poland’s GDDKiA con-cerning the completion of thetroubled A2 highway between¸ódê and Warsaw.
Despite having previouslyaccepted all of the govern-ment’s conditions, Eurovia isnow demanding a change tothe completion deadlines,which were drawn up by Polishauthorities for the various seg-ments of the highway. Whilethe company maintains itsreadiness to complete the A2as a whole and in time forEuro 2012, in reality the pro-posed changes to work sched-ules make opening the road todrivers by the current targetdate of May 30 next yearunlikely, reported DziennikGazeta Prawna.
Eurovia is also reportedlydemanding an extra z∏.1.5 bil-lion for the project. This isdouble the amount the previ-
ous consortium, COVEC, hadbid. While Eurovia denies thereports, it refuses to specify itsfees.
Neither GDDKiA norEurovia are prepared to sug-gest how long it may be untiltalks are concluded and thereare worries that the latter’s lat-est demands will significantlydelay completion of the A2highway, which is alreadybehind schedule. There areapproximately 11 months leftto complete the work by theoriginal deadline.
This latest turn of eventsfollows the National Chamberof Appeal’s, rejection of
COVEC’s appeal againstGDDKiA for choosing newcontractors without a tender.The COVEC appeal was putforth after the Chinese consor-tium was dismissed from theproject for failing to meet con-struction deadlines.
COVEC argued that thedecision was illegal since itlimited competition.
COVEC’s appeal wasrejected on the grounds thatthe company could not lodgean appeal alone, since it wasworking in a consortium withthree other entities, reportedRzeczpospolita.
TTaarraa TTaayylloorr
A2 highway
Eurovia increases its demands for
completion of key highway section
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Completion of the A2 by the May 30, 2012 deadline now
looks less likely
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The contract to build PGE arena was worth z∏.427.7 million
The value of Polishvegetable exports toRussia amounted to€114 million last year
As of July 20, Polish fruit andvegetable produce wasallowed back into Russia, theInterfax news agency reported,citing a decision made by Gen-nady Onishchenko, the headof Russia’s state consumerprotection group, to lift a banthat had been in place fornearly two months.
The embargo on Polish pro-duce was part of a wider Russ-ian ban on European Unionfruit and vegetable importsthat followed the widespreadoutbreak of E. coli poisoning
cases across Europe.During an EU-Russia sum-
mit on June 9-10, the Kremlinagreed to lift the ban on vegeta-
bles from the bloc, providing itreceived security guarantees.
On June 22 an agreement wassigned to end the ban, althoughRussia has only lifted it on acountry-by-country basis.
So far, in addition toPoland, the embargo hasbeen lifted on fruit and veg-etable imports from theCzech Republic, Greece, Bel-gium, Holland, Spain andDenmark. Exporters fromGermany, where the out-break began, are still not per-mitted to send their produceto Russia.
In 2010, Poland exportedfresh and frozen vegetablesworth €114.3 million to theRussian market, up from €72.5million the year before.
BBaarrbbaarraa GG´́ddeekk
Food exports
Russia lifts ban on Polish fruit and vegetables
JULY 25 – AUGUST 8, 2011 IINNDDUUSSTTRRYY NNEEWWSS www.wbj.pl 5
Ad market
outlook
gloomy
According to forecasts by
analysts from media
house ZenithOptimedia,
Polish companies’
advertising expenses in
2011 will be a mere 2.4%
higher than in the
previous year, Dziennik
Gazeta Prawna reported.
Prior forecasts were for
an increase of around
5%. Zenith expects that a
significant improvement
in the advertising sector
will be seen no sooner
than next year, when the
Euro 2012 soccer
championships will take
place in Poland. The
value of the whole
market should increase
by some 5.6% in 2012,
they say.
Smuggled
smokes cause
sales declineIn the first half of this
year, tobacco companies
sold some 28 billion
cigarettes in Poland,
Rzeczpospolita reported.
That’s 800 million fewer
than in 2010. Many Poles
have started buying
cheaper cigarettes from
illegal sources ●
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The embargo was part of a wider Russian ban following the E.coli outbreak in May
Polish Infrastructure MinisterCezary Grabarczyk estimatesthat the cost of building a seriesof planned interconnectedhigh-speed rail links betweensome of the country’s majorcities will amount to z∏.18 bil-lion.
One of the rail links will joinWarsaw with the city of ¸ódê,from where a second connec-tion will stretch to the westerncity of Wroc∏aw. A third line will
link Wroc∏aw with Poznaƒ. Thenetwork will be built between2018-2020.
Mr Grabarczyk said theproject will complement theexisting network, adding that acompany has already been cho-sen to carry out a feasibilitystudy for the scheme.
“By the end of the year, thecompany will present the firstpart of the feasibility study. Thisstudy will indicate the [precise]
location for the project. Then,within around 18 months, thesecond part of the study will be
presented. This will show thereal costs of constructing andmaintaining the system,” MrGrabarczyk said.
He added that the cost ofrolling stock will amount toaround z∏.4-6 billion.
However, Mr Grabarczykstressed that the real cost of thewhole project will only beknown after the feasibility studyhas been completed.
When asked about the price
of tickets for the high-speed railnetwork, the head of PKP Pol-skie Linie Kolejowe, ZbigniewSzafraƒski, said that he wouldlike the pricing system to besimilar to the one used by air-lines.
“This means that during thebusiest times of day and themost attractive days of the yeartickets will be more expensive,”Mr Szafraƒski was quoted byPAP as saying. BBGG
High-speed rail system could cost z∏.18 billion
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JULY 25 – AUGUST 8, 2011BBUUSSIINNEESSSS EENNVVIIRROONNMMEENNTT6 www.wbj.pl
Even the rain could not spoil the flamboyantatmosphere at the July 14 Ball, organized forthe seventh year in a row by the FrenchChamber of Commerce and Industry inPoland in honor of the French Bastille Day hol-iday.
The annual celebration brought togetherthe capital’s francophiles with members ofthe French community living in Poland,including representatives from the worlds ofbusiness, media and culture.
The guests regaled themselves with tradi-tional French cuisine, enjoyed a recital fromGoshka Banka – a Polish artist living in Paris –and had a chance to win several lotteryprizes, including a car.
The entire event was held in the sumptu-
ous gardens and interiors of Endorfinarestaurant, located on Warsaw’s historicul.Foksal. ●
July 14 ball: tradition and glamor
Media patronage
Guests enjoyed the entertainment in the garden of Endorfina restaurant
Private sector wages
and employment rise The private sector employmentrate rose by an above-forecast3.6 percent year-on-year inJune, according to data fromthe Central Statistical Office(GUS).
The average salary in thePolish private sector, mean-while, rose by 5.8 percent fromthe same period in 2010. Theaverage wage now stands atz∏.3,600.
The result surprised ana-lysts, who had predicted lowergrowth, as it was significantlybetter than the 4.1 percentincrease reported in May.
Bank Zachodni WBK ana-lysts wrote in a reserch notethat “acceleration in wage
growth in June means that onaverage it was not much lowerthan in Q1, which supports ourestimate that the slowdown inprivate consumption growth inQ2 was not significant.”
The bank’s analysts addedthat the data did not affect theoutlook for possible furtherinterest rate hikes this year.
“From the Monetary PolicyCouncil’s (RPP) point of view,the data did not change the pic-ture of Poland’s economic situ-ation. Continued improvementin labor market conditionsspeak in favor of keeping thedoor open to further hikes,”the note read.
DDaavviidd IInngghhaamm
3,000
3,500
4,000
June
201
1
May 2
011
April
2011
March
201
1
Febr
uary
2011
Janu
ary 2
011
Dece
mber
201
0
Nove
mber
201
0
Octob
er 2
010
Sept
embe
r 201
0
Augu
st 20
10
July
2010
June
201
0
Fluctuating wages
Average gross wage in the private sector,
June 2010-June 2011, in z∏oty
Source: GUS
Industry
Global economic troubles weigh onPoland’s industrial productionEconomists aredivided on the impactthe slowdown will haveon GDP growth
In June Polish industrial out-put grew at its lowest ratesince October 2009, due toweakening economic activityacross the rest of the world.
Output rose by a below-forecast 2 percent year-on-year in June, compared togrowth of 7.7 percent themonth before.
Economists say lacklustergrowth abroad is the maincause of the slowdown, as abreakdown of the resultsshows the biggest slowdown
was felt by firms that aregeared towards export.
The export-oriented manu-facturing sector saw growth ofjust 1.9 percent y/y.
“A … slowdown in industryis visible, which is due to wan-ing economic activity abroad,”Bank Zachodni WBK analystswrote in a research note.
Citigroup Global Marketsanalysts wrote in a report thatthe result stems in part fromweaker global activity in thewake of the Japan earthquake.They also wrote that a differ-ence in the number of workingdays in June last year and thisyear had an impact.
Nevertheless, on the plus
side, the Polish constructionsector is still buoyant due tolarge-scale infrastructureinvestments, including thosefor the Euro 2012 soccerchampionships. Moreover,output in mining and utilitiesrose faster than in May.
Prices in industry, mean-while, are still strong (5.6 per-cent growth y/y), although theyhave slowed from the 6.3 per-cent growth seen in May.
The repercussionsSome experts don’t think theslowdown in output will lastfor long. “We believe the cur-rent weakness of industrialdata is temporary and the out-
SH
UT
TE
RS
TO
CK
The construction sector bucked the disappointing trend,
remaining strong due to Euro 2012 investment
put is likely to accelerate laterthis year,” Citigroup wrote.
The bank’s analysts say thatindustrial production couldreturn to 7-9 percent y/ygrowth by the end of 2011.
Analysts are split on theimpact the industrial outputletdown will have on the GDPgrowth rate for the secondquarter.
“In Q2 2011, economicgrowth probably decelerated to4.2 percent y/y from 4.4 percentin Q1,” Citi wrote. BZ WBKanalyst, however, think therewon’t be much, if any, differ-ence between Q1 and Q2 GDPgrowth.
GGaarreetthh PPrriiccee
0
3
6
9
12
15
June
201
1
May 2
011
April
2011
March
201
1
Febr
uary
2011
Janu
ary 2
011
Dece
mber
201
0
Nove
mber
201
0
Octob
er 2
010
Sept
embe
r 201
0
Augu
st 20
10
July
2010
June
201
0
Industrial-scale disappointment
Industrial production y/y growth, in %
Source: GUS
DAILY EXECUTIVE DIGEST
S i g n u p f o r a 2 - w e e k f r e e - t r i a l ! w w w. p o l a n d a m . p lG e r m a n v e r s i o n : w w w. p o l e n a mm o r g e n . p l
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Have the most valuable news delivered to your inbox each weekday morning.
JULY 25 – AUGUST 8, 2011 LLIISSTTEEDD FFIIRRMMSS www.wbj.pl 7
Despite the overall positive economic climatein Poland and indications that Polish banks arein good shape, lenders are still proving reluc-tant to lend, while businesses are hesitant toborrow.
State-owned PKO Bank Polski recentlypassed a stress test conducted by the Euro-pean Banking Authority (EBA). It was the onlyPolish bank tested, but most of the othermajor Polish lenders have reported drasticallyimproved financial results in recent quarters,often on the back of reduced provisions forbad loans.
“One could have expected increased finan-cial activity in the last year or so but actually,corporate credit has dropped by around z∏.9.7billion since 2009,” Jaros∏aw Dàbrowski, anexpert in international banking, said at a recent
conference on the Polish economy organizedby the Association of Chartered CertifiedAccountants (ACCA).
Exaggerated claims?During a panel discussion at the conference,Witold Or∏owski, chief economist at Pricewater-houseCoopers, was asked if Polish entrepre-neurs were not being excessively risk-averse.
“No, I don’t see anything different in Polandwhen compared to other countries right now.We simply live in unpredictable times and such[risk-aversion] is the dominating behavior allover the world. Although assets are currentlyundervalued and it is a good time to buy, firmsare afraid that if through an acquisition theylimit their cash flow, then if things go wrong,they may be in serious trouble,” he said.
“It’s an exaggerated fear of course, thereused to be an exaggerated optimism and thathas changed to an exaggerated pessimism. Iam not saying that one should cease to con-sider risk, but much won’t happen if every-body remains in such a mood. No risk, nodevelopment,” he added.
Mr Or∏owski suggested that the govern-ment could implement measures such asshrinking public debt, to reduce risk factors.
UncertaintyJaros∏aw Pietraszkiewicz, president of theUnion of Polish Banks (ZBP), pointed toother factors apart from risk-aversion whichhave led to the current situation. He citedsurveys conducted by the Ministry of Econ-omy that asked investors what stopped
them from investing. Some of the resultsproved surprising. Even though the last sur-vey was conducted before the crisis, theissues raised are still far from beingresolved.
“Entrepreneurs pointed to the fact that theyare not sure of the direction of our economicdevelopment as the main reason for them notinvesting. The second reason was that Polandis not in the euro zone and they don’t know onwhat conditions it will join if it does,” MrPietraszkiewicz said.
“The third reason was that entrepreneurs saidthey had no strategy for the development of theirfirm and no trusted financial advisor to help themwith that,” he added. Access to finance was list-ed as the fourth major problem.
RReemmii AAddeekkooyyaa
Corporate credit
Risk aversion dominates in the Polish economy
Media patronage
Huge WSE
tax windfall
Taxes paid on earnings
from the Warsaw Stock
Exchange were likely
two-thirds higher in
2010 than in the
previous year, reported
daily Parkiet. Poland
was expecting
z∏.1 billion in taxes from
income collected on
2010 stock market
profits, but Parkiet’s
calculations indicate the
treasury could receive
more than z∏.1.3 billion.
Clearly, the treasury has
cause to celebrate,
suggest some analysts.
“After a less than
spectacular 2009, 2010
offered a number of
chances for significant
gains,” Maciej Reluga,
chief economist at BZ
WBK, told the daily.
IPF to join
WSE?
An increasing number
of credit companies are
listing on stock
markets, including SMS
Kredyt Holding, a
Wroc∏aw-based
company that
specializes in micro-
credit. Next year
however, the markets
may welcome one of the
field’s big international
players, International
Personal Finance (IPF),
which specializes in
sales of home credit
and owns Poland’s
largest lending firm,
Provident, reported
Puls Biznesu. The
company is currently
evaluating the
possibility of entering
the WSE and so-called
secondary listings, said
IPF president John
Harnett. ●
Privatization
Poland could earn z∏.7.5 billion from sale of PKO stake
Up to 15 percent ofPKO will be offered –significantly less thanthe 20 percentexpected
Poland’s treasury ministry hasannounced that up to 15 per-cent of state-controlled PKOBank Polski will be put up forsale during a secondary public
offering due to be held on theWarsaw Stock Exchange atthe end of the third quarter.
The lender filed its issueprospectus with the country’sfinancial regulator, the KNF,in the middle of July, thetreasury said in a statement.
The treasury itself plans tosell up to 5 percent in PKO.This will be in addition to thesale of some or all of state-
controlled Bank Gospodarst-wa Krajowego’s (BGK) 10.25percent stake.
At first, up to 13 percentwill be offererd. If the full 13percent is made available forsale, the treasury will thendecide whether to offer anadditional 2 percent.
The day after it issued itsprospectus, PKO’s share pricerose as investors responded
with relief to the news that thestake put up for sale was signif-icantly smaller than the 20 per-cent expected. Treasury Min-istry Aleksander Grad said ear-lier this year that Poland couldsell up to 26 percent. It would,he said, keep hold of a 25 per-cent controlling stake.
The stake up for sale isworth at least z∏.6.75 billion,based on the company’s shareprice the day after the issueprospectus was filed. Thestake has, however, been val-ued as high as z∏.7.5 billion,which would make it one ofthe biggest offers in the histo-ry of the WSE.
But not everyone is con-vinced that the stake will
fetch such a high price. “War-saw is not Wall Street. Wewant to be careful. Eventhough the bank is perceivedwell by foreign investors, thefinancial crisis in Europekeeps escalating,” Rzecz-pospolita quoted a ministrysource as saying.
The treasury currentlyholds a 40.99 percent stakein PKO, while state-ownedBGK is the second-largestshareholder with 10.25 per-cent. The state plans to raisez∏.15 billion from privatiza-tions this year with aroundhalf expected to come fromthe PKO BP sale.
DDaavviidd IInngghhaamm,,GGaarreetthh PPrriiccee
CO
UR
TE
SY O
F W
IKIM
ED
IA C
OM
MO
NS
The PKO sale could be one of the largest in the WSE’s history
PKO BP recently passed astress test conducted by theEuropean Banking Authori-ty (EBA). It was the onlyPolish lender surveyed.
The test, designed toevaluate lenders’ resistanceto financial shocks, was car-ried out on several financialinstitutions, each of whichwas considered large enough
to affect the wider economyif it ran into trouble.
Of the 91 financial insti-tutions tested, eight Euro-pean banks – Österreichis-che Volksbanken-AG fromAustria, Greece’s EFGEurobank Ergasias andATEbank and five regionalSpanish banks – failed topass. GGPP
Enea to spend z∏.3.8 billion on network investmentsPoland’s energy regulator hasgiven the country’s third-largest utility, Enea, the go-ahead to invest z∏.3.8 billionbetween 2012-15 to expandand develop its distributionnetwork.
The money will be spent indifferent phases, Danuta Taba-ka, a spokesperson for Enea
Operator, Enea’s networkarm, said. In 2012, capitalexpenditures will reachz∏.899.9 million; in 2013,z∏.971.76 million; in 2014, z∏973.67 million and in 2015, z∏953.2 million.
According to the utility’sdevelopment plans, the moneywill be invested in the exten-
sion and modernization of itsdistribution network.
The company will allocatebetween 30 to 35 percent ofthe total funds to a programaimed at connecting new cus-tomers with new sources ofenergy. Meanwhile, between52 percent and 56 percent ofthe total will be spent on mod-
ernizing and reconstructingexisting assets, with a view toimproving service quality andincreasing market demand forpower sourced from Enea.
The remaining funds willbe earmarked for investmentsrelated to communications,fiber optics and informationtechnology.
The regulator has alsogreen-lit the developmentplans of a number of otherPolish utilities, which are plan-ning to spend billions of z∏otyover the next few years tobring their communist-erainfrastructure up to date.
Remi Adekoya: Was thereanything in particular thatsurprised you about the find-ings of your report?Janusz Czapiƒski: What wasextremely surprising for mewere Poles’ opinions about thecauses of the 2010 Smolenskplane crash in which PresidentLech Kaczyƒski and 95 othersdied. The survey was carriedout around the time of theone-year anniversary of thecatastrophe, emotions werehigh, conspiracy theoriesabounded and yet only twelvepercent of Poles believed thatthe crash was in some wayengineered or was the result ofa conspiracy to assassinate thelate president.
I have always believed thatPoles are very susceptible toconspiracy theories and I was
sure that at least 20 percentwould buy into the assassina-tion narrative. What’s more,even among supporters ofLaw and Justice (PiS), theparty headed by LechKaczyƒski’s twin brother,Jaros∏aw, which has continu-ously stoked the conspiracyflames, only 38 percent oftheir electorate believeSmolensk was an assassina-tion. This was an absoluteshock for me and showed thatPoles are a much more ration-al and level-headed peoplethan many may think.
Your survey shows that 80percent of Poles are happywith their lives. It also high-lights that while they are gen-erally happy with theircareers or their level of edu-
cation they are at the sametime increasingly dissatisfiedwith their personal relationsregarding family, friends andtheir sex lives. Why do youthink this is?Poles still see their status asdefined by what they own andthey feel the need to impressothers with what they have.This of course does not helpin building good relationswith people and is a commonreason for domestic conflict.Some values have also startedto diminish in significance.Marriage in Poland is nolonger the sacred institution itwas 20 years ago. In addition,women are becoming moredemanding of their male part-ners. They now want to co-decide many issues in theirrelationships and are increas-ingly less inclined to play therole of second-fiddle.
This can be difficult forsome men to handle and canalso create frustrations forwomen who feel they are notbeing treated as they should be.
Regarding relationshipswith friends, a problem withPoles is that they are not tol-erant. They demand a lot ofothers and when those expec-tations are not met they oftenreact negatively. They alsooften have a problem under-standing that conflicts can betemporary, you can have adisagreement or even a tenseexchange of words with some-body but then later on you putthat behind you and move on.
Poles instead tend to bitter-ly hold on to negative emotions
Janusz Czapiƒski, psychology professor at theUniversity of Warsaw and chief author of SocialDiagnosis 2011, an analysis of Polish societytoday, sat down with WBJ to talk about thesurprising results of the study
“The Polish economyis simply not at the
stage where it cancreate jobs for so
many graduates. Thisis why the number
who want to leave isso high”
CO
UR
TE
SY O
F W
AR
SA
W U
NIV
ER
SIT
Y
Rados∏aw BiedeckiPartner
AA nneeww ttaaxx oonn yyoouurr ttrraasshhLegal Forum
Did you know that you will soonlose ownership over your waste?Beginning January 1, 2012 allwaste in Poland will be managedby local municipalities and a new“waste tax” will be introduced.
Poland has already failed tomeet the obligations of the Euro-pean Commission’s waste storagedirective, according to which, byDecember 31, 2010, Polandshould have reduced the amountof stored biodegradable waste toa maximum of 75 percent of theamount produced in 1995.
Currently, the country is notcomplying with the allowable vol-ume and could face more finesfrom the European Commission.By December 31, 2013, Poland issupposed to decrease the storageof biodegradable waste to 50 per-cent and by December 2020 to 35percent of the waste volume pro-duced in 1995, according to theEC’s directive.
However, in 2011 Poles pro-duced 12 million metric tons ofwaste while Warsaw alone creat-ed 800,000 metric tons. Most ofthis ended up in landfill sites.
Facing time pressures and thepossibility that the EU will imposefurther fines, the Polish parliamentfinally adopted an amendment onJuly 1, 2011 that aims to involve allmunicipalities in achieving theirwaste management targets.
The amendment is currentlyawaiting the signature of Presi-dent Bronis∏aw Komorowski.
Currently, foreign companiescontrol almost 60 percent of thewaste-related market and haveentered into millions of agree-ments with waste producers,such as individual real estate own-ers or production facilities. Thenew rules are set to have a directimpact on their business.
How will it work?Under the new law, municipalitieswill become the owners of wasteproduced by households and inturn, will have to control the wastemanagement on their territory. Inpractice, this means that the col-lection of waste will now becomethe responsibility of the municipal-ities. As such, a potential redistrib-ution of business among private
companies will likely take place inthe waste-collection sector.
Using a public tender process,municipalities will have to appointa waste-collection and treatmentcompany to be in charge of dis-posing and managing their waste.If a municipality chooses to partic-ipate in such a tender they willneed to transform their waste-col-lection department into a com-mercial company.
The new taxOwners of real estate will becharged a waste-management feeby the municipality. This will covercollection, transportation, recov-ery and recycling costs. Themunicipalities will determine ifbusinesses within their borderswill be subject to such servicesagainst the waste-managementfee or whether they can enterdirectly into agreements withwaste-management companies.
The provisions of Poland’s taxordinance will apply to the wastefee, meaning municipalities willbenefit from strong legal instru-ments to collect the new tax.
The amount of the “waste tax”will be fixed by each municipalitytaking into consideration: (i) thenumber of inhabitants or (ii) thehouse/apartment living space or(iii) the volume of water used. Theidea is to pay for the actualamount of the waste produced ina household, rather than for sometheoretical or declared volume.
But what happens if the serviceof waste collection is performedimproperly or not at all? Shouldthe real estate owner claim com-pensation from the municipality orwaste-collection company? Thesequestions remain unanswered.
Infrastructure issuesA municipality or group of munici-palities listed in the voivodshipwaste management plan (yet tobe drafted) will build and maintainwaste-treatment plants. The sameplan will also contain the locationof new waste treatment plants.Municipalities, waste-collectioncompanies and the marshall of aparticular voivodship will berequired to deliver reports describ-ing the performed responsibilities
which should help eliminate illegaldumping.
The municipalities, as the own-ers of the waste, will be able tosecure enough raw materials forwaste-treatment plants combinedfor example with heating facilities.This isn’t currently the case and itis considered by experts as one ofthe key reasons why public-privatepartnership (PPP) projects in thewaste-management industry areunpopular.
Again, the municipalities willchoose, by way of a public tender,the investor for the waste-man-agement facility. But there is anobligation to organize only onetender procedure. If it is unsuc-cessful, the municipalities will befree to invest in such a facility.
This leaves us with anotherunanswered question: Will theappeal of structuring waste treat-ment plants under the PPP modelsignificantly increase or will themunicipalities prefer to keep thisactivity with a potential “privatiza-tion” option in the future?
In any case, there is no moretime to waste.●
Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market. The content is created in consultation with Warsaw Business Journal's editorial staff.
Janusz Czapiƒski
JULY 25 – AUGUST 8, 2011 IINNTTEERRVVIIEEWW www.wbj.pl 9
they felt while arguing withsomebody in the past and thatprevents them from continuingthe relationship with a positivemindset. They are also veryprone to taking an uncompro-mising stance on many issues.
Does your research say thatPoles are individualists?Oh yes. Poles are radical mate-rialists and individualists.
But so are Americans, the Bri-tish and probably many othernations, isn’t that correct?That’s true, but the Americansand the British are differentfrom the Poles. When the timecalls for it they are able to seethe common interest of thegroup and can, at least forsome time, put aside unneces-sary egoistic attitudes. If aroad or a bridge needs to bebuilt, then everybody comestogether and builds it. Polesare not capable of this.
Where does this attitudestem from? It is an attitude deeply rootedin Polish history and culture.Let me give you an example.No other society has everthought up an institution likethe Liberum Veto, whichbegan in the 16th century, andallowed any member of thelegislature to force an imme-diate end to the current ses-sion and nullify any legislationthat had already been passedat the session by shouting “Ido not allow.” This revealsthe individualistic and egoisti-cal tendency of Poles and theinability to see or care aboutthe common good.
Unity in Poland happensonly when there is a commonenemy, but this is also individu-alistic because it is in every-body’s personal interest to fighta common enemy who is athreat to all. But today we don’tneed that kind of unity, weneed the ability for positive col-lective thinking and the settingof collective goals. Right now,we haven’t been able to learnthis and you see proof of thisevery day, even at the lowestpossible levels of government.
Do you really believe that whenPolish parents bring up theirchildren they tell them to beindividualistic and to not careabout the common good? Andif not, where does the youngergeneration learn this from?Their parents do not need totell them that. Childrenobserve how their parents treatconflicts and quarrels with theirneighbors, how they do notwant to negotiate but arerelentless in pursuing their ownindividual goals. Children
observe much more than adultsrealize and often adopt certainbehaviors subconsciously.
The problem is that societycan go from the stage of beingan industrial economy tobeing a knowledge-basedeconomy without social capi-tal. But how can we buildsocial capital with such atti-tudes? It is a big obstacleholding us back. I’ll give youtwo concrete examples of howthis kind of attitude hindersPolish development. The firstis the blue laser. It was invent-ed by a Pole but it was neverpatented in Poland. Why isthat? Because he couldn’tcome to terms with the Polishadministration. They said,among other things, it wouldbe too expensive to patent itworldwide, and that it wouldbe too complicated.
The second example is[technology to mass produce]graphene [which was devel-oped by Poles]. A wonderfulinvention, but I have to sayone I am sure will never bepatented in Poland because ofthe same reasons the bluelaser was never patented here.This is because it is such a longjourney from idea to industry.
Your research shows that onein six students plans to leavePoland after studies. Why isit that so many young gradu-ates don’t see prospects forthemselves in Poland despiteall the positive economicindicators?They don’t see prospectswhich would suit their expec-tations or their skills. Like Isaid earlier, Poland is anindustrial economy. When bigcapital came to Poland, theybuilt factories to assemblewashing machines, DVD play-ers and televisions. What dothey need university gradu-ates for? The same can besaid for huge Polish firms likecopper miner KGHM.
The Polish economy is sim-ply not at the stage where itcan create jobs for so manygraduates. This is why thenumber who want to leave isso high. For those who stay,many will spend a frustratingsix months looking for the kindof job they expect, then theywill lower their expectationsand take what they can get.And thus you can find a uni-versity graduate working at thecounter in a discount store.
That must arouse a lot offrustration among graduates.It does. Moreover, it is moneythrown down the drain, sincemost Polish students have topay for their education. Ingeneral, I think Poles have
over-invested in education.Do you know that after Aus-tralia, Poland has the highest[percentage] of 19-year-oldsabout to start studying at uni-versity? The figure for thisage group is 80 percent.
But the economy simplydoesn’t need them right nowbecause it has not yet devel-oped into a knowledge-basedeconomy. The problem is thatwe will not reach the stage ofbeing a knowledge-basedeconomy without those edu-cated people and human cap-ital. So here we have a catch-22 situation. I predict that ineight years’ time, we will runout of fuel for development inPoland and then there will bea major problem.
Your report shows that pover-ty is increasing in Poland butonly in two groups, those onwelfare and those on disabili-ty pensions. So consideringthis and all the negative newscoming from the euro zone,including the possibility ofanother major economic cri-sis, do you see any real possi-bility of massive social unrestoccurring in Poland, as wehave witnessed in other coun-tries such as Greece?Not at all. There might beprotests of hundreds, eventhousands, of people but Ihave found no evidence of thepossibility of tens or hundredsof thousands of people organ-izing protests and being ableto bring radical populists topower. Poles are not in thatkind of mood right now. Theyare really very sensible andrational when approachingthese issues. They do notallow themselves to get hys-terical over the negative newsthey hear on TV.
You say 80 percent of Poleshave “egalitarian” views,could you be more specificabout this point?When it comes to the socialstructure of society, Poleshave a very hierarchical men-tality. They believe some peo-ple should talk while othersshould listen. They believenot everybody deserves thesame respect, that youshouldn’t treat a universityprofessor the same way youdo a plumber.
On the other hand, Polesare also firmly convinced thatthe prime minister should notearn more money than they.Neither should their employ-er earn more than they do.Instead, they believe every-body’s salary should be at asimilar level. It is in thisrespect that Poles are veryegalitarian. ●
“The problem is that no society can go from thestage of being an industrial economy to being a
knowledge-based economy without socialcapital. But how can we build social capital with
such attitudes?”
JULY 25 – AUGUST 8, 201110 www.wbj.pl OOPPIINNIIOONN && AANNAALLYYSSIISS
Iwould like to reassure all thosewho expect this fall’s parliamen-tary election campaign to be
fiercely fought and engaging, that inreality it will likely be insipid, blandand uneventful.
A brief campaignPolish President Bronis∏awKomorowski has already stated thathe will soon officially announce thedate of the parliamentary electionsfor October 9. In practice, this meansthat the election campaign will be rel-atively brief, lasting for around amonth. It is also unlikely to fascinatemost Poles, as they will have otherthings on their minds. First and fore-most – vacations.
The start of September is whenbig political issues are put on the backburner. Polish families will be return-ing from holidays and will be busypreparing for the new school year;single people will no doubt be head-ing off on cheap September vacationsand students will be either relaxing ortaking exams for the fall semester.
Yet already among the typical“silly season” summer tabloid storiesabout the birth of a two-headed
python or the amazing night-timevisit of a UFO to a village in Podlasie,ads for Jaros∏aw Kaczyƒski’s opposi-tion Law & Justice (PiS) party havebegun to appear. They are so boringand out of touch that spin doctorsadvising the ruling Civic Platform(PO) do not even want to commenton them.
Similarly, PiS spin doctors do notwish to attack the intellectuallysophisticated brochure featuring theachievements of Donald Tusk’s gov-ernment. The voters who are readersof popular tabloids would not evenread half a page of this type of publi-cation, just as PO voters are unlikelyto be in a rush to see PiS campaignslogans in the tabloids.
Preaching to the convertedPR specialists had predicted that theelection campaign would take placeaccording to the American model: onthe internet. But in the Polish “virtu-al” world, the campaign has begun toresemble something of a caricature ofany serious political contest.
Supporters have shut themselvesoff in their social networking, Face-book, and blogging groups where
they preach to the converted, tryingto convince those who are alreadyconvinced of their positions about themerits of their party.
On one PiS supporter’s page thereis an “independent” poll which sug-gests Jaros∏aw Kaczyƒski’s party will
obtain 76 percent of the vote, andthat the ruling PO can count on only9 percent at most.
On PO’s social media pages noone even raises questions about theelection results. There is a convictionthat the next four years of a DonaldTusk-led government will bringPoland wealth, prestige and develop-ment.
On the other hand, the PolishPeasants Party (PSL) – the minorityparty in government – is almost
absent from the internet, and tradi-tionally motivates its supportersthrough the voluntary fire brigadesthat are active in the countryside andare closely associated to the party.
All of this means that each party istalking to its own supporters; there isno cross-party debate except for thevulgar mud-slinging matches whichtake place on specific web pages andchatrooms.
A victory for Civic Platform?Prime Minister Donald Tusk’s rulingCivic Platform is all but certain to winthis fall’s parliamentary elections.The only real question left is howmuch of a distance there will bebetween PO and its main oppositionrival, PiS, come election night.
Indeed, even if there is a signifi-cant gap and PO wins over half of theseats in parliament, party leaders aresure to try to form a coalition anyway,since any government would, some-what paradoxically, be much morelikely to succeed in a coalition.
PO is hoping for PSL to do well inthe elections. Together with PO, PSLsits in the European Parliament aspart of the largest political grouping –
the European People’s Party. If PSL fails to cross the necessary
threshold of 5 percent of the vote toenter parliament, the situation in Pol-ish politics could become rather morecomplicated. PO would have twostrong opponents – PiS on the rightand the Democratic Left Alliance(SLD) on the left.
Civic Platform would then facemajor difficulties because Mr Tusk’sgovernment, faced with a strong par-liamentary opposition, would haveproblems implementing its policies.
It could, of course, try to form acoalition with either of these two par-ties – which for the past two yearshave been opposed to almost anymeasure the government has tried toimplement.
If that happens, late autumnmight turn into an altogether differ-ent type of silly season. ●
Joanna Wóycicka is the former headof the foreign sections of the ˚ycieWarszawy and ˚ycie newspapers andthe former head of the foreign depart-ment at the Polish Press Agency(PAP). [email protected]
“Supporters have shutthemselves off in their socialnetworking, Facebook, andblogging groups where theypreach to the converted”
Before stepping down as the USSecretary of Defense in lateJune, Robert Gates once again
lashed out at the inability of America’sEuropean allies to muster enough fire-power and resources, this time to pre-vail in the military operation againstLibya.
Mr Gates identified two reasons forthe military weakness – cuts in Euro-pean defense budgets (administeredsometimes too hastily against the back-drop of the economic crisis), and arecurring lack of will to back policydecisions with the appropriate forceand capabilities.
He indicated that Americans aretaken aback by the course of events inLibya, where Europeans were expectedto spearhead the fighting, as well as bythe inadequacies of the allied perform-ance in Afghanistan.
America has therefore grown reluc-tant to “carry most of the burden in theAlliance,” he said, adding that unlessEuropeans find a way to become “seri-ous and capable partners in their owndefense,” US leaders “may not consid-er the return on America’s investmentin NATO worth the cost.”
Calling Gates’ bluffInitially, the speech sent shock wavesthroughout Europe. But as the confu-sion over possible implications for theoperation in Libya subsided, the mediaquickly placed Mr Gates’ commentsinto context.
After all, unequal burden-sharing inNATO, with America putting more onthe line, is nothing new. After the aircampaign over Kosovo, in whichAmerica did the heavy lifting, the USgovernment reportedly began to recon-sider whether to grant political leverageto the militarily superfluous Europeansin the future. That showed during theUS response to the 9/11 attacks, whenNATO was initially sidelined at theexpense of a “coalition of the willing.”
Fast forward to 2011, and NATOremains arguably the most potent ofAmerica’s alliances worldwide. Onlyrecently, the Pentagon announced thepostponement of the withdrawal of UStroops stationed in Europe, citing theneed to maintain interoperability withallies and to ensure a credible level ofassurance.
Mr Gates has made his name as theproverbial bad cop, repeatedly sermo-
nizing on the need to avoid a “two-tiered alliance” of those who fight andthose who don’t, and the imbalance indefense spending has grown nonethe-less. In short, it seems safe to call thisbluff.
Intervention fatigueYet it would be a mistake to dismiss hisoutburst of candor. As America tight-ens its belt, its involvement in Europe’ssecurity equation will increasingly bemet with more cost-effective measures,better attuned to US threat percep-tions, such as missile defense. The USmilitary presence around the world willtherefore likely decrease, though grad-ually.
However, as long as the risk of alarge-scale military conflict in Europeremains scant, this prospect seems lessproblematic than another trend thathas already become visible in publicopinion polls. According to a survey bythe Pew Research Center, the percent-age of Americans who believe that theUS should “mind its own business”internationally is among the highestsince the end of American engagementin Vietnam. The survey found that one
in two Americans favors a reduction inUS military commitments overseas, atwo-fold increase since 2001.
When President Obamaannounced his decision to wind downthe Afghan surge, he also clearly setforth his administration’s priorities:“America, it is time to focus on nationbuilding here at home,” he said.
Remaining relevantAll this speaks to a greater awarenessof the limits on US power and influ-ence as a result of war-weariness andrecession. Yet equating it with a specterof “isolationism” would be inaccurate.Rather, the US seems intent on strikinga new bargain with the world that isbest described as selective engagement.The terms of its use of military powerwill be the centerpiece of this approach,but similar recipes may be applied toother efforts such as development aid,for example.
In hindsight then, the interventionin Libya may turn out to be the closingact of the kind of activism that the UShas exercised during most of the post-Cold War period, either out of necessi-ty or out of choice. From now on,
necessity – that is, advancing narrowlydefined US national interests – willdrive US strategic thinking.
Some might greet this with relief.After all, less power implies greaterrestraint, thus lowering the risk of com-mitting hubris-driven mistakes. Butthere is a flipside. If and when a prag-matic America decides to fix whateverneeds fixing (being careful not to inviteunnecessary challenges or problems), itwill be looking for capable, resoluteand reliable partners. Indeed, a moremodest US role means that others willhave to step up as mediators, stabiliz-ers, or enforcers, or risk a less pre-dictable international order.
For Europeans to become “moreserious partners,” then, is not reallyabout staying relevant to the UnitedStates. It is about remaining relevantin the world where America will beless keen to lead. Rather than counton the reversibility of this process, it ishigh time to acknowledge its conse-quences. ●
Bartosz WiÊniewski is a research fellowat the Polish Institute of InternationalAffairs (PISM). www.pism.pl
PUBLISHER VALKEA MEDIA SA EDITOR-IN-CHIEF ANDREW KURETH ([email protected]) MANAGING DIRECTOR MONIKA STAWICKA
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 [email protected]. Please include a name and contact information and clearly indicate if they are to be considered for publication.
Joanna Wóycicka
JULY 25 – AUGUST 8, 2011 OOPPIINNIIOONN && AANNAALLYYSSIISS www.wbj.pl 11
NATO has been the main insti-tutional security guarantor forthe European continent since
the end of World War II, but recentlyit has experienced a steady loss ofstrategic identity and instilled doubtsamong its peripheral members aboutits true commitment to their defense.Poland, a NATO member since 1999,has grown frustrated in recentmonths with the alliance’s reluctanceto make permanent security commit-ments to Warsaw on a number ofissues.
With Russia’s resurgence into itsperiphery showing no signs of slow-ing, Poland has begun looking foralternative security arrangements.First, on May 12, Poland committeditself to the formation and leadershipof a battle-group with fellow Visegrad
Group (V4) members, which includeHungary, Slovakia and the CzechRepublic. More recently on July 5,Poland also signed an agreement withGermany and France – the two othermembers of the so-called Weimar Tri-angle – to create a joint militaryforce.
While these and other optionscurrently under consideration by thePolish government are only in theirpreliminary stages, they illustrate thatPoland is increasingly worried thatNATO will be unable, or unwilling, toensure its security in the future. Inresponse, Warsaw is exploring andtrying to develop every potentialavenue of cooperation in the regionin the short term – without fully com-mitting to any particular one.
The V4The first alternative is the creation ofthe V4 group. In theory, this alliancewould be able to geographically con-tain Russia and its periphery by form-ing a bloc across Central Europe. TheV4, however, suffers from politicalweaknesses that cast doubt on itsability to ensure the region’s security.The members lack consensus on the
threat posed by Russia: Hungary, forexample, feels secure behind theCarpathian Mountains. Furthermore,political tensions between somemembers of the V4 could threatenthe stability of an alliance.
The EUThe second avenue that Poland ispursuing is centered on the EuropeanUnion. After recently assuming theEU presidency, Warsaw is gettingready to push for the creation of anEU-wide security framework. Polandis counting on the inefficiencies high-lighted during the Libyan campaignto encourage EU members to devel-op an institutional military frame-work that will share costs and distrib-ute responsibilities.
The main problem with this planis that it aggregates widely divergentinterests into a single institution.Another major point of concern forPoland is the increasingly close rela-tionship between Russia and Ger-many, the consequences of whichare still unknown. Despite its appar-ent flaws, Poland remains deter-mined in pursuing a joint avenue ofcooperation, in this case by creating
a battle-group with France and Ger-many.
The USThe third option Poland is activelypursuing is increasing its strategicpartnership with the US. As NATO’sleading power, Washington has beena key ally of Poland since the fall ofthe Soviet Union. Recently, the UShas placed Poland at the heart of itsCentral European policy. While theUS would be the most effective deter-rent to Russia, its commitment toPoland has always seemed to fallshort of its promises especially inWarsaw’s view. Furthermore, the USis still deeply involved with militaryoperations in the Middle East, delay-ing any potential increases in its com-mitment to Central Europe. Never-theless, Poland will continue to pushfor a heavier American military pres-ence on its territory.
Nordic allianceFinally, Poland has the option of join-ing a Nordic security alliance, cen-tered in particular on Sweden and theBaltic states. Warsaw and Stockholmhave established strong political ties
lately, particularly during the estab-lishment of the Eastern Partnershipprogram. While no formal militarycommitment has been made, a Polishalliance with Sweden would provemore manageable in scale than anEU military force; it would also beless prone to internal divisions suchas those expected with the V4.
One can expect Warsaw to pursuethis option in parallel with the othershighlighted above.
Poland has no obvious replace-ment for NATO’s security provisionsin the mid- to long-term and is there-fore developing a set of cooperativerelationships by way of a hedgedsecurity investment. The four optionsare not necessarily isolated andPoland has the time and the room tomaneuver and combine them inorder to best satisfy its needs. In fact,pursuing these potential securitycooperation avenues in parallel is alow-cost strategy that will not involveany exclusive commitments fromWarsaw in the short-term. ●
This edited version of “Poland looksfor security alternatives” is reprintedwith permission of STRATFOR.
The recent hacking scandal atthe News of the World has shedlight on some of journalism’s
worst practices and has prompted alively – and necessary – public debateabout the state of ethics in journal-ism. During this difficult period inhistory for newspapers (who in theirstruggle to make ends meet are look-ing for easy ways to turn a buck, tosell papers, or to get the story) thisrenewed focus on news organiza-tions’ ethical conduct is welcome.
There is no doubt that the meth-ods used by the News of the World arenot limited to that newspaper alone,nor to the tabloid sector or the UK.News organizations all over the worlduse shady tactics to get their storiesand we in the media ought to be vigi-lant to ensure that they don’t happenin our own organizations. We must
also expose such practices when wefind they have occured.
And while one of the key aspectsof maintaining journalistic integrity ishaving a healthy respect for people’sprivacy, news organizations need tomake sure they are focused on keep-ing all of their ethical standards high.
Selling their soulsIn Poland, there is tremendous pres-sure on news organizations to violatejournalistic integrity in a particularlyinsidious way: by selling content that is,in reality, advertorial, but is presentedto the reader as journalistic. Whilesuch practices are in no way limited toPoland, they are especially prevalent inthe region, partly because of a limitedexperience with free media and alsobecause of the misunderstanding onthe part of advertisers as to what
amounts to effective advertising. The practice comes in many
forms, ranging from the subtle to theovert, from the simple inordinatecoverage of a particular client’s prod-ucts or services to the outright sale ofspace for a company to promote itselfunder the guise of an “expert’s opin-ion.” In any form, it is a violation ofthe readers’ trust.
Most organizations do their best toavoid such breaches, but with advertis-ing dollars dwindling it is increasinglytempting to give in to a client’s tit-for-tat proposition of “sure, I’ll buy an ad,as long as you write about my compa-ny / interview our president / give ourproduct a good review.”
It is first and foremost the respon-sibility of news organizations to resistsuch temptations. It is also theirresponsibility to educate their clients
and advertisers that such deals rarelywork to anyone’s benefit. Readers arebecoming increasingly sophisticatedand can easily spot such underhand-edness. Often, the reader’s disgustwill result in a loss of respect for thenews organization as a whole, as wellas for the company doing the adver-tising, not to mention the loss of acustomer for both.
Businesses can helpIt is here where business executives canhelp make a difference by emphasizingto their marketing departments thatsuch methods are not to be tolerated.If advertising isn’t enough (and thesedays most companies expect added-value for their advertising investment)then other solutions need to be found.News organizations are usually willingto help their partners gain value
through many of the different channelsthey have at their disposal.
In the end, trust is at the heart ofjournalism ethics. To maintain theirreaders’ trust, news organizationsmust protect their journalistic integri-ty, whether this means resisting thetemptation to violate privacy laws orkeeping the lines between advertisingand journalism clear.
Hopefully, the recent focus onjournalistic standards will remindnews organizations everywhere to putintegrity first. ●
“A major point of concernfor Poland is theincreasingly closerelationship betweenRussia and Germany”
“In Poland, there istremendous pressure on
news organizations to violatejournalistic integrity”
Editorial
AA wweellccoommee ffooccuuss oonn jjoouurrnnaalliissttiicc iinntteeggrriittyy
JULY 25 – AUGUST 8, 2011CCOOVVEERR SSTTOORRYY12 www.wbj.pl
Rail network
Off the tracks
Following a series of high-pro-file rail-related fiascos, includ-ing a power outage at Warsza-wa Centralna (Warsaw CentralStation) in June, it shouldcome as little surprise that aEuropean Commission surveyon passenger satisfaction indi-cates that Poles are the mostdisgruntled rail users inEurope.
Anyone who spendsenough time traveling inPoland is bound to feel somelevel of dissatisfaction with thecountry’s railway network,which is run by the sprawlingstate-owned rail operator Pol-ish State Railways (PKP).
Once the country’s largestemployer, PKP has in recentyears seen its public imagedeteriorate as frustrationamong Poles about the condi-tion of the railway system hascontinued to grow. Although2010 brought a strong financialresult for PKP, some of itsmany constituent parts havealso seen their losses mount inrecent years: PKP Intercity, forexample, has set itself the goalof ending the current year withlosses of no more than z∏.45million, following some heftylosses in previous years.
Privatization of PKP’s myri-ad parts, including freightoperator PKP Cargo, is under-way, but what prospects arethere for improvement? WBJlooks into the problems facingPoland’s railways and askswhether the privatizationprocess is on track.
Train of woesOn June 22, Warsaw CentralStation was affected by a large-scale power cut between 10 am
and 1 pm, resulting in 40 traindelays, as well as the evacua-tion of passengers from the sta-tion. The cause of the problemis currently being investigated,but some local media sourceshave already pointed the fingerat PKP Energetyka, the arm ofthe PKP rail group that isresponsible for electricity sup-plies at rail stations.
The blackout at WarsawCentral Station was the latestin a long line of problems thathave dogged the Polish railnetwork in recent months. InDecember of last year, follow-ing changes to PKP’stimetable, train operators didnot give passengers properinformation concerning thenew schedules. This causedconfusion and frustration forpassengers, many of whommissed important journeys orwere left stranded due to themiscommunication.
Even worse, in the depthsof this past winter there was anuntimely breakdown of severalworn-out overhead cables,which left a large number ofpassengers awaiting rescue infreezing conditions.
These incidents led to thedismissal of both AndrzejWach, the CEO of PKP, thecompany charged with over-seeing the restructuring andprivatization of various compa-nies within the PKP group, andDeputy Infrastructure Minis-ter Juliusz Engelhardt.
Regional contextHowever, a number of Polishrail experts are keen to put crit-icism of PKP into context, say-ing that a lot of it is simplyhyperbole.
“Criticism of the railways inPoland is justified, but it isoften too strong, and too emo-tional,” said Marcin Kamola,an analyst at TOR – TransportConsultant’s Group.
Karol Wach, managing edi-tor of public transport portaltransinfo.pl, agreed, sayingthat most of the problems fac-ing the rail network are relatedto local lines.
“I wouldn’t generalize over-ly about the opinion Poles haveof their rail services,” he said
“Connections betweensome major cities, like Krakówto Warsaw or Poznaƒ to War-saw, are fast and inexpensive.The real problem is with the
local lines, where the situationis considerably worse.”
Slow coachesThe government’s plans to pri-vatize the rail system wereaimed partly to improve thesituation on the network. Nev-ertheless, the journey hasn’tbeen an easy one.
In 2001, PKP was split into anumber of different companies,many of which the governmenthoped it would be able torestructure and privatize.
While the company respon-sible for the country’s railinfrastructure, PKP PLK, wasnot intended for privatization,most of the other companieswere. Freight operator PKPCargo and PKP Intercity, forexample, were both to be soldoff under the government’sprivatization plan.
It is fair to say, however,that in the 10 years since theprocess was started, little visi-ble progress has been made,with the privatizations of majorPKP units being delayed timeand time again.
TOR’s Mr Kamola argues
that this is largely becauseefforts to modernize Poland’srail network have not beeneffective enough.
“For more than 20 years,the modernization of the rail-way network, replacement ofrolling stock or renovation ofstations has practically beenabandoned,” he said.
“There have been somesmall signals that things arechanging, but in terms of thewhole rail system, it’s been toolittle. Today we can see a slowchange for the better, but thereis a policy of very slow andsmall steps in place, and it isdifficult to see its effect in aneveryday sense,” he added.
Rays of hopeThe Euro 2012 soccer champi-onship is proving to be some-thing of a catalyst for the devel-opment of the country’s railnetwork, although many of theprojects currently underwayare unlikely to be completedprior to the start of the tourna-ment.
A contract signed for theconstruction of a new Warsza-
wa Zachodnia (Warsaw West)station building with developerHB Reavis is the latest in aseries of deals that have beensigned by PKP with privateinvestors. Similar contracts arein place for stations in Katow-ice and Poznaƒ, where work isalready under way.
The new Warsaw West sta-tion building, which was initial-ly due to be completed by2012, is now scheduled fordelivery in 2014.
In addition, the recent pur-chase of 20 high-speed Pen-dolino trains by PKP Intercityfor €665 million has also givenrise to the hope that servicesbetween many Polish cities willimprove. This announcementshould also give PKP an advan-tage in the competition againstdomestic road and air travelservice providers, experts say.
“There really are many posi-tive changes being made, theeffects of which we will feel inthe coming years,” ¸ukaszKurpiewski, press spokespersonfor the PKP group, told WBJ.
“However, the long-termlack of investment in the rail
A number of recent incidents have exacerbatedPolish rail passenger discontent. Privatization isseen as a panacea to the rail industry’s woes, butjust how well is it progressing?
Brendan Melck
CO
UR
TE
SY O
F P
KP
PKP Intercity is attempting to end the year with losses of no more than z∏.45 million
Company name 2009 2010
PKP group -z∏.674 z∏.45
PKP SA z∏.150 z∏.194
PKP Energetyka z∏.34.8 z∏.131.6
PKP Cargo -z∏.497.5 z∏.62
PKP profits and losses for selected companies in the group, for 2009 and 2010 (z∏. millions)
JULY 25 – AUGUST 8, 2011 CCOOVVEERR SSTTOORRYY www.wbj.pl 13
If you’re one of those peoplewho think it takes an inordi-nate amount of time to travelby train in Poland, the onlyconsolation I can offer is tosay that you are not alone.Unfortunately, not only aretravel times slow, but so isprogress.
The restructuring and pri-vatization process of Polishrailways is creeping along at asnail’s pace. The fact is, how-ever, that a special law oncommercialization, restruc-turing and privatization ofthe Polish State Railways(PKP) has been in existencenow for over 10 years.
Component partsThe special law set outparameters designed to reor-ganize and strengthen theclay-footed behemoth thatwas (and still is) PKP. Now,10 years later, the continuingproblems with PKP indicatethat the purpose behind thelaw’s introduction are still,unfortunately, relevant.
One of the goals of thelaw was to rationalize PKP.Instead of having all opera-tions grouped in one largeentity, the law permitted var-ious subsidiaries to be creat-ed, including a passengerservice, a cargo transporta-tion and a railway adminis-tration. Only this last sub-sidiary, PKP Polskie LinieKolejowe S.A. (“PLK”),must remain a state-con-trolled company.
The law also attempted todeal with the financial woesof PKP. It anticipated variousmeans of handling overduetaxes and other debts, includ-ing debt restructuring, write-offs and sales of assets. Whilemuch of the law addresseddebt that was incurred before2003, it still remains an issue.For example, the law allowsPKP to pay its corporatetaxes for 2011-2015 by trans-ferring shares in PLK to thestate treasury.
Employee mattersAs is the case with the Lawon Commercialization andPrivatization (“PrivatizationLaw”), which dates back to1996 and is the general lawon privatization, this speciallaw contains a large sectionon employee entitlements.The sum of all these statutoryentitlements is such that itcould be disadvantageous fora long-term employee toleave the relative job security
of PKP and its subsidiarieseven if offered higher wageselsewhere.
Additionally, the law hascreated a special ownershipfund for PKP employeesfrom which 15 percent of theproceeds raised from variousasset sales, real estate salesand privatization proceedsare supposed to be distrib-uted to employees. To be fair,the Privatization Law alsosets up an employee fund tocollect up to 15 percent ofthe proceeds of privatizationsfor further distribution toemployees who worked atthose privatized entities. Forexample, PKP employeeswho worked for the companyat the time of the commer-cialization of PKP (when astate-owned enterprisebecomes a corporation withshares held by the State Trea-sury) and those employeeswho have worked in the com-pany for over 10 years areentitled to benefit from thisfund.
As a benchmark of theslowness of this wholeprocess, the law specifies thatthe PKP employee fund’scharter may not expirebefore the end of 2010. Obvi-ously 10 years ago, someonemust have thought this was asafe time line for the privati-zation of PKP.
Privatization basicsEven if political will, PKP’sinternal financial situationand overall investor confi-dence were to be combinedin a happy confluence thatwould allow the privatiza-tion of PKP to move for-ward, it will still be a slowprocess. The PrivatizationLaw contains specific pro-cedures for preparing andconducting privatization. Inany case, before any officialdecisions are made to priva-tize, a full legal and finan-cial analysis of PKP wouldneed to be made. Otherreports, such as environ-mental compliance reports,may also be requested.
The sale process itselfmust be conducted accord-ing to a closed list ofoptions. The possible formsof a sale of shares of a PKPsubsidiary would include apublicly announced offer-ing, public procurement,negotiations following apublic invitation, auctionand sale on the stock mar-ket. ●
system is such that it is not pos-sible to change everything withthe wave of a magic wand – ifonly for financial and logisticalreasons,” he said.
“A drop in the ocean”While some investment hasbeen made to improve thestandard of Poland’s rail net-work, a number of expertsargue that the amount spent isstill woefully inadequate.
“At a local level, the infra-structure company PKP PLK’smodernization work seemslike a drop in the ocean interms of what is needed.Moreover, the purchase ofnew modern passenger car-riages or railbuses is not any-where near sufficient,” saidMr Wach of transportinfo.pl.
“The local passenger railoperator, Przewozy Region-alne, which runs most localservices, is limited to what itgets [financially] to use fromlocal governments,” he added.
Local services, which weretransferred to the control oflocal governments at the endof 2008, must now compete forlimited local governmentmoney. This has translatedinto employee dissatisfaction.
A July 5 strike by employ-ees of Przewozy Regionalnecould, some experts have said,be a precursor of worse disrup-tions to come. Workersinvolved in that particularstrike were protesting not onlyagainst low wages but alsoagainst what they perceived tobe the indifference of the infra-structure ministry towards theissues that face the rail net-work at the local level.
In particular, the strikerssaid that the ministry is provingunresponsive to the impendingdemographic problems thatwill face local railway opera-tors: the average age ofemployees at PKP companies
is between 45-50 and the com-pany’s low wages are notattractive for young Poles.According to PKP union infor-mation quoted by local media,the average basic monthlysalary of a train driver is onlyaround z∏.1,400-1,600.
Is privatizationthe answer?In the freight sector, the long-awaited privatization of PKPCargo may soon finally come topass. PKP Cargo is one of thelargest rail-freight operators inthe European Union and hastraditionally been involved inthe transport of heavy goods,such as coal and ore.
However, economic reali-ties have forced the companyto follow a difficult path tomodernization. Recently, thecompany’s management boardtook a number of unpopularsteps to improve the compa-ny’s financial situation. Aftermaking significant cuts to itspayroll and reducing its activi-ties, the company finallyreported a return to profit in2010.
The short-list of potentialbidders for PKP Cargo isexpected to include both sectorand financial investors, includ-ing Russia’s national rail oper-ator RZD.
However, there are con-trasting views as to whetherprivatization is the right strate-gy at the present time.
“PKP Cargo is developingin the right direction now,” MrKamola said. “It is followingthe pattern of German andFrench freight operators, beingtransformed into a logisticsoperator, and not just a railcompany.”
Mr Wach’s views are some-what different: “I don’t thinkPKP Cargo is properly pre-pared for privatization today –and it should not be privatized
now; maybe in a year or two itwill be ready,” he said.
Mr Kamola did also admitthat PKP Cargo’s privatizationwould not be a straightforwardprocess. “There is a definitebarrier to its development, andthat is money for investment –this money needs to comefrom outside, but not fromanother railway undertaking –rather it should be a financialinvestor,” he said.
Commitment problems PKP says that while the privati-zation of a number of its armsis making good progress, thatof PKP Intercity, which oper-ates long-distance and interna-tional passenger trains, is goingto have to be delayed.
“The process of privatizingPKP Cargo and the rail infra-structure repair company PNIare well advanced, as is that ofPKP Energetyka,” PKP spokes-person ̧ ukasz Kurpiewski said.
“The privatization plans ofPKP Intercity, however, havebeen delayed until the situa-tion on the passenger rail mar-ket is sufficiently stable thatpotential investors will be surethat it will be worth investing inthe company,” he added.
Nevertheless, questionsremain over the government’scommitment to this goal. As astate-owned enterprise PKPdepends on support from thegovernment, which determinesthe level of resources that arecommitted to the railway sec-tor. But successive govern-ments have been more reactivethan proactive.
“Personally, I do not seeany political will in the Polishgovernment to improve the railsystem,” Mr Wach said.
“It seems to me that thegovernment remembers thatthe railways exist only aftersome media scandals aboutparalysis on the network, or aserious accident. This is too lit-tle; there is no proper plan fordevelopment,” he said.
While the process of priva-tizing the railways is slowlytaking shape, it is not clearwhen, or if, it will finally becompleted. Nevertheless,even a fully-privatized rail sys-tem provides no guaranteethat services will be improved.
The only thing that ap-pears set in stone is thatanother winter of discontentbeckons for Polish rail pas-sengers. ●
On the wrong track for satisfied customersSelected results of the European Commission's Survey on Passengers' Satisfaction with Rail Services, June 2011
Frequent complaints
Percentage of respondents’ very or rather satisfiedwith frequency of trains
Percentage of respondents’ very or rather satisfiedwith punctuality and reliability of trains
0 10 20 30 40 50 60 70 80 90 100
Public transportconnections
Personalsecurity
Ease ofbuyingtickets
Easy, secure and well-connected
In Poland, travelers were most likely to be satisfied with:(% of very satisfied or rather satisfied)
0 10 20 30 40 50 60 70 80 90 100
Facilitiesfor car parking
Quality of station facilities
Cleanliness of station facilities
Source: European Commission
Dirty, dilapidated and nowhere to park
In Poland, travelers were most likely to be dissatisfied with:(% sum of very dissatisfied and rather dissatisfied)
Can't get no...
In June, the European Com-mission published a reportthat indicates the level of satis-faction EU citizens have withtheir respective countries’ railservices. The survey showedthat Poland has the lowestproportion of rail passengerswho reported being either“very” or “rather” satisfiedwith the services they receive.The only exception to this wasfound in the “ease of buyingtrain tickets” category.
Surveyed Poles alsoexpressed with relativelyhigh frequency that they
were “very dissatisfied” withthe services on offer: Polandhad the highest number ofrespondents (17.1 percent)who claimed they were“very dissatisfied”with theprovision of informationabout train schedules andplatforms. Greece was nextwith 10.9 percent.
Poles were particularlydisgruntled with the fre-quency of trains, the cleanli-ness and maintenance ofstation facilities, and withregards to how secure theyfelt on PKP property. ●
JULY 25 – AUGUST 8, 2011CCOOMMPPAANNYY FFOOCCUUSS14 www.wbj.pl
Business process outsourcing
Poland ‘completes’Itella’s regional strategy
Barbara G´dek: Why did Itel-la come to Poland three yearsago?Jukka Alho: There are twomain reasons why we decidedto enter the Polish market.The first is that we definedthe Baltic Sea region as ourhome market years ago andfrom Finland we started toexpand towards Scandinavia.Later on we continued on tothe Baltic countries and Ger-many. In that sense, our moveto Poland has been a very nat-ural one. Poland is ratherclose to Finland geographical-ly and it has a similar culture,education level and people.The country also has a largenumber of skilled workers.That is why it is a very attrac-tive market for us and why itcompletes Itella’s strategy inthe Baltic Rim region.
But then we also hadanother reason. We have beenlooking for markets where wecan implement and developour production and know-howand thus, Poland turned out tobe the right place for us.
How do you plan to developyour business in Poland?Our goal is to become a leaderin financial and accountingprocesses, and we have a verystrong presence here. Thereare not that many competitors
in Poland and in other poten-tial markets. As far as the future is con-cerned, we have interesting newdevelopments in the pipeline.We are planning to integratebanking services as part of oursolutions, but not in the tradi-tional sense. Instead we aregoing to focus on paymentprocesses and automated com-pany payment and cash-flowprocesses.
The pace of our develop-ment depends on many factorsand we are currently in a fairlyearly phase. Itella Informationnow has approximately 10,000customers across Europe. Weare hoping that Itella grows totwo or three times its currentsize some time in the future,but we don’t have any strictplan regarding this.
Your core business in Finlandis postal services. Do you seeItella Group competing in thesame market in Poland in thefuture?The postal business is very dif-ficult. The internet is takingmore and more of the tradi-tional postal market share,with people receiving moreelectronic invoices, readingfewer newspapers and sub-scribing to fewer magazinesbecause they are using theinternet instead.
So, we don’t plan to expandour postal business presence inany other country and wedon’t plan to invest in this old-fashioned but still widely usedbusiness sector.
For over 20 years, we havebeen developing our electron-ic services, as well as other newtypes of business services inorder to diversify our expertiseand to continue to provide rev-enue to our shareholders nowand in the future.
Last November, Itella Infor-mation took over Poznaƒ-based Outsourcing Solutions.How has this acquisition ben-efited your firm?With the acquisition of Out-sourcing Solutions we haveacquired a good customer base,a well-educated and profession-al staff and new potential forfaster growth. The deal sup-ported our strategy of becom-ing the number-one partner forcustomers in the field of finan-cial transactional processes inEurope. It has also allowed usto have a business process out-sourcing arm in the Polish andEuropean markets.
There is no doubt that thismove will accelerate Itella’sdevelopment in Europe; nowwe can operate faster as wellas provide more and betterservices to our clients acrossmany European markets. Thefact that we can do it rightaway, rather than step-by-step, is a result of our strategyfor dynamic expansion. ●
Jukka Alho, CEO of Finnish business processoutsourcing company Itella Group, spoke withWBJ about the firm's business in Poland andits future plans
More advanced than Germany
WBJ also spoke with Miikka Savolainen,CEO of Itella's Information Branch inPoland. We asked him about Polish com-panies – which fairly or unfairly have a rep-utation for being resistant to new businessmodels – and how open they are to usingoutsourcing services.
“Poland resembles other Europeanmarkets and I think that Polish companies
are ready to use these kinds of solutions,”he said.
“However, different market segmentsaccept certain financial services faster thanothers. For example, in outsourcing servic-es, Nordic countries seems to be ahead ofother markets, but Poland is still moreadvanced than Germany.”
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JULY 25 – AUGUST 8, 2011 BBUUSSIINNEESSSS BBRREEAAKKFFAASSTT www.wbj.pl 15
LLoobbbbyyiinngg:: PPoolliisshh ffiirrmmss mmiissssiinngg oouuttA negative perception of lob-bying, a limited knowledge ofhow Brussels works and a fail-ure to realize just how muchEU legislation determines Pol-ish law were cited by experts asthe main reasons why Polishlobbyists can rarely be foundin the corridors of EU institu-tions. The comments weremade during a business break-fast organized by WBJ to dis-cuss the opportunities andchallenges for Polish compa-nies to influence EU decisionsduring Poland’s six-monthpresidency of the bloc.
“Many Polish entrepre-neurs simply don’t realize just
how much Polish legislation issimply an implementation ofEU directives. They feel Polishlaw is up to Polish lawmakersand thus don’t see the need totry and influence what goes onin European legislation,” saidPiotr Sarnecki, a permanentrepresentative of the Polishemployers association PKPPLewiatan in BusinessEurope,a Brussels-based lobby groupfor entrepreneurs.
Another factor which caus-es Polish entrepreneurs tosteer clear of lobbying is thenegative perception it suffersin Poland. Due to a series ofhigh-profile corruption scan-
dals involving lobbyists at theturn of the last decade, lobby-ing has come to be seen bymany Poles as inherently cor-rupt and as something thatshould not be encouraged.
“When Poles hear lobby-ists, they think corruption,money and favors beingexchanged and other criminalor semi-criminal activities,”said Agnieszka Cianciara, alobbying expert at the Collegeof Europe.
Anna ¸aciƒska, managingdirector at European andfinancial consulting firm(EFICOM), agreed with MsCianciara and Mr Sarnecki,
and said that the biggest chal-lenge would be to convincePolish entrepreneurs that lob-bying is not a waste of money,does not have to entail corrup-tion and can help them influ-ence legislation that couldhave a direct influence ontheir business.
“Also, Polish firms have tolearn that they must be presentin Brussels all the time, moni-toring the various legislativephases rather than reacting atthe last minute to legislationthat could be detrimental tothem. Then it is often toolate,” Ms ¸aciƒska said.
RReemmii AAddeekkooyyaa
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Piotr Sarnecki said one of the biggest challenges is to
convince Poles of the value of lobbying
PIO
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Agnieszka Cianciara said a perceived link to corruption
was one reason for a lack of Polish lobbyists
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Anna ¸aciƒska stressed the need for Polish firms to be
present in Brussels
WBJ would like to thank our Business Breakfast
partners:
LLOOKKAALLEE IIMMMMOOBBIILLIIAAW 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 l y s u p p l e m e n t o n r e 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 • JULY 25 – AUGUST 8, 2011, LI 16/29-30
Porto 55
contractor
chosen
Gdynia-based Allcon
Budownictwo is the newly
selected general
contractor of Sjaelso’s
Porto 55 shopping center
project in Elblàg,
Warmiƒsko-Mazurskie
voivodship. The
investment, which will be
located in the city’s
downtown, will be the
first scheme of its kind in
the Elblàg market and is
scheduled to open in the
last quarter of 2012. The
Porto 55 development
will comprise 22,000 sqm
of retail and service
space.
Eiffage to build
Aquarius
Business
House
Warsaw Stock Exchange-
listed developer Echo
Investment has
contracted Eiffage
Budownictwo Mitex to
build the shell of its
Aquarius Business House
class-A office project in
downtown Wroc∏aw. ●
Urban planning
Zoning plan raises hopes for Port Praski revamp
One of Warsaw’s mostdilapidated areascould see some much-needed redevelopment
The long-neglected Port Pras-ki (Praga Port) river portneighborhood of Warsaw’sPraga Pó∏noc district couldfinally be renovated andupgraded, with Warsaw CityHall finishing work on a zon-ing plan for the area and a pri-vate investor planning the con-struction of a major mixed-usedevelopment at the location.
The land, located next tothe Vistula River near the cap-ital’s Most Âwi´tokrzyski(Âwi´tokrzyski Bridge), wouldarguably lend itself to water-front revitalization similar tothat carried out in Germany’sHamburg where construction
on the much-touted HafenCi-ty project is now underway.
Dziennik Gazeta Prawnahas reported that Port Praski,a company which manages theeponymous area, is in theprocess of obtaining adminis-trative permits for a residen-tial complex which would bedeveloped on part of the land.In later phases of the invest-ment, office and retail space,as well as a marina, a park anda promenade could be built.
For the time being, it is notknown when construction onthe planned project, whosearchitectural concept is beingprepared by the JEMS Archi-tekci studio, could begin orwhat the total value of themulti-phased investment willbe. Ultimately, much willdepend on when the zoning
plan comes into force andwhat kinds of developments itwill allow.
Port Praski was built dur-ing the interwar period toserve as a reloading dock andwinter port. The facility com-prised three port basins andseveral buildings, all locatedon an area of about 38hectares. It was closed in 1963when its functions were takenover by another of the capi-tal’s ports – Port ˚eraƒ.
In the 1990s, urban plannerJan Rutkiewicz suggested theconstruction of a new centerfor Praga with a high-riseoffice and services develop-ment in Port Praga. The plan,however, has never beenimplemented.
The investment is thecompany’s first inPolandLuxembourg-based SCALAIRP Capital Partners hasacquired the Galeria Narewshopping center in ¸om˝a inthe Podlaskie voivodship.Although the value of the proj-ect has not been disclosed, thepurchase marks the company’sfirst investment in Poland andillustrates SCALA’s strategy toaccelerate further growth inCentral and Eastern Europe.
“Having monitored the Pol-ish retail market for sometime, our decision to acquireGaleria Narew was driven byits attractive prime locationand the considerable potentialof the region. It offers theopportunity to benefit fromPoland’s healthy economicgrowth that has been driving
consumer spending and rentalgrowth,” Alex Antonis, COOand board member, said in astatement.
“Poland leads the way asthe most targeted ‘emerging’market and destination in Cen-tral and Eastern Europe withone of the strongest regionaleconomies and undersupply ofgood quality retail space. Thecombination of all thesestrengths has created the fun-damentals of our decision topurchase Galeria Narew,” MrAntonis added.
Galeria Narew will be locat-ed at the intersection of ul.Wojska Polskiego and ul. Pi∏-sudskiego. It will comprise40,000 sqm of space and over90 stores. Construction on theproject will begin in Augustand is projected to end in thelast quarter of 2012.
AAddaamm ZZddrrooddoowwsskkii
Port Praski revamp . . . . . . . . . .16
Galeria Narew sale . . . . . . . . . .16
Marvipol projects . . . . . . . . . . .17
SGI Baltis in Szczecin . . . . . . . .17
Atlas Estates in Żoliborz . . . . .17
Property-related stocks . . . . . .18
Financing for foreigners . . .18-19
In this issue
1718-19
There are plenty of challenges
for foreigners who want to get
financing to buy a residence. But
the effort may be worth it
Marvipol is working on no
less than four new residential
projects throughout Warsaw
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The mixed-use development could help revitalize the Port Praski neighborhood
AUGUST 8Legal & insurance matters – pitfalls and solutions. Plus: how do Pol-ish regulations compare with those in other European countries?
AUGUST 22Design & innovation – trends in building, architecture and interiordesign
Coming up:
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Residential investment
Marvipol set to deliver slew ofnew residences in Warsaw
JULY 25 – AUGUST 8, 2011 LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE www.wbj.pl 17
SGI Baltis to launch
new Szczecin projects
The developer plans ahuge new investmentin Ursynów, isworking on one inW∏ochy, and will soonstart on residentialprojects in ˚oliborzand Bielany
Warsaw Stock Exchange-list-ed developer Marvipol ispreparing a new major multi-family residential investment inthe Polish capital. The schemeis expected to deliver morethan 130,000 sqm of usablehousing space, Andrzej Nizio,president of the company’smanagement board, toldLokale Immobilia.
The planned developmentwill be built on 11 hectares ofland located on ul. K∏obucka inWarsaw’s Ursynów district. Thecompany is now in the processof obtaining administrativepermits for the scheme, con-struction on which couldlaunch in the next one and ahalf to two years, Mr Nizio said.
He added that because ofthe size of the project on ul.K∏obucka, the developmentwill be constructed in phaseswhose designs will most likelycome from a number of dif-ferent architectural studios.
Before that, Marvipol willcome up with a general archi-
tectural concept for the wholeinvestment.
Mr Nizio said that thepresence of a nearby railwaystation that provides a trans-portation link with downtownWarsaw is one of the loca-tion’s major assets.
That’s a theme with thedeveloper, whose ZielonaItalia project in Warsaw’sW∏ochy district is also locatednear a railway station, and hasso far attracted a large num-ber of buyers, said Mr Nizio.
Following sustained inter-est in Zielona Italia, in whichunits are priced at approxi-
mately z∏.6,000 per sqm, thedeveloper has recentlylaunched sales of all apart-ments in the future phases ofthe project.
Marvipol hopes the plannedproject on ul. K∏obucka, inwhich apartment prices shouldonly slightly surpass those inZielona Italia, will repeat thatscheme’s success.
Other plansBefore construction on theUrsynów investment kicks off,Marvipol will most probablystart two other residentialprojects in Warsaw. For one,
the company will soon launcha development on ul. Sokrate-sa in Bielany. The scheme isexpected to deliver 378 apart-ments priced at an average ofz∏.7,700 per sqm.
By the end of this year, thedeveloper is also due to obtaina building permit for a projectcomprising 291 apartments onul. Powàzkowska in the capi-tal’s ˚oliborz district. Units inthe scheme, which will be sitedon a plot that Marvipol boughtfrom Ciech last year, will bepriced between z∏.8,000 andz∏.9,000 per sqm.
“We are viewing the cur-rent situation in the residen-tial market with moderateoptimism,” Mr Nizio said. Headded that he does not expectapartment prices to fall in thenear future.
The upcoming restrictionsdue to be placed on the grant-ing of preferential govern-ment-subsidized mortgagesfor first-time home buyersshould not have a majorimpact on Marvipol’s apart-ment sales, Mr Nizio believes.
For the time being,Marvipol, which is currentlyfinishing an office tower proj-ect in Warsaw’s Wola district,is not planning to launch otheroffice projects, the develop-er’s president said.
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Marvipol is due to receive a building permit later this
year for a 291-apartment project on ul. Powàzkowska
Szczecin-based developer SGIBaltis will launch two residen-tial projects – Osiedle Po-ziomkowe and Osiedle pod Pla-tanami – in its home city by theend of September. Earlier thisyear, the company launched thesecond phase of its OsiedleKrakowska project which is alsoin Szczecin. The total value ofthese three investments is esti-mated at approximately z∏.62million.
“[Launching] three newprojects in one city is a majorchallenge for us. Szczecin is ourhome city and one of the keyinvestment markets for us andthis is why it is where we want tocontinue to develop and invest.We know the needs ofSzczecin’s inhabitants and aretrying to meet their expecta-tions,” Grzegorz Kawecki, vicepresident of SGI Baltis, said in astatement.
Scheduled for completion in
mid-2013, the Osiedle Poziom-kowe complex will be located atthe intersection of ul. Rapack-iego and ul. ks. Warcis∏awa. Thesite will comprise two buildingswith a total of 98 housing units.The Osiedle pod Platanamidevelopment will be built on ul.Emilii Plater and will be readyin the third quarter of 2013,delivering 134 apartments.
SGI Baltis is currently over-seeing the development of 12projects in seven major Polishcities: Warsaw, Szczecin, ¸ódê,S∏upsk, Gorzów Wielkopolskiand Poznaƒ. The company is asubsidiary of Baltis InvestmentGroup, which has been on themarket since 1992. The BaltisGroup also owns Porta Drzwiand Invest Komfort.
SGI Baltis’ flagship invest-ment is Barciƒski Park, anapartment complex currentlyunder construction in ̧ ódê.
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SGI Baltis is launching three developments in Szczecin
AAttllaass EEssttaatteess llaauunncchheess ˚̊oolliibboorrzz ssaalleessWarsaw Stock Exchange-list-ed developer Atlas Estateshas launched sales of apart-ments in its ApartamentyPrzy Krasiƒskiego housingproject in Warsaw. Theinvestment, which will belocated at the intersection oful. Przasnyska and ul.Krasiƒskiego in the capital’s
˚oliborz district, will com-prise two buildings offering atotal of 303 units priced fromz∏.6,700 per sqm.
“The launch of apartmentsales in ˚oliborz reflects ourstrategy which involves thestarting of new housing proj-ects in the best locations inWarsaw,” Reuven Havar,
CEO of Atlas Group, said in astatement. He added that theapartments have a number ofhighly sought-after attributes,including a good location,modern architecture, high-quality finishing and afford-able prices.
Atlas Estates is currentlyfinalizing talks concerning the
financing of Apartamenty PrzyKrasiƒskiego. It is also in thefinal stages of selecting a gen-eral contractor for the project.Construction on the invest-ment is set to launch nextmonth and the first residentsare expected to move in duringthe second half of 2013.
Atlas Estates was formed
to invest in real estate assets inPoland, Hungary, Romaniaand Bulgaria.
The company’s primarymarket is Poland, where 75percent of its investments arelocated. The company’s largestprojects include Warsaw’sPlatinum Towers apartmentbuilding, the Hilton Warsaw
Hotel & Convention Centre,the Millennium Plaza officebuilding and the Capital ArtApartments residential proj-ect.
In the first quarter of 2011the value of Atlas Estates’assets stood at nearly €387million.
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JULY 25 – AUGUST 8, 2011LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE18 www.wbj.pl
Luxury
apartments
in ˚oliborz
Real estate developer
and operator Layetana
Developments Polska
has announced the start
of construction on
sPlace - smart living,
the first phase of an
extensive housing
project to be completed
by the company in
Warsaw’s ˚oliborz post-
industrial
neighborhood. The
facility, which will
comprise 66 high-
standard apartments
with space ranging from
24 sqm to 174 sqm, will
also include lofts.
Neocity plans
housing
investment The Polish branch of
Neocity Group is
planning to launch
apartment sales in a
new housing project in
Warsaw. The company is
in the process of
obtaining a building
permit for a scheme
called Neovillage, which
will be developed in the
capital’s Ursus district
and will comprise five
low-rise buildings. ●
Foreign buyers haveplenty of troubletaking out mortgagesin Poland. But thereare some pleasantsurprises, too
Foreigners unversed inPoland’s language and finan-cial market can find obtainingmortgage financing for ahome in Poland a dauntingtask. But though the processis difficult, it’s not impossible,and relatively favorable lend-ing conditions can help offsetsome of the initial trouble.
Additional restrictionsForeign clients, who oftentreat the acquisition of a resi-dential property in Poland asa form of investment, tend tofinance their purchases withcash more often than theaverage Polish buyer. Butplenty still turn to the coun-try’s banks in the hope ofsecuring a mortgage loan.
Among those who do
apply for bank financing areforeign home buyers whohave Polish family or a Polishpartner, noted Jan Bijas, gen-eral director of SalomonFinance, a mortgage broker-age firm.
“Such mortgage-takersare trying to make use of thesame financing opportunitiesas a Polish citizen, which isfully allowed in banking law,”Mr Bijas said.
He added that contrary topopular belief, foreigners caneven apply for government-subsidized mortgages if theywork in Poland and have aPolish spouse. Unfortunately,Mr Bijas pointed out, thereare no special mortgageoffers for this group of clientsand banks tend to view for-eigners in terms of anincreased risk rather than anopportunity to increase theirportfolio.
Grzegorz CieÊlak, aregional financial director atHome Broker, agreed. Hesaid that foreign clients in
Poland often face morerestrictive procedures thanPolish buyers do. This mayinvolve, among other things,banks’ reluctance to acknowl-edge revenues secured by for-eigners abroad.
“In Poland, a higher downpayment is also oftenrequired [from foreigners].Additionally, some banksrequire that documents betranslated by a certifiedtranslator, which significantlyincreases the cost of obtain-ing a mortgage. This mainlyconcerns documents writtenin languages other than Eng-lish,” Mr CieÊlak said.
Surprises galoreForeign clients expect realestate brokers not only tohelp with navigating the lan-guage barrier, which can beparticularly bewildering if thepotential buyer speaks a lesspopular language such asDanish or Finnish, but also tohelp get to grips with con-cepts and regulations that are
Security Closing % change 52-week 52-week % change Total Marketprice (week) low high (year) shares value
Houses and residences in Konstancja estate blend perfectly intothe green landscape of Konstancin. The project is located in closeproximity to Warsaw, near the entry road to Konstancin-Jeziorna –a charming enclave, traditionally inhabited by the representativesof the media, business, arts and the diplomatic world. Konstancjais also located in an immediate vicinity to the American School ofWarsaw. Stylish architectural details, unique design and bestmaterials – this is what characterized the local buildings over 100years ago and still remains as an inherent feature of Konstancja.
All new residents of Konstancja can also purchase a limitededition MINI Cooper car, at a price of 19 900 PLN.
The investor of Konstancja estate is Globe Trade Centre S.A.(GTC S.A.) – one of the leading developers in the New Europe withover 15 years of experience, operating in 10 countries.
GTC develops projects and manages completed properties inthree key sectors of real estate: office buildings and parks, retailand entertainment centers and residential sector, realized morethan 130 projects in Europe.
You can find more information on the project at: www.konstancja.pl
Selected residential real estate brokers in Warsaw
Villa Poema
gets permit
Hochtief Polska has
obtained a building
permit for its Villa Poema
residential project in
Warsaw. Located on
ul. Krasiƒskiego in the
capital’s ˚oliborz district,
the scheme will be the
first investment whose
development process will
be carried out entirely by
Hochtief Polska.
Construction was due to
launch in July and finish
in Q4 2012. The five-
storey Villa Poema
development will deliver
2,710 sqm of usable
residential space,
including 42 apartments
sized from 38-92 sqm.
Unidevelop-
ment’s Warsaw
projectDeveloper
Unidevelopment is
applying for a building
permit for a new multi-
family housing project in
Warsaw. The planned
investment will be
located on ul. Berensona
in the capital’s Bia∏o∏´ka
district and will comprise
nine low-rise buildings
offering a total of 166
apartments sized 34-82
sqm. ●
specific to the Polish market.Foreigners most often ask
questions about how possibleit is to get a mortgage loan inPoland, as well as what per-centage of a property’s valuecan be financed through abank loan: while a Polishclient can count on a loan-to-value ratio of 100 percent, forforeigners the figure is usual-ly 70 percent, or even as lowas 50 percent, Mr Bijas said.
Foreigners pursuing amortgage loan in Poland areoften surprised by what theyperceive as a slow decision-making process and by thelarge number of documentsthey have to provide bankswith. In addition, variableinterest rates are somethingnew to clients from countrieswhere fixed interest rates aremuch more popular.
But there are positive sur-prises too. According toSalomon Finance’s Bijas, for-eigners are pleasantly sur-prised by the lending condi-tions themselves, which caninvolve significantly lowerbank margins than those insome other countries inEurope.
“With the total cost of amortgage coming in as muchas tens of thousands of z∏otylower, even the difficult veri-fication process does notseem so bad,” he said. ●
JULY 25 – AUGUST 8, 2011MMAARRKKEETTSS20 www.wbj.pl
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PLN-EUR
4.0
343
4.0
402
4.0
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4.0
014
3.9
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3.97
60
15.0
7
18.0
7
19.0
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20.0
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21.0
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22.0
73
4
5 PLN-USD
15.0
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20.0
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21.0
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22.0
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2.8
545
2.
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2.83
72
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.821
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.806
4
2.76
01
2.5
3.0 PLN-GBP
15.0
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18.0
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19.0
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20.0
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21.0
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22.0
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.593
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4.62
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.579
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4.5
470
4.5
359
4.49
62
4
5 PLN-CHF
3
.490
9
3.52
04
3
.454
7
3.4
325
3.4
128
3.35
64
15.0
7
18.0
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19.0
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20.0
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21.0
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22.0
73.0
3.5
4.0 PLN-RUB
15.0
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18.0
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19.0
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20.0
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21.0
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22.0
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0
.101
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0.1
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0.1
007
0.1
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0.09
96
0.08
0.10
0.12 PLN-100JPY
15.0
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18.0
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19.0
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20.0
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21.0
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.578
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3.5
587
3.51
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3.4
4.0
currency rates
Relief or just
correction?
Currency report
This summer is certainlyproving to be no vacation forinvestors, as the gravity ofrecent events has not giventraders much rest. The eco-nomic slowdown is clear, asworse macroeconomic newsfrom the US (labor and hous-ing markets) and the eurozone (economic activity) con-tinues. Quarterly results fromUS companies have alsobegun to be published, withmost big firms meeting orexceeding forecasts.
Of course, the main topicover the past two weeks wasGreece. Fears that Europeancountries will let Greece gobankrupt caused risk aver-sion to increase, causing bigmarket swings. TheEUR/USD reached a three-month low at $1.39, while thez∏oty depreciated dramatical-ly (reaching z∏.4.05 againstthe euro and z∏.2.93 against
the dollar) with theCHF/PLN reaching a historichigh of z∏.3.54.
Thursday’s summit ofEuropean leaders broughtoptimism back as a rescueplan for Greece, amountingto €109 billion, was decidedupon. The plan, if executedcorrectly, might bring reliefto the markets.
Of course, it does not takeaway the probability thatGreece will default, followedby other financially disturbedPIIGS countries. The mid-term moves of currencies willbe determined by howinvestors interpret the aidpackage given to Greece.After a quick depreciation,the z∏oty regained during lastweek to finish at z∏.3.98against the euro, z∏.2.77against the US dollar andz∏.3.39 against the Swissfranc.●
Change for the week: -0.47% 52-week high: 2,932.62
Change year to July 21: -0.45% 52-week low: 2,360.91
mWIG40 2,743.22 (July 21 close)
Change for the week: -2.02% 52-week high: 2,987.72
Change year to July 21: -0.28% 52-week low: 2,416.47
sWIG80 11,324.97 (July 21 close)
Change for the week: -2.90% 52-week high: 12,932.00
Change year to July 21: -4.79% 52-week low: 11.305.41
NewConnect 52.02 (July 21 close)
Change for the week: -2.66% 52-week high: 64.07
Change year to July 21: -15.72% 52-week low: 52.02
WIG-Banki 6,781.76 (July 21 close)
Change for the week: 1.01% 52-week high: 7,387.49
Change year to July 21: -3.56% 52-week low: 5,830.96
DJIA12,714.79 (July 21 close)
2.23% (for the week)
CHANGE: 7.43%
(year to July 21)
52-week high:12,928.50
52-week low: 9,915.73
NASDAQ2,833.87 (July 21 close)
3.93% (for the week)
CHANGE: 5.87%
(year to July 21)
52-week high: 2,887.75
52-week low: 2,099.29
S&P5001,344.31 (July 21 close)
2.71% (for the week)
CHANGE: 4.08%
(year to July 21)
52-week high: 1,370.58
52-week low: 1,039.70
FTSE1005,898.93 (July 21 close)
0.99% (for the week)
CHANGE: -0.02%
(year to July 21)
52-week high: 6,105.80
52-week low: 5,070.90
DAX7,290.77 (July 21 close)
1.05% (for the week)
CHANGE: 4.55%
(year to July 21)
52-week high: 7,600.41
52-week low: 5,833.51
NIKKEI22510,010.38 (July 21 close)
0.75% (for the week)
CHANGE: -3.30%
(year to July 21)
52-week high: 10,891.60
52-week low: 8,227.63
world stock indices
45,000
46,000
47,000
48,000
49,000
50,000
24.0
6
27.0
6
28.0
6
29.0
6
30.0
6
01.0
7
04.0
7
05.0
7
06.0
7
07.0
7
08.0
7
11.0
7
12.0
7
13.0
7
14.0
7
15.0
7
18.0
7
19.0
7
20.0
7
21.0
7 2,500
2,600
2,700
2,800
2,900
3,00024
.06
27.0
6
28.0
6
29.0
6
30.0
6
01.0
7
04.0
7
05.0
7
06.0
7
07.0
7
08.0
7
11.0
7
12.0
7
13.0
7
14.0
7
15.0
7
18.0
7
19.0
7
20.0
7
21.0
7
2,600
2,700
2,800
2,900
3,000
24.0
6
27.0
6
28.0
6
29.0
6
30.0
6
01.0
7
04.0
7
05.0
7
06.0
7
07.0
7
08.0
7
11.0
7
12.0
7
13.0
7
14.0
7
15.0
7
18.0
7
19.0
7
20.0
7
21.0
7 11,000
11,360
11,720
12,080
12,440
12,800
24.0
6
27.0
6
28.0
6
29.0
6
30.0
6
01.0
7
04.0
7
05.0
7
06.0
7
07.0
7
08.0
7
11.0
7
12.0
7
13.0
7
14.0
7
15.0
7
18.0
7
19.0
7
20.0
7
21.0
7
50
51
52
53
54
55
24.0
6
27.0
6
28.0
6
29.0
6
30.0
6
01.0
7
04.0
7
05.0
7
06.0
7
07.0
7
08.0
7
11.0
7
12.0
7
13.0
7
14.0
7
15.0
7
18.0
7
19.0
7
20.0
7
21.0
7
6,500
6,600
6,700
6,800
6,900
7,000
24.0
6
27.0
6
28.0
6
29.0
6
30.0
6
01.0
7
04.0
7
05.0
7
06.0
7
07.0
7
08.0
7
11.0
7
12.0
7
13.0
7
14.0
7
15.0
7
18.0
7
19.0
7
20.0
7
21.0
7
Other indices
Short-term
relief
Stocks report
The week of July 18-22 beganhorribly for global stockmarkets, with indices fallingacross the board. Monday,July 18, saw the biggest lossesfor the WIG20 this year,which shed 2.62 percent (theWIG lost 2.19 percent) onfears that Europe’s debt crisisand US debt levels are beingmishandled by bureaucratsand politicians.
The rest of the week tookthe form of smaller buybacks,with investors trying hard tobuy any rumor of good news.European stock marketseventually climbed their wayback, though gains, untilThursday, July 21 on theWSE’s main index, the WIG,were unimpressive.
On Tuesday, July 19, theWIG shed some 0.19 per-cent, unable to grow on newsof strong quarterly results formany American blue-chip
companies. Affecting theWIG on Tuesday was theweak industrial productiondata for June (lowest growthsince October 2009).
On Thursday, stock mar-kets rebounded, as news of aplan to use the Europeanbailout fund to make cheaperloans to Greece and otherindebted governments withinthe euro zone brought reliefto investors. The WIG closed1.03 percent higher, with theWIG20 up 1.35 percent.
Huge gains were record-ed by oil and gas companies,as well as banks. Getin rose5.57 percent, while PGNIGrose 4.23 percent – recoup-ing heavy losses from earlierin the week. On Friday, July22, the WIG closed 0.45 per-cent higher. Next week,expect cautious buying byinvestors with eyes on the USdebt situation. ●
Andrew Nawrocki, Market analyst & trader, gowebtrade.com
JULY 25 – AUGUST 8, 2011 TTHHEE LLIISSTT www.wbj.pl 21
Education
Largest Business SchoolsRanked by number of lecturers in business departments in 2010/2011 www.bookoflists.pl
Notes: NR = Not Ranked, WND = Would Not Disclose. Research for the List was done in November2010. Number of employees and ownership structure are as of October 2010. All information pertains tothe companies’ activities in Poland. Companies not responding to our survey are not listed.Footnotes: (1) SGH chose not to participate in the survey due to objections to the methodology.
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, omis-sions 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 [email protected]. Copyright 2011, Valkea Media SA. TheList may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.
Rank
Company nameAddressTel./FaxE-mail
Web page
Num
ber o
f lec
ture
rs in
busi
ness
dep
artm
ents
:20
10/2
011
/ 200
9/20
10 /
2008
/200
9
Tota
l num
ber o
f Pol
ish
teac
hers
with
deg
ree
/To
tal n
umbe
r of f
orei
gnte
ache
rs w
ith d
egre
e
Num
ber o
f Pol
ish
teac
hers
: M
aste
r’s d
egre
e / P
h.D
/Po
st-P
h.D
/ Hon
orar
yPr
ofes
sor
Num
ber o
f for
eign
teac
hers
: Ba
chel
or’s
deg
ree
/M
aste
r’s d
egre
e /
Ph.D
deg
ree
Num
ber o
f stu
dent
s in
busi
ness
dep
artm
ents
:To
tal 2
010/
2011
/20
09/2
010
/20
08/2
009
Cour
ses
offe
red:
Ex
tern
al /
Indi
vidu
al /
E-le
arni
ng
Cour
ses
offe
red:
BA
MA
Cour
ses
offe
red:
Pos
t-gr
adua
teM
BA Business departments:majors
International academicprograms Year founded Rector
1
Uniwersytet Ekonomiczny w Krakowieul. Rakowicka 27, 31-510 Kraków12 293-5200/12 [email protected]
738736714
7344
2423646959
-13
21,64020,87120,653
-✓✓
✓✓
✓✓
Administration; Economics; Economicand Public Administration;
International Economic Relations;Sociology; International Relations;Finance and Accounting; Spatial
Economics
Leonardo da Vinci (Greece, Italy, Sweden,Portugal); Public Policies and Social
Universidade Da Beira Interior Coviha(Portugal); University of National WorldEconomy (Bulgaria); Saint PetersburgState Polytechnical University (Russia)
Economics; Management; Financeand Accounting; International
Relations; Public Administration
The US system of higher education andchallenges (USA); Analysis of systemicreasons for lower competitiveness ofEuropean Universities (UK); Growthversus security; Old and New EU
Members’ Quest for a New Economicand Social Model (USA)
Rempex Art and Auction Houseul. Karowa 31www.rempex.com.pl
Royal CastlePl. Zamkowy 4www.zamek-krolewski.com.plSimonis Galleryul. Burakowska 9www.simonisgallery.com
State ArchaeologicalMuseum in Warsawul. D∏uga 52 (Arsena∏) www.pma.pl
State Ethnographic Museumul. Kredytowa 1www.ethnomuseum.website.pl
Historical Museum of Warsaw Old Town Square 28-42www.mhw.pl
History Meeting House of Warsaw ul. Karowa 20www.dsh.waw.pl
Warsaw Philharmonic ul. Jasna 5www.filharmonia.pl
Warsaw Rising Museum ul. Grzybowska 79www.1944.pl
Wilanów Palace Museumand Wilanów PosterMuseumul. St Kostki Potockiego 10/16www.milanow-palac.plwww.postermuseum.pl
Zachęta National Art GalleryPl. Ma∏achowskiego 3www.zacheta.art.pl
Museums, galleries and venues in Warsaw
Art Pop FestivalMyÊl´cinek parkBydgoszczJuly 30, 4 pm
What was known last year asthe Smooth Festival has chan-ged its name and format, andthis year will be called the ArtPop Festival.
The concert will featureGrace Jones, who fills in forAmy Winehouse after thesinger was forced to cancel herEuropean tour following anunfortunate and inebriatedperformance in Belgrade earli-er this year.
Other international acts willinclude Hooverphonic, Razor-light and I Blame Coco.
The Polish acts will include
Ania Dàbrowska, MonikaBrodka, Neo Retros, PiotrRogucki, Sofa and SkinnyPatrini.
Tickets are priced from
z∏.130 and are available at Tick-etpro.pl and Eventim.pl. ●
For more information, log onto www.artpopfestival.pl
Music festival
New name, new formatC
OU
RT
ES
Y O
F W
IKIM
ED
IA C
OM
MO
NS
Robert Plant & The Band of JoyTorwarul. ¸azienkowska 6AWarsaw, August 2, 6 pm
Legendary Led Zeppelin front-man Robert Plant will performone concert in Poland as part ofhis European tour.
Mr Plant’s current reper-toire includes blues, gospel, folkand country as well as new ver-sions of Led Zeppelin classics.
In 2006, Plant was namedthe “Greatest Metal Vocalist ofAll Time” by Hit Parader maga-zine.
He has influenced manyartists past and present and haswon several Grammy awards,including 2009’s Album of theYear for “Raising Sand.” ●
Tickets are priced from z∏.220and are availableat Eventim.pl
Concert
A voice from the past
CO
UR
TE
SY O
F W
IKIM
ED
IA C
OM
MO
NS
Off FestivalDolina Trzech Stawów ParkKatowiceAugust 5-7
The Off Festival is an inter-national celebration of alter-native music that has beenrunning since 2006.
This year, the festival, theonly one of its kind in Cen-tral and Eastern Europe, isalso officially supported as aEU presidency culturalevent.
The lineup includesCanadian group Junior Boys,
Poland’s Czes∏aw Âpiewa,Scottish band Mogwai, TheJon Spencer Blues Explosionand Magic Kids from the US,
as well as Omar Souleymanfrom Syria. ●
For more information, logon to www.off-festival.pl
Music festival
International alternative
CO
UR
TE
SY O
F W
IKIM
ED
IA C
OM
MO
NS
Erykah Badu in concertSowiƒski Park Amphitheater,Warsaw, August 6, 8 pmand Wyspa S∏odowa,Wroc∏awAugust 7, 7 pm
With a style ranging from R&Band hip hop to jazz, ErykahBadu has become known as thequeen of neo-soul. Her debutalbum went straight to numbertwo on the Billboard charts andthe single “On and On”reached number 12 in the USand the UK.
Ms Badu has collaboratedwith Outkast and Macy Gray,among other big names. Herfirst concert at Sala Kongre-sowa in Warsaw’s Palace of Cul-ture and Science in July 2006was a great success and she isnow returning for more.
Ms Badu will be playing inWarsaw on August 6 andWroc∏aw on August 7. ●Tickets are priced from z∏.130 forthe Wroc∏aw show and fromz∏.135 for the Warsaw concertand are available at Eventim.pland Ticketpro.pl. ●
Concert
The return of the queen
CO
UR
TE
SY O
F W
IKIM
ED
IA C
OM
MO
NS
Content provided by theWarsaw Insider. Formore information onculture and enter-tainment in Warsaw this month, pick up the July issue.
Grace Jones
John Spencer
JULY 25 – AUGUST 8, 2011 LLAASSTT WWOORRDD www.wbj.pl 23
If Techeye had a giant pickle forevery time we heard the phrase,“Hey idiot, quit stealing giant pick-les!” well, we’d have a whole lot ofbig pickles. But the fact of the matteris that we don’t have many at all,probably because giant pickles arenotoriously difficult to steal.
That doesn’t mean we’re going togive up though. After all, we’reabout to enter the silly season, alsoknown as the “cucumber season” inmany countries (Poland has its“sezon ogórkowy,” for example), andthat seems an exceedingly good time
to go about misappro-priating humongous,briny treats.
So, yeah, that’s our bigplan for August. Under-whelming? Perhaps.But of course we’ll alsobe on the lookout forshiny new toys to playwith, hopefully while eating prodi-gious pilfered pickles. Things likeHP’s new TouchPad (www.hp.com).
HP must be drooling at the suc-cess of Apple’s iPad and, to a less-er extent, Samsung’s Galaxy Tab. Ithas released a few tablets of its ownalready, but nothing that really cap-tured consumers’ imaginations. TheTouchPad has gotten some attentionthough, if for no other reason thanbeing the first tablet to run Palm’swebOS (HP acquired the operatingsystem in its 2010 acquisition ofPalm).
Unfortunately for its maker,reactions to the newly releasedTouchPad have ranged from mod-estly positive to “needs more cow-bell.” At $499 and $599 (for 16 and32 GB models, respectively), it’s onpar with the iPad 2 and Galaxy Tab10.1, but it trails behind in severalcritical areas. Boot-up time is report-
edly slower, batterylife is worse and at 1.65 lbs it’s con-siderably heavier than its main com-petitors.
The 9.7 inch screen is bigger,which counts for little if system per-formance disappoints, but it meansthat the TouchPad can displaygianter giant pickle pictures than itsrivals. Something to keep in mind.
Then again, if size is the prime cri-terion, perhaps the MT55 Platformmultitouch table from Ideum(www.ideum.com) is a better, if lessportable, bet. The computer con-tained within runs a 2.66 GHz proces-sor along with 8GB of RAM and a128 GB solid-state drive. The 55-inch
and the table stands 31inches tall, allowing thewheelchair-bound to get inon the action.
But, you may wonder,what use is the MT55
Platform? Judging by itswebsite, Ideum seems tobe hoping that consumerswill splash out $17,950(including a two-year war-ranty) before asking thatquestion. The companydoesn’t say it outright, but museums,restaurants and hotels seem the mostlikely clients, possibly casinos. Don’tbother picking one up for Grandmathough – there are probably 31 mul-titouches too many for her.
Last up this week: a stroller. It’s abit of an odd choice, we admit, and weconsidered justifying it by claiming theproduct is made of uber-adamantiumand smells of waffles. But the honesttruth is that press images of beautifulwomen jogging behind strollers werejustification enough for Techeye. Andoh, how they jog.
Anyway, the item in question iscalled the Ironman Stroller
(www.bobgear.com) from BOB, acompany which is apparentlynobody’s uncle. For $409 ($559 forthe twin-seater), you get the “officialstroller of the Ironman Triathalon,”with all the rugged bells and whistlesthat entails. And there are plenty ofthose, although the only thing thatcaught our attention was “snacktray.” That sounds pretty cool.
Presumably BOB is targetingparents who are keen on competingin triathalons, but who knows?Maybe you’ll actually see babiescompeting in the near future. Afterall, cucumber season is right aroundthe corner. ●
Ever surrendered to the frenzied passion of a 32-multitouch computing experience? Let us know: [email protected]
