VOLUME 17, NUMBER 49 • DECEMBER 12-18, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127 Russia on edge What do the post-election protests in Russia mean for the country’s March presidential elections? 4 Since 1994 . Poland’s only business weekly in English WWW.WBJ.PL Foul play Allegations of corruption within Poland’s national soccer association have struck at its core just months before Euro 2012 kicks off in Warsaw 12-13 UK bows out Most EU countries look set to approve new measures to bring them closer to a fiscal union. But the UK isn’t one of them 3 SHUTTERSTOCK 4 3 5 Copper mining giant KGHM has agreed to take over another industry titan Economists call Poland’s budget plan for 2012 ‘realistic’ Was Poland an honest broker at the Durban climate-change talks? News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Luxury in Focus . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . . .16-19 Markets . . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23 In this issue REAL ESTATE Lokale Immobilia • Miasteczko Orange sale • Royal Wilanów permit • Foreigners buying apartments 16-19 Right to disagree Law and Justice spokesperson Adam Hofman tells WBJ that the party can resurrect Poland’s right 8-9 COURTESY OF BRANDLAB
Transcript
VOLUME 17, NUMBER 49 • DECEMBER 12-18, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127
RRuussssiiaa oonn eeddggeeWhat do the post-election protests in Russia
mean for the country’s March presidential
elections? 4
Since 1994 . Poland’s only business weekly in English
WW
W.W
BJ.P
L
Foul playAllegations of corruption within
Poland’s national soccer association
have struck at its core just
months before Euro 2012
kicks off in Warsaw
12-13
UUKK bboowwss oouuttMost EU countries look set to approve new
December 13 will mark the30th anniversary of the impo-sition of martial law byPoland’s communist authori-ties. One of the most tragicdates in modern Polish histo-ry will be remembered acrossthe country, with numerousspecial events scheduled totake place.
These will include histori-cal debates, film screenings,exhibitions and reenactments.In Warsaw, for one, a reenact-ment of a street battle be-tween anti-communist op-position members and com-munist police is being plan-ned.
Like every year, a protest isexpected to take place in thecapital in front of the house ofWojciech Jaruzelski, Poland’slast communist leader who, in1981, declared martial law.Some leftist sympathizers of
the general are also expected tobe there.
This year, December 13 willalso see an initiative organizedby the opposition Law and Jus-tice party. The goal of its Inde-pendence and Solidarity Marchis to commemorate the martiallaw anniversary and also focuson what the party sees astoday’s threats to Polish inde-pendence.
In force between Decem-ber 13, 1981 and July 22, 1983,martial law was introduced inorder to counter growingunrest against the communistregime and suppress anypotential uprising. At the time,the opposition Solidaritymovement was gaining supportand momentum.
A number of former com-munist dignitaries have longmaintained that the impositionof martial law was necessary to
avoid a potential Soviet inva-sion of Poland. Mr Jaruzelskihas insisted that the decisionwas a “lesser evil.”
While the exact number ofcasualties resulting from mar-tial law remains unknown, aspecial Sejm committeeworking from 1989-1991 con-cluded it amounted to no lessthan 91 people. Approxi-mately 10,000 opposition me-mbers were interned over theperiod.
In March of this year,Poland’s Constitutional Tri-bunal ruled that the imposi-tion of martial law in 1981had been contrary to bothtoday’s constitution and theone in force during the com-munist period. It also ruledthat it was in violation ofinternational law.
€114.7 billionis how much Europe’s banks must find to withstand
the euro-zone debt crisis and restore investor
confidence, according to results of stress tests carried
out by the European Banking Authority.
80%is the proportion of Polish households that donated
money to a charitable organization in 2010.
z∏.16,000is the average individual debt in Poland, with
2.1 million Poles currently struggling to meet
their debt payments.
30is the number of Polish companies which have already
purchased licenses to use the proprietary marks,
slogans and images associated with the forthcoming
2012 European soccer championship.
“[The UK is acting] like a man who wants to goto a wife-swapping party without taking
his own wife”The Telegraph reported a comment made by an unnamed French diplomat on
the demands the UK made during negotiations over an EU deal for closer fiscal
ties. In the end, the UK chose to opt out of the agreement.
Quote of the Week
Warsaw Christmas marketSome of the most famous Christmas markets inEurope have been running since the late Middle Ages,and they can draw upwards of a few million visitorsduring December. Warsaw has joined the ranks. Fol-low WBJ as we take you on a quick tour of the Polishmarket in Warsaw’s Old Town.
On WBJ.pl
Numbers in the News
Company index
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14 BPCC BUSINESS BREAKFAST
Event: This event, entitled: The euro-zone crisis andits impact on Poland – economic prospectsfor 2012” aims to answer questions such as:How will the euro-zone crisis end? How will itaffect Poland in 2012? Will Poland’s economymaintain sufficient momentum to avoid goinginto recession? A panel led by PwC’s chiefeconomic adviser, Prof Witold Orlowski, willoffer insights into the way Poland’s economyis likely to perform and the factors that will
influence its performance.Location: British Embassy, ul. Kawalerii 12bpcc.org.pl
JANUARY12 TAXATION AND ACCOUNTING CONGRESSEvent: This event aims to deepen participants’
knowledge on recent developments in thefield of tax and accounting, as well as to cre-ate a platform for comprehensive exchangeof views on the practice of implementing theprovisions. Location: Hotel Hilton, Warsaw kpmg.com/pl
December/January
DATELINE
The anniversary of the imposition
of martial law in Poland
IN THE SPOTLIGHT
Figures in focus
Perceptions of poverty
Percentage of respondents who strongly or somewhat agreed
with the statement that “in this city poverty is a problem,”
selected EU27 cities in 2009
Source: Eurostat
DECEMBER 12-18, 2011 NNEEWWSS www.wbj.pl 3
Regional
wealth divide
growing
The gap between the
richest and poorest
regions in Poland is
widening, Dziennik
Gazeta Prawna reported.
The Central Statistical
Office announced that
during the 2009 crisis,
the Kujawsko-Pomorskie,
Âwi´tokrzyskie,
Lubelskie and Opolskie
voivodships experienced
drops of GDP per capita
of between 0.3% and
1.3%.
Lower global
gas prices
Despite a growing
oversupply of natural
gas in global markets
that is putting
downward pressure on
the prices, Polish
consumers don’t stand
to benefit. This is
because Poland is tied
to an expensive gas deal
with neighboring Russia
until 2022, reported
Dziennik Gazeta
Prawna.
PGE: no to
Lithuania
nuclear projectPolish energy company
PGE has said it will not
help build a planned
nuclear power plant in
Lithuania. It had been
invited by the
Lithuanian government
to participate in a
project to construct a
1.3-gigawatt plant by
2020. “In the face of
conditions that PGE
found unacceptable
at this stage and
taking into account
other key projects, we
have decided to
suspend our
participation in this
project before its takes
the form of any formal
obligations,” PGE CEO
Tomasz Zadroga said in
a statement.
Illegal spirits
sales
According to the Public
Opinion Research
Center (CBOS), up to
15% of all spirits
retailed in Poland are
sold illegally. What’s
more, approximately
4% of illegally
purchased alcohol is
smuggled into the
country, reported
Parkiet. Distillers lose
around z∏.2 billion
annually as a result of
counterfeit sales and
smuggled liquor. ●
2012 budget
Budget plan foresees 2.5% GDP growthThe government hasadopted an updatedbudget plan thateconomists havelabeled “realistic”
Polish Prime Minister DonaldTusk’s government has adopt-ed a 2012 budget plan whichpredicts GDP growth of 2.5percent and an inflation rateof 2.8 percent next year. Thedeficit is forecast to be nohigher than z∏.35 billion.
In the end, the governmentdecided to base its budget onthe more moderate of thethree economic scenarios pro-posed by the Finance Ministryin November. The most opti-mistic had predicted 3.2 per-cent growth, while the mostpessimistic had forecast a 1percent contraction of the Pol-ish economy.
“A crisis [period] is notime for revolution but forembarking on responsiblemeasures,” said Prime Minis-
ter Donald Tusk at a pressconference last week wherethe budget plan was unveiled.Mr Tusk said that two mainfactors had been taken intoconsideration when prepar-
ing the budget, namely “thesafety of public finances andthe safety of citizens.”
Finance Minister JacekRostowski, who was also pres-ent at the conference, said, “if
the budget needs to be amend-ed – probably in the middle ofnext year in my opinion – wewill not hesitate to do so.”
Economists generallyreacted positively to the pro-
posed budget.“The macroeconomic fig-
ures are fine, very realistic. Infact, I think inflation will beslightly lower than 2.8 percentwhile nominal growth shouldbe similar to what the govern-ment predicts,” said Prze-mys∏aw Kwiecieƒ, chief econo-mist at X-Trade Brokers.
Mr Kwiecieƒ added thatwhen it comes to the projectedz∏.35 billion deficit, it was toosoon to comment as a lotdepended on how determinedthe government would be toimplement the changes it haspromised to reduce spendingand increase revenues.
Government revenues for2012 are estimated at z∏.293.8billion while spending isexpected to stand at z∏.328.8billion. Reforms, spendingcuts and tax increases areexpected to reduce public debtas a percentage of GDP from53.7 percent in 2011 to 52.4percent in 2012.
RReemmii AAddeekkooyyaa
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The PM and the finance minister appeared as moderately optimistic as their budget plan
Euro-zone crisis
A closer union – without the UK
As the EU movestowards closerintegration, the UKsteps to the sidelines
As WBJ went to press, all indi-cations suggested that everyEuropean Union nation exceptthe UK was ready to worktowards creating a fiscal unionthat would tighten budgetaryand financial coordination
between its members. As of press time, Hungary,
which was initially against theagreement, signed on, and theCzech Republic and Swedenwho had also initially declined,agreed to consult their parlia-ments on the matter. That leftthe UK potentially standing asthe odd man out on a Europe-wide agreement.
Herman van Rompuy, the
president of the EU Council,said at a press conference that“except for one, all are consid-ering participation.”
On the peripheryThe key moment came in theearly hours of Friday morningwhen UK Prime MinisterDavid Cameron effectivelyvetoed any agreement on fiscalunion that would include all 27member states, after he failedto win opt-outs and vetoes forthe UK on financial regulationsin an effort to protect his coun-try’s financial center, the City ofLondon.
Among Mr Cameron’sdemands was that “any trans-fer of power from a nationalregulator to an EU regulatoron financial services would besubject to a veto.” FrenchPresident Nicolas Sarkozy –widely viewed as a victor in thenegotiations – said later thatthe British demands were“unacceptable.”
In response, Mr Cameronstated that what was on offer“wasn’t in Britain’s interests so Ididn’t agree to it.”
If 26 EU countries do even-tually decide to join, the UKwould be left on the outside of afiscal union, looking in.Whether that will end up beingto the country’s benefit or harmremains to be seen, but theeuro-zone economies – led byGermany – were determined topress on with or without Lon-don on board.
German Chancellor AngelaMerkel expressed her confi-dence that a fiscal union would
be achieved, and that it wouldmark the beginning of the endof the euro crisis. “We will havea euro currency within a stableunion. We will have strongerbudget deficit regulations foreuro-zone members ” she saidat the summit.
New budget rulesThe agreement also requiresthat member states guaranteethe balancing of their budgetsby introducing the appropriatelegislation within their nationallegal systems. Also, they wouldhave to report national debtissuance plans in advance.
If a member state breach-es the 3 percent budget-deficit ceiling enshrined inthe EU’s Growth and Stabili-ty Pact, there will be automat-ic penalties, including possi-ble sanctions, unless a quali-fied majority of members ofthe fiscal union vote againstsuch measures.
At the summit, the EUcountries also agreed to pro-vide €200 billion in bilateralloans to the IMF to helptackle the debt crisis, with€150 billion of the total com-ing from the euro-zone coun-tries and the rest from mem-
bers outside the euro zone. Also, the European Stability
Mechanism, the permanentrescue mechanism due to comeinto force in July 2012, will becapped at €500 billion untilMarch 2012, when it will bereviewed.
Polish reaction: nothing new for usCommenting on the summit’sresults, Prime Minister DonaldTusk said there was a “speedingup,” which now created thechance for inter-governmentalagreement “which would not befor only euro-zone members
but also for countries whichaspire to join the euro zone,which is what Poland mainlywanted.”
Mr Tusk added that “fromthe Polish point of view, thedecisions made at the summitto increase fiscal discipline areno sacrifice. We long ago imple-mented deficit ceilings into ourconstitution.”
The fiscal union agreementwill now have to be ratified bythe parliaments of all the coun-tries wishing to join. The agree-ment is scheduled to be readyby March next year.
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David Cameron vetoed an agreement on fiscal union
Mr Cameron said that what was on offer
“wasn’t in Britain’s interests”
DECEMBER 12-18, 2011NNEEWWSS4 www.wbj.pl
A state crackdown ondemonstrations hasled to widespreadcondemnation, butPoland has so farfailed to comment
Large-scale protests wereplanned in Russia’s capital lastSaturday, with over 30,000people scheduled to partici-pate. If that were to come tofruition, the demonstrationswould be the biggest in Russiasince the fall of the SovietUnion 20 years ago.
Dissenters had beenprotesting all last week againstalleged fraud and vote-riggingin the December 4 elections forthe State Duma, Russia’s lowerhouse of parliament. Russianpolice made numerous arrests,with independent rights groupAgora estimating that as manyas 1,000 people had beendetained by last Thursday.
US Secretary of State Hil-lary Clinton was quick to con-demn the Kremlin, saying theUS had “serious concernsabout the conduct of thoseelections,” with “independentpolitical parties denied theright to register and reports ofattempts to stuff ballot boxes,manipulate voter lists, andother troubling practices,” she
said in a statement. “Russianvoters deserve a full investiga-tion of electoral fraud andmanipulation. They deservefair, free, transparent electionsand leaders who are account-able to them.”
European Parliament Presi-dent Jerzy Buzek echoed thesesentiments, when he said hewas concerned about the deten-tion of opposition activists andintimidation against independ-ent election watchdog GOLOSand cyber attacks on leadingindependent news websites.
Poland remains silentAs WBJ went to press, Polandhad made no official state-ment regarding the election orthe ongoing protests.
“It is a sensitive issue tocomment on elections in anindependent country, but withPolish journalists on theground and Polish diplomats’excellent contacts, the govern-ment knows what is happen-ing, and there should be a sortof condemnation, at leastregarding massive arrests,”said Adam Bodnar, memberof the board at the HelsinkiFoundation for Human Rightsin Warsaw.
“I don’t understand howPoland can promote humanrights and democracy in
Eastern Partnership countriesand be silent regarding what ishappening in Moscow rightnow,” he added.
One explanation might bethat Poland is wary that Russiacould punish any perceived crit-icism by blocking Polish exports,a tool it has used in the past.
“There is no point, espe-cially for neighboring coun-tries, to underline their ownposition towards Russia,” saidJaros∏aw åwiek-Karpowicz,program coordinator onEastern and SoutheasternEurope at the Polish Instituteof International Affairs. Headded that Poland was choos-ing to be active through EUinstitutions for the time being.
Setback for PutinSaturday’s protests are plannedto coincide with the release ofthe final election results.According to the preliminaryresults, United Russia, theparty of current Prime MinisterVladimir Putin, garnered 49.3percent of the vote. This is asignificant fall in support fromthe 63 percent it won in the lastelection four years ago. Howev-er, some observers have arguedthat the real figures could prob-ably be much lower, at around30-35 percent.
“This is an interesting prel-
ude to the March 4 presiden-tial elections. The Duma elec-tions have revealed how the sit-uation has changed in the lastfour years. Support for the rul-ing team – United Russia,Vladimir Putin, Dmitry Med-vedev – is crumbling,” said Jad-wiga Rogo˝a, an expert onRussia at Warsaw’s Center forEastern Studies.
No alternative, yetAlthough Ms Rogo˝a said she
believed Mr Putin was not setto rule for two consecutiveterms, she does believe thatRussia’s current PM is boundto win next March’s presiden-tial election.
“There is no alternative can-didate as popular or as influen-tial, and the state currently hasall the tools to suppress protestsand punish any possible candi-date. But the legitimacy of theruling camp has been significant-ly weakened, and in a few years I
think we will see the emergenceof some formal political opposi-tion – not necessarily with demo-cratic views – who will try tochallenge the existing leader,”said Ms Rogo˝a.
She also said that Russia’sgovernment is now fully awarethat Mr Putin’s potential victoryin March will require a signifi-cant effort, and a great deal ofmanipulation in order to ensurea favorable outcome.
AAlliiccee TTrruuddeellllee
Russia elections
Massive protests against alleged vote-rigging
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The Dec. 4 elections have set the stage for Mr Putin’s return to the presidency in March
Climate change
PPoollaanndd ssttiicckkss ttoo tthhee ssccrriipptt iinn DDuurrbbaannBut the country stillcame under attack atthe climate changeconference for itsemissions record andreliance on coal as anenergy source
As the UN Climate ChangeConference in Durban drew toa close last Friday, it seemed asif the Polish presidency wasfulfilling its role as the coordi-nator of a common EU posi-tion.
However, things did notbegin too well for Poland atthe start of the two-week sum-mit, with Climate Action Net-work, an NGO, giving it a“Fossil of The Day” award for“endangering the credibility ofthe EU.” The “award” is givento countries “who have per-
formed badly in the climatechange negotiations,” theorganization writes.
“While EU diplomats are
trying to find solutions, thePolish Presidency has decidedto support ‘the European CoalDays’ by using its Presidency
logo,” the organization said ina statement. But the Polishgovernment later sent a letterto the organization explainingthat the logo was used withoutits permission.
As WBJ went to press,newly appointed EnvironmentMinister Marcin Korolec’srhetoric suggested Poland wasfollowing the line officiallyagreed to by the 27 EU mem-bers. The EU wants to negoti-ate for an extension of theKyoto Protocol, establish aroad map for a legally bindingagreement that includesemerging economies, and laythe foundations for a fundwhich would provide $100 bil-lion annually to help emergingcountries adapt to climatechange.
“We need to ensure thatthrough our decisions this
week, we take a further steptowards the establishment ofan ambitious and globalregime,” Mr Korolec said in astatement.
‘Coal, coal, coal’Not everyone seemed so sureof Poland’s true intentions,however, with John Prescott,the UK’s former deputy primeminister and a current mem-ber of the House of Lords,telling the Financial Timesthat Poland was all about“coal, coal, coal,” and that thenegotiations would be goingbetter with another country atthe helm.
Krzysztof Bobiƒski, presi-dent of the Unia i PolskaFoundation, echoed this senti-ment, saying, “Poland’s recordon climate change is abysmaland it couldn’t possibly be a
constructive player in Dur-ban.”
But Artur Gradziuk, inter-national economic relationsand global issues programcoordinator at the Polish Insti-tute for International Affairs,said that “only after the sum-mit will we be able to assessPolish efforts.”
Poland’s dependence oncoal has often led it to clashwith EU environmental legisla-tion. The country produces over95 percent of its electricity usingcoal, and World Bank figuresshow that transitioning to a low-emission economy would put asignificantly higher burden onthe Polish economy – possiblyleading to lower GDP growth,job cuts and a rise in electricityprices – than on the economiesof other European countries.
AAlliiccee TTrruuddeellllee
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Poland produces more than 95 percent of its energy
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DECEMBER 12-18, 2011 BBUUSSIINNEESSSS www.wbj.pl 5
The Polish firm looksset to become theworld's fourth-largestcopper producer
Polish copper producerKGHM has entered into aconditional agreement to buyCanadian mining groupQuadra FNX Mining. Thevalue of the transaction is$2.83 billion (z∏.9.46 billion),according to KGHM, and willbe financed by the firm’s owncash resources.If the deal goes through, itwould be the single largest for-eign acquisition made by aPolish company.
The deal would also makeKGHM, currently the world’sninth-largest producer of cop-per, number four globally.
“We are investing in thisproject to make KGHM morecompetitive as well as more
resistant to downturns in thecopper price cycle,” HerbertWirth, president of the man-agement board at KGHM,said in a statement.
Quadra FNX has mines inCanada, the US and Chile. InChile, the company is begin-ning a new project in SierraGorda, the site of one of theworld’s largest copperdeposits. This is a potentiallylucrative project, but it is notwithout its difficulties.
“It is in the middle of thedesert, and the companywould need to build a 150 kmwater pipe from the PacificOcean to make it work,” saidAndrzej Knigawka, an analystat ING Securities.
The acquisition of QuadraFNX will increase KGHM’scopper production levels by 25percent next year and by near-ly 50 percent by 2018, the com-
pany says. KGHM also esti-mates that after the acquisi-tion, operating costs will fall bymore than 20 percent come2018.
As far as the impact of thedeal on KGHM’s share pricegoes, the outlook is positiveoverall, Mr Knigawka said.“The market needs time todigest the news but based onour most bullish copper-priceforecast, earnings per sharecould rise by 7 percent.”
In the long term, Mr Kni-gawka said, Quadra couldbecome a significant source ofcash for KGHM.
“First, however, the com-pany needs to make sure thatkey people at Quadra stay byincentivizing them. It alsoneeds to ensure the game-changing Sierra Gorda projectis successful,” he added.
The deal will make KGHM the fourth-largest copper producer in the world
Copper
KGHM in z∏.9.46 billion dealfor Canadian copper miner
A member of theboard is facingcharges of acceptingbribe money
Poland’s Internal SecurityAgency (ABW) has made fourarrests in an investigation intoalleged corruption related tocontracts signed by Polish oilrefiner PKN Orlen.
Among those who weredetained is a board member ofOrlen’s petrochemicals divi-sion, two subordinate man-agers and a businessman.
Citing its own findings,Rzeczpospolita wrote that theABW secured documentsrelating to contracts enteredinto by Orlen.
The orders were reportedlyimplemented by a firm con-nected with 39-year-old busi-nessman Pawe∏ M., the co-owner of several companiesfrom P∏ock and Warsaw thatcarry out renovation and con-struction work.
Under Polish law, only thefirst name and the first letterof the surname of a suspectedcriminal may be written out infull in an article appearing inthe press.
According to Polish media,
it has been alleged that MarekS., a board member responsi-ble for Orlen’s petrochemicaloperations, took bribes fromPawe∏ M., who was hoping forpreferential treatment whencontracts were being negotiat-ed.
Both men are facingcharges of corruption, forwhich they could spend up toeight years in prison. The two
managers who report toMarek S. are also linked to thecase, but have been releasedon bail.
Orlen revealed in a state-ment that its supervisoryboard had unanimously adopt-ed a resolution to suspend amanagement board member,“due to detention of him bythe Internal Security Agency.”
GGaarreetthh PPrriiccee
Corruption allegations
Four detained in Orlencorruption probe
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Four old power unitswill be replaced with asingle block at a plantin Rybnik
French energy giant Électric-ité de France (EDF) willinvest around €1.8 billion tobuild a 900-megawatt coal-fired power plant in Rybnik,southern Poland.
The project entails replac-ing the four oldest of theplant’s eight power units witha single, more efficient one.
EDF, which holds a con-trolling stake in the plant, willuse “supercritical” technologyin the new unit. The technolo-gy allows combinations of fuelto be burned more efficiently,thereby producing significant-
ly lower carbon emissionsthan technology used in astandard coal-fired unit.
French engineering groupAlstom will supply the unit’sboiler island and turbine hall.Construction on the projectwill take six years, with thelaunch date not yet known.
EDF wrote in a statementthat the investment is part ofa strategy to help “reinforceits position in CentralEurope.” It will fund the proj-ect using its own cash,sourced from within thegroup.
By 2020, the companywants to bring its totalinstalled power generationcapacity in Central Europe to200 gigawatts, 25 percent of
which it aims to source fromfossil fuels.
EDF is making the invest-ment to capitalize on expect-ed growth in demand forenergy of 3 percent per yearin Poland, and on new envi-ronmental directives thatrequire the oldest productionunits to be shut down from2016, thus reducing supply.
Électricité de France hasbeen present in the Polishmarket for 12 years. It says itsactivities provide 10 percentof output in the country’senergy market and 15 percentof district heating. It buyssome seven million metrictons of coal per year.
BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE
Incorrect instructions by acourt won’t affect appealsdeadline On November 22, 2011 the SupremeCourt ruled that a failure by a court to cor-rectly instruct a party which is involved incourt proceedings without a professionalattorney about both the deadline for anappeal and the manner in which it shouldbe filed, will not affect the time period forfiling the appeal.
In the Polish legal system the deadlinefor filing appeals is specified under legalprovisions and as such may not bechanged or prolonged even if the dead-line is not met due to the fault of thecourt.
In the case of incorrect instructions ora failure to instruct the said party aboutthe deadline and the manner in which theappeal should be filed, the party whichfailed to file the appeal within the dead-line may file a motion for reinstatement ofthe deadline. This motion needs to beapproved by the courts.
Budget-Related Act approvedIn order to stabilize public finances thegovernment approved the Budget-Relat-ed Act on November 22. The act aims toprevent public debt from increasing nextyear. The draft act provides that theexcise tax on diesel and bio-compositefuels will be increased. Moreover, it willno longer be possible to avoid paying 19percent tax on profits from deposits.
Creditor of shareholder hasthe right to complain aboutresolutionsPursuant to the Supreme Court’s resolu-
tion of November 25, the creditor of ashareholder in a joint-stock companymay appeal resolutions agreed to at ageneral shareholders’ meeting if thoseresolutions threaten his or her being ableto retrieve the money they are owed. Thisis the case even if a court has appointedan official to make sure the creditor getsthe money owed to them.
Earlier retirement for employees On November 17 the draft legislation onchanges to the Act on Retirement Bene-fits and Disability Pensions from theSocial Insurance Fund received its firstreading. The draft provides that womenwho have been in employment for 35years and men who have been inemployment for 40 years may retire earli-er than the standard retirement age.
The provision is designed to helpemployees who have been insured for along period to receive retirement benefitsearlier. The changes are intended toimprove the situation of employees who,due to their long periods in certain typesof employment, often have health prob-lems that affect their ability to work prop-erly. The authors of the draft argue thatmany of these types of employees go onsick leave more frequently than otherworkers. As a result their efficiency atwork is reduced.
Higher real estate tax in 2012Next year the rate of tax on real estate inPoland will increase. As a result mostlocal government authorities havealready increased or are set to increasethe tax rate by 4.2 percent. ●
Inflation
RPP keeps rates on holdfor sixth straight monthDespite signs theeconomy is starting toslow down, Poland’srate-setters are stillworrying about highinflation
Poland’s rate-setting Mone-tary Policy Council (RPP)chose to keep interest ratesunchanged at a meeting lastweek, saying that despiteindications economic growthis starting to ease, inflationis still too high. The Councilhas not changed rates sinceraising them by 25 basispoints in June.
In line with analysts’expectations, the RPP keptPoland’s headline interestrate steady at 4.5 percent.Annual CPI (consumer priceindex) figure increased to4.3 percent in October,remaining well above the
National Bank of Poland’sinflation target of 2.5 per-cent.
The RPP said it aims tokeep inflation in check infuture months, withoutbeing more specific about itsintentions. “The Councildoes not rule out the possi-bility of further monetarypolicy adjustments in thefuture, should the outlookfor inflation returning to thetarget deteriorate,” the RPPwrote in a statementexplaining its decision.
The Council said, howev-er, that it expects inflation toease due to the expectedeconomic slowdown andgovernment belt-tightening.
“In the opinion of theRPP, in the medium terminflation will be curbed bygradually deceleratingdomestic demand amidst fis-cal tightening, including
reduced public investmentspending, and interest rateincreases implemented inthe first half of 2011, as wellas the expected global eco-nomic slowdown,” the Coun-cil wrote.
The significant monetarypolicy tightening implement-ed in the first half of 2011should enable inflation toreturn to the target in themedium term, the RPP said.
Bank Zachodni WBKanalysts wrote in a marketreport, “We maintain theview that there will be twointerest rate cuts in 2012,each by 25 basis points.However, due to a worseoutlook for the z∏oty, whichwill slow down inflation’sreturn to [the central bank’s]target, the first decision maytake place only at the end ofQ2 2012.”
GGaarreetthh PPrriiccee
Investment incentives
Economic Activity Zonelaunched near WarsawThe z∏.2.2 billion Parkof Poland theme-parkinvestment will besited in the zone
The Polish government hasestablished a 3,200-hectareEconomic Activity Zone in anarea located in the west of theMazowieckie voivodship.
Called Western Mazovia,the new zone is located in theMszczonów, Radziejowice andPuszcza Mariaƒska municipal-ities. It is earmarked to hosttourism, retail and entertain-ment investments.
Unlike a special economiczone, Western Mazovia willnot provide tax incentives forinvestors. Instead, the govern-ment has promised to improveinfrastructure in the area.Plans are afoot to build moreroads, modernize railwayinfrastructure, and probablybuild an airport, said MosheGreidinger, owner of Global
Parks Poland, the first compa-ny to sign a letter of intent forinvesting in Western Mazovia.
“Aside from the immediatepopulation of seven millionpeople, access to a highwayand railway, we have receivedgreat support from the localcommunities and the govern-ment which has promised tostrengthen the infrastructurein the area,” Mr Greidingertold WBJ.
Global Parks will develop atheme park in WesternMazovia that will includeroller coasters, a water park,two hotels, and shops. Thescheme is expected to costz∏.2.2 billion and attract fourmillion visitors every year. Itwill be one of the five largestamusement parks in Europe.
The first stage of the park isplanned to be completed by2015, with the investor intend-ing to expand it four yearslater.
“Park of Poland is tobecome the engine of the eco-nomic activity zone,” Mr Grei-dinger said.
He added that the compa-ny first thought about buildinga theme park five years ago,and that it has spent a lot oftime looking for the right loca-tion.
Mr Greidinger said thatafter meeting with JózefKurek, the mayor of Mszc-zonów, he was convinced thatthe west of Mazowieckie wasthe best area in Europe inwhich to invest.
“Our zone has a majorgrowth potential, we have agreat location, and the per-spectives for huge invest-ment,” Mr Kurek said.
“By 2015 the zone shouldhave created over 2,000 newjobs and will have attractedz∏.3.8 billion of incomingassets,” Mr Kurek added.
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Prudential returning to
Poland following absence
of more than 70 years?The insurance business of Bri-tish financial services companyPrudential plc may be comingback to the Polish market in2012 after an absence of morethan 70 years. According tounnamed sources cited by busi-ness daily Puls Biznesu, headhunters have already startedthe process of recruiting peopleto help build the insurer’s busi-ness in Poland.
Prudential did not respondto WBJ’s requests for a com-ment on the reports.
In addition to Prudential,French insurance firm Groupa-
ma is also reportedly preparingto enter the Polish market.
Both companies would befollowing in the footsteps ofAegon, an insurer headquar-tered in the Netherlands, whichhas opened a branch in Poland.
In April this year, it wasalso reported by the Polishmedia that Prudential wasinterested in entering the Pol-ish market.
Prudential left the Polishmarket 70 years ago due to thethen complicated geopoliticalsituation.
Prior to World War II, the
company offered insuranceservices in Poland throughPrudential Assurance Com-pany Limited and its sub-sidiary PrzezornoÊç. The twocompanies were merged in1937, occupying the Pruden-tial building – an iconic sky-scraper located on Plac Pow-staƒców along ul. Âwi´-tokrzyska.
Assets belonging to Pru-dential’s Polish business wereseized by the occupying Naziauthorities following theirinvasion of Poland in 1939.
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Mr Greidinger speaking at the launch of the zone last week
The world diamondtrade continues togrow due toincreased demandfrom Asia and theMiddle-East
Despite the difficult globalfinancial situation, demandfor diamonds is set to growby more than 6 percent ayear over the next decadedue to an increasing desireamong Indian and Chineseconsumers for the preciousstone. That’s according to anew report compiled by Bain
& Company and theAntwerp World DiamondCenter.
Annual growth is predict-ed to average 6.4 percent,and will reach a total of 250million carats a year by 2020.But with demand set to faroutweigh supply due to alack of new mines in themarket, some consumerscould be priced out.
Premysl Synek, directorgeneral of Diamonds Inter-national Corporation (DIC),a Czech-based company spe-cializing in the productionand sale of original diamond
jewelery, believes that ininvestment terms, “dia-monds are still the mostvaluable investment instru-ment as their price in the lasthundred years has neverdiminished.”
However, gold and plat-inum still remain the bestinvestments according tofigures published on DIC’swebsite, with a $1,000investment in January 2001yielding a $4,112 and $1,779profit respectively byDecember 2010. The sameinvestment on a five-caratdiamond brought $1,527
profit over the same period,making diamonds the third-most valuable investmentopportunity.
For those curious to findout what millions of eurosworth of diamonds actuallylook like, one of the biggestdiamond exhibitions inEurope is taking place at theDIC showroom in Warsawfrom December 10 to 20.
The 320 unique diamondexhibits featured are wortha total of €20 million, andinclude rare stones such as a23-carat black diamond anda 15-carat yellow “Sun
Drop” diamond. The exhibi-tion will also feature luxuryjewelery and the crown of
the winner of the 2010 MissWorld competition.
DDaavviidd IInngghhaamm
DECEMBER 12-18, 2011 LLUUXXUURRYY IINN FFOOCCUUSS www.wbj.pl 7
Polish art market
Art prices in Poland on the rise
Polish artists areattracting moreinterest from buyersbut prices still lagbehind the world’smajor markets
Poland’s artists are beginningto see higher prices paid fortheir works. There have beenexamples of contemporaryPolish artwork selling for sixfigure sums in recent years.Between 2009 and 2010, 10Polish artists sold works atauction priced from z∏.100,000to z∏.470,000.
Zuzanna Sokalska, directorof Galeria Art NEW media,said that “the most expensiveworks sold in Poland areequivalent to the price of a lux-ury vehicle.” But while suchprices are high for the Polishmarket, they are small changein comparison to the pricespaid in some of the larger art
markets around the world,such as the US, UK, or China.
Nevertheless, interest in artin Poland is rising. Accordingto Ms Sokalska, “in Polandthere has never before beensuch an interest in art.”
One artist who has man-aged to find financial successwith her artwork is AgataKleczkowska, who while still inher fifth year of universitystudy sold a piece for approxi-mately z∏.160,000.
While that purchase shouldbe seen as an encouraging sig-nal, the reality remains thatthe Polish art market is stillrelatively immature comparedto those in the US or the UK.In the West, buyers tend tofavor abstract art, which alsocommands the highest prices.
“In Poland the most expen-sive paintings are older worksand there is a preference for19th century art,” said MsSokalska, adding, “In Poland
abstract art is still not well-enough understood.”
However, the immaturityin Poland’s art marketextends further. Ms Sokalskasaid that in Poland, there isalso a lack of awareness anddesire for art. “In Poland,people don’t wait in line toget into museums. There isalso not enough educationabout art,” she said. And that,as a result, impacts the priceof art.
Moreover, while somePoles are waking up to thefact that they can purchase artas an investment, most arestill unaware of the opportu-nities. That goes for business-es as well as individuals, whoare currently the main buyersof art in Poland. Polish corpo-rations “don’t want to spendmoney on something thatthey don’t consider serious,”Ms Sokalska added.
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Luxury for pets
New pet club near Warsawoffers pet pool, daycareThere’s also a fitnesscenter and ahairdresser
Those who are missing aplace in Poland to pampertheir pets now need look nofurther than Bone Pet Club,a new pet hotel and play cen-ter near the capital.Launched in August, BonePet Club recently branchedout from its original pethotel services and now alsoprovides pet daycare, a fit-ness center and a pool. Thefee for the hotel per night isz∏.95 and the pass for thepool is z∏.15 per hour.
“Generally pet hotels inPoland are weak, they keepanimals, but they do notreally take care of them,”said Aneta Cholewa, an ani-mal behaviorist and theowner of Bone Pet Club.
“We have a differentapproach. We are not justproviding a ‘storage room,’but also entertainment,activity, training and in gen-eral, happiness for pets,” sheadded.
Aside from the hotel, day-care, pool and fitness area,the Bone Pet Club offers apet hairdresser, dog trainingand a pet-taxi service to pickthe animal up from home.
Ms Cholewa said that thepet club has been very suc-cessful.
“Our two peaks are dur-ing the summer and Christ-mas holidays. In the summerwe have a lot of Poles leav-ing their animals while theygo abroad on vacation,whereas Christmas time iswhen we get a lot of ‘foreigndogs,’ those which belong toexpats who fly back to their
countries for Christmas,”she said.
The club owner addedthat aside from peak sea-sons, everyday clients areusually wealthy people whowork late, and who do notwant to leave their pets allalone for the day, or peoplewho “love their animals somuch” they want to providethem with the best enter-tainment, regardless theprice.
The pet club is also openfor owners who just want todrop in to have some funwith their pets.
“Wintertime, when it istoo cold to be outside, is atime when more peoplecome with their dogs, eitherto watch them play or to playwith them,” Ms Cholewaadded.
Ewa Boniecka: As Law andJustice (PiS) leader Jaros∏awKaczyƒski has admitted, mis-takes were made during yourparty’s October parliamentaryelection campaign. Arguablyone of the biggest of those wasthe publication of a book inwhich Mr Kaczyƒski plays onanti-German sentiment. Whydidn’t you, as one of the mostprominent faces of PiS’s cam-paign, try to stop this? Wereyou afraid to do so, as somecritics of PiS say?Adam Hofman: It is not truethat we were afraid, weexpressed our remarks freelywhile talking with Jaros∏awKaczyƒski. In the case of theremarks about [GermanChancellor] Angela Merkel, itseemed to us that Polandshould be a free country inwhich the independent leaderof the biggest opposition partycan say what he likes about theGerman chancellor. Unfortu-nately, it turned out that hecannot, because the harshelection battle and overblownreaction of some politiciansfrom other parties, and fromthe hostile media, was so furi-ous that we lost the election.That incident was a bitter les-son for us all.
In a letter to members of PiS,Jaros∏aw Kaczyƒski remarkedthat the main reason for thefailure of the right in the lastelection was the ambition ofpoliticians in charge of many
small right-wing parties,which led to the division andweakness of the Polish rightas a whole. How do you planto prevent such a scenariofrom occurring again and leadPiS to success when a numberof your party’s former mem-bers have established sepa-rate rightist organizations,such as Poland Comes First(PJN) and Solidarity Poland?The bitter scenario should betreated as … a warning, yet thesituation in Poland is nowquite different. Political par-ties have become professional-ized and financed from thestate budget, and PiS, a partywhich has the support of 30percent of the electorate, isthe essential force of the right.So the recipe for success is tobuild unity around PiS,because we are the only pro-fessional conservative party inPoland and those who are try-ing to break us are in fact radi-cal opponents of the right. So,we will not pay attention tothose small emerging splintergroups, but will proceed andrealize our aims. Poland needsa strong conservative opposi-tion and PiS is the only partywhich can provide this.
What would be your party’sattitude towards SolidarityPoland if that organizationwere to make it into parlia-ment? We would not conduct negoti-ations with Solidarity Poland
in parliament because to us itis a group with an unknownprogram, while PiS has a well-defined rightist conservativeprogram. According to it, wewould act in parliament only[in areas] where our one seri-ous competitor – Civic Plat-form (PO) – operates.
Solidarity Poland cannot beseen as our competitor and Iwill make a comparison hereto the producer of Coca-Cola,which does not enter into com-petition with small andunknown firms who produce asimilar beverage, because itknows that these are falsebrands that cannot competewith a genuine, strong one andwill fail.
Law and Justice is a well-rooted party, firmly estab-lished on the sharply-dividedPolish political scene, whichreflects real social divisions.Being a serious rightist-con-servative party, PiS might becompared to the RepublicanParty in the US or the Conser-vative Party in Britain, and if Ihesitate to elaborate furtheron these comparisons, it isonly because those partieshave been in politics muchlonger than we have. ... Yetlooking at their experiences isan edifying exercise becausethose parties have also beenthrough periods when theywere not in power, as we arenot presently, yet they
returned to power strongerthan before. The conclusionsfrom this are obvious.
Will PiS adopt a totally nega-tive approach towards all gov-ernment proposals? No, it will not be total nega-tion, we would perform ourrole as a strong oppositionparty ... evaluating the govern-ment’s proposals according toour own principles and pro-gram. I think there could besome issues in the economicand social domains in whichwe could cooperate with thegovernment. Yet there wouldbe one condition: that the gov-erning party should get rid ofits conviction that the opposi-
tion – and this means Law andJustice – should be destroyed.If Civic Platform rejects thisconviction and recognizes theopposition as a respected ele-ment of a democratic system,then we could talk with itabout some of the problemswe consider to be importantfor the country. In the presentsituation, when PO is wagingwar on us and wants to destroyPiS, cooperation is out ofquestion.
It seems that PiS is preparedto criticize itself in somerespects, but are you con-vinced that your party actual-ly wants to make fundamentalchanges and reform itself?
Some changes must be intro-duced in our party to allow usto work more effectively in thepresent environment, whereparties are professionalizing,the media is influential andthere is aggression by main-stream thinkers against PiS.But we need one importantthing to achieve victory: socialchange in Poland along withchanges in attitudes towardsthe role and obligations of thestate towards citizens. Whilethe present formula of Lawand Justice is earning us thesupport of 30 percent of theelectorate, we have to gainmore in order to win.
I am certain that the finan-cial and economic crisisapproaching our country andaffecting ordinary people willgalvanize certain socialchanges in Poland. That crisisis already bringing about socialchanges and ... anger in severalEuropean countries. The con-fusion of political elites has ledto the fall of some govern-ments in the EU – Poland isnot an island.
The Democratic Left Allianceand Palikot’s Movement havepresented certain proposalsfor changes related to moraland ethical matters, likefinancing in vitro fertilizationand legalizing same-sex civilunions. Many sociologists areeven claiming that there issome kind of revolution inthinking concerning theseissues. Maybe our society isnot as conservative as it oncewas …I believe that Poland is a coun-try where a traditional modelof thinking [normally] prevails.That is now being stronglynegated by certain political
Adam Hofman, spokesperson for the Law andJustice party and a member of its politicalcommittee, talks to WBJ about the situation onPoland’s political right, mistakes made in thelast election campaign and the party’s strategyfor achieving success
“We would not conduct negaotiations withSolidarity Poland just as Coca-Cola doesnot enter in to competition with small
unknown firms”
DECEMBER 12-18, 2011 IINNTTEERRVVIIEEWW www.wbj.pl 9
groups. Yet in my view thesemoral and ethical changes arebeing forced on our society bypolitical elites and are notchanges that come from thegrass-roots of society.
We see the need to contra-dict these forced changes andI am saying this not only as apolitician, but also as a youngman with conservative viewswho has a family with twochildren. And I do not wantmy children to move awayfrom the traditional model oflooking at the world; I hopethat they would not be forcedby their schools and themedia to reject traditionalvalues. I believe the conserva-tive model of life and thinkingis the one which guaranteesstrong social links and thosesocial links guarantee thatPoland will be an independ-ent country that is difficult todefeat economically and in allother fields.
So I think that even whensome of these ethical changesare forced through parliament– because Prime MinisterDonald Tusk‘s [PO] will beobliged to do so to win thesupport of the DemocraticLeft Alliance and Palikot’sMovement in certain matters –… it will end in failure. Likefor [former Prime Minister]Zapatero in Spain it will end inPrime Minister Tusk’s final
defeat because our society isquite conservative. While thebig cities are presently drivingtowards liberal and leftist val-ues, the electoral vehicle willlater turn to our, conservativeside.
So if PiS wins the next elec-tion, would such changes berejected?Yes, and the status pro ante willbe restored.
It is assumed by many thatPiS’s electorate comprisespeople who are disappointedwith life, feel neglected bysociety and the state, and whohave received little educationand have no drive to achievethings or change things forthe better. Why does yourparty not appeal to peoplewho have achieved success? This characterization of ourelectorate is a myth, created byCivic Platform and it is one ofthe elements used to discreditand destroy our party. I knowvery well the structure of ourelectorate and in it there arepeople who are disappointedby changes in Poland and feelpushed to the economic mar-gin, but in [the main] there arepeople from the middle class,or who aspire to it, some well-off businesspeople, lawyers,doctors, other professionalsand educated young people
who share conservative viewsand a determination to changeour country for the better. Soit is not so, as PO politiciansclaim and the mainstreammedia likes to portray, thatpeople voting for PO are niceand successful and those whovote for PiS are nasty andbackward.
Let’s move on to PiS’s eco-nomic and business policies,one of which is a proposal forthe re-polonization of banks.What is the merit of this pro-posal?We want to provide the statewith certain mechanisms tofight the financial crisis andone such mechanism could bethe re-polonization of ourbanks. Due to an incorrectpolicy … our banks were soldto foreign lenders and throughthis Poland has lost much of itsinfluence over its banking sec-tor. Now, 67 percent of Polishbanking assets are in foreignhands. PiS’s proposal for theirre-polonization does not meanthat we want to take back thebanks from private hands, butthat in a time of financial crisiswe want to restore some Polishcontrol over the activity ofbanks operating in our coun-try. … We think that it wouldbe helpful for strengtheningour economic competitivenessand financial standing. ●
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DECEMBER 12-18, 201110 www.wbj.pl OOPPIINNIIOONN && AANNAALLYYSSIISS
Alina Inayeh
Given the traditional electoralmodel in Russia – where votingis generally not as important as
how the votes are counted – theDecember 4 elections were nothingout of the ordinary. The manipula-tion of elections is an intrinsic part ofRussian history, and it has usuallybothered only a few zealous and dili-gent activists. It is no wonder then,that the ongoing protests have comeas a surprise to the Kremlin. What isreally extraordinary is how obliviousRussia’s leaders have been to histo-ry’s recent lessons. The Arab Springand the Color Revolutions offer con-siderable material on how nondemo-cratic governments should approachelections, yet Prime Minister Vladi-mir Putin and President DmitryMedvedev seem not to have studiedfor this test.
Public protestsEarlier this year, people took to thestreets in several Russian cities, as inmany other cities around the world,in response to economic hardships.But the grievances of Russian pro-testers did not resemble those heardin London or Berlin. Instead theymirrored those in Cairo and Tunis,with people demanding civil rightsand freedoms in addition to jobs andpensions. Their discontent was felt inregional elections, where Mr Putin’sUnited Russia performed poorly.
The Kremlin failed to respond to
this show of publicdissatisfaction andMr Putin’s plans toreturn to the presi-dency only furtheralienated the public.Subsequent protestshave become morevocal and wide-spread. The culturalelite, usually an allyof those in power,put up a silent andlargely unnoticedprotest by refusing topromote United Rus-sia, as has previouslybeen customary.Images of popularsingers, ballerinas, and gymnasts –whose endorsements carry weight inthis culturally sensitive country –were largely absent from United Rus-sia’s publicity posters.
Ever since the Rose and theOrange Revolutions in Georgia andUkraine, the Kremlin’s anxieties haveincreased. Wary of people taking tothe streets in protest against electoralfraud, it overreacted to allegationsand evidence of electoral fraud dur-ing the latest elections and attemptedto silence observers.
Following previous elections dur-ing Mr Putin’s tenure, such allega-tions were met with indifference andcold superiority. Disputes andappeals were dealt with quietly and
implacably by electoral commissionsand the judiciary, while domestic andinternational election monitors weresimply dismissed. Drawing the wronglessons from the Color Revolutions,the Kremlin decided not to decreasefraud this time around, but to hide it,with the predictable outcome that itrevealed itself even more.
GOLOS, the nationwide electionmonitoring group that was so obses-sively harassed during these elections,denounced fraud on election day, andthis activism was followed by thou-sands of protesters taking to thestreets. As in several Arab countriesearlier this year, protesters have usedsocial media tools to communicate andorganize. In response, the Kremlin has
amassed militiaforces to crack downon protesters in themain squares ofMoscow and St.Petersburg, andmany have alreadybeen imprisoned.
A sympatheticapproachThe lesson thatautocratic govern-ments such as Rus-sia’s are tempted totake away from thisyear’s Arab revoltsis to crush protestsmercilessly, before
they get out of control. But as Egypt,Libya, and Tunisia demonstrate(along with East Germany, Romania,and Yugoslavia before them), successis not always guaranteed – and thestrategy almost inevitably eventuallybackfires.
The correct lesson of the Arabrevolts, and a much wiser choice forany government, is to be sympatheticto the underlying reasons that moti-vate protesters to take to the streetsand address them. This means nottightening the regime’s grip onpower, but relaxing it.
This is not to say that spring hascome to Moscow, or that the protestsof the last two days will necessarilyturn into a revolution. Mr Putin
thrives on crisis and he may well findways to solve this one as well. But if heis to take away one lesson from theArab revolutions earlier this year, it isthat the last few days do not constitutea temporary eruption of anger. He didnot just experience and steer his waypast another ordinary election. Theprotests made an irreversible fissure inthe political establishment, and helpedensure that fraud and repression areno longer publicly acceptable.
Mr Putin would do well to dustoff current President DmitryMedvedev’s speeches and bringabout some of the measures thatwere so eloquently addressed there,such as more media freedoms, freeand fair elections, greater independ-ence for the judiciary, and the mod-ernization of the economy. As thingsstand now, Putin has only two choic-es: repress opponents and dissi-dents, manipulate elections, and fearrevolt in the days after; or start liber-alizing Russia’s society and modern-izing its economy, while standing in(and probably winning) Russia’s firstfree and fair elections. ●
Alina Inayeh is director of theBlack Sea Trust for Regional Coopera-
tion and the Bucharest office of theGerman Marshall Fund
of the United States. Copyright: German Marshall Fund
of the United Statesgmfus.org
Seven years ago, Ukraine’sOrange Revolution inspiredhope that the country was mov-
ing towards genuine democracy. Sincethen, democratic freedoms have beencurtailed, the former prime minister
and co-leader of the revolution, YuliaTymoshenko, has been imprisoned,and President Viktor Yanukovych’sregime has become internationallyisolated. Ukraine is unraveling.
Today, a small group of oligarchsclustered around Mr Yanukovychhave captured power. They manipu-late elections, control the media, andare shaping the country’s institutionsto further their own business interests.Condemnation by the West has hadno impact. So long as they control thecountry’s industries and naturalresources, they will maintain their grip
on power – the approach perfected bytheir role model, former Italian PrimeMinister Silvio Berlusconi.
Dangerous precedentWhatever one thinks of MsTymoshenko, she was not imprisonedfor any ostensible crimes she commit-ted while in power. She is in prisonbecause she lost that power. This setsa dangerous precedent, for it creates apowerful incentive – winner takes all,loser goes to prison – for ruthlessness.
It is difficult to predict how MsTymoshenko’s case will play out –whether Mr Yanukovych will succumbto pressure from the European Unionand the United States to release her,or to the forces that want to excludeher from politics forever. Until recent-ly, Ukrainian leaders were accus-tomed to more efficient means thanprison for dealing with inconvenientopponents. In 2000, for example, thejournalist Georgiy Gongadze was kid-napped and beheaded after publishingonline reports about high-level gov-ernment corruption. During the ensu-ing investigation, former Interior Min-ister Yuriy Kravchenko died of twogunshots to the head hours before hewas to testify.
Perhaps Ms Tymoshenko herselfdid not understand how sharply hercountry had turned away from demo-cratic norms when she mocked Mr
Yanukovych and her opponents dur-ing her trial. Indeed, her first briefimprisonment in 2001 furnished herwith political capital and pushed herinto the democratic opposition’s frontranks.
Perhaps Mr Yanukovych himselfdid not foresee the consequences ofMs Tymoshenko’s arrest, trial, andimprisonment. Some Ukrainian con-spiracy theorists – of whom there is noshortage – maintain that MrYanukovych was tricked by skillfullyprepared misinformation provided bythe officials around him.
Enduring damageIf the EU refuses to sign an Associa-tion Agreement with Ukraine at theupcoming Ukraine-EU summit inKiev on December 19 because of MsTymoshenko’s imprisonment, thedamage to the country will be vast andenduring. But, with every month thatMs Tymoshenko spends in jail – morethan three so far – her martyrdomgrows, making it harder for MrYanukovych to free her. MrYanukovych has become hostage to asituation that he created – and thushas done nothing to extricate himselffrom it.
Russia’s then-president, VladimirPutin, put himself in an analogousbind in 2003 with the arrest of the oiloligarch Mikhail Khodorkovsky. At
the time, Mr Khodorkovsky was thewealthiest man in Russia and an opencritic of the Russian government, sohis arrest triggered a storm of interna-tional protest. Like Mr Yanukovych,Mr Putin is under pressure from theWest to release his opponent, but thepolitical risk is too great.
Mr Yanukovych’s goals areunclear. He does not respond to Euro-pean pressure, even though Ukrainewould gain political leverage fromcloser EU ties. Perhaps he simply dis-likes the EU because it applauded hisdefeat in the Orange Revolution, andbecause he makes embarrassing gaffeswhenever he goes there.
Then again, perhaps he haslearned from Belarusian PresidentAlexander Lukashenko that the EUhas little influence over non-EU coun-tries’ internal politics. At the first pos-itive sign from Belarus, the EU for-gives and forgets. Indeed, even with-out a positive signal from Ukraine, theEuropean Parliament has recom-mended that negotiations on theAssociation Agreement begin.
Toxic mixGenerally, Mr Yanukovych’s foreignpolicy appears reactive. In 2010, forexample, he bowed to Mr Putin’s pres-sure to extend the Russian lease onnaval facilities in Crimea to 2042,whereas Ms Tymoshenko and others
pointed to the treaty’s unconstitution-ality.
Mr Yanukovych also underminedUkraine’s geopolitical strength vis-a-vis Russia by rejecting NATO’s invita-tion to join in 2010. Even if the Krem-lin is not particularly happy with theplanned EU-Ukraine AssociationAgreement, it has little reason toworry as long as Mr Yanukovychremains a weak president in a dividedcountry.
Ukraine is thus becoming a toxicmix of authoritarianism and corruptcapitalism. In Belarus, an impover-ished President Lukashenko increas-ingly resorts to brute force to maintainhis rule – breaking up peacefuldemonstrations, imprisoning politicalopponents, and terrorizing the intelli-gentsia. Compared to him, Mr Berlus-coni is a shining example of good gov-ernment. But, as Mr Yanukovych andhis backers are well aware, Mr Berlus-coni is gone, and PresidentLukashenko is not.
Tatiana Zhurzhenko is a politicalscientist at the University of Vienna.
Her most recent book is Borderlands into Bordered Lands:
The Geopolitics of Identity in Post-Soviet Ukraine.
DECEMBER 12-18, 2011 OOPPIINNIIOONN && AANNAALLYYSSIISS www.wbj.pl 11
Kevin O’Rourke
Asmany feared and mostexpected, the just-conclud-ed European summit left
much to be desired. Once again,Europe’s national leaders showedthemselves to be in denial about whatunderlies the euro zone’s economic,banking, and sovereign-debt crises.
One lesson that the world haslearned since the financial crisis of2008 is that a contractionary fiscalpolicy means what it says: contrac-tion. Since 2010, a Europe-wideexperiment has conclusively falsifiedthe idea that fiscal contractions areexpansionary. August 2011 saw thelargest monthly decrease in euro-zone industrial production sinceSeptember 2009, German exports fellsharply in October, and declines ineuro-zone GDP are being predicted.
A second, related lesson is that it isdifficult to cut nominal wages, and thatthey are certainly not flexible enoughto eliminate unemployment. That istrue even in a country as flexible, small,and open as Ireland, where unemploy-ment increased last month to 14.5 per-cent, emigration notwithstanding, andwhere tax revenues in November ran
1.6 percent below target as a result. Ifthe 19th “internal devaluation” strate-gy to promote growth by cuttingdomestic wages and prices is provingso difficult in Ireland, how does theEU expect it to work across the entireeuro-zone periphery?
Cost-benefit analysisThe euro-zone members’ loss of abilityto devalue their exchange rates is amajor cost. Governments’ efforts topromote wage cuts, or to engineerthem by driving their countries intorecession, cannot substitute forexchange-rate devaluation. Placing theentire burden of adjustment on deficitcountries is a recipe for disaster.
In such a world, fiscal union is anessential counterpart to monetaryunion. If the gumbo industry goesinto decline, driving the US state ofLouisiana into a recession, residentswill pay fewer federal taxes andreceive more fiscal transfers. Thesefinancial flows are a natural counter-cyclical mechanism that helps localand regional economies to weatherbad times. In a hypothetical Euro-pean fiscal union, there would cer-
tainly be transfers from Germany tothe periphery in 2011, but a properlydesigned setup would have ensuredflows to Germany in the 1990s, as itstruggled to cope with the costs ofreunification with East Germany.
With this in mind, the most obvi-ous point about the recent summit isthat the ‘fiscal stability union’ that itproposed is nothing of the sort.Rather than creating an inter-region-al insurance mechanism involvingcounter-cyclical transfers, the ver-sion on offer would constitutionalizepro-cyclical adjustment in recession-hit countries, with no countervailingmeasures to boost demand else-where in the euro zone.
Many will argue that sucharrangements are needed to save theeuro zone, but what is needed to savethe euro zone in the immediatefuture is a European Central Bankthat acts like a proper monetaryauthority. True, Germany is insistingon a ‘fiscal stability union’ as a condi-tion of allowing the ECB to do eventhe minimum needed to keep theeuro afloat; but this is a politicalargument, not an economic one.
Survival requirementsWhat is needed to save the euro zonein the medium term is a central bankmandated to target more than justinflation – for example, unemploy-ment, financial stability, and the sur-vival of the single currency. A com-mon framework for regulating thefinancial system is also required. Thiswill require a minimal fiscal union; afull-scale fiscal union would be betterstill. Yet none of this was on the sum-mit’s agenda.
An immediate breakup of theeuro zone would be a catastrophe,which is why the European Councilagreed to a “fiscal stability union” inexchange for some movement by theECB. This may indeed prevent col-lapse in the short run – though that isfar from certain.
In the slightly longer run, such adeal, assuming that it goes ahead,will mean continued austerity on theeuro-zone periphery, without theoffsetting impact of devaluation orstimulus at the core. Unemploy-ment will continue to rise, placingpressure on households, govern-ments, and banks. We will hear
much more about the relative meritsof technocracy and democracy.Anti-European sentiment will con-tinue to grow, and populist partieswill prosper. Violence is not out ofthe question.
This summit should have proposedinstitutional changes to avert such ascenario. But if such changes are polit-ically impossible, and the euro isdoomed, then a speedy death ispreferable to a prolonged and painfuldemise. A euro-zone collapse in theimmediate future would be widelyperceived as a catastrophe, whichshould at least serve as a source ofhope for the future. But if it collapsesafter several years of perverse macro-economic policies required by coun-tries’ treaty obligations, the end, whenit comes, will be regarded not as acalamity, but as a liberation.
And that really would be worse. ●
Kevin O’Rourke is Chichele Pro-fessor of Economic History at the
University of Oxford, and a fellow ofAll Souls College. Copyright: Project
Syndicate, 2011.www.project-syndicate.org
In a meeting with militaryattaches in Moscow lastWednesday, Russian Gener-
al Nikolai Makarov, chief of the Gen-eral Staff of Russian armed forces,said that the Russian military hasbegun to implement several militarymeasures in response to US ballisticmissile defense (BMD) plans inEurope. These measures, whichRussian President Dmitri Medvedevoutlined in a televised address twoweeks earlier, include activating anearly warning radar in Kaliningradand strengthening Russia’s defensivecapabilities for strategic nuclearforces installations.
In the same speech two weeksago, Mr Medvedev stressed Russia’sdesire to cooperate with Washingtonin a joint BMD framework, and saidmeasures such as deploying advancedoffensive systems – including Iskan-der mobile short-range ballistic mis-siles – would only be enacted if “theaforementioned measures prove tobe insufficient.”
But Russia has wasted no time fol-lowing through on many of thoseharsher measures. On the same dayas Makarov’s statements, the pressservice of Russia’s Western MilitaryDistrict said that an S-400 surface-to-air missile regiment will be placed oncombat duty in the exclave of Kalin-
ingrad, which borders Poland, beforethe end of the year. Meanwhile, thechief of the Belarusian ArmedForces’ General Staff said his countryexpects to receive Tor-M2 surface-to-air missile systems from Russia thismonth, adding that an Iskanderdeployment to the country wouldsoon follow.
Russian opposition to US BMDplans is nothing new. For Russia, thefundamental issue at hand is not theBMD system itself (which is nominal-ly geared toward countering the bal-listic missile capabilities of states likeIran), but the US military presencethe system would bring with it. USBMD plans are focused on CentralEurope, which abuts Russia’s formerSoviet periphery. Moscow can’t helpbut feel threatened by the US mili-tary commitment to the region thatthe system represents.
Russia escalates its oppositionWhile Russia has publicly expressedits opposition to US BMD plans onmany occasions over the past fewyears, last Wednesday marked a clearescalation by Moscow on the issue,particularly since Russia softened itsstance on US missile defense afterthe so-called “reset” in Russo-Ameri-can relations in 2009. The timing ofthis escalation is important. On
Thursday, a foreign minister-levelRussia-NATO Council meeting willtake place in Brussels, and Moscowhas grown increasingly frustratedwith Washington’s unwillingness toeven discuss the BMD issue withRussia in the weeks leading up to themeeting.
According to STRATFOR sour-ces, the United States has also beenpreparing to take BMD off the agendafor Thursday’s meeting, and possiblyeven exclude it from the more signifi-cant NATO-Russia summit slated forMarch in Chicago. Russia continues topress the issue and demand talks, withRussian Foreign Minister SergeiLavrov stating that he plans to clarifyMr Medvedev’s position on the issueduring Thursday’s meeting.
More important than the timingof the upcoming meeting is the devel-opment of a more significant shift,between Washington and Moscow,over the position of US BMD. Wash-ington has no shortage of issues todeal with. It must wrap up the war inAfghanistan; address Iran’s increasedinfluence in strategic Middle Easterncountries like Iraq and Syria; shift itsfocus to the Western Pacific region;and prepare for a possible economiccollapse in Europe that would haveglobal implications. These concernshave served to distract Washington
and limit its room for maneuver out-side of the theaters it is already com-mitted to. The last thing the UnitedStates needs is another crisis on itshands.
Conversely, Russia has seen itsposition steadily improve. Unlike theUnited States, the Russian military isnot drawn into protracted conflictsfar from home. Russia is flush withcash from energy revenues and hasbeen looking to take advantage of thecrisis raging in Europe. Most impor-tantly, Russia has increased its lever-age vis-a-vis Washington thanks tothe United States’ increased relianceon the Russian-dominated NorthernDistribution Network (NDN), at theexpense of Pakistan-based supplylines into Afghanistan. Moscow hasalready begun threatening to closethe NDN if its interests over BMDare not taken into account.
Central Europeans are caught inthe middle. In the face of a resurgentRussia, a concrete security commit-ment from Washington is exactlywhat these countries need, and theBMD system has come to serve as asymbol of that future commitment.Russia knows this and has worked tochip away at this commitment byattempting to wedge the UnitedStates between two bad scenarios:either abandon the BMD system and
with it the Central Europeans, or riska potential disruption to Washing-ton’s pressing commitment inAfghanistan. Essentially, Russia isattempting to force the United Statesto make a decision – over whether itwants the NDN now or BMD later –hoping that Washington leaves theCentral Europeans out to dry.
Yet Russia knows that whateverlevers it may hold against the UnitedStates, it is not immune to global eco-nomic problems and to blowbackfrom Afghanistan. Moscow knows itmust be careful not to press its cur-rent advantage too far. The UnitedStates, despite its current relativelypoor position, is still the dominantpower on which the global systempivots. It can bring a range of forcesto bear against Moscow if it deemsthem necessary. Ultimately, in anysparring match between the UnitedStates and Russia, neither player candeliver a knockout punch. And how-ever long the match between the twopowers drags out, it is the CentralEuropeans that will continue to becaught in the middle. ●
This edited version of “CentralEurope Watches as Washington,
Moscow Clash Over BMD” is repub-lished with permission of STRATFOR
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.
DECEMBER 12-18, 2011CCOOVVEERR SSTTOORRYY12
Poland’s credit
ratings safe According to ratings
agency Fitch, the
prospects for Poland’s
credit ratings are stable
thanks largely to the
country’s relatively strong
economic prospects. “We
don’t see grounds for any
ratings action now. The
risks to our rating [of
Poland] are in balance.
There are sufficient
domestic strengths to
balance out the negatives
coming from the external
environment, so the net
result from that is the
stable outlook we attach
to our rating,” said Matteo
Napolitano, director,
Europe, the Middle East
and Africa, sovereign
ratings at Fitch Ratings.
Europe’s banks
need €115
millionThe European Banking
Authority says stress tests
it carried out in November
suggest that Europe’s
banks will need to raise
an extra €7 billion in
capital to enable them to
withstand shocks
emanating from the euro-
zone debt crisis, and
restore investor
confidence. In October,
when the last stress tests
were carried out, the EBA
analyzed the condition of
71 banks from 21
European countries,
including Poland’s largest
bank, PKO BP. According
to a press release from
PKO BP, the bank “passed
another test by a wide
margin.”
Polish business
schools in FT
rankingThe Warsaw School of
Economics (SGH) and the
Leon Kozminski Academy
(ALK) were named in the
Financial Times’ list of the
75 best business schools
in Europe this year. Ewa
Barlik, spokesperson for
ALK, told Rzeczpospolita
that the “FT’s ranking
reflects not only the
position the school has
against other educational
institutions in Europe, but
also the economic
situation of a given
country.” ●
www.wbj.pl
Polish soccer
PPoolliisshh ssoocccceerr’’ss ggoovveerrnniinngg bbooddyymmuuddddiieedd bbyy ccoonnttrroovveerrssyyAllegations ofcorruption havehounded the PolishFootball Association,raising questionsabout its future
Just days before the groupstage draw for next summer’sEuro 2012 championships,Poland’s image as co-host ofEurope’s premier internation-al soccer tournament receiveda damaging blow. Secretlyfilmed footage showing thePolish Football Association’s(PZPN) secretary-generalZdzislaw Kr´cina and its pres-ident Grzegorz Lato allegedlydiscussing corrupt practices,was turned in to the country’sMinistry of Sport.
The ensuing controversyled to the dismissal by thePZPN board of Mr Kr´cina asthe body’s secretary-general.In addition, Minister for SportJoanna Mucha passed on the
recordings to the Central Anti-corruption Bureau (CBA),which will investigate the alle-gations of corruption. Follow-ing Mr Kr´cina’s sacking, MrLato, a former star of the Pol-ish national team, was sum-moned to a meeting at theSejm, Poland’s lower house ofparliament, to discuss theissue.
The scandal has thrown thefuture of the PZPN intodoubt, with some politicianssuggesting that the organiza-tion needs a total shake-up.“This is the beginning of adebate on changes within thePolish Football Association,”said Ireneusz RaÊ of the CivicPlatform (PO) party at thebeginning of a recent specialhearing into the matter by theSejm’s Committee on Sport,Culture and Tourism.
New structure neededPressure is mounting frominside the ranks of PZPN for a
change in the structure andleadership of the organization.“More than half the membersof the management boardwould like to see changes inthe structure of the PZPN,”Jacek Masiota, a member ofPZPN’s management board,told WBJ.
But Mr Masiota is con-vinced that Mr Lato will notleave his post until after Euro2012. “I’m quite sure that wehave no possibility now to endMr Lato’s presidency. Thosechanges will occur after Euro2012 when we will elect a newpresident of the PZPN inOctober,” he added.
Mr Masiota believes theassociation needs “structuralchanges” and argues that thePZPN president currentlyenjoys too much power.
“The president has thepower to make some decisionswhen the management boardis not present,” he said.
And Mr Lato has used this
power in the past. In 2009, hesigned a 10-year deal withSportfive, a German sportsmarketing and distributioncompany, without consultingthe board.
Time for change?Members of PZPN stood upand took notice of the furorsurrounding the organization’sown image by washing itshands of Zdzis∏aw Kr´cina, adecision that was publiclyannounced by Mr Lato out-side the association’s head-quarters. And in a statementpublished on its website, theassociation subsequentlyannounced that it was “com-mitted to taking actions thatwill improve the image of thePZPN.”
The association has alsodecided to enact new meas-ures aimed at preventing asimilar type of situation fromoccurring in the future. “ThePZPN board will, within the
next few weeks, develop a newdisciplinary code for theorganization,” reads the state-ment.
But changing the structureof the PZPN could prove to bea difficult task. “A lot of peopleworking for the PZPN havebeen there for 15 or 20 years.It’s a disadvantage becausethere are no vacancies for newpeople. If they look to hirenew people, changes in theorganization could be possiblebut at the moment it’s hard tosay [if they would be imple-mented],” said Wojciech Sza-niawski, editor-in-chief of thePolish edition of soccer maga-zine FourFourTwo.
A common complaint isthat PZPN is stuck in the past.“PZPN is one of the last relicsof the communist days inPoland. A total modernizationof the Polish Football Associa-tion is needed,” said Piotr˚elazny, a soccer journalist forleading Polish sports publica-
Grzegorz Lato – the player
Grzegorz Lato – the PZPN president
Grzegorz Lato is widelyconsidered to be one of
Poland’s greatest-ever soccerplayers, due to his perform-ances during the so-calledgolden era of Polish soccer inthe 1970s and early 1980s.
During an illustrious play-ing career which saw himscore 45 goals in 100 appear-ances for his country, Latowon an Olympic gold in 1972and a silver medal at the 1976games. He representedPoland in three World Cups(1974, 1978, 1982), helpinghis country achieve thirdplace finishes in both 1974and 1982. He also finishedthe 1974 finals as winner ofthe Golden Boot, after scor-ing seven goals.
Lato spent the majorityof his career playing for Pol-ish side Stal Mielec, ratherthan for one of Europe’selite clubs, as at the time thePZPN prohibited players
under the age of 30 frombeing transferred outside ofPoland. He did eventuallymove abroad but soonended his career after shortspells playing in Belgium,Mexico and Canada, beforegoing on to manage a num-ber of Polish club sides,including Stal Mielec andWidzew ¸ódê. ●
Grzegorz Lato looked atired man as he hauled
himself in front of the SejmCommittee of Sports, Cultureand Tourism at the end ofNovember. It was hard tobelieve that this was the sameman who had once skimmedpast the world’s best defensesto score countless goals.
“We are truly open, we
don’t have anything to hide,”Mr Lato told the committeeduring an hour-long meeting,prior to informing MPs thathe and his delegation were ina rush because they neededto catch a flight to Kiev forthe Euro 2012 draw. Sufficeit to say, it was not his finestpublic relations performance.
A number of public gaffeshave helped to mar Mr Lato’sterm as president of thePZPN. He once stood behindPolish reserve goalkeeper¸ukasz Fabianski in the post-match media zone and while atelevision crew was interview-ing the player, Mr Lato made acurt remark about his ability asa player.
“Lato has not been com-petent. He has no public rela-tions training and is just anordinary guy who knows verylittle about politics,” saidPiotr ˚elazny, of PrzeglàdSportowy.
On another occasion, ajournalist quizzed Mr Latoon how fast he could run the100 meters, to which Latoreplied “three seconds” andmade a gesture as if to downa shot of vodka.
And according to JacekMasiota, a member of PZPN’sboard, Mr Lato’s public errorshave been mirrored by poordecision-making inside theboardroom. “The main prob-lem is Mr Lato. I’ve been onthe management board fortwo years and all of the eco-nomic decisions were bad.There is no transparency,” hetold WBJ.
But perhaps Piotr Florek,publisher of Polish weekly soc-cer magazine Magazyn pi∏kars-ki summed up public feelingabout Mr Lato’s stewardshipof PZPN best when he said,“He was a great football play-er, but he’s not fit for this posi-tion.” ●
Liam Nolan
EA
ST
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AP
/FO
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DECEMBER 12-18, 2011 CCOOVVEERR SSTTOORRYY www.wbj.pl 13
A retrospective on 2011 couldstart with market uncertaintyover the future of the euroand end with Poland’s eupho-ria about its fortunate groupdraw for the Euro 2012 soccerchampionship. This retro-spective, however, would notbe complete without a discus-sion regarding bribery.Recently, the Polish FootballAssociation (PZPN) founditself involved in the so-called“tape scandal,” relating tovideo footage allegedly show-ing the president and general-secretary involved in corruption.
BackgroundLegislative efforts to curbbribery started in the 1970swith the US introducing theForeign Corrupt Practices Act(FCPA). This granddaddy ofbribery legislation still servesas a benchmark for anti-bribery laws today. In July, theUK Bribery Act 2010, whichintroduced one of the strictestanti-bribery regimes in theworld, came into effect. Dis-cussions about the UKBribery Act 2010 often startby indicating how the UK’slaw has a broader reach thanthe FCPA.
The FCPA focuses onbribery of public officials byUS companies or their sub-sidiaries around the world. Itrelates to both the giving andaccepting of bribes to influ-ence decisions or to obtain ormaintain business activities.The term “public officials”refers broadly to all those whocould be in a position to rep-resent the government,including current officials,those acting on behalf of agovernment (for example,advisers on a public tender),candidates for office and offi-cers of political parties.
A key exception under theFCPA allows for certain“facilitation payments.” The-se are viewed as minor “greas-ing-the-wheel” payments toaccelerate business matters.An example cited is a smallpayment to a custom officialto get cargo released.
The UK Bribery Act 2010takes a more restrictiveapproach. It does not allowfor facilitation payments. Italso extends its reach tobribery in the private sector.
Various typesThe classic forms of briberyare the giving (active) andaccepting (passive) of bribes.
While the “tape scandal”involves allegations of theimproper passing of monetarypayments, bribery can involveanything of value.
The UK Bribery Act 2010adds a new category by creat-ing liability for companies ifthey “fail to prevent bribery.”In other words, companiesneed to be proactive on fight-ing corruption. However, theBribery Act recognizes adefense if a company has“adequate procedures” inplace to minimize the risk ofbribery.
Polish rulesPoland does not have its ownseparate anti-bribery law.Instead, various provisions ofthe Criminal Code addressseveral forms of public andprivate corruption.
With respect to giving andreceiving bribes, Polish lawgenerally follows the classicdefinition. The elements of abribe are the giving or receiv-ing of a financial or personalbenefit involving a public offi-cial with the intent to obtainan advantage. For a claim ofcorruption, it is sufficient thata benefit was offered, but theadvantage does not have to bereceived.
With respect to the publicsector, Polish law also crimi-nalizes influence-peddlingand abuse of official position.The latter refers to a situationof taking an extraordinaryaction or failing to act in thepublic or private interest inorder to receive a financialbenefit.
With respect to the privatesector, the Criminal Codeprohibits abuse of trust, whichalso involves misuse of a posi-tion held, in two different sce-narios. The first relates tousing authority granted forpersonal gain, while causingsignificant damage to thecompany. The key to thiscrime is the term “signifi-cant,” which is defined as 200times the national minimumwage. As of January 1, 2012,this threshold will amount toz∏.300,000.
The second looks to rela-tionships with a company’scontractors. As an example,managers may not accept ordemand personal or financialbenefits from customers, sup-pliers or others, in exchangefor preferential treatment.
In all cases, Polish law pro-vides for a potentially lengthyjail term for corruption. ●
tion Przeglàd Sportowy.
UEFA’s influenceBut just how much damagewill the allegations do toPoland’s reputation and to theEuro 2012 soccer champi-onships as a whole?
“The allegations will haveno impact on the Euro [cham-pionships] and the staging ofthe Euro in Poland,” Mr Gian-ni Infantino, the general secre-tary of UEFA, European soc-cer’s governing body, toldreporters in Kiev when askedabout the recent scandal.
Piotr Florek, publisher ofPolish weekly soccer publica-tion Magazyn Pi∏karski,believes that UEFA does notwant the recordings to damagePoland’s image as co-host ofEuro 2012. “FIFA and UEFAwill block the Polish govern-ment’s efforts to destroy thisbad side of Polish football,” hesaid.
And although change atthe heart of PZPN may be onits way, it will not occur imme-diately, according toFourFourTwo editor WojciechSzaniawski. “I believe that the
government will try to reor-ganize PZPN after Euro 2012.The public’s impression is thatPZPN is corrupt but proof isnow needed,” he said.
“I think that the future ofthe PZPN as an association issecure. It is cooperating veryclosely with UEFA and PZPNis UEFA’s only partner inPoland,” Mr Szaniawskiadded.
A stay of execution?The Euro 2012 draw seesPoland pitted against Russia,Greece and the Czech
Republic, in arguably thetournament’s easiest group.This likely came as a relief toMr Lato following an earlierstatement of his in which hesaid he would only resign aspresident of PZPN if the Pol-ish team failed to qualify forthe quarter-finals of the tour-nament.
Now that Poland hasavoided playing any of theworld’s major soccer powersin its opening three games, itseems possible that Mr Latocould hang on to power, atleast until October. ●
TThhee eeaaggllee hhaass llaannddeedd ...... aaggaaiinnPoland’s soccer players andfans alike must be wonderingwhat the PZPN is playing at.The video-tape scandal brokejust weeks after the crownedwhite eagle, Poland’s nationalemblem, was removed fromthe national team’s shirts bythe PZPN, before eventuallybeing reinstated followingwidespread public outrage.
The removal of the eagleand its replacement with thePZPN’s own emblem caused a
wave of protests from Polishsoccer fans, thousands ofwhom boycotted a recentfriendly match against Hun-gary in Poznaƒ by way ofprotest. Even Polish PresidentBronis∏aw Komorowski wasbemused as to why Poland’s“well-known, well-liked andloved symbol” had vanishedfrom the national team’sshirts.
The eagle affair was yetanother public relations deba-
cle for the PZPN, which citedmarketing rights as the reasonbehind the emblem change.But both PZPN and kit mak-ers Nike underestimated thescale of discontent that wouldfollow. “Someone was think-ing in a strictly businesssense,” Piotr ˚elazny, soccerjournalist at Przeglàd Sportowytold WBJ.
Following two weeks ofintense criticism from fans,politicians and the media,
PZPN made a U-turn. “Wemade a mistake. The nationalemblem should not disappearfrom the Polish nationalteam’s shirts,” a humbled MrLato, the body’s president,told reporters.
And to ensure such anincident never occurs again,President Komorowski lastweek signed a bill whichrequires all Polish nationalsports teams to display theeagle on their kits ●
TThhee lluucckk ooff tthhee PPoolliisshhThe only recent saving gracefor the PZPN and its president,Grzegorz Lato, was the out-come of the recent Euro 2012draw in Kiev. Poland, classed asone of the tournament’s rankoutsiders, was handed possiblythe easiest of the four first-round groups, having beendrawn against the CzechRepublic, Greece and Russia.
“I think it is the best possi-ble group that we could havegotten. In my opinion, we’vegot a good chance to advanceto the next stage of the tourna-ment. Russia is the strongestteam, but I believe we can fin-ish second,” said Wojciech Sza-niawski, editor-in-chief ofPoland’s FourFourTwo maga-
zine.Poland may also field one of
the youngest teams of the tour-nament. Only two of managerFranciszek Smuda’s currentsquad members were bornbefore 1983 and some punditsbelieve the pressure of being ahost team might be too muchfor the youngsters.
Defensively, the team isstrong. Full-back DariuszDudka, the most capped playerin the squad, is a reliable veter-an, while Arsenal shot-stopperWojciech Szcz´sny is currentlyseen as one of Europe’s bestgoalkeeping prospects.
Captain Jakub B∏aszczy-kowski and star striker RobertLewandowski, both of whom
play their league soccer withGerman giants Borussia Dort-mund, are key talents in theside.
However, Mr Smuda hasfaced criticism for his counter-attacking style of play. “Smudahas a huge problem. Afterpreparing to play teams likeGermany and Italy for the pastcouple of years, we can onlycounter-attack,” said Piotr˚elazny, a journalist at PrzeglàdSportowy.
“Right now we only have sixmonths to learn how to play adifferent game, which is posses-sion football,” added Mr˚elazny.
Many Polish fans have alsocriticized Mr Smuda for opting
to use FIFA’s grandparentrule, which allows players torepresent the country of thegrandparents’ place of birth.Central defender DamienPerquis and midfielderLudovic Obranik are bothFrench-Polish players, whosegrandfathers are Polish. Nei-ther player speaks Polish,which could make communi-cation on the pitch tricky.
With less than six monthsleft to go until the team playsits first match at Euro 2012against Greece, the Polishsquad will no doubt be hopingthat it can concentrate onpreparations rather than wor-rying about the latest contro-versy involving the PZPN. ●
CO
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Poland’s national team has been drawn with the Czech Republic, Greece and Russia at Euro 2012
Angel investors, high-net-worthindividuals who invest directly inpromising start-ups in return for ashare of the company, are still rel-atively rare in Poland, but theirnumbers are growing. Accordingto several investors spoken to byWBJ, conditions for angel invest-ing are excellent, but in order toreach the next level angels inPoland must start investingtogether.
Jacek B∏oƒski, CEO ofLewiatan Business Angels (LBA),an organization which describesitself as the largest and mostactive business-angel network inPoland, says the number of appli-cations for investment funding hisorganization receives is soaring.
“Awareness of angel investingin Poland is growing rapidly. We areorganizing a lot of events and sem-inars among seed funds and incu-bators to show that angels nowplay a critical role in financing early-stage projects.” Another reason forthe surge in applications, accordingto Mr B∏oƒski, is that governmentand European investments in R&Dare starting to pay off.
“A lot of EU money waspumped into R&D centers. Peoplestarted working in them andlaunching their own ideas, and it’sreally helping us,” he said.
The next stepAccording to Mr B∏oƒski, potentialangel investors are also starting toget more curious as they are hear-ing about increasing numbers ofsuccess stories. But as angelinvesting becomes more wide-spread and more sophisticated,investors, experts say, shouldlearn to mitigate risk by expandingtheir portfolios. This, however, issomething few can do on theirown.
That is where syndication, orinvesting in groups that combinethe capital and business experi-ence of several investors, comesin to play. The practice is alreadycommon in the US, where syndi-cation deals account for the major-ity of angel investor deals, and isgrowing quickly in WesternEurope. But it is still a marginalinvestment option in Poland,where the majority of investors
currently seem to prefer investingalone or in small groups.
Syndication makes particularsense for angel investing becauseit is an alternative form of invest-ment rather than a full-time activi-ty. For example, the EuropeanBusiness Angel Network advisesinvestors to commit betweenthree and 10 percent of their netwealth, excluding their ownhomes. Those in the angel invest-ing community who are mostactive and knowledgeable investup to 40 percent, but that’s notthe norm, said Mr B∏oƒski.
Angel investing is also an espe-cially risky form of investment,where businesspeople expect
above-average returns – often 25percent or more – but also acceptabove-average risk. In the US,fewer than 10 percent of invest-ments bring a greater-than five-fold return on invested capital.
“Risk mitigation is a major con-cern for any investor, and in partic-ular for business angels becausethey invest in early-stage compa-nies where risk is larger,” saidAnna Hejka, an angel investor, aswell as founder and managingdirector of merchant banking firmHeyka Capital Markets Group.
Syndication allows groups ofinvestors to quickly build a portfo-lio of emerging companies, andcombine relatively small sums ofmoney to ensure a stronger nego-tiating position, and possibly gainstronger corporate rights withincompanies.
Combining capital also allowsangels to take on larger projects,which can go some way towardsbridging the equity gap between
individual business angels andventure capital funds. Mr B∏oƒskicited the example of Air VenturesPolska, in which venture capitalfund Helix Ventures invested z∏.3.5million in March, as a classicexample of angels investing in afirm’s first-stage development,before bringing it up to a level atwhich venture capital funds find itattractive.
With syndication, angelinvestors can stay much longerwith a company and becomeinvolved in the second, third, andfourth rounds of investment.
Syndication also enablesinvestors to venture into differentindustries than ones they arefamiliar with. According to MrB∏oƒski, while many Polishinvestors are well-versed in theITC sector, it is almost impossibleto find knowledgeable investors inPoland in biotech, medical tech oradvanced materials.
Anna Walkowska, founder and
managing director of Homplex, anonline service for people lookingto renovate their homes, says thatthe group of three angel investorswho agreed to fund part of herfirm provides a tailored mix ofknowledge in the marketing, furni-ture and construction sectors.
In more developed markets,syndicates operate according tovarious models and can bringtogether up to several dozeninvestors. In Poland, it is still tooearly to say if a particular organiza-tional model has taken hold, andthe line between group investingand syndicates of investors stillseems blurry.
Good conditionsInvestors seem to agree that thereis currently no lack of cash inPoland for new business projects.Whereas only a few years ago Pol-ish entrepreneurs suffered from aserious equity gap, today they haveseveral options for finding a partnerto help finance their projects.
“The Polish market is very inter-esting right now because there isplenty of money for start-up com-panies, even seed companies,”said Krzysztof Gawrysiak, aninvestor associated with three Pol-ish angels networks. According tohim, up to z∏.1.6 billion is currentlyavailable for start-ups or early-stagecompanies in Poland. Mr Gawrysi-ak said companies from places asfar away as California had contact-ed him through business angelsnetworks in search of funding.
Among potential sources offunding for start-ups are the over40 business incubators that existin Poland. These provide an arrayof business support resourcesand services to start-ups or early-stage companies. Each incuba-tor usually invests up to €20,000per project received, with eachincubator investing in betweenfive and 10 companies or busi-ness ideas.
Partnership between angelinvestors and incubators is par-ticularly promising, according toMr B∏oƒski, with LBA currentlyin the process of closing twodeals, one in the chemical sec-tor and the other in medicaldevices, that are co-investmentsbetween angels and incubators.
“Effective incubators do thepreparatory work with entrepre-neurs, and therefore when angelinvestors appear the companyhopefully has an improved busi-ness model, better understandingof the business process, stronger
BROUGHT TO YOU BY LEWIATAN BUSINESS ANGELS
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There is no lack of available funds or ideas forpotentially lucrative investments in promisingPolish start-ups, but experts say thoseinterested in riding the angel-investing waveshould learn to invest in tandem with others toreap the full benefits
DECEMBER 12-18, 2011 www.wbj.pl 15
organizational structure, and bet-ter knowledge of the capital mar-kets, all of which makes investingin such a company less risky forangel investors,” said Ms Hejka.
Other sources of funding forstart-ups include several fundscreated by the National CapitalFund (KFK), which are able toinvest up to €1.5 million both instart-ups and early stage compa-nies, said Mr Gawrysiak. Add tothis the 10 or so different angelinvesting networks and EU fundsmade available for young entre-preneurs through organizationslike the Polish Agency for Enter-prise Development, and “there isplenty of money for start-ups inPoland at the moment,” he added.
On top of this relative abun-dance of funding sources, would-be entrepreneurs now also haveaccess to partners during everystep of the business developmentprocess, said Mr B∏oƒski. “Whatwe have today in Poland is a dreammodel where you have a partner oneach stage of developing your proj-ect. In the initial stage you canenter incubators, and they havemoney and experts to polish yourprojects. Once the company isestablished you can find moneyfrom angel investors, and then youhave the option to turn to KFK orventure capital funds for largerfunding. Finally, when you are readyto exit, you can list on the WarsawStock Exchange’s NewConnectmarket.”
Angel networks and trustAn increasing number of syndi-cate deals are likely to take placein Poland, experts say. However, aboom in syndicate investing is notexpected just yet. One reasonwhy it is taking a time for syndica-tion or group investing to catch on
in Poland might have to do withthe fact that it is still an emergingform of investment.
Because syndication is a newphenomenon in Poland, the differ-ent angel networks probably stillfeel a need to prove themselvesand therefore have more of a com-petitive approach than a coopera-tive approach, explained Ms Hejka.
Mr Gawrysiak agreed that Pol-ish business-angel networks com-pete for projects and angels, butadded that there was cooperationto promote angel investing. “Chiefoperators of the different net-works know each other, so I thinkon a level they cooperate, but it’strue, they are fighting for the bestdeals,” he said.
“There are almost no examplesof angel groups calling one anoth-er to invest together, which is nor-mal in the US,” said Mr B∏oƒski.
He added that LBA is workingactively to change this. “We arethe biggest network, are quitewell established and are part ofwider European associations, so Ithink it’s our responsibility to takecare of the whole ecosystem ofangel investing in Poland.”
According to Mr B∏oƒski, amajor obstacle to increasedcooperation among Polish busi-ness angels is a deeply ingrainedlack of mutual trust. “I think it willtake a long time to change.Maybe it’s in the Polish mentality,maybe it’s related to our history,but many businesspeopleassume that people will cheatthem, and this mental block is abig challenge for us.”
But according to Ms Hejka,lack of trust is a general problemwhen it comes to investing, andPolish resistance might havemore to do with a lack of experi-ence. “In the US, syndication hasbeen going on for many years
and therefore you have teams ofpeople who already know eachother, already know who likes totake care of which part of theinvesting process, and in whichfield. In Poland syndication isnew and people don’t know eachother that well.”
Syndication in Poland oftenends up in a group of peoplewho are willing to invest togeth-er but who only commit them-selves to put the money orspend a very limited period oftime on the project. Therefore,the burden of the investmentprocess often falls on one per-son, something Ms Hejka saysshe has experienced personally.
Macro-level impactDistrust is not the only chal-
lenge facing angel investors inPoland. Government support inthe form of tax breaks for indi-vidual investors would give asolid push to the movement, MrB∏oƒski said.
Figures concerning the eco-nomic impact of Polish or evenEuropean angel investing are rare.But the Center for VentureResearch at the University of NewHampshire calculates that in thefirst half of 2011, total angel-fund-ed investments in the UnitesStates amounted to $8.9 billion,an annual increase of 4.7 percent.The center also estimates thatangel investment is a significantcontributor to job growth, esti-mating that the practice led to thecreation of 134,130 new jobs inthe US in 2011, or five jobs per
angel investment. “On a macro level it’s worth it
for the government to supportindividual investors who invest instart-ups with tax relief. It can cre-ate a real incentive. With exam-ples from other European coun-tries, we want to show thesepotential benefits to the Polishgovernment.”
Mr B∏oƒski recognized thismight not be easy. “It’s a politicaldiscussion, inevitably some peopleare going to say the governmentwould be allowing rich people tosave money, while failing to see thaton the macro level it would createjobs and companies on which thegovernment can levy taxes.”
Polidea, an angel-funded firm operatingon the mobile IT market, benefited fromthe combined knowledge of angelinvestors investors Krzysztof Gawrysiakand Tomasz Grzybowski in the tech andmarketing sectors, respectively.
Lewiatan Business Angels providedz∏.100,000 in 2009, and the firm wasalready profitable after its first year. “Weare still seeing strong, double-digitgrowth,” said Mr Gawrysiak. Althoughfollowing the typical angel-funded invest-ment pattern Polidea could now be readyfor listing on the Warsaw StockExchange’s alternative market NewCon-nect, it is not in the immediate plans.“We have thought about listing but wedon’t need the money. The company isvery profitable. Maybe if we will needsome money injection for opening newbranches, for example in the US, but forthe moment we are not considering it,”said Mr Gawrysiak.
Polidea has developed quickly bysurfing on the latest trends on themobile market, such as paper publica-tions expanding or developing online.Its platform Pixblish is used by severaltitles and publishing houses in Polandsuch as weekly Polityka, and the firm isalso selling its application in WesternEurope. “Digital technology is very inter-esting for publishers. It’s much easierand cheaper to reach their audienceand update information, while also pro-viding interaction with the reader,” saidMr Gawrysiak.
The firm is also working to provide ITsolutions for a few US-based medicalcompanies, and is currently working on amajor transaction. “Polidea is perceivedas one of the best mobile-software solu-tion providers in Europe. Those compa-nies are choosing us not because ofprice but based on quality,” said MrGawrysiak. ●
PolideaAnna Walkowska and her husband wereboth employed in the IT sector whenthey started renovating their home. Todaythey run Homplex, an online service aim-ing to offer comprehensive help for peo-ple looking to do the same. The projectwas partly angel-funded, and MsWalkowska says it benefited from themix of knowledge combined betweenangel investors Jacek B∏oƒski, CEO ofLewiatan Business Angels, MarcinLorych (from the furniture sector) andMiros∏aw Ro∏ek (from the constructionsector).
The idea for Homplex came from thefounders’ own experience. “I wanted tohave control over the whole renovationprocess, and I wasn’t interested in pay-ing an interior architect for this informa-tion. I searched on the internet but theinformation wasn’t satisfying. So I hadthe idea of an application supportingthe whole process starting from the
idea, and later managing tasks, plan-ning the shopping, and managing rela-tions with contractors, something like avirtual interior architect for people whocan’t afford such a service,” said MsWalkowska.
She did the research, and foundthat in Australia, the US and the UK,there was no competition for such aproject. The pair then started lookingfor funding and after being rebuffed bybanks, looked at both angel investingand venture capital groups. “We choseangel investing in large part becausewe retain control over the company.Venture capital funds were asking forover 50 percent of the company,whereas our three business angelstogether took 40 percent. I didn’t wantto give up so fast on my idea,” said MsWalkowska.
Homplex is planning to expand to Ger-many and the UK in the near future. ●
Homplex
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 • DECEMBER 12-18, 2011, LI 16/49
CBRE opens
office in
Gdaƒsk
CBRE has opened an
office in Gdaƒsk after
observing growing
interest in real estate
investments in the Tri-city
area. Mariusz WiÊniewski,
senior property
negotiator at CBRE, will
head the new office. Colin
Waddell, managing
director of CBRE in
Poland, said that “opening
an office in Gdaƒsk is the
next step in the
development of CBRE on
the Polish market and
allows us to extend our
services in this region.”
Multikino in
Mokotowska
SquareMulti-screen cinema
operator Multikino will
have its offices in the
Mokotowska Square
office building in Warsaw.
Following a lease deal the
company signed with the
project’s owner, Yareal
Polska, the property is
currently over 80%
leased out, with its major
tenants including PGE
Energia Jàdrowa, Knight
Frank, Euromedic
International Polska and
Beiten Burkhardt. The
seven-storey
Mokotowska Square
development, which
involved the
revitalization of a
building from the 1950s,
comprises over 8,600
sqm of office and
almost 1,300 sqm of
retail space. ●
Miasteczko Orange sale . . . . . .16
Royal Wilanów permit . . . . . . .16
Luciano Capaldo interview . . .17
Property-related stocks . . . . . .17
New theme park in Poland . . .18
Galeria Pestka sale . . . . . . . . . .18
Ogrody mall extension . . . . . . .18
Foreigners in housing market . .19
Złota 44 financing . . . . . . . . . . .19
In this issue
1918
The co-owner of multiplex
chain Cinema City plans to
build a new theme park in
Poland
Orco Property Group has
obtained additional funding
to finish its Z∏ota 44 tower in
Warsaw
To subscribe: e-mail [email protected] or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription
Warsaw Business Journal presents Real Estate weekly newsletter
• Know about the newest projects before they’re on the market• Keep up to date on the latest tenders and auctions• Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate
or
The project is due tobe completed by thesummer of 2013
Developer Bouygues Immo-bilier Polska has signed a con-tract to sell its under-con-struction Miasteczko Orangeoffice complex in Warsaw toQatar Holding, an investmentcompany.
The cost of the transactionhas not been revealed. Thebuilt-to-suit class-A officeproject, which is located onAl. Jerozolimskie in the capi-tal’s Ochota district, is QatarHolding’s first investment inPoland. It will house theheadquarters of Telekomu-nikacja Polska (TP).
“We are very happy thatTelekomunikacja Polska SAhas chosen Bouygues Immo-bilier Polska to develop theirheadquarters in Warsaw …This project is the first step inour development in Poland inthe office market, where weintend to grow,” LaurentTirot, managing director ofBouygues Immobilier Polska,said in a statement.
The project, which is dueto be completed in the sum-mer of 2013, will comprisefive buildings totaling 43,700sqm of leasable office space,
all of which will be taken upby TP.
Just over 1,000 parkingspaces will be provided at thesite. The complex will include
a canteen, space to park bicy-cles, a garden, first-aid sta-tions and meeting rooms.
Each of the buildings willhave raised floors and sus-
pended ceilings, air-condi-tioning, a security system, anda telecommunication system.
“The complex and itsimmediate neighborhood isone of Warsaw’s prime non-central locations that benefitsfrom excellent road accessand visibility,” Jones LangLaSalle, the company whichis advising Bouygues Immo-bilier Polska in the transac-tion, said in a statement.
The complex is going to beBREEAM certified, JonesLang LaSalle said.
“We choose only primeproperties and greatcovenant tenants. This invest-ment proves that we believein the Polish economy and itsdevelopment potential.Poland is coping very wellwith the overall economicslowdown in Europe, which isconfirmed by strong econom-ic indicators,” Navid Cham-dia, head of real estate at theQatar Investment Authority,which established QatarHolding in 2006, said in astatement.
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The project will comprise 43,700 sqm of leasable space
Investment market
Qatar Holding buys Miasteczko Orange
The facility willcomprise 35,000 sqmof leasable space
Real estate investor CapitalPark Group has secured abuilding permit for its RoyalWilanów class-A office buildingproject in Warsaw. Construc-tion on the scheme, which willbe located at the intersection oful. Przyczó∏kowa and ul. Klim-czaka in the capital’s Wilanówdistrict, is scheduled to launchin the second quarter of 2012.
“Royal Wilanów is an alter-native to facilities located inMokotów, where more andmore office space is being built.We are offering a high-qualityoffice and service building in a
prestigious location,” DorotaEjsmont, leasing director atCapital Park Group, said in astatement. She added that thecompany hoped the investmentwould attract the most demand-ing clients.
Designed by the JEMSArchitekci studio, the five-floorRoyal Wilanów development willcomprise 35,000 sqm of leasablespace, including 28,000 of officespace on four floors and 7,000sqm of retail and service space onthe ground floor. A three-levelunderground parking lot will pro-vide spaces for 921 cars.
Capital Park Group hasbeen active in the Polish prop-erty market since 2003, invest-ing in cooperation with the
international private equityfund Patron Capital Partners.The group’s investment portfo-
lio comprises 72 assets totalingalmost 309,000 sqm of complet-ed and planned space, more
than 80 percent of which islocated in Warsaw.
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Office buildings
Royal Wilanów obtains building permit
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DECEMBER 12-18, 2011 LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE www.wbj.pl 17
Security Closing % change 52-week 52-week % change Total Marketprice (week) low high (year) shares value
Ella Pa∏ka: What do you see inPoland that appeals to you? Luciano Capaldo: You’ve gottwo advantages here, you are abig country. You’ve got a histo-ry behind you, a history whichtells a lot of what you’ve beenable to achieve. But I will say, ifyou take a place like Warsawwhich was completelydestroyed during World War II– and I sometimes compareWarsaw to Milan, which wasequally destroyed, you can seethat it was rebuilt in a very shorttime and therefore without tak-ing too much notice of thedesign and the urban planningitself. The overall look of thebuilt environment in Warsawcould really do with a goodmake over, a good revamp too.
Do you feel there is demand inthe high-end residential marketnow?The demand is extremely highand all indicators point to thatdirection. The GDP is risingconstantly and with that thequality of life is rising too.
Are you designing any homes inPoland or have any projectsplanned?Not at the moment, no. I’m notdesigning homes in Poland. Weare researching this marketbetween myself and my partneras we would like to enter thismarket too. Our main researchis focused on the residentialsector. I specialize in the top-level market of residentialdesign. We’re doing severalprojects in the UK at themoment but also projects inItaly, Cyprus and Romania. Wetried to enter the Russian mar-ket a couple of years ago but itproved to be not an easy task.
How did you find the Russianmarket? You are there quiteoften not only as a designer butalso chairman of RICS Europe.The Russian market? A verybureaucratic one. Sometimesyou have the feeling that verylittle has changed from the oldregime.
So it hasn’t changed verymuch?Do not get me wrong, therehave been some great changesbut the opportunities arereserved to a very small sphereof society. I am working in theretail sector in Russia and I findRussians are very open, they’reopen to new ventures, they’reopen to new design. Most of thecommercial and old hospitalitystructures in Russia lack a focalpoint – especially commercial
properties, hotels. I see that as amajor problem but also a majoropportunity for re-designingthem. Unfortunately there isstill a strong demarcationbetween the rich and the poorin Russia and the rich segmentis extremely thin when com-pared to the one in which peo-ple are just trying to survive.
Do you see the same amount offreedom in Poland that youwould in the UK or in Italy interms of design?I would say so, yes, probablyeven more.
Are you noticing any trends inPoland that are coming fromthe West?Well yes, there is influence fromthe West especially in the resi-dential sector. Some of thestyles and product designs arevery much influenced by inter-national trends and those pres-ent in the West of Europe. Let’salso not forget that some majorWestern Europe architecturalpractices have being designingin Poland for some time now.
When you think of the residen-tial sector, do you find thatPoles have a good idea of whatthey want in terms of design?With the little experience I’vehad, you’re more concerned
with the practical side ratherthan the design side of the livingenvironment. But I think that’sa part of your history I suppose.It takes a while to make thetransition.
Are you interested in designingresidential properties inPoland?I would love to, yes. I wouldlove to implement my designif indeed it suits the lifestyleof those who will eventuallyoccupy and live in what isdesigned.
Is sustainability something thatPoles are looking to incorporatewhen building their homes?Absolutely, sustainability issomething that you can nolonger disregard.
You design for Versace andother major brands in manyparts of the world. Do you thinkPoland needs more boutique ordesigner hotels?A boutique hotel is a differentconcept of hotel. I am surePoland and in particular War-saw is more than ready to haveboutique hotels. Branding ahotel by linking its design to amajor icon, be it in the fashionindustry or other sectors is, inmy view, a natural and some-what forced transition that thePolish market and in the casethe Warsaw market is ready forand probably with a great suc-cess too.
Why do you believe it would bemore successful in Poland?Because of the fact that thereis a lot of investment and withthat an international clientelethat demands such needscoming into Poland but alsothe Polish the people arebecoming more and moredemanding in the quality theyexpect with the hospitalitysector.
It is increasingly evident thatPoland is being affected by thefinancial crisis which is plagu-ing Europe. When do you expecta rebound from that crisis?It is difficult to say. We are allwatching with disbelief what ishappening to the euro. In myview, a liability cannot be extin-guished with another liability.The crisis will come to an endthe moment that productionstarts again, the moment westart to recreate wealth.
How, in your opinion, can werecreate wealth?By investing in the right sec-tor and at the same timeadmit that the high standardof living we have been used tohas to take a step back beforeit can leap forward. We allhave to take our share of theblame and go back to thebasic economic principleswhich too often have beenoverlooked over the last 10years. ●
“The demandhere [for luxury]
is extremelyhigh”
New leases at
Raszyn
Business Park
Real estate investment
manager Valad has, in
partnership with Aviva
Investors and on behalf
of the Central European
Industrial Fund,
announced the lease of
1,480 sqm of warehouse
and office space and
almost 800 sqm of
warehouse space to
Polish retail operator
Galaktyka and Chinese
wholesaler Damax,
respectively, at the
Raszyn Business Park
distribution facility near
Warsaw.
Permit for
Mokotów Park
Developer Marvipol has
obtained an occupancy
permit for the first phase
of its Apartamenty
Mokotów Park residential
project in Warsaw. The
building, which is located
on the capital’s ul.
Bernardyƒska, comprises
130 apartments, 121 of
which have already been
sold. Marvipol is now
selling units in the second
phase of the investment
which is scheduled for
completion in 2013. ●
Luciano Capaldo, architect and chairman ofthe Royal Institution of Chartered SurveyorsEurope, talks to Lokale Immobilia about thehigh-end residential real estate sector and hisoutlook for Poland
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Mr Capaldo has designed spaces for Versace all over
the world
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Mr Capaldo designs luxury residences in top markets
DECEMBER 12-18, 2011LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE18 www.wbj.pl
The co-owner ofCinema City plans toinvest z∏.2.2 billion tobuild the first stage ofPark of Poland
A large theme park, a waterpark and two hotels will bedeveloped at a site in the Mszc-zonów municipality, locatednear Warsaw, by Global ParksPoland (GPP) which belongsto Moshe Greidinger who isalso the co-owner of multiplexchain Cinema City Poland.
“Park of Poland will bethe biggest amusement parkin this part of Europe,” MrGreidinger said at a recentpress conference.
GPP will invest z∏.2.2 bil-lion in the first stage of theproject which is set to becompleted by the summer of2015. An extension to the
scheme is planned four yearsafter the park’s opening.
Aside from roller coast-ers, the water park andhotels, the site will also fea-ture a wastewater treatmentplant, as well as shops, cine-mas and other facilities.
“We have been workingon this project for a numberof years. The time is now tolaunch it. An investment likethis one will transform theentire region and many sus-tainable jobs will be creat-ed,” Mr Greidinger said.
He added that as many asfour million people areexpected to visit the parkevery year.
Although Mr Greidingerdid not reveal ticket prices,he said they would be around25 to 30 percent cheaperthan they are at other themeparks in Europe.
This is not the first proj-ect of its kind near Warsaw.Luxembourg-based company
Las Palm is also planning tobuild Adventure World War-saw, a theme park modeled
on Disneyland Paris.IIzzaabbeellaa DDeeppcczzyykk
Amusement parks
Another theme park to be built near Warsaw
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The new theme park is set to be completed in the summer of 2015
King’s Street Retail, a fundmanaged by Blackstone RealEstate Group, has acquiredGaleria Pestka, a shoppingcenter in Poznaƒ. The valueof the investment has notbeen revealed.
Master ManagementGroup has taken over man-agement duties at the shop-ping center.
Paul Kusmierz, principalof Master ManagementGroup, said in a statementthat, “We are enthusiasticabout Galeria Pestka joiningKing’s Street Retail, as we seetremendous potential forgrowth in this already popularPoznaƒ mall.”
Galeria Pestka has 42,000sqm of GLA, parking spacefor 1,000 vehicles and is apopular family-oriented cen-ter with stores that include
Carrefour, Saturn, Douglasand Rossmann.
“Applying our expertise indelivering the best retailexperience to customers willresult in the addition ofsome new highly-desiredbrands to Galeria Pestka,increasing the footfall andeffectively boosting theturnover for the tenants,”Mr Kusmierz added.
The purchase marks anexpansion of King’s StreetRetail’s portfolio in Polandwhich also includes Magno-lia Park in Wroc∏aw, GaleriaTwierdza in K∏odzko andGaleria Twierdza in ZamoÊç,all of which were acquired in2011. The company plans topurchase Galeria T cza inKalisz by the end of thisyear.
EEllllaa PPaa∏∏kkaa
Blackstoneacquires Poznaƒ’sGaleria Pestka ACTEEUM Central Europe
will next year launch, on behalfof CBRE Global Investors, anextension of the Ogrody shop-ping center in Elblàg,Warmiƒsko-Mazurskie voi-vodship. The leasable area ofthe scheme is expected to dou-ble and reach 43,500 sqm giv-ing the facility the character ofa regional mall.
Built in 2002, the one-floorOgrody scheme today offers17,500 sqm of GLA housing 55stores and points of service. Asa result of the extension, thedevelopment will get an addi-tional floor and the number ofstores and points of servicewill increase to 130. The num-ber of parking spaces will alsogo up, from today’s 901 to1,200.
Currently, the main tenantsof Ogrody include a 10,200sqm Carrefour hypermarket,as well as Komfort, RTV EuroAGD, Deichmann and
Reserved stores. After theextension, which is scheduledto be completed at the turn of2013 and 2014, those storesare going to be joined by,among other things, a multi-screen cinema and a two-levelH&M store.
Elblàg has a population of127,000 and is the second-
largest city in the War-miƒsko-Mazurskie voivod-ship. The developer of theOgrody shopping center esti-mates that due to the mall’sextension, the monthly visitoraverage will increase fromtoday’s 390,000 to approxi-mately 500,000.
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Extension of Elblàg’s Ogrody
mall set to launch in 2012
Radom’s Vis a
Vis mall openThe Vis a Vis shopping
center in Radom,
Mazowieckie voivodship,
has opened for business
offering over 3,600 sqm
of leasable space. The
scheme, which houses
over 20 tenants, is a
street mall, a retail
format which
incorporates small
shopping facilities
located on high streets.
Radom’s Vis a Vis belongs
to Capital Park Group
which plans to open
another development of
this kind on ul. Zgierska
in ¸ódê.
Karawela gets
building
permit
The planned Karawela
retail project in Toruƒ,
Kujawsko-Pomorskie
voivodship, has obtained
a building permit. The
mall, which is scheduled
to open by the end of
2013 and is expected be
the largest shopping
center in the region, will
comprise 60,000 sqm of
GLA including a
40,000-sqm shopping
gallery and a 20,000-sqm
retail park. Lease
agreements with a
hypermarket and three
large specialist stores
are to be finalized soon.
The scheme, which is
being developed by
Karawela, was designed
by Sud Architectes and is
being commercialized by
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Developer Orco PropertyGroup has obtained an addi-tional z∏.190 million in financ-ing from Bank Pekao to coverthe remaining cost of buildingits Z∏ota 44 luxury residentialproject in downtown Warsaw.
An annex to the agreementwith the bank will allow thefirm to complete the z∏.700million investment on sched-ule, Orco Property Group saidin a statement.
The decision to provide theadditional loan for Z∏ota 44was influenced by a number offactors that, in the bank’s eyes,confirmed the stability of theinvestment, the companyadded. These included highengagement of Orco’s ownfunds in the execution of theproject and a satisfactory level
of apartment sales in thescheme.
“The provision of full financ-ing for Z∏ota 44 is a huge successof Orco Property Group, espe-
cially when one takes into con-sideration the current difficultmacroeconomic conditions,problems of the global bankingsector and high competitiveness
of the housing market,” TomaszRusak, director of finance atOrco Property Group inPoland, said in the statement.
“The awareness that the
building will be completed inline with the schedule isimportant for both our currentand potential clients. We arehappy that we can offer thiscertainty to the future inhabi-tants of Z∏ota 44,” addedKrzysztof GodleÊ, develop-ment director at Orco Proper-ty Group in Poland.
Located on ul. Z∏ota inWarsaw’s central district, theZ∏ota 44 development will rise192 meters and offer 251apartments. Designed by therenowned architect DanielLibeskind, the 54-storey toweris being built by Italian con-tractor Inso/Consorzio Coop-erative Costruzioni and isscheduled to be completed atthe beginning of 2013.
AAddaamm ZZddrrooddoowwsskkii
Who can be considered the authorof a particular work? And whodecides ownership of copyright ofa particular piece of work?
The simple answer is that thecopyright belongs to the creator ofthe work. The copyright may beshared, since a number people canbe considered creators or authors.Depending on the type of copy-right involved, it can be transferredbetween co-authors or only exer-cised upon the author’s consent.
Who authored a work is a ques-tion of fact, not something nego-tiable between those who claim tobe authors. Nevertheless, if dis-putes arise, a court examines thematter and makes an appropriateruling.
Creative inputWhen considering who is anauthor, the court takes into
account the creative input into thework. The person who is responsi-ble only for the production of analready existing idea, for example acopywriter re-writing a manuscript,can not be considered an author.
The co-authors of a work maydecide in a formal agreement whois the owner of the copyrightand/or the person who is entitledto perform the work. This howeverdepends on the kind of copyrightinvolved (material or personal).
Personal copyright is the rightto be called the creator (theauthor), the right to inviolability ofthe work (for example the right todemand the work is presented asit is, without any amendments,deletions or modifications) and itsreliable use or right to decide onthe first publication of a work.
The material copyrights are (i)exclusive right to use the work inevery field of exploitation and (ii)the right to royalties for usage ofthe work.
Only material copyrights maybe assigned. Personal copyrightsmay not be transferred and/orrenounced. However, one co-author may oblige him/herself inan agreement with the other co-author that he or she shall not per-form a work with a personal copy-right. The other solution is that heor she shall provide (under a spe-cific remuneration) a power ofattorney for the other co-author toperform personal rights on his orher behalf. These kind of provi-sions may ensure a more effectiveway for entrepreneurs to makeuse of the work; it can mean, forexample, that the first publicationof the work is dependent on thedecision of just one person.
These regulations may put intopractice between the actual co-authors, who each put creativeinput into the work.
Copyright at work In many cases, however, the copy-
right is transferred by law tosomeone other than the originalauthors. Such situations comeinto play when, for example, theauthors are working under anemployment contract.
The copyright to work createdby an employee can belong to theemployer, not the employee. Thisrefers to copyright from thework: (i) created as a result of anemployee’s work obligations and(ii) made within the scope andpurpose of the specific role aspresented in the employmentagreement.
The transfer of rights is effec-tive at the moment the employeraccepts the employee’s work.Although it is possible to andwould be favorable for theemployment contract parties tospell out the matter in theemployment agreement, theemployer is not obliged to pro-vide specific copyright regula-tions in the employment contract.
The transfer of copyrightbetween the employee andemployer relates only to materi-al copyrights. The employeeshall be fully entitled to person-al copyright, which means thatthe employee shall in any casebe considered as the author. Inaddition, when there are two(or more) employees whotogether create work for theemployer, they shall also bedeemed as co-authors, but onlywith respect to personal copy-right. The material copyrightshall be transferred to theemployer.
As you can see, the regula-tions on transfer of copyright ismore straightforward with regardto business activity. The actualco-authors may decide on thispoint in an agreement and in thecase of the employment contract,the employer is by law grantedwith material copyrights to thework of his employees. ●
DECEMBER 12-18, 2011 LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE www.wbj.pl 19
New contracts
for Erbud
Construction company
Erbud has signed two
new contracts
concerning residential
projects in Gdaƒsk and
Warsaw. In Gdaƒsk, the
contractor will build a
housing complex for
Warsaw-based
developer Cedrowa for
z∏.46.2 million. In
Warsaw, Erbud has
signed a contract with
Sowiƒskiego Park for
the construction of a
multi-family residential
building which is valued
at z∏.20 million.
Point House
ready for
occupancy
GN Invest, a special-
purpose vehicle
belonging to developer
Unidevelopment, has
officially finished
construction on its
Point House residential
project in Warsaw.
The development, work
on which was started in
August last year, has
just obtained an
occupancy permit.
Point House is located in
the capital’s Mokotów
district and comprises
235 apartments,
over a half of which
have already
been sold. ●
Ula Kalata GrykoAttorney-at-law
Copyright sharing in business
Legal Forum
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.
But activity hasdipped from its pre-crisis high while thepurchase of homesfor investmentpurposes has becomemuch less popular
Foreigners have purchasedapproximately 950,000 sqm ofresidential space in the Polishmarket over the last five yearswith British, Irish, German,Spanish and Italian buyers
accounting for more than halfof the volume, according todata from Poland’s Ministryof Internal Affairs.
Assuming that the averagesize of the units bought by for-eigners is 50 sqm, the transac-tions volume would translateinto 19,000 apartments,slightly more than the numberof units delivered to the Pol-ish market by developers inthe first half of this year, realestate advisory Lion’s Housesaid in a recent analysis.
In the years before the cri-sis, the activity of foreign buy-ers grew steadily. Theyaccounted for the purchase of134,000 sqm, 185,000 sqmand 225,000 sqm in 2006,2007 and 2008, respectively.
After the onset of theglobal economic crisis, therewas a visible drop-off indemand with 208,000 and198,000 sqm of housing spaceacquired by foreigners inPoland in 2009 and 2010,respectively.
Still, this was not a majorslump as the 2010 figure rep-resents a decrease of just 12percent on the record year2008, Lion’s House noted inthe analysis. It also pointedout that the official data arenot complete in that they donot factor in transactionsconcluded by investmentfunds.
Foreigners mostly target-ed the largest cities, withWarsaw being the most popu-lar destination. In contrast to
the pre-crisis years, foreign-ers have recently tended tobuy for themselves rather forinvestment purposes.
“For more than a year for-eigners looking for real estatefor investment purposes havebeen a rare sight. While buy-ing [apartments] for them-selves they usually chooselarge real estates in the bestlocations,” Rafa∏ Gójski, anadvisor at Lion’s House, saidin a statement.
AAddaamm ZZddrrooddoowwsskkii
Residential
Foreigners keep buying apartments in PolandC
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Orco secures funds to finish Z∏ota 44 skyscraper
The 54-storey tower is set to transform the Warsaw skyline
DECEMBER 12-18, 2011MMAARRKKEETTSS20 www.wbj.pl
SO
UR
CE
: W
SE
PLN-EUR
4.4
812
4.4
773
4.4
711
4.4
690
4.4
692
4.
5195
02.1
2
05.1
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06.1
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5 PLN-USD
02.1
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09.1
2
3.32
35
3.3
276
3.3
429
3.33
10
3.33
59
3
.387
5
3.0
3.5 PLN-GBP
02.1
2
05.1
2
06.1
2
07.1
2
08.1
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09.1
2
5.21
65
5.20
59
5.2
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5.20
07
5.2
489
5
.295
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5
6 PLN-CHF
3.
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3.6
155
3.60
89
3.60
10
3.6
107
3
.665
3
02.1
2
05.1
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4.0 PLN-RUB
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0.
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0.12 PLN-100JPY
02.1
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05.1
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06.1
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07.1
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09.1
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4.26
96
4.26
96
4.3
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4.2
883
4.3
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4
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2
4
5
currency rates
EU treaty deal
moves markets
Currency report
Instead of being able to waitcalmly for Christmas, inves-tors were bombarded withimportant news and events,triggering big movements inthe currency markets.
Markets rallied but thenretreated almost instantlyafter Mario Draghi, theECB’s president, announcedthat lending channels arestuffed. That puts in doubtthe possibility of the centralbank taking strong action inthe case of an immediateneed for financial aid in theeuro zone.
An important step was anagreement by Europeannations to sign an intergov-ernmental fiscal treaty. It willalso be signed by non-euro-zone countries (includingPoland), but not by the UK.Investors were hoping formore radical steps such aschanges to the EU treaty,
unlimited bond purchases bythe ECB, and possibly alsoeuro bonds in the future.They got none of these.
The EUR/USD climbedto almost $1.35 to finish theweek at nearly $1.33. Uncer-tainty drove investors outfrom emerging markets,hurting the z∏oty. DespitePoland’s Monetary PolicyCouncil leaving interest ratesunchanged at 4.5 percent,and a generally optimisticoutlook for the economy, thelocal currency tumbled. TheEUR/PLN advanced fromz∏.4.44 all the way to z∏.4.51,while the USD/PLN rosefrom z∏.3.30 to z∏.3.38.
As the end of the yearapproaches and with it thecalculation of foreign curren-cy denominated debt, it islikely the central bank willintervene soon to strengthenthe z∏oty. ●
Change for the week: -2.35% 52-week high: 2,932.62
Change year to December 8: -19.71% 52-week low: 2,089.84
mWIG40 2,181.58 (December 8 close)
Change for the week: -0.09% 52-week high: 2,987.72
Change year to December 8: -22.30% 52-week low: 2,081.49
sWIG80 8,544.80 (December 8 close)
Change for the week: -1.86% 52-week high: 12,932.00
Change year to December 8: -30.24% 52-week low: 8,483.22
NewConnect 41.29 (December 8 close)
Change for the week: -0.41% 52-week high: 64.04
Change year to December 8: -34.88% 52-week low: 41.09
WIG-Banki 5,531.32 (December 8 close)
Change for the week: -0.08% 52-week high: 7,387.49
Change year to December 8: -20.55% 52-week low: 4,944.19
DJIA11,997.70 (Dec 8 close)
-0.19% (for the week)
CHANGE: 3.63%
(year to Dec 8)
52-week high: 12,876.00
52-week low: 10,404.49
NASDAQ2,596.38 (Dec 8 close)
-1.14% (for the week)
CHANGE: -3.00%
(year to Dec 8)
52-week high: 2,887.75
52-week low: 2,298.89
S&P5001,234.35 (Dec 8 close)
-0.82% (for the week)
CHANGE: -1.85%
(year to Dec 8)
52-week high: 1,370.58
52-week low: 1.074.77
FTSE1005,483.80 (Dec 8 close)
-0.10% (for the week)
CHANGE: -7.05%
(year to Dec 8)
52-week high: 6,105.80
52-week low: 4,791.00
DAX5,874.44 (Dec 8 close)
-2.67% (for the week)
CHANGE: -15.76%
(year to Dec 8)
52-week high: 7,600.41
52-week low: 4,965.80
NIKKEI2258,664.58 (Dec 8 close)
0.78% (for the week)
CHANGE: -16.30%
(year to Dec 8)
52-week high: 10,891.60
52-week low: 8,135.79
world stock indices
10.1
1
14.1
1
15.1
1
16.1
1
17.1
1
18.1
1
21.1
1
22.1
1
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24.1
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29.1
1
30.1
1
01.1
2
02.1
2
05.1
2
06.1
2
07.1
2
08.1
237,000
37,800
38,600
39,400
40,200
41,00010
.11
14.1
1
15.1
1
16.1
1
17.1
1
18.1
1
21.1
1
22.1
1
23.1
1
24.1
1
25.1
1
28.1
1
29.1
1
30.1
1
01.1
2
02.1
2
05.1
2
06.1
2
07.1
2
08.1
22,000
2,080
2,160
2,240
2,320
2,400
10.1
1
14.1
1
15.1
1
16.1
1
17.1
1
18.1
1
21.1
1
22.1
1
23.1
1
24.1
1
25.1
1
28.1
1
29.1
1
30.1
1
01.1
2
02.1
2
05.1
2
06.1
2
07.1
2
08.1
22,000
2,060
2,120
2,180
2,240
2,300
10.1
1
14.1
1
15.1
1
16.1
1
17.1
1
18.1
1
21.1
1
22.1
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23.1
1
24.1
1
25.1
1
28.1
1
29.1
1
30.1
1
01.1
2
02.1
2
05.1
2
06.1
2
07.1
2
08.1
28,400
8,560
8,720
8,880
9,040
9,200
10.1
1
14.1
1
15.1
1
16.1
1
17.1
1
18.1
1
21.1
1
22.1
1
23.1
1
24.1
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25.1
1
28.1
1
29.1
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30.1
1
01.1
2
02.1
2
05.1
2
06.1
2
07.1
2
08.1
2
40
41
42
43
44
45
10.1
1
14.1
1
15.1
1
16.1
1
17.1
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18.1
1
21.1
1
22.1
1
23.1
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1
25.1
1
28.1
1
29.1
1
30.1
1
01.1
2
02.1
2
05.1
2
06.1
2
07.1
2
08.1
25,100
5,240
5,380
5,520
5,660
5,800
Other indices
Crunch
time
Stocks report
Stocks throughout Europehad another bumpy week,with thin volumes showinghow concerned investors areabout investing in equities.Monday began well, as Ger-many and France agreed ontighter fiscal control for theeuro zone. Gains were short-lived though, with S&P plac-ing Germany, France andother euro-zone nations on“credit watch negative.”
Indices tumbled on Tues-day, erasing gains from theprevious session. The WIGfell nearly 2 percent, with theWIG20 (-2.18 percent) alsodragged down by KGHMshares, which slumped 8 per-cent after Poland’s copperproducer announced its take-over of leading Canadianfirm Quadra FNX Mining.
On Wednesday stockssaw a strong opening. Butgains dwindled throughout
the day, as a weak Germanbond auction, as well asreports indicating concernon the part of German politi-cians about the new EU deal,dragged stock prices lower.The WIG managed to closeslightly higher, up nearly halfa percent, with the WIG20up 0.51 percent. Leading theway were shares of GTC,which closed 4.3 percenthigher than the previous day.
Thursday saw investorsdump stocks after Germanyrejected proposals thatwould have bolstered thebailout fund. Adding to wor-ries were comments by ECBPresident Mario Draghi,who said that the bank wouldnot rush to buy up bonds.The WIG finished 1.48 per-cent lower, while the WIG20lost 1.85 percent. Friday, theWIG and the WIG20 closedslightly up. ●
Andrew Nawrocki, WBJ market analyst
DECEMBER 12-18, 2011 TTHHEE LLIISSTT www.wbj.pl 21
Motor Industry & Freight
Moving and Relocation CompaniesRanked by revenue from moving in 2010 www.bookoflists.pl
Notes: Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was donein November/December 2011. Number of employees and ownership structure are as of Novem-ber 2011. All information pertains to the companies’ activities in Poland. Companies not respond-ing to our survey are not listed.
To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions andtypographical 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. The List may not be reprintedor reproduced in whole or in part without prior written permission of the publisher. Reprints are available.
DECEMBER 12-18, 2011LLIIFFEESSTTYYLLEE22 www.wbj.pl
Moscow City BalletDecember 17, 6 pmPKiN Sala KongresowaPl. Defilad 1Warsaw
The world-renowned Mo-scow City Ballet will performthree of the most famous bal-lets of all time this December– “Romeo and Juliet,” “SwanLake” and the “Nutcracker.”Founded in 1988 by the distin-guished Russian choreogra-pher Victor Smirnov-Golo-vanov, the company has madeits name abroad since per-forming for the first time inSeoul in 1989. And in recentyears as many as 120,000 peo-ple have watched Russia’s pre-miere troupe performing inPoland. Tickets for the eventare priced z∏.90 to z∏.250. ●
Ballet
Ballet for the holidaysC
OU
RT
ES
Y O
F M
OS
CO
W C
ITY B
AL
LE
T/
FA
CE
BO
OK
Moscow City Ballet
Montserrat CaballéDecember 22PKiN Sala KongresowaPl. Defilad 1WarsawOne of the world’s mostfamous living opera singers isset to make an appearance inthe capital this month. Spain’sMontserrat Caballé has beenentertaining crowds worldwidefor over 40 years now, sinceshe received a 25-minute
standing ovation for her 1965debut as a soprano in NewYork’s Carnegie Hall. Herincredible voice and skills asan actress have since made herone of the most sought-aftersopranos in the world andhave won her numerousawards.
Ms Caballé’s talent has ledto her becoming known affec-tionately in the opera world as“La Superba,” a sign that she
has now reached the status ofdiva. Arguably her mostfamous song is “Barcelona”which was recorded in 1987with the late Queen frontmanFreddy Mercury, and becamean anthem for the 1992Olympics, hosted in the song’snamesake, also her home-town. Tickets for the event arepriced from z∏.130 to z∏.550. ●
For more information, logon to kongresowa.pl
Concert
‘La Superba’ in Warsaw
UP
G/R
EP
OR
TE
R
Montserrat Caballé
New Year’s Eve GalaDecember 31, 8 pmNational TheaterPl. TeatralnyWarsawFor those unsure about theirplans for New Year’s Eve, thisevent, which aims to com-memorate the end of Poland’s
presidency of the EU council,will offer a great evening ofentertainment. The perform-ance, which is directed byJaros∏aw Kilian, will see oper-atic and classical music per-formances of works from suchesteemed composers as Lud-wig van Beethoven, Wolfgang
Amadeus Mozart, RichardWagner and Giuseppe Verdi.The evening is hosted by pre-senter and journalist MonikaRichardson and actor PiotrPolk. ●
For tickets and moreinformation, log on to
teatrwielki.pl
Concert
A New Year’s Eve to remember
For more information, log on to kongresowa.pl
DECEMBER 12-18, 2011 LLAASSTT WWOORRDD www.wbj.pl 23
Christmas whimsy and the malodor of antiquity
Tech Eye
Techeye had something a little dif-ferent in mind this week. Instead ofa regular column, we planned topublish an open letter to Santa,calling him out over the Christmasof 1988, when our stocking wasstuffed with deodorant and a leakybottle of Old Spice aftershave. Tothis day the stocking smells like aWorld War II sailor on shore leave.
But something prevented Tech-eye from publishing that letter,something we call our “awfully
wedded wench.” She saidit would be naughty
to publicly chal lenge
Santa. Thiswas confusingsince she always saysshe likes it when we’renaughty, but then she said thiswould be an example of “badnaughty,” which is bad, instead of“good naughty,” which is nice.
Thoroughly nonplussed, wedecided to stick with tradition. Sohere it is folks, the moment you’vebeen awaiting since 148 words ago– part two of Techeye’s annual cav-alcade of Christmas whimsy. Thisyear with 28 percent more whim-sy.
Here’s something for die-hardHarry Potter fans: the KymeraWand (wand-control.com). Don’tget too excited though, it’s not a“real” wand made of orphantears, dragon mung and the othermagical ingredients we assume
are part of Rowling’s lore.Instead, it’s a wand-
shaped remotecontrol which
“ r e c o g -nizes upto 13 ges-tures and sendsthe accordinginfrared signals.”
There’s great potential for mis-adventure here. Imagine grandpalimps over for a visit and wants to
watch Animal Planet. You shoutthe magic words – “snarkus,barkus, banalio, mammalio!” –but accidentally flick up instead ofleft, giving grandpa a rheumy eye-full of Hustler TV. You’ve eithergot a heart attack victim on yourhands or a new roommate.
So, on second thought, maybethe Kymera Wand is good for die-hard Harry Potter fans with
While we’re on the topic ofvenerated ancestors, here’s a toythat mocks them directly: theGranny Racers racetrack (bit-sandpieces.com). This electricracetrack is pretty simple and, by
many accounts, not very wellcrafted. But that doesn’t matter.It’s got little old ladies in wheel-chairs who go flying off the trackwith alarming (for bystanders)frequency.
The Granny Racers racetrackis available from Bits and Piecesfor $26.99 (four AA batteries notincluded). It’s also on Amazon for
$74.50, but you ’d
have to besenile to pay that much.
And now for something dis-tinctly more whippersnappery: theXO-1 radio-controlled supercar(traxxas.com). If you’ve everdreamed of owning a stupidlyexpensive toy car that goes point-lessly fast and will probably be
annihilated within a week becauseyou don’t have an appropriateplace to race it, then this is the stu-pidly expensive toy car for you.
The XO-1 goes from 0-100 inunder five seconds, with the caveatthat you need to be running theTraxxas Link App in order toachieve that speed. And you needto have an iPhone or iPod Touch torun the Traxxas Link App, which iskind of annoying. On the other
hand, the type of per-son who spends
$1,100 on an RCcar is also prettyannoying, somaybe it all bal-
ances outsomehow.
We’renot that fond of the XO-1.
But if you’re out there reading this,Santa, guess what? Techeye wantsone for Christmas, if for no otherpurpose than to be annoying andcreate the illusion that we havemoney to waste.
Got that Santa? Good. Nowtry not to drench it in Old Spice,ok? ●
Ever struck a bystander with a little old lady in a wheelchair? Let us know: [email protected]
CO
UR
TE
SY O
F B
ITS
AN
D P
IEC
ES
COURTESY OF THEWANDCOMPANY
To advertise in WBJ’s classifieds section, contactMs Agnieszka Brejwo, at
