WBJ #7 2011

ING Bank Âlàski could hand out a quarter of its 2010 profit

Tickets for Euro 2012 go on sale March 1 – got z∏.2,400 to spare?

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WWW.WBJ.PL

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Chemicals firm ZC Police brewed up a solid net profit for Q4 2010

VOLUME 17, NUMBER 7 • FEBRUARY 21-27, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

Hungry for change

REAL ESTATE

COURTESY OF S+B GRUPPE

Lokale Immobilia

Is the Polish banking market in for consolidation?

• Zebra Tower sale • Warsaw’s potential • Gant’s new projects 15-17

12-13

Battle strategies Law and Justice MEP Ryszard Czarnecki talks election strategy, foreign relations and the “war” with Civic 14 Platform

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-3 International . . . . . . . . . . . . . . . . . .4 Industry News . . . . . . . . . . . . . . .5-7 Markets . . . . . . . . . . . . . . . . . . . . . . .8 Listed Firms . . . . . . . . . . . . . . . . . . .9 Opinion . . . . . . . . . . . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Interview . . . . . . . . . . . . . . . . . . . .14 Lokale Immobilia . . . . . . . . . . .15-17 Tax . . . . . . . . . . . . . . . . . . . . . . . . . .18 Business Environment . . . . . . . . .19 The List . . . . . . . . . . . . . . . . . . . . . .20 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

SHUTTERSTOCK

Travel management companies 20

Budget deficit doubts

Slim’s pickins

The EC wants Poland’s budget deficit under three percent of GDP by 2012, but the government isn’t so sure 3

Will the world’s richest man add Poland’s biggest mobile telecom to his portfolio? 5

A GUIDE TO POLISH EXPORT will hit shelves in April 2011!

For advertising and promotion opportunities contact: Agnieszka Brejwo: abrejwo@wbj.pl; (+48) 639-85-68, ext. 226

2

NEWS

www.wbj.pl

Labor market numbers strong

Pawlak: don’t raise rates Deputy Prime Minister Waldemar Pawlak has warned that if the NBP raises interest rates, it could put the brakes on Poland’s economy. He called on the Monetary Policy Council (RPP) to separate global factors from domestic inflation.

Inflation in January rose to 3.8% (see p. 3), which most analysts believe will prompt the rate-setting council to speed up monetary tightening.

Klesyk in or out at PZU? The supervisory board at PZU, Poland’s largest insurer, has passed a resolution to start the process of filling the positions of president and six members of the management board. The term of the current president and board of PZU ends this coming June. PZU spokesperson Micha∏ Witkowski refused to answer reporters’ questions about whether current president Andrzej Klesyk would compete in the upcoming leadership contest. ●

Marta Kaczyƒska

IN THE SPOTLIGHT

Numbers in the News

3.8% was the y/y growth in private-sector employment seen in January

9.9% is Poland’s unemployment projection for the end of 2011

€3.8 billion

is how much Polish companies invested abroad in 2010, compared to €7.5 billion in FDI to Poland

1,804 Polish businesses declared bankruptcy or liquidated their assets in 2010, up 0.5% on 2009

EAST NEWS

Quote of the Week

Will Marta Kaczyƒska, daughter of late Polish President Lech Kaczyƒski and First Lady Maria Kaczyƒska, take up the family profession? Once again the media is awash with speculation that she might enter the fray.

Ms Kaczyƒska has entertained the notion in the past. In an interview with Wprost last June, for example, she cagily stated that she wouldn’t rule out running for the Sejm, but suggested that, as her daughters are still young (both are under 10), it was too early to consider a serious candidacy.

Poland will see parliamentary elections this autumn, however, and in a recent interview with Onet.pl, Marcin Dubieniecki, Ms Kaczyƒska’s hus-

band, stated that if she decided to run, she should be given first place on a Law and Justice party (PiS) candidate list. “[PiS president Jaros∏aw Kaczyƒski] has no right to tell her ‘no.’ Marta Kaczyƒska should get the top spot if she wants it. … There can be no discussion in PiS on whether Marta Kaczyƒska deserves a place on the lists,” Mr Dubieniecki said.

In a different interview with the same media outlet, Ms Kaczyƒska again stated that she would not rule out a political career. She also said that she wished she had been more involved in the presidential campaign of Jaros∏aw Kaczyƒski, her uncle, last year.

Whether she ultimately

decides to run and how this decision would be received in PiS remains to be seen. At the end of last month Mr Kaczyƒski addressed the speculations, saying that as long as he was at the helm there would be no nepotism in the party.

Born in 1980, Ms Kaczyƒska earned a diploma in law at the University of Gdaƒsk. In 2007 she married Mr Dubieniecki, her second husband.

Mr Dubieniecki too has shown interest in entering politics. He has past ties to the Democratic Left Alliance, but has since distanced himself from that party. Were he to run for parliament, it is assumed he would do so from a Law and Justice candidate list.

“Even if a chimpanzee had been sitting in the control tower jabbering information, it would not have resulted in the tragedy” Oleg Smirnov, head of the “Partner of Civil Aviation” foundation and a former deputy aviation minister, explains why the pilots of President Kaczyƒski’s plane caused last April’s fatal crash

Figures in focus A year of good growth Value of trade turnover with top five countries (in € billions) and annual growth (in %), 2010 Trade turnover Export

The dangers of the internet How much do parents know about their children’s use of the internet? How well are children in Poland protected from the sometimes disturbing content available on the web? To find out, WBJ.pl sits down with Dr Lucyna Kirwil, a consultant for the Polish section of the EU Kids Online project at the London School of Economics and Political Science.

DATELINE

February/March 23-24 EXPOCHEM Event:

4th International Chemical Industry Exhibition and International Conference. Location: Spodek, Katowice. www.expochem.pl

1-5 Event:

3 Event:

MARCH 1 Event:

CEEQA GALA & AWARDS 8th Annual CEEQA Gala. Annual industry awards for business performance & achievement in Central & Eastern European real estate in 2010. Preceded by Forum & Panel Debate GREEN DEBATE 2 Location: Warsaw Marriott Hotel. www.cee-insight.com

Import

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28

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21

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21

30

14

20

14

20

7

10

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CeBIT 2011 CeBIT 2011. Poland will be an official partner of the event in 2012. Location: Hannover, Germany. www.cebit.de/home BOOK OF LISTS GALA AND WBJ AWARDS Warsaw Business Journal launches the 16th edition of its annual Book of Lists ranking publication, and hands out the prestigious WBJ Awards. Location: Teatr Bajka, Marsza∏kowska 138, Warsaw.

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ACCESS MBA TOUR

Event:

Access MBA Tour in Warsaw. Location: Mamaison Hotel Le Regina, Warsaw. www.accessmba.com

ny

a erm

G

FEBRUARY

Annual growth

Adam Zdrodowski

On WBJ.pl

SHUTTERSTOCK

Although January’s wage growth figures, released last week by Poland’s Central Statistical Office were slightly below forecast, they were still seen as positive. Citi Handlowy chief economist Piotr Kalisz pointed out that the deceleration (from 5.4% y/y in December to 5.0% y/y in January) was mainly due to there being fewer work days.

BZ WBK economists said in a statement that, “Wage growth in the corporate sector in January … confirms that the solid acceleration in wage growth in December was not a one-off phenomenon.”

Employment growth surprised substantially, by rising 3.8% y/y – the fastest pace since August 2008, though the statistical office’s methodological changes accounted for this somewhat. Most analysts said that the data were further impetus for the central bank to raise interest rates soon, potentially in March.

FEBRUARY 21-27, 2011

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Source: Central Statistical Office

Company index Alior Bank ..................................13 Allianz Bank ..............................13 Allied ..........................................11 Allied Irish Banks ................12, 14 AMC – Andrzej M. Cho∏dzyƒski 15 América Móvi .............................. 5 Antal ..........................................15 Apple ..........................................23 Banco Santander ......................12 Bank BPH ..................................12 Bank Millennium..................12, 15 Bank of Ireland ..........................14 Bank Pekao ............................8, 12 Bank Zachodni WBK..............8, 12 Bankier.pl ..................................15 Bankowe Biuro Podró˝y TRAVELBANK ............................20 Berlitz ........................................15 BGK ......................................13, 14 Biuro Podró˝ników Flugo ..........20 Blue Sky Travel ..........................20 BNK Petroleum............................5 BNP Paribas ..............................12 BOIG Property Consulting ........16 Boston Consulting ....................15 BRE Bank ..................................13 BRE Leasing ..............................15 BZ WBK ......................................11 Carlson Wagonlit Travel ............20 CB Richard Ellis ........................15 Centrum Podró˝y Air Club ........20 Citi Handlowy ......................13, 18 Cityboard Media ........................15 Cognor..........................................8 Colliers International ................15 D&B Poland ..............................19 Dezamet Metal Works ..............19 DM PKO BP ..................................9 DZ Bank......................................12 EBS ............................................14 EFG Eurobank Ergasias ............11 Électricité de France ..................5 Enea..............................................5 Fannie Mae ................................11 FCm Travel Express ..................20 Fly Away Travel ..........................20 Freddie Mac ..............................11 Gant Development ....................16

Gemalto ......................................15 Geonafta ......................................9 Getin Holding ........................8, 13 Ghelamco ..................................17 Globe Trade Centre....................15 Grupa Lotos ................................8 Grupa ˚ywiec ..............................5 HSW – Gear and Transmission Plant ..........................................19 HTC ............................................23 Huta Stalowa Wola ....................19 ING Bank Âlàski ....................7, 18 Inpro ..........................................16 Inter Groclin Auto ........................8 Ipopema Securities......................7 Irish Banks ................................11 Irish Life and Permanent ..........14 Kancelaria Brochocki ................16 Keen Property Partners ............15 KGHM ......................................5, 8 King Sturge ................................17 Kredyt Bank ..............................13 Kronos Real Estate ....................15 Lehman Brothers ......................11 LG ..............................................23 LOT ..............................................9 Lotos ............................................9 Lotos Group..................................7 Mazurkas Travel ........................20 Merlin ..........................................7 Millennium BCP ........................12 Millennium Dom Maklerski ......13 myFC ..........................................23 Netmedia Business Travel ........20 Nomi ..........................................16 Nordea Bank ..............................15 Optimus ........................................8 Orlen ........................................7, 9 Panattoni Europe ......................16 Parkridge Retail Development ..16 PBG ..............................................8 Pemug ..........................................8 Pepees..........................................8 Peter Nielsen & Partners Law Office ............................................7 Petrolot ........................................9 PGNIG ..........................................8 Philips Lighting Poland ............15

PKO BP ..........................11, 12, 15 Polbank EFG ........................11, 13 Polish Chamber of Commerce..19 Polskie Sieci Elektroenergetyczne ..................15 Pramerica Real Estate Investors ........................15 PricewaterhouseCoopers ..........17 Procter & Gamble......................19 PZU ..........................................2, 8 Raiffeisen Bank..........................13 Retailer NFI Empik Media & Fashion..........................7 RIM ............................................23 RWE ..............................................5 S+B Gruppe ................................15 Samsung ....................................15 Sobieski Institute ......................19 Solid Security ............................16 Supertour Lufthansa City Center ................................20 Svenska Handelsbanken ..........15 Techmex ......................................8 Telefonica ....................................5 Telekom Srbija ............................5 Telekomunikacja Polska..............8 Telenor..........................................5 TeliaSonera ..................................5 Totalserve ..................................18 Towarzystwo Ubezpieczeƒ i Reasekuracji “Partner” ............16 Towarzystwo Ubezpieczeƒ Wzajemnych “TUZ” ....................16 Trip Club ....................................20 TuiR Allianz Polska ....................13 TVN ..............................................8 Unicredito ..................................12 Union Investment Real Estate ..15 Urban Land Institute..................17 Valkea Media ..............................19 Vattenfall ......................................5 Vodafone Group............................5 Wasko ..........................................8 Weco Travel ................................20 X-Trade Brokers ........................13 Zastal............................................8 ZC Police ......................................9 ZO Bytom......................................8

NEWS

FEBRUARY 21-27, 2011

www.wbj.pl

Public finance

PiS to stay quiet on Smolensk

EC to Poland: trim budget deficit At a meeting with Prime Minister Donald Tusk and Polish Finance Minister Jacek Rostowski last Wednesday, European Commissioner for Economic and Financial Affairs Olli Rehn stressed that Poland must get its budget deficit under three percent of GDP by 2012.

Meeting the goal is “feasible and doable,” he said, adding that he sees “no need for extending the deadline from 2012 further.”

Mr Rehn said at a press conference that “Poland has had rather good economic development even during the crisis, which actually underlines the importance of sticking to the targets of the Stability and Growth Pact.”

Urging Poland to take quick action, he added, “I expect shortly a formal response

Poland’s main opposition party, Law and Justice (PiS), plans to keep the April 10 Smolensk airplane disaster out of debates, at least until the anniversary of the tragedy, Rzeczpospolita reported. The party made the decision after facing continued criticism that it had focused on little else than the events surrounding the airplane crash. PiS now plans to hold four conferences through March, focusing on domestic issues and social affairs.

to the concerns I have raised as regards the path of fiscal adjustment of Poland.”

However, the Polish government has expressed concern that it will not be able to meet the goal. Finance Minister Rostowski said that the government intends to curb public spending, but has no intention of raising taxes. He added that the Polish government is handling the problem, saying that savings “have been, are, and will be on the agenda.”

The Polish government predicts that the budget deficit will reach 2.9 percent of GDP in 2013, exceeding the deadline set by the European Commission by one year. The deficit is expected to amount to 6.5 percent of GDP in 2011, and to 4.5 percent in 2012.

If Poland fails to meet the deadlines, the European Commission has said it will closely supervise reforms aimed at reigning in the budget deficit.

PO dismisses ‘unethical’ behavior

COURTESY OF THE EUROPEAN COMMISSION

Poland has until 2012 to reign in the deficit, but the gov’t is aiming for 2013

Commissioner Rehn sees no reason to delay cuts in Poland’s budget deficit

Natalia Kazik

Inflation Ticket prices for Euro 2012 revealed Inflation shoots higher,

more rate hikes seen

Food for thought FAO Food Price Index 2010/11, selected products Sugar

500

Grains

Dairy

400

300

200

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Polish and Ukrainian citizens will be able to pay in their local currency via credit card or bank transfer, while ticket prices for foreign buyers will be denominated in euro and payable via credit card only.

The prices will not include delivery fees.

UEFA’s pricing scheme takes into account the cost of the opening match, groupstage matches and knockout matches, including the final.

The tournament will take place from June 8 to July 1 KP 2012.

Poland’s consumer price index (CPI), a measure of inflation, leapt to an above-forecast 3.8 percent year-on-year in January, Central Statistical Office data revealed last week. The market had predicted a 3.4 percent rise.

The result overshot the central bank’s target, which is set at 2.5 percent plus or minus one percentage point, and also rose from an annual rate of 3.1 percent in December.

Food, housing and transport prices showed especially strong increases last month, after value-added tax was hiked by one percentage point in January to help the government pare down the budget deficit.

Rising global food prices, which have impacted many economies’ recent inflation readings, also strongly influenced Poland latest CPI score.

“The main factor which triggered acceleration of CPI infla-

an] interest rate hike at the next [RPP] meeting in March,” Mr Reluga wrote on the result’s release, adding that the decision will also hinge on other macroeconomic data due out this month.

The z∏oty strengthened against the euro immediately after the CPI data release. The EUR/PLN pair finished last Friday at z∏.3.91 compared to z∏.3.93 at the close of the previGareth Price ous week.

tion was an increase in food prices,” Maciej Reluga, chief economist at BZ WBK wrote in a report.

Poland’s rate-setting Monetary Policy Council (RPP) raised interest rates last month for the first time since June 2008 on inflation fears, and analysts expect that the latest inflation figures will prompt further rate hikes soon.

“Today’s data suggest an increase in the likelihood [of

Jan

COURTESY OF BIEG 2012

January’s CPI reading surprised the market and shot above the central bank’s target rate

Ticket prices for the Euro 2012 soccer tournament in Poland and Ukraine will range from z∏.120 to z∏.2,400, UEFA, European soccer’s governing body, revealed last week. Tickets for the 31 matches have been divided into three price categories, depending on the attractiveness of places in the stadiums.

Tickets for the general public will be put on sale between March 1 and March 31, exclusively via UEFA’s website.

Applicants will need to open an account on UEFA’s website in order to purchase tickets.

3

Source: Food and Agricultural Organization of the United Nations

According to mayoral candidate Marcin Lis, the former leader of political party Civic Platform (PO) in Swarz´dz, the meetings held to choose the list of PO candidates for the city’s council were carried out in an unethical manner, Gazeta.pl reported. Mr Lis said that the candidates were required to write the amount they would pay to be given the number one slot on the electoral list. However, after inspecting the situation, PO’s director of the Poznaƒ district, Jan Grabkowski, announced that he found that no unlawful proceedings had taken place.

US using Poland as Egypt case study While the unrest in Egypt continues, the US government is closely studying the historical breakthrough that occurred in Poland in 1989, Gazeta.pl reported.

Thomas Donilon, a Homeland Security advisor to President Obama, urged the administration to evaluate the process of democratic transformation in other countries closely, citing Poland among his examples. But others, such as conservative critic George Will, have said the comparison has little merit, as the Egyptian revolutionaries are less-well organized and have no clear leader, unlike the Poles, who had Lech Wa∏´sa. ●

4

INTERNATIONAL

www.wbj.pl

FEBRUARY 21-27, 2011

Polish-Belarusian relations

Komorowski pressures Lithuania

Arrest sparks anger

The president has urged Lithuania to respect the rights of its Polish population

The arrest of a journalist in Minsk has raised hackles in Warsaw

Lithuania must respect the rights of its Polish minority, but disagreements between the two countries should not become a reason for relations to deteriorate, President Bronis∏aw Komorowski said during his visit last week to Vilnius on the occasion of Lithuania’s Independence Day celebrations.

The president discussed various areas of difficulty between the two EU member states with his Lithuanian counterpart, Dalia Grybauskaitė, and stressed the importance of overcoming frictions between the countries.

Mr Komorowski confirmed that the talks concerned the rights of Lithuania’s Polish minority, adding that this issue “must not lead to breaking off our relations and ceasing our cooperation, but it is nevertheless a source of unsteadiness, bitterness, and disappointment.”

Polish-Lithuanian relations have grown chilly in recent months due to disagreements over the Polish minority’s rights to receive Polish-lan-

The detention of journalist Andrzej Poczobut in Minsk, Belarus, has provoked anger in Poland. As WBJ went to press, President Bronis∏aw Komorowski was expected to soon address the matter publicly.

“The president is consulting with the Ministry of Foreign Affairs and the Union of Poles in Belarus in order to agree on an optimal response,” read a statement on the website of the Chancellery of the President.

However, Roman Kuêniar, advisor to the president, admitted on radio TOK FM that his boss’ options were limited. Pressure from abroad does not always help to bring about internal changes, and the current regime has strong roots in Belarusian society, he stated.

Mr Poczobut was sentenced to 15 days’ detention on February 11 by a district court in Minsk on charges of “participation in an unsanctioned protest rally” that followed the December 19 presidential elections. Mr Poc-

COURTESY OF THE OFFICE OF THE PRESIDENT OF LITHUANIA

Polish-Lithuanian relations

Could business ties help thaw Polish-Lithuanian relations? guage education and to use Polish characters when spelling their names in legal documents.

President Komorowski emphasized that the future of Polish-Lithuanian relations lies in strengthening economic ties between the countries.

Cooperation based on “business rules” in which “everyone is talking less about politics and more about money,” will

build a strong foundation for developing more friendly relations, said Mr Komorowski.

After the Independence Day ceremonies held in Vilnius’ Radziwi∏∏ Palace, the Polish President laid a wreath at the Ponary Memorial, paying homage to 100,000 people, mainly Polish Jews, killed there between 1941 and 1944.

On Wednesday morning President Komorowski met

with the Polish community from Maišiagala, a town near Vilnius. Recognizing that the Polish diaspora constitutes a highly valued contribution to society, he stressed that it was essential that the Polish minority be respected in Lithuania.

The visit was President Komorowski’s first official to Lithuania since assuming office.

Natalia Kazik

zobut says he covered the protests for Polish daily Gazeta Wyborcza.

Mr Poczobut is also the president of the Supreme Council of the Union of Poles in Belarus (UBP), an organization representing the 400,000-strong Polish minority in Belarus.

The UPB has officially appealed to Mr Komorowski to react to the sentence, as well as to the harassment and repression of its members by Belarusian authorities.

“The harassment and imprisonment of the President of the Supreme Council and other members of the organization is an unmistakable attack on the Union of Poles,” the appeal read.

In January, Mr Poczobut was detained by agents of the Belarusian security service.

He was allegedly beaten and his apartment raided before he received a fine of 1.75 million Belarusian rubles (about €500).

According to Mr Poczobut, all of these actions amount to revenge on the part of the Belarusian authorities for his and his organization’s active position against the government’s abuses.

Alice Trudelle

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INDUSTRY NEWS

FEBRUARY 21-27, 2011

www.wbj.pl

Energy producers

EDF delays its power play for Enea The long saga of Enea’s privatization looks like it will drag on a bit longer.

French power behemoth Électricité de France (EDF), which is in exclusive negotiations for a 51 percent stake in Poland’s third-largest utility, announced last week that submitting its final bid would take longer than expected. According to press reports, its bid was expected on February 20.

Based on its stock listing on the Warsaw Stock Exchange, a 51 percent stake in Enea is worth around z∏.4.9 billion, but the Polish government will likely demand a control premium. Moreover, there have been rumblings from the Treasury that it wants any strategic buyer to bid for a full stake.

Nuclear fusion?

Another condition of the sale, according to Reuters, is that EDF expand a coal-fired power plant. The French firm has countered with an offer to build a nuclear plant instead.

This looks like a strategic play by the French government, the de facto power behind EDF, in its efforts to deploy its nuclear technology in Poland. The Polish government has tasked top utility PGE with developing the country’s nuclear program, but no technology has been chosen yet and several countries – including France, Japan and the US – have lobbied for the privilege of providing it.

Would EDF’s purchase of Enea make French nuclear technology a shoo-in for the Polish program? “I don’t think so – it’s not that simple – but it would definitely be much simpler,” said Tomasz Chmal, an energy expert at the Sobieski Institute. The French would then have a much stronger negotiating position, he noted.

Mr Chmal sees little reason to sell Enea to EDF, or any foreign investor, in the first place.

“The know-how necessary [for the industry] is already in Poland,” he stated, noting that the tie-up brings little added value in this respect. He’s not alone in this opinion.

“If we sell Enea to a French company, it will be difficult to accomplish our nuclear program,” Economy Minister

˚ywiec to share profits

Purchasing Enea could strengthen EDF’s position regarding Poland’s nuclear program Waldemar Pawlak told journalists last October, expressing disapproval at the idea.

Given such opposition, as well as ongoing delays, proposals and counter proposals, EDF’s acquisition of Enea is not assured.

A series of failures If the deal were to fall through, it would mark the latest in a series of failures. The initial privatization effort was a late2008 IPO on the Warsaw Stock Exchange. Interest was dismal,

Telecoms

World’s richest man to pick up Polkomtel?

COURTESY OF WIKIMEDIA COMMONS

The company’s CEO will make a decision this week Carlos Slim Helú, the “world’s richest man” last year, is eyeing the Polish telecoms market. His América Móvil, a telecommunications firm headquartered in Mexico City, is mulling an offer for Polkomtel, operator of Plus, Poland’s largest mobile network.

Polkomtel’s owners, including oil refiner Orlen, mobile operator Vodafone Group and copper miner KGHM, intend to sell 100 percent of the company’s stock in the first half of this year. The company has been valued at around $5 billion.

According to Reuters, América Móvil’s CEO Daniel Hajj is due to make a decision soon.

“I am thinking about bidding for Polkomtel, I will decide [this] week,” Mr Hajj told the news agency.

Around 20 investors have picked up Polkomtel’s sales documents, Rzeczpospolita reported, including Telenor ASA of Norway, Swedish car-

Mr Slim is worth $53.5 billion, according to Forbes rier TeliaSonera AB, Spain’s Telefonica SA and América Móvil.

The latter firm currently has no investments in Europe, but is looking to broaden its portfolio as growth slows in its traditional markets in the Americas. It had been speculated that the telecoms behemoth could also be planning to bid for Serbia’s former monopolist, Telekom Srbija.

However, Mr Hajj was coy

BNK Petroleum strikes gas BNK Petroleum struck gas on its Wytowno 1 well in its Slawno concession in Poland, the company announced last week. The discovery – methane with traces of ethane and propane – was made at a depth of 3,580 meters. “We are pleased with the initial log analysis and the gas shows in the Wytowno 1 well,” said Wolf Regener, CEO of BNK, said in a statement.

SHUTTERSTOCK

The French firm wants to build a nuclear plant in Poland, but will put in its bid later than expected

5

when asked about the rumors, saying, “I am thinking about not bidding for Serbia.”

América Móvil provides wireless services throughout South America, Central America, Mexico and the US. It is the largest wireless services provider in Latin America.

Mr Slim, the son of a Lebanese immigrant, had a net worth of $53.5 billion in Forbes’ 2010 list of billionaires.

Gareth Price

however, and only Swedish firm Vattenfall’s last-minute purchase of 18.7 percent of the company “rescued” the debut.

Then, in the summer of 2009, the government invited bids for a 67 percent stake in Enea while most of Europe was on holiday, giving potential bidders just over two weeks to submit offers. Only Germany’s RWE made it to serious negotiations, but the government was unsatisfied with its offer and scrapped the sale.

The privatization process restarted last year, with the government selling another 16 percent of Enea via the bourse and later inviting firms to bid once again for a strategic stake, with EDF eventually emerging as the front-runner.

Will the Enea sale finally go through this time? There’s no telling at this point, but there’s some frustration among analysts with the government’s inability to stick to a single course of action.

E Blake Berry

Brewer Grupa ˚ywiec has said it will pay a dividend to its shareholders, Parkiet reported. Company president Xavier Belison has not yet revealed how much of last year’s profits will be paid out to shareholders. Share holders received z∏.2 per share toward the end of last year, when the company paid out a dividend. The group saw an 8% jump in profits last year, to nearly z∏.400 million. ●

INDUSTRY NEWS

FEBRUARY 21-27, 2011

www.wbj.pl

M&A

Good times for oil sector

Retailer NFI Empik Media & Fashion has announced its intention to pursue its acquisition of e-tailer Merlin, despite a red light from the Office of Competition and Consumer Protection (UOKiK).

The two companies want to merge their online divisions.

An agreement will take months, possibly years, to broker, according to Empik, and will likely incur further opposition from the regulator, UOKiK.

In blocking the merger, the regulator cited that the two would have a monopoly over the book industry.

Empik said last week that it would appeal UOKiK’s decision because the latter had incorrectly identified the market share of the two retailers. The firm also claimed the regulator hadn’t correctly identified the impact the tie-up would have on the market.

“In UOKiK’s opinion, a strong brand, dynamic development, a wide range of products and customer confidence represent unfair competitive advantage. In our opinion,

these are the effects of longterm investments and efforts – we cannot and should not be discriminated against for it!”

Empik stated following the announcement of its decision to appeal.

The retailer aims to strengthen its online presence, while Merlin needs a backer. Moreover, the companies view the merger as a means to fortify their presence amidst growing competition in the e-market.

In other news, Empik announced that it made a consolidated net profit of z∏.72.9 million in the fourth quarter of 2010, up from z∏.50.5 million a year earlier.

COURTESY OF EMPIK

Empik to appeal on Merlin tie-up It claims the regulator incorrectly overstated the merger’s impact on competition

UOKiK says a merger with Merlin.pl would create a monopoly in the book market, but Empik disagrees The group’s revenues for the same period amounted to z∏.1

billion, up from z∏.941 million NK, AT in Q4 2009.

Bank results

ING considers dividend payout ING Bank Âlàski turned in a strong Q4 profit and could reward shareholders ING Bank Âlàski, a unit of ING Groep NV, reported a z∏.191.7 million net profit for Q4 2010, marking a 59 percent

rise y/y. This was on the high end of the market’s expectations.

The bank’s net interest income for the period amounted to z∏.421.7 million, and it made a z∏.256 million profit on commissions. Provisions for non-performing loans amount-

Interesting results ING Bank Âlàski’s net interest income and net profit (in z∏. millions), 2005-2010 2,000 Net interest income Net profit

1,500

1,000

500

zł. mln

2005

2006

2007

2008

2009

2010

Source: ING Bank Âlàski

ed to z∏.61.2 million.

Ipopema Securities analyst Tomasz Bursa attributed the bank’s strong quarterly profit to its retail business.

“After years of corporate policy, ING Bank Âlàski turned to retail credit. In 2010 the bank gained 208,000 new retail clients on balance,” he commented, noting that its mortgage portfolio grew substantially. This, he said, put it in the top four banks in the Polish mortgage market last year.

In addition to announcing its Q4 results, ING issued a communiqué suggesting that it could pay a z∏.195.15 million dividend on its 2010 net profit.

That amounts to about z∏.15 gross per share.

According to the firm’s consolidated report for Q4 2010, its full year net profit amounted to z∏.753 million.

The proposed dividend thus

Legal News Contact: Miros∏aw Stefanik ms@pnplaw.pl

Inheritance of companies and stock in companies easier At the beginning of February, the Sejm adopted a bill which changes the Civil Code by making it easier to inherit property items such as: enterprises, real properties, shares in companies and transferable rights and obligations in partnerships.

The act has not yet been signed by the president. It is to come into force six months after its publication.

An employee may refuse to carry out an employer’s order Pursuant to the Article 100, item 1, of the Labor Code, an employee is obliged to perform work dutifully and diligently

and to follow supervisors’ orders. This, however, refers to tasks which are compliant with the law or the employment contract.

If an employee suspects that the performance of a task might bear the hallmarks of a crime, then he/she should notify the police or a public prosecutor’s office.

This is something the National Labour Inspectorate has to explain increasingly often to employees that contact it – if they feel a crime may be involved, they are not obliged to follow their supervisors’ orders and, in certain cases, they should notify state authorities. One example of such a situation is if workers are told to falsify the “best before” date of foodstuffs. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

7

represents over a quarter of its 2010 net profit.

If the proposal is accepted, ING Bank Âlàski could pay the dividend on July 1.

Ipopema’s Tomasz Bursa said ING’s decision to consider a dividend was not a given, but that it may be a sign of a larger trend in the sector, as banks “rediscover” the advan-

tages of dividend policies.

“Several risks which dominanted the financial market in 2009 have faded away,” he said. Thus ING may intend to bolster shareholder confidence through a generous dividend.

ING Bank Âlàski’s official report for full-year 2010 is scheduled for a March 31 Kasia Piasecka release.

Poland’s largest WSElisted oil companies improved their financial results last year and are hungry for even more profits this year. According to Lotos Group CEO Pawe∏ Olechowicz, his company could even make a z∏.1.2 billion profit this year, after it completes expansion work on its refineries. And the results of Poland’s largest refiner, Orlen, may rise in 2011 to z∏.100 billion thanks to macroeconomic factors and technological improvements, Parkiet reported.

Play gains 1.7 million customers Poland’s fourth-largest mobile network operator, P4, recorded an increase of 1.7 million new clients in 2010, Parkiet wrote. The Play brand operator’s revenues jumped from z∏.1.3 billion in 2009 to over z∏.2 billion last year. P4 ended the year with 5.2 million customers and an 11% share of the mobile market in Poland. ●

8

MARKETS

www.wbj.pl

FEBRUARY 21-27, 2011

Stocks report

world stock indices DJIA

NASDAQ

S&P500

FTSE100

DAX

A disappointing week on the WSE

NIKKEI225

12,317.12 (Feb 17 close)

2,831.58 (Feb 17 close)

1,340.34 (Feb 17 close)

6,085.41 (Feb 17 close)

7,399.62 (Feb 17 close)

10,833.59 (Feb 17 close)

0.72% (for the week)

1.47% (for the week)

1.40% (for the week)

1.09% (for the week)

0.89% (for the week)

2.15% (for the week)

CHANGE: 6.39%

CHANGE: 5.79%

CHANGE: 6.58%

CHANGE: 3.14%

CHANGE: 6.11%

CHANGE: 4.65%

(year to Feb 17)

(year to Feb 17)

(year to Feb 17)

(year to Feb 17)

(year to Feb 17)

(year to Feb 17)

52-week high: 12,331.31

52-week high: 2,835.20

52-week high: 1,341.50

52-week high: 6,101.42

52-week high: 7,438.42

52-week high: 11,408.20

52-week low: 9,614.32

52-week low: 2,061.14

52-week low: 1,010.91

52-week low: 4,790.04

52-week low: 5,518.27

52-week low: 8,796.45

Major indices WIG

46,575.14 (February 17 closure)

WIG20

2,641.83 (February 17 closure)

17.02

16.02

15.02

14.02

11.02

10.02

09.02

08.02

07.02

04.02

03.02

02.02

01.02

17.02

16.02

15.02

14.02

11.02

10.02

09.02

08.02

07.02

2,600

04.02

46,000

03.02

2,640 02.02

46,400 01.02

2,680

31.01

46,800

28.01

2,720

27.01

47,200

26.01

2,760

25.01

47,600

24.01

2,800

21.01

48,000

31.01

52-week low: 2,198.36

28.01

Change year to February 17: -4.10%

27.01

52-week low: 37,949.49

26.01

52-week high: 2,794.58

Change year to February 17: -2.25%

25.01

Change for the week: -2.37%

24.01

52-week high: 48,371.02

21.01

Change for the week: -1.41%

Top 5 GROCLIN COGNOR OPTIMUS WASKO PEPEES

Closing 26.49 3.26 7.55 3.90 0.63

% change (week) 52-week high 33.79 26.80 33.06 4.32 29.06 7.55 22.64 3.90 21.15 0.63

52-week low 10.70 2.40 1.15 1.37 0.43

Top 5 TVN PBG TPSA BZWBK LOTOS

Closing 16.55 199.90 16.75 223.70 40.50

% change (week) 2.48 1.78 0.90 0.22 0.02

52-week high 19.31 252.00 18.65 224.20 42.06

52-week low 15.02 192.00 14.10 168.10 25.58

Bottom 5 TECHMEX ZASTAL PEMUG POLJADLO BYTOM

Closing 0.15 3.83 1.20 1.39 1.23

% change (week) -25.00 -21.84 -18.92 -15.24 -12.14

52-week low 0.12 1.99 1.19 1.35 0.78

Bottom 5 PEKAO KGHM GETIN PGNIG PZU

Closing 160.50 165.50 12.50 3.72 337.50

% change (week) -4.92 -4.50 -3.62 -3.38 -3.02

52-week high 196.50 188.90 13.25 3.91 417.50

52-week low 153.00 88.20 8.75 3.16 326.00

52-week high 2.30 5.35 1.90 2.99 1.73

Currency report

Local news affects z∏oty

Other indices 2,840.01 (February 17 closure)

sWIG80

12,816.19 (February 17 closure)

NewConnect

58.14 (February 17 closure)

WIG-Banki

17.02

16.02

15.02

14.02

11.02

10.02

09.02

08.02

07.02

04.02

03.02

02.02

01.02

31.01

17.02

16.02

15.02

14.02

11.02

10.02

09.02

08.02

07.02

04.02

03.02

6,600

02.02

58

01.02

6,680 31.01

59

28.01

6,760

27.01

60

26.01

6,840

25.01

61

24.01

6,920

21.01

62

28.01

52-week low: 5,479.10

27.01

Change year to February 17: -4.98%

26.01

52-week low: 54.64

25.01

52-week high: 7,262.73

Change year to February 17: -8.31%

24.01

Change for the week: -2.82%

21.01

52-week high: 64.09

7,000

Macroeconomic news from the Polish economy was partly responsible for the z∏oty’s swings last week. Global factors also remained of great importance, however, especially for the EUR/USD. The main currency pair, after reaching a monthly low last Monday (at $1.3430) regained some ground to reach $1.3630 on Friday.

Mixed news from the US economy (inflation, retail sales, industrial production) did not help the dollar. A weak labor market (and, in turn, a possible monetary policy change by the Fed) is still an obstacle for the dollar’s attempts to gain. In addition, rumors that the ECB might increase interest rates due to inflation led the EUR/USD higher.

The beginning of the week brought a depreciation of the z∏oty, continuing a

6,615.61 (February 17 closure)

Change for the week: -2.37%

63

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

17.02

16.02

15.02

14.02

11.02

10.02

09.02

08.02

07.02

04.02

03.02

02.02

01.02

31.01

17.02

16.02

15.02

14.02

11.02

10.02

09.02

08.02

07.02

12,500

04.02

2,800

03.02

12,580

02.02

2,840

01.02

12,660

31.01

2,880

28.01

12,740

27.01

2,920

26.01

12,820

25.01

2,960

24.01

12,900

21.01

3,000

28.01

52-week low: 10,980.45

27.01

Change year to February 17: 4.63%

26.01

52-week low: 2,287.76

25.01

52-week high: 12,855.31

Change year to February 17: 1.15%

24.01

Change for the week: 1.66%

21.01

52-week high: 2,904.35

SOURCE: WSE

mWIG40 Change for the week: 0.01%

Analysts have been pointing to the inflation hike and a planned pension reform as some of the main causes of malaise on the WSE in recent weeks.

The fact that construction firm Polimex-Mostostal and digital TV provider Cyfrowy Polsat are expected to leave the WIG20 soon has been seen by some as a having a negative impact on the index’s performance of late.

Last Friday there was finally some reaction to the previous losses and improving sentiment was more visible in Warsaw than in the majority of European stock exchanges.

The WIG20 saw a 0.82 percent increase on the day and all other indices rose as well, with the exception of the mWIG40, which fell by 0.93 percent. ●

The Warsaw Stock Exchange continued to perform disappointingly throughout most of last week, with the WIG20 consistently seeing losses over the first four days and dropping to its 2011 low on Thursday. All of this occurred at a time when indices on Western European bourses wereclimbing to new highs.

While positive data from the Asian economies and a calming of the situation in Egypt on Monday allowed European bourses, including the WSE, to start the week on the rise, in Warsaw a lack of foreign demand soon caused the indices to sink back to their Friday levels. The following days generally saw low activity and low fluctuation of the bourse’s main indices.

trend seen during the previous week. The situation on the local currency market turned around after news about inflation in Poland was released on Tuesday. CPI inflation grew by 3.8 percent on a yearly basis, providing another sign that the Polish Monetary Policy Council will hike interest rates during its March meeting.

The market’s confidence in a March rate hike grew on Friday, when the Polish statistical office (GUS) published the PPI inflation figure, showing that this increased to 6.2 percent (in line with forecasts), while industrial production grew by 10.3 percent in January.

The EUR/PLN finished the week at z∏.3.91 (from a weekly high of z∏.3.95), while the USD/PLN dropped to z∏.2.87 (from a z∏.2.93 weekly high). ●

currency rates 3.4898

3.4529

3.4465

15.02

16.02

17.02

18.02

3.5077 14.02

3.0

SOURCE: NBP

3.4873 11.02

0.0985 18.02

0.0983

3.5

3.4540

PLN-100JPY

4.0

17.02

0.0986 16.02

0.0993

0.0996 15.02

14.02

11.02

3.0109

3.0247 18.02

0.08

0.0998

PLN-RUB

0.11

17.02

3.0006 16.02

3.0067 15.02

14.02

2.9979 2.5

11.02

4.6720 18.02

4.6443

3.0

3.0036

PLN-CHF

3.5

17.02

4.6583 16.02

4.6691 15.02

14.02

4.6702 11.02

2.8790

2.8803 18.02

4

4.6799

PLN-GBP

5

17.02

2.8864 16.02

2.9159 15.02

14.02

2.9116 11.02

3.9068

3.9105 18.02

2.5

2.9219

PLN-USD

3.0

17.02

3.9123 16.02

3.9398 15.02

14.02

3.9370 11.02

3.5

3.9337

PLN-EUR

4.0

LISTED FIRMS

FEBRUARY 21-27, 2011

Refining

COURTESY OF LOTOS

Lotos surprises with Q4 profit

Lotos posted a z∏.223 million net profit in Q4

The refiner is also angling to service planes at Warsaw’s airport

to owners of the parent) stood at z∏.223 million in Q4, compared to z∏.56 million seen in a Dow Jones Newswires survey and z∏.88 million seen in a Reuters poll.

For full-year 2010, however, it earned a net profit of z∏.653 million in 2010 on sales revenues of z∏.19.7 billion, marking a drop of 28 percent and a 37 percent rise, respectively, on 2009’s results.

Lotos’ management listed a number of recent successes, such as the completion of its

Poland’s second-largest oil refiner, Lotos, saw its fourthquarter 2010 profit fall by much less than expected – just 1.8 percent year-on-year. The absence of the one-offs that had helped boost its takings in Q4 2009 were offset by improved margins in Q4 2010.

The state-controlled company’s net profit (attributable

multi-year “10+” investment plan in late 2010, a deal to take control of Lithuanian firm Geonafta, finalized earlier this month, and overall increases in production.

“Other than increasing production power, we are effectively fighting for a bigger share of the market. In 2010 we achieved a 30 percent share in the national fuel market,” Lotos CEO Pawe∏ Olechnowicz stated.

Meanwhile, Lotos is quietly trying to undermine larger rival Orlen’s monopoly on airplane fuel supply for Warsaw’s Frederic Chopin Airport, according to Rzeczpospolita.

Orlen holds a 51-percent stake in Petrolot, a firm created in the 1990s by Polish carrier LOT and Petrochemia P∏ock (which later became Orlen). Petrolot currently enjoys a monopoly on fuel for airplanes at the airport.

However, in December Lotos signed a contract with the airport authorities for the lease of land which will host a transshipment station. This will allow the firm to ship in fuel by train, transfer it to storage tanks and then to fuel vehicles. The station could be ready by 2012.

EBB, GP

Chemicals

ZC Police beats profit forecasts

ZC Police, a manufacturer of mineral fertilizers and chemicals, turned in a net profit of z∏.47.7 million for Q4 2010, outstripping analysts’ expectations two-fold.

The result stands in stark contrast to the company’s z∏.99.7 million net loss in Q4 2009. “‘Police saw an improvement in its profits mainly due to the favorable economic situation in the fertilizer market,” said Monika Kalwasiƒska, an analyst at brokerage DM PKO BP. Specifically, it was the fertilizer segment, with a growing share of export sales that contributed to the rise, she said.

“Police was also successful in increasing sales volumes and the average prices of NPK and NP fertilizers,” she added.

Offering more insight into the unexpected increase, the company wrote in its report that demand for fertilizer in the fourth quarter was high, “despite the fact that the fourth quarter is usually a time of weakening demand. The current trends … allow for

COURTESY OF ZC POLICE

However, rising raw materials prices could pose a threat to future profits

Fertilizer sales buoyed Police’s Q4 results positive margins, and the chemical market is stabilizing.”

The data indicate that Police turned an operational profit of z∏.30 million in the last three months of 2010, roughly in line with analysts’ forecasts. In Q4 of 2009, the company had reported a z∏.62.2 million operational loss. Police’s revenue rose in the fourth quarter to z∏.573.5 million from z∏.405.4 million, in line with analysts’ estimates.

For the full year, the company posted a net profit of z∏.26.8 million. Its operational profit equaled z∏.4.3 million,

while revenues amounted to z∏.2.02 billion.

The company wrote on its website that the high net profit signals that “the group is gradually coming out of the crisis, but further restructuring is necessary.”

Ms Kalwasiƒska said the company’s performance was likely to remain strong in the first quarter of 2011, since “the first and the fourth quarters are most favorable for fertilizer companies.” She added, however, that the rising prices of raw materials pose a threat to the company’s results.

Natalia Kazik

www.wbj.pl

9

10

OPINION

www.wbj.pl

FEBRUARY 21-27, 2011

Slashing the EU’s budget won’t fix the crisis The EU’s proposed budget for 2014-20 has already sparked fierce wrangling between member governments, with the UK, Germany and France reportedly backing a freeze. Miko∏aj Dowgielewicz argues that it will be crucial to Europe’s economic development and global competitiveness

Aiming at growth A crucial first step when addressing this would be to highlight the different nature of the EU budget when compared to national ones. The EU’s budget mostly covers investments in our continent’s future. Not just investments in infrastructure, human capital, scientific research or environmental protection, but also investments in external and internal security. All these areas will determine the prosperity of our continent in the years ahead. The future EU budget should therefore be ambitious, and because of its exceptional character the debate on it should differ from the current discussions on national public finances that have been dominated by pro rata cuts. Now that the Lisbon treaty has widened the EU’s powers, this should be reflected in the size of outlays from the common budget.

Second, re-defining the EU’s budget means re-defining the EU itself. The European Union and its actions are heavily dependent on the budget that the member states agree on – so defining the new financial perspective means defining the goals of the Union for the next decade.

The budget represents the EU’s level of ambitions, and discussion between EU governments should not consist of setting top-down expenditure limits. On the contrary, the size of the budget should

COURTESY OF THE EUROPEAN COMMISSION

A

lthough Europe is slowly emerging from the deepest recession since the Great Depression of the 1930s, the crisis has led to profound fiscal deficits in many EU countries. Governments have often found themselves forced by the financial markets to cut budget expenditure, so now a major question is: Should we adopt the same approach in the case of the common EU budget?

More fundamentally, the question that faces us is whether or not we see the European Union as holding the solution to Europe’s economic recovery.

result from their discussion of the policies they want and then their assessment of the financial needs involved.

And third, the EU’s budget mostly covers investments in our continent’s future. Working together through the EU budget in many cases allows for savings, better co-ordination and economies of scale.

Although budget consolidation will be of major importance to all member states for the next few years, if Europe is to remain globally competitive the policy focus cannot only be on repaying the debts incurred during the crisis. In the postcrisis situation, the goals of the Europe 2020 strategy will be of major importance to the wellbeing of European citizens – economic growth and employment are and should remain the overriding objectives of EU policy.

The message is simple: everything we do should be aimed at growth. Of course

the economic crisis is a challenge, but if properly dealt with the EU could enter a new growth path.

Agriculture and equality This sort of growth strategy ought to be implemented through such proven delivery mechanisms as cohesion policy

“Re-defining the EU’s budget means re-defining the EU itself” and the Common Agricultural Policy. The compromise achieved by member states back in December 2005 and during earlier negotiations has enabled the EU to create a budget that offers a fair distribution of policy objectives, with 30 percent of funding allocated to cohesion measures inside the EU, 40 percent for agricultural support and environmental protection and

Common Agricultural Policy expenditure (in € billions) in total EU expenditure (2007 constant prices) CAP expenditures 60

EU 15

58

% of EU expenditure

EU 25

EU 27

60

52

56

44

54

36

52

28

€ bln

2000

2001

2002

2003

2004

the remaining 30 percent for all other policies. This balance should be maintained in the future, but this doesn’t mean that we should ignore the need for change, but these changes should chiefly take place at the micro level so as to better target funds for the EU’s Europe 2020 growth strategy.

2005

2006

2007

2008

2009

%

Source: EC Department of Agriculture and Development

EU cohesion policy emerged in its present shape when the single market was being created in the late 1980s, and the need for it is still just as great. Markets create winners and losers, but the most important thing of all is to prevent a widening of the gap between the EU’s richest and poorest regions, in which the poor regions become poorer still. Future cohesion policy should go on embracing the whole of the EU, but it should also remain the main EU instrument for promoting growth and employment in all regions.

Although the importance of agriculture to the European economy has been declining for many years, it is a sector that continues to be special. In no other sector are revenues so variable because they depend on so many factors like the weather or animal and plant diseases. Direct subsidies therefore constitute a stabilizing element for farmers’ incomes, which are generally

lower than those earned by Europe’s urban population.

We should also not forget that in the future European agriculture is going to have to face stronger competition from exporters in the US, Brazil, Argentina and other emerging markets.

The EU’s agricultural sector therefore still needs a strong rural development policy. Countries like Poland or Romania can focus more on modernization and the concentration of farms to become competitive in the single market, while the richer EU member states can allocate greater resources for environmental protection. Europe’s rural development policies should also focus more on renewable energies and on innovation and adjustment to counteract climate change.

Supporting agriculture still makes sense, but the current system, which is complicated and lacks uniformity, has exhausted itself. The future EU subsidies system should ensure equal competition conditions between member states’ agricultural sectors.

decrease every year, in large part because reductions in customs tariffs result in lower revenues for the EU’s coffers.

Direct contributions from member states currently account for nearly 80 percent of the EU’s budget even though this state of affairs runs counter to the spirit of the European treaties and promotes the logic of juste retour, which of course fails to accommodate the wider European interest.

This is why Budget Commissioner Janusz Lewandowski, who is Polish, was right to initiate a discussion on how the European budget should be financed in the future.

Some of the possible solutions that have been aired would be unacceptable for Poland too, a good example being the idea of “eurotax” based on CO2 emissions. Such a solution would hit the citizens of new member states most severely of all because their power sectors are often based on coal.

It’s going to be a difficult discussion, but it is certainly legitimate and may even prove highly beneficial for the Union as a whole.

“The only thing we have to fear is fear itself,” said Franklin Delano Roosevelt during his inauguration speech in 1933, when the US and the world were in the grip of the Great Depression. Those words sound just as true today.

This is the time for Europe to perform and to deliver, not to succumb to doubt. We Poles believe we have brought just this kind of enthusiasm to the European Union, and that all Europeans should appreciate once again what it is that Europe has to offer.

Only an ever-closer union can help the European Union to redefine and rebuild itself after the wake of the economic crisis. ●

In the European interest The EU’s founding fathers wanted the budget to be chiefly financed from “own resources,” and this was supposed to reflect its dual character of being both an intergovernmental organisation and a citizens’ union with its own directly-elected parliament. The reality has proved somewhat different.

The EU’s own resources

Miko∏aj Dowgielewicz is Poland’s Secretary of State for European Affairs The original version of this article is published in Europe’s World

OPINION

FEBRUARY 21-27, 2011

www.wbj.pl

11

Markets need foresight, not waffling O ne of the great fears in Poland at the start of the financial crisis, when people began to grasp the severity of the situation, was that foreign ownership would be the undoing of the banking sector.

Cash-starved in their home markets, hounded by creditors, regulators and government officials, spendthrift institutions would suck all available funds out of assets in Poland, leaving credit in short supply.

Or, worse, these wastrels would cut their losses and run, sticking “for sale” signs on their Polish subsidiaries with indecorous haste.

That was the logic of it, anyway. Armageddon never arrived for the sector, but otherwise these early fears proved remarkably prescient.

In their eagerness to embrace parsimony, lenders did indeed leave credit in short supply. And, as Allied Irish Banks and EFG Eurobank Ergasias have demonstrated, some foreign banks have been forced to exit Polish assets (BZ WBK and Polbank EFG, respectively) with greater haste than otherwise would be expected.

But, in the end, the market survived the crisis without a single major bankruptcy, emerging stronger and earning international praise in the process.

Fickle platform The credit for this must be spread around. Poland’s oftunloved financial regulator, the Financial Supervision Authority, deserves some for its firm but (generally) fair guidance of the market. The banks themselves have earned a pat on the back.

And the government? Yes, but perhaps not for the reasons it would itself suggest.

The government’s handling of the financial crisis was most remarkable because it often succeeded despite Civic Platform’s best efforts.

Civic Platform’s track record at reading the economic climate is poor. Take, for instance, Prime Minister Tusk’s infamous October 2008 proclamation that Poland should join the euro zone in 2011. This ill-considered announcement came three days after the US government took over Fannie Mae and Freddie Mac and five days before Lehman

Brothers collapsed. The scope of the crisis may have yet been unknowable, but the air was certainly charged with its coming.

The sale of BZ WBK too was plagued by ham-fistedness. The prime minister and Treasury Minister Grad pushed hard to make a case for state-owned PKO BP’s acquisition of the Allied Irish Banks unit. There was also much talk in the second half of last year about the need to create “national champions” of the kind born of a PKO BPBZ WBK tieup. Yet when PKO BP’s bid failed, the government petulantly began to discuss plans to sell the bank off.

Ryszard Czarnecki (see interview p. 14), as a member of the opposition, is a natural critic of the government. But it seems a growing chorus of others concur. Just last week, various independent sources contacted by this paper described Civic Platform as having “aimless policy,” suffering from a “complete lack of strategy” and accused it of “just reacting to the next emergency.”

It is a rare thing that WBJ finds itself in agreement with Law and Justice, whose 2005-2007 government was characterized by bellicose foreign policy and paranoid intrigues on the domestic front. Yet something rings true in Mr Czarnecki’s assessment of Civic Platform “reacting nervously to emerging events only under public pressure, rather than dealing with them from any strategic perspective.”

This growing discontent could explain, in part, the party’s recent plunge in the

“It is a rare thing that WBJ finds itself in agreement with Law and Justice”

‘Aimless policy’ In this paper’s contact with analysts, experts and politicians, the government’s influence in the market comes up frequently. But the criticism from these sources is increasingly harsh.

Law and Justice MEP

opinion polls. Surveys published last week suggested its support continued to slip, while Law and Justice made further inroads.

If true, it doesn’t bode well for Civic Platform. After all, if the party can’t make coherent policy choices when it’s at its strongest, there’s little chance of it embarking upon a resolute path of action in an election year.

Rely on the regulators What Poland needs is prudent regulation and, given Civic Platform’s serial waffling, it’s clear that this isn’t going to come from the government itself. In the absence of proper financial governance, the country needs to rely on the strength, integrity and independence of its regulators, such as the KNF and the Office of Competition and Consumer Protection (UOKiK).

This will not be easy, as Prime Minister Tusk has already demonstrated a lamentable willingness to interfere with the work of UOKiK. Moreover, the market regulators themselves need to exercise greater foresight.

For instance, the KNF’s

recent Recommendation S (II), which forcibly restricts the ability to lend in foreign currencies, is a good example of regulating to contain an existing “problem.” In this case in particular it would be better to let market forces react naturally, while putting greater pressure on lenders to educate would-be borrowers as to the risks of credit denominated in a foreign currency.

If Poland’s regulators are to truly safeguard the market, they must also look to the murkier areas of finance, in which new, poorly understood products are emerging.

Indeed, one reason why Polish banks avoided the worst of the financial crisis was that they were not engaged in the same risky ventures as their Western peers. But the sector’s growing confidence and strong results mean that it will be better positioned in the future to take advantage of new and curiously profitable products.

In other words, without precocious and independent regulators, the next financial crisis may well live up to the market’s worst fears. ●

The irrelevance of Olli Rehn

C

an one stern-faced Finn from the European Commission outweigh a million voters in the mind of the Polish government? The answer seems obvious, but nevertheless a confident Olli Rehn made a visit to Poland last week to shake his finger at Polish government officials (see article, p. 3).

He told them, in not so many words, that they had to bring Poland’s budget deficit under three percent of GDP by 2012 … or else.

services deserve some special treatment, but the deal they are getting now is too extravagant. Not only could their retirement ages be raised, but certain benefits could be restricted to those who actually risk life and limb, excluding career bureaucrats. Their ability to work while drawing a pen-

Truth, no consequences

“Any pressure on the gov’t to remain fiscally responsible is welcome

Or else what? Judging by past experience, not a whole lot.

But a whole lot of trouble is what’s in store for the government if it tries to meet the EC’s 2012 deadline. The ruling Civic Platform party faces pressure from uniformed-services unions to keep pensions high and benefits sweet, for example, and to stand stalwart against their demands would mean losing votes. The group represents a bloc of at least a million voters who will most certainly seek to vote out any politicians threatening their handouts (see article, p. 19).

Members of the uniformed

sion should also be limited.

And though this newspaper is no friend of the Social Insurance Institution (ZUS), we agree with the majority of Poles that it is only fair that uniformed services contribute to, and receive their pensions from, the state’s insurance fund. Paying their unwieldy pensions directly from the state budget is unsustainable.

We therefore hope that Mr Rehn’s visit made an impression on Prime Minister Tusk and Finance Minister Rostowski, as the government gets ready to negotiate with the

unions. The uniformed services’ pension payouts would be a good place to start making budget cuts, thereby shrinking the deficit – the government calculates it could save as much as z∏.16 billion by 2060.

Not-so-tough choices Unfortunately, Mr Rehn’s options for recourse are limited. There’s little the EC can do to force member states to meet Stability and Growth Pact targets. Witness countries such as France, the UK and Italy, which have also flouted the rules.

Nevertheless, any pressure brought upon the government to remain fiscally responsible is welcome. The business community still has no alternative to Civic Platform, meaning the party feels it can comfortably maintain the status quo without losing core supporters. On the other hand, the votes of the uniformed services could mean the difference between another term in office and a period in the political wilderness.

So, a rap on the knuckles from an ineffectual EC or the wrath of a million voters?

That’s the choice facing Civic Platform. Don’t expect it to choose the latter. ●

EDITOR-IN-CHIEF ANDREW KURETH (AKURETH@WBJ.PL) MANAGING DIRECTOR MONIKA STAWICKA DEPUTY EDITOR

POLITICS EDITOR

E. BLAKE BERRY (BBERRY@WBJ.PL)

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NATALIA KOPYTNIK RICHARD WERNICK JOANNA WÓYCICKA

ONLINE & NEWS EDITOR

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Unless otherwise noted, the opinions here are those of Warsaw Business Journal Readers’ comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

COVER STORY

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Legal Eye

Let’s buy a bank Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com In early February, Banco Santander, a Portuguese bank holding company, announced its intent to purchase 100 percent of the outstanding shares in BZ WBK, following its earlier agreement to purchase a 70 percent stake in the bank from the current majority shareholder, Allied Irish Banks.

Banco Santander agreed to purchase Allied Irish Banks’ 70 percent stake in BZ WBK for EUR2.94 billion. The planned purchase is to occur through the Warsaw Stock Exchange no later than March 29, 2011, at the price of z∏.226.89 per share.

Two conditions need to be satisfied before Banco Santander can take over the shares in BZ WBK: (i) approval by at least 70 percent of the current shareholders; and (ii) approval by Poland’s financial regulator, also known as the KNF. Shareholder approval seems assured as Allied Irish Banks is already contractually bound to sell its majority stake to Banco Santander. For its part, the KNF’s long-awaited approval came last Friday.

Now let’s take a look at just what the KNF looked at in deciding whether to approve the sale of BZ WBK to Banco Santander.

Threshold crossed The purchase of 10 percent or more of a Polish bank’s shares is subject to the prior approval of the KNF (Article 25 of the Banking Act).

Specifically, approval is required each time a particular shareholder acquires more than 10 percent, 20 percent, 25 percent, 33 percent, 50 percent, 66 percent or 75 percent of a bank’s shares. With respect to the sale of BZ WBK, both Allied Irish Banks and Banco Santander are required to give notice of the planned sale to the KNF.

Criteria The criteria enumerated by Poland’s Banking Act, which the KNF uses in deciding whether to approve the sale of a bank, are open to interpretation, to say the least. Art. 25(7) states that the KNF may withhold approval if the sale is “liable to be detrimental

to the sound and prudent management of the bank.”

Moreover, the KNF may block the deal if the purchaser intends to use borrowed funds to finance the purchase of shares.

Please note that this criteria applies to the purchase of shares in a publicly traded bank. Additional laws and oversight would apply to the privatization and sale of a state-owned bank to a private investor. Specifically, the sale of any stateowned enterprise, including a bank controlled by the State Treasury, would be subject to the requirements of the Commercialization & Privatization Act (in addition to the Banking Act).

FEBRUARY 21-27, 2011

Banks

Generating foreign interest Anthony Casey

Politics and permission In 2005 Bank Pekao, which is majority owned by the Italian UniCredit Group, announced its intent to purchase Bank BPH, a Polish bank.

In this case, politics appeared to play an equal role in the approval process to that of the Banking Supervision Commission, the KNF’s predecessor.

Despite receiving approval from the European Commission to purchase Bank BPH without any conditions, the Polish government objected to the planned purchase by Bank Pekao, arguing that the merger of the two banks would be detrimental to the clients of both.

In other words, the proposed sale would be detrimental to the sound and prudent management of the bank. In the end the regulator approved the sale, but only after requiring Bank Pekao to sell not less than 200 of the 466 Bank BPH branches, and the Bank BPH name, to a third party.

In December of last year, the European Commission gave its blessing to the planned takeover of BZ WBK by Banco Santander.

In contrast to the approach taken by the Polish government to the sale of Bank BPH to Bank Pekao, the KNF ruled that there was, “no reason to refuse the direct purchase [of BZ WBK] by Banco Santander” and it did not impose any particular conditions on the transaction. ●

SHUTTERSTOCK/¸UKASZ MAZUREK/WBJ

12

Some of the brands competing in Poland’s crowded banking market

Poland’s profitable banking sector is generating much speculation, but is consolidation really in the offing?

It was the talk of the banking sector – would Portugal’s Millennium BCP sell its Polish arm, and if so, who would buy it? Would PKO, thwarted recently in other bids, try its hand again? Or perhaps UniCredit unit Pekao?

All this was laid to rest – for the time being, at least – when Millennium’s chief executive officer, Carlos Santos Ferreira, speaking earlier this month at an annual meeting of bank employees in Lisbon, nixed rumors of a sale.

Describing the Polish business as a “strategic asset,” Mr Ferreira said, “Millennium BCP has not mandated anyone to sell part or all of Bank Millennium.” He added that the company intended to keep hold of its 65.5 percent stake in Bank

Millennium and to remain its majority shareholder.

Looking at the figures for Millennium’s Polish operation, it’s not difficult to see why. The bank made a profit z∏.326 million (€81 million) in 2010.

That’s compared to z∏.1.5 million (€0.4 million) in 2009.

And Millennium is not alone in reporting an upsurge.

In fact, the Polish Financial Supervisory Authority estimated the Polish banking sector’s net income growth in 2010 at 41 percent – a y/y rise to z∏.11.7 billion. That result, and the sector’s general strength during the global financial crisis, help to explain why there’s so much international interest in Poland these days.

Allied Irish Banks’ 2010 sale of Bank Zachodni WBK, necessitated by woes in its home market, attracted plenty of big fish. Spanish bank Santander, whose takeover of BZ WBK was approved by the Polish financial authority last Friday, eventually won out.

But its competitors included

that DZ was not large enough to be an attractive proposition.

France’s BNP Paribas, a Polish-government backed PKO BP and, initially, Italy’s Intesa.

PKO Bank Polski, rebuffed in the BZ WBK sale, has reportedly looked into a number of other banks, including German DZ Bank’s Polish assets. None of these has panned out, though – for example, PKO president Zbigniew Jagie∏∏o stated last week

A way forward With new rumors appearing every week and international players clearly keeping an eye on things, the Polish banking system seems to be in a state of flux.

PKO’s Jagie∏∏o has repeatedly stated that he sees consol-

Paying the bills Employment in the Polish banking industry, 2003 to Q1-Q3 2010 200,000

175,000

150,000

125,000

100,000 2003

2004

2005

2006

2007

2008

2009

2010 (Q1-Q3)

Source: Polish Financial Supervision Authority

COVER STORY

FEBRUARY 21-27, 2011

idation of the Polish banking sector as a way forward. In dismissing DZ Bank as an acquisition target he nevertheless declined to rule out PKO’s participation in further consolidation of the market. Indeed, acquisitions are an attractive prospect for the bank, which already boasts the largest deposit base in Poland. And, thanks to its stake in Bank Pocztowy (25 percent plus one share), it also has the largest service network.

PKO’s chief rival is Pekao, followed by a group of banks constantly jockeying for position: Millennium, ING, BZ WBK, Kredyt Bank, Citi Handlowy, BGK, Raiffeisen Bank Polska and BRE Bank.

Ownership in the sector is largely foreign, with PKO and BGK the only large players in Polish (meaning the government’s) hands.

Meanwhile, Raiffeisen has announced that it aims to become Poland’s sixth-largest player – in terms of lending, at least – by taking control of crisis-hit Polbank EFG for z∏.1.9 billion.

Attractive prospects According to Marcin Materna, director of the analysis department at Millennium Dom Maklerski, Poland is, simply put, a very attractive financial prospect at the moment.

“After the financial crisis, banks in Poland are emerging much stronger, more quickly [than others]. And the crisis in Poland was not so deep, because there was a lower exposure to high-risk markets and none of the toxic debt that other banks had,” he commented.

“Now, investors are looking at Polish banks and they

see that they have mainly state securities. They see that there is plenty of room to grow, particularly in the corporate sector, but increasingly in retail,” Mr Materna added.

This opinion is borne out by a report by Michal Strojwas of the European Commission’s Directorate General for Economic and Financial Affairs. He noted that this prudence and steadiness had also prevented Poland from slipping into the economic crisis, the aftershocks of which are still rumbling on through the neighboring euro zone.

But, he added, while Poland is still a relatively attractive market, it could be even more so without such a high dependency on higher risk, foreign investment.

Zbigniew Jagie∏∏o puts the combined foreign stake in Polish banks at 70 percent of the

Allianz and Alior

A tale of two banks The Polish banking sector can be just as unpredictable as it is profitable. This is perfectly illustrated by the fortunes of two banks which launched in Q4 2008, during the onset of the global financial crisis – Allianz Bank and Alior Bank.

TuiR Allianz Polska, the Polish arm of German financial group Allianz, was slow off the mark, ending its first full year of operations with a z∏.126 million net loss. By the middle of 2010 it had a base of 73,000 retail customers, with almost 60 branches around the country and 650 employees, but reports appeared that Allianz was ready to cut its losses and run.

Then, last November, Polish financial group Getin Holding inked a deal to purchase 100 percent of Allianz Bank Polska’s assets (Getin itself had already begun to consolidate its banking activities with the merger of highend consumer banks Getin and Noble). Getin Holding said it considered the Allianz acquisition a long-term investment, valuing it at around z∏.140 million.

As of last week the deal had not been com-

pleted, but Allianz Bank Polska is nevertheless set to exit the market less than three years after it entered.

Now compare this with Alior Bank, which also started operating in Poland in Q4 2008.

Unlike Allianz, Alior divided its efforts fairly equally between the retail and corporate sectors, and it has earned a number of accolades since launching. Its current customer base is huge – 670,000 according to Alior’s own figures – of which nearly 70,000 are corporate clients.

Alior experienced fast growth, announcing that it had achieved operational profitability early in 2010, some seven months ahead of schedule. The bank’s next target is to make a profit of z∏.100 million this year.

Unlike its ill-fated peer, a change of ownership is not expected in the foreseeable future for Alior. The bank – described by its management as “the largest greenfield banking project in Europe’s history” – is frankly doing well enough on its own at present.

Will it be sold off somewhere down the road? For now, that is impossible to predict. ●

total asset value of the industry. But he too said that many mergers and acquisitions in the Polish banking market in the past three years had come about through necessity rather than choice (as reflected in the cases of Polbank and BZ WBK).

The attractiveness of lowrisk investment and steady growth (and the associated profits) was also noted by Adam Narczewiski, a Polish financial expert currently heading X-Trade Brokers’ Hungary office.

But while the big players may swap assets, he said, such an attractive market meant that Polish banks – especially the smaller ones – were reluctant to sell.

“In the Polish banking sector, in most cases, the cards are already on the table. We should not expect any spectacular acquisitions or mergers on top. Large banks could be sold only when their foreign owners experience problems,” he said, noting that further consolidation will happen, but slowly.

“Poland is an attractive market and even smaller banks will be reluctant to leave the market,” Mr Narczewski stated, adding however that, “Due to the attractiveness of the banking sector, there will always be potential buyers, regardless of the size of the bank.”

The (measured) pace of change Given the pace of rumors in the market, further consolidation seems like it could take place quickly. Yet experts say it will be slow and steady. So should we expect major structural changes in the market or not?

Despite the volume of speculation in the market, Marcin Materna suggested

www.wbj.pl

13

Growing despite tough times Value of total assets in the Polish banking industry, 2006 to Q1-Q3 2010 (in z∏. bln) 1,500

1,250

1,000

750

zł. bln 2006

2007

2008

2009

2010

Source: Polish Financial Supervision Authority

that little would come of it in the short term.

“It is not good for the banks to be sold now,” he said. “If they don’t need to sell, they will wait for a better time, when prices are high-

“After the financial crisis, banks in Poland are emerging much stronger, more quickly than others” er.” At the moment, banks can expect to be quoted at approximately two-and-ahalf times book value. In the past, Mr Materna said, they have been quoted as high as four times the value – and probably will be again.

X-Trade’s Adam Narczewski does not expect to see much change at the top.

He predicts PKO and Pekao will continue to lead the market for some time to come, although consolidation may lead to shuffling in the pack of banks chasing those two.

Nevertheless, customers could benefit from growing responsiveness in the bank-

ing industry.

“The banking sector is divided in Poland and we should not expect any major changes. Clients do want to see banks competing with each other, because that lowers provisions and makes certain offers more attractive,” Mr Narczewski said. “The more foreign banks enter the local market, the more ‘global’ Polish banks have to become in terms of service and fees.”

Marcin Materna described this as a good time for Polish bank customers to shop around. “The banks are all driving to attract new customers, so there are some very attractive rates around – especially for deposits and mortgages.”

He also commented that there is no reason why Polish banks should not continue to grow and attract investors, both domestic and foreign.

But he was even more skeptical than Mr Narczewski about the prospects of a short-term push towards major consolidation.

“There is nothing new about this talk,” he said.

“Everyone has been talking about consolidation for the past 10 years, and there has been no sudden change.” ●

INTERVIEW

www.wbj.pl

Irish banks get creative Irish banks have started issuing bonds to themselves, using a previously undisclosed clause in December’s bailout agreement that allows them to trade such bonds for cash from the European Central Bank, instead of using the less attractive loans from the Irish central bank. Bank of Ireland, AIB, Irish Life and Permanent and EBS issued governmentguaranteed bonds totaling €17 billion (z∏.66.4 billion). Critics are slamming the move as a thinly disguised method to print more money.

BGK bonds snapped up Bank Gospodarstwa Krajowego (BGK), one of the few state-owned banks in Poland, said that pension and investment funds were eager to buy its bonds during a recent public issue. Foreign investors were also interested in the bonds and reportedly bought about 7% of total bonds sold, said BGK.

HSBC: z∏oty a good investment The z∏oty, alongside the Czech koruna and the Hungarian forint, are among the most attractive currencies from emerging markets in Europe and Africa, HSBC analysts wrote in a currency report. In their opinion, at the end of Q1, EUR/PLN will hold stable at about z∏.3.9. In the following quarter, however, the Polish currency should gain in value, and they expect it to end the year at z∏.3.6 to the euro.

Chemical spill National road 7, which connects Gdaƒsk and Warsaw, was temporarily closed last Wednesday while firefighters cleared a chemical spillage. The incident occurred near the town of Nidzica when plastic containers carrying potassium monoxide, sodium monoxide and phosphoric acid fell from a truck onto the road. The cleanup operation took over six hours, as firefighters took their time, fearing a potential explosion. ●

FEBRUARY 21-27, 2011

Politics

Czarnecki: we didn’t start the war Ryszard Czarnecki, an MEP and member of Law and Justice’s political committee, talks to WBJ about his party’s strategy, its battles with Civic Platform and Poland’s foreign policy Ewa Boniecka: You are now a member of Law and Justice’s [PiS] political committee, which has been enlarged to 27 members. What does this move mean for your party’s strategy?

Ryszard Czarnecki: Law and Justice wants to win [this autumn’s] parliamentary elections and has a chance to win, so the decision was made by [PiS leader] Jaros∏aw Kaczyƒski to enlarge the party’s leadership to make it function more effectively and also to concentrate more on economic matters. ... The enlarged political committee gathers together people from various streams of conservative thought and various professional experiences, and it will improve the effectiveness of our party’s dealings with the country’s problems.

And what’s your role inside the party’s new setup?

I have conservative-national views and regard them as the foundations of Poland’s independence and development. I am in the main stream of our party’s leadership arrangement, and I think that Jaros∏aw Kaczyƒski wanted to have me in the political committee as the person dealing with foreign policy matters.

I am certain that our enlarged leadership will reinvigorate Law and Justice’s image as a modern centristconservative party similar to other European parties. Contrary to our opponents’ views, we are not a populist party and will never be a populist party.

You have said that Law and Justice wants to focus on economic matters now, yet last year’s catastrophe in Smolensk and the government’s handling of the investigation seem to be at the heart of the battle between PiS and Civic Platform [PO]. Will this dominate the election campaign?

The Smolensk catastrophe is an important matter which has to be explained, and we will act to do this. And it is obvious now that we were right about the investigation, rather than the Tusk government, which has put itself at the Russians’ mercy. Yet the Smolensk catastrophe will not be the main issue in our electoral campaign.

Our economic offensive is already in motion – it started with a big conference in Warsaw and there will be more.

Jaros∏aw Kaczyƒski has presented our economic postu-

lates, the simplification of taxes, unburdening the economy and public administration.

We are pointing out that the government has no strategy for curing public finances and is implementing only ad hoc measures to reduce the budget deficit, which mainly involves taking money from people’s pockets.

In the files of the Speaker of the Sejm there are already

described it as a confrontation between two visions of civilization. Is that accurate?

I would not want to use the word hate, but sometimes when I listen to the words of PO’s Deputy Sejm Speaker Stefan Niesio∏owski, I have the impression that this word appropriately characterizes the aggression towards PiS. Yet in the long run, I think that politicians who put an emphasis on matters which connect us, rather than divide us, will govern Poland.

That does not mean ignoring the existing differences, because they are serious. There is a clash

was perceived – is not possible to implement. While some elements of that vision remain, copying the whole idea from a few years ago and transferring it to present-day Poland is not an option.

Your former colleagues who have formed PJN [Poland Comes First] are also attacking the government over its handling of the Smolensk catastrophe investigation. Are they strengthening your position?

In the political context, the statements from PJN’s leaders

EAST NEWS

14

PiS’s Ryszard Czarnecki says Civic Platform lacks any vision for Poland over 60 draft bills prepared by our party, 90 percent of which deal with economic and social matters. We are the only party which has a chance of taking power from PO in the coming election and we offer alternatives. When we talk about solutions, we indicate how to obtain the money to implement them.

Yet your heated confrontations with PO still center on the Smolensk catastrophe. How do you feel on the battlefield of Polish-Polish war?

It was not us who began the war. I think that the majority of Poles would like to see politicians from the big parties be willing to cooperate.

I will give you an example from a European perspective.

In the Bundestag, important economic proposals are approved by consensus between the government coalition and the opposition, in order to keep those bills from being changed after a change of government.

And I think that we could learn some lessons from the Germans here.

But surely you must admit that the scale of confrontation, even hate, between PiS and PO is enormous. Some have

“The Tusk government has put itself at the Russians’ mercy” between our vision of a strong, properly functioning state which offers liberty and opportunities to entrepreneurs, and Civic Platform’s lack of any vision. I can’t describe the Tusk’s government’s policy as bad, because it simply doesn’t exist.

The government reacts nervously to emerging events only under public pressure, rather than dealing with them from any strategic perspective.

This mentality results in Civic Platform being weak on domestic and foreign policy.

Is PiS still holding on to its Fourth Republic ideology, its concept of fundamental change to all domains in Poland?

Even beautiful ideas ... require proper instruments for their realization. And so PiS has to be a little pragmatic if it wants to realize certain ideas, like the idea of a strong, effective state.

But I think that the idea of the Fourth Republic in the shape as it was known – or, rather, as it

about the Smolensk catastrophe strengthen our debate about it. It is certainly handy and useful for us when they say that Jaros∏aw Kaczyƒski was right from the beginning to criticize Tusk for his stance towards the Russians.

Yet I think that these statements will not convince people – and there are many who are critical of the Russians’ actions – to vote for them. That’s because the electorate which is critical of Tusk’s actions regarding the Smolensk catastrophe will choose to vote for PiS as the more reliable party.

So I expect that PJN will not cross the five percent threshold to enter parliament. But if that happens, which seems highly unlikely to me, I would be able to imagine that PJN could be invited into a governing coalition by PiS. How do you view Poland’s policy towards Russia?

I think that the Tusk government’s policy towards Russia is ineffective. Moscow only respects strong stances, and I am saying this as an historian.

Certainly it does not bring results to hide one’s head in the sand like an ostrich, which Tusk is doing. I think that we have to talk with Russia openly about

our differences.

During the PiS government our mutual trade turnover increased. So the acknowledgement and even strong verbalization of opposing interests in some domains does not mean that there cannot be cooperation in other fields.

And to build a stronger position in relations with Russia, Poland should use the instruments we have as members of the EU to shape general EU policy towards Moscow. When Russia tries to conduct its European policy by developing close bilateral relations with chosen EU members – like Germany, France and Italy – we should react to this divisive policy by pointing out that the process of building better cooperation between Russia and the EU cannot be realized without progress in Polish-Russians relations. Poland has to fight to include our bilateral relations with Russia into the whole EU set up.

Yet our complicated relations with Russia are frowned upon by our partners in the EU and US at a time when Western policy towards Moscow is to reset relations.

We have to face the fact that the US is conducting a new policy of close cooperation with Russia and is talking with Moscow above the heads of Europe, and not only of Eastern Europe. On the other hand, the main policymakers in the EU are establishing direct relations with Russia, without being interested much in guarding the EU’s institutional relations with Russia.

Poland finds itself now in a period when national interests are prevailing in the EU and when European Union faces what I call its marginalization in world politics.

The Eastern Partnership program is a priority of Poland’s upcoming presidency of the European Union. You have had a look at it from the inside – what are its chances?

As vice chairman of the Euronest Parliamentary Assembly, which includes all EU members and the six countries participating in the Eastern Partnership, I can see that it exists mainly on paper. It has no proper financial means for implementation.

The budget of the Eastern Partnership is 20 times smaller that the budget of the Mediterranean Union program, created under the patronage of French President Sarkozy.

So the Eastern Partnership, initiated by Poland and Sweden two years ago, still isn’t a real instrument of European Union policy towards countries located east of the EU. ●

New research puts Warsaw’s development potential in the spotlight

Developer Inpro’s debut on the WSE last week was less than impressive 17

16

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

Real estate consultancy Colliers International has overseen the lease of 8,000 sqm of office space in Warsaw on behalf of real estate funds managed by Pramerica Real Estate Investors.

Recruiting company Antal (450 sqm) and BRE Leasing (5,600 sqm) have extended their leases in the capital’s Stratos, an eight-storey office building located on ul.

Skorupki. At the same time, energy firm Polskie Sieci Elektroenergetyczne (1,500 sqm) and ICT solutions firm Gemalto (350 sqm) took up space in the seven-storey Nordic Park building.

Millennium in Francuska Developer Globe Trade Centre has leased 700 sqm of office and 100 sqm of service space at its Francuska Office Center complex in Katowice to Bank Millennium. The latter area will be occupied by a bank outlet. The tenant is expected to move into the property in May. Located in downtown Katowice, Francuska Office Center comprises two seven-storey buildings.

Tenants include Philips Lighting Poland, Berlitz Polska and Nordea Bank Polska. GTC is now in negotiations with other potential tenants for the property. ●

Office

Union investment to buy Zebra Tower The deal is worth z∏.300 million, but remains “preliminary” Germany’s Union Investment Real Estate has signed an agreement with Austrian real estate firm S+B Gruppe for the purchase of Zebra Tower, an office property in Warsaw. The value of the transaction amounts to z∏.300 (€76) million.

Union Investment is purchasing the office building for its Immo-Invest: Europa open-ended real estate fund.

Asked about the deal, Izabella Kieler, head of leasing & marketing at S+B Gruppe, emphasized that the deal is not yet final. “The parties have only signed a preliminary document,” she said.

Zebra Tower is a 17 storey,

class-A office building located next to Rondo Jazdy Polskiej, near the Politechnika subway station. It offers approximately 18,280 sqm of office and retail space.

“We can expect Zebra Tower to be fully let before long” Work commenced in September 2008, and the building was delivered and saw its first tenants in Q4 2010. Leases have been signed with Samsung, Boston Consulting, Cityboard Media, Bankier.pl, PKO Bank and Svenska Handelsbanken, among others.

“Poland’s economy contin-

Spanish developer Kronos Real Estate is moving ahead with its Ambassador office

project in Warsaw’s Mokotów district. Construction on the 11-storey scheme, which was

Focus Mall leasing . . . . . . . . . . .16 Inpro debut . . . . . . . . . . . . . . . . .16 Panattoni in Silesia . . . . . . . . . .16 Gant’s 10 projects . . . . . . . . . . .16 Property-related stocks . . . . . .16 Warsaw’s potential . . . . . . . . . .17

COURTESY OF CB RICHARD ELLIS

Zebra sale . . . . . . . . . . . . . . . . . .15

Rzeszów Plaza . . . . . . . . . . . . . .15

ues to grow. Stable demand for high-quality space in central locations like Warsaw city center means that we can expect Zebra Tower to be fully let before long,” stated Dr Karl-Joseph Hermanns-Engel of Union Investment Real Estate.

Zebra Tower has applied for a Leadership in Energy and Environmental Design (LEED) Gold certification.

This is not Union Investment’s first transaction in the Polish capital. Last spring it acquired both the Horizon Plaza office building and the office and commercial Lipinski Passage.

Founded in 1986, S+B Gruppe is present in Austria, the Czech Republic, Poland and Romania.

Katarzyna Piasecka

The deal for Zebra Tower came to z∏.300 million

Construction launches on Kronos Reale Estate’s Ambassador project

In this issue Ambassador work . . . . . . . . . . .15

FEBRUARY 21-27, 2011, LI 16/07

COURTESY OF S+B GRUPPE

Colliers lets 8,000 sqm

•

The Ambassador building will bring 15,600 sqm of space to the market

designed by the AMC – Andrzej M. Cho∏dzyƒski studio, has just been launched by Warbud and is expected to finish in Q1 2013.

Located on the capital’s ul.

Domaniewska, the Ambassador development will offer 15,600 sqm of office and retail space. A four-level underground parking lot will provide 298 parking spaces and the building’s amenities will include restaurants, coffee shops, banks, a laundry facility and a fitness club as well as a 1,800-sqm green terrace on the structure’s eighth floor.

Kronos Real Estate has appointed CB Richard Ellis as the exclusive leasing and marketing agent of the Ambassador project.

“The building is perfectly

suited to attract high-profile tenants from the financial, insurance, pharmaceutical and automotive sectors, among others. Mokotów is a well-established office district with historically strong tenant demand and low vacancy rates,” ¸ukasz Ka∏´dkiewicz, office agency director at CB Richard Ellis Polska, said in a statement.

“The combination of convenient location, superb car parking provision and great floor sizes is proving very popular with local and regional companies seeking competitive rates together with a prestigious address,” commented Angel Medina, general director of Kronos Real Estate.

Rzeszów Plaza expansion Keen Property Partners Retail is planning to expand the Rzeszów Plaza shopping center project in Rzeszów, Podkarpackie voivodship, following growing tenant interest in the property.

Approximately 5,000 sqm of GLA, housing 15 new stores on two floors, will be added to the scheme, which will thus comprise a total of 19,500 sqm. Construction is expected to launch in the next few weeks and the grand opening of the new section of the mall is scheduled for October. The cost of expanding the Rzeszów Plaza shopping center will amount to approximately €13 million.

Adam Zdrodowski

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 To subscribe: e-mail subscribe@wbj.pl c +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription or call

AZ

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Brochocki’s new deals

Sporting goods retailer Digisport has signed on with the Jantar shopping center in S∏upsk, taking up 300 sqm in the mall’s future expansion. It joins a number of tenants who will also occupy the new section of the retail center, including cinema operator Multikino and fashion brands Zara and Reserved. Work on Jantar is expected to begin soon, expanding it to a total of 46,000 sqm. ●

The mall is scheduled for completion in Q1 2013

Leasing begins on Pomorskie Focus Mall Parkridge Retail Development has launched the commercialization of its Focus Mall Starogard Gdaƒski project in Pomorskie voivodship. The process is being overseen by the company’s leasing department together with BOIG Property Consulting.

“We are seeing a lot of interest in leases. Influencing this is the mall’s good location, near a main street in the center of town neighboring the Market Square, as is our reputation as a developer,” stated Jaros∏aw Fija∏kowski, the firm’s president.

Construction on Focus Mall Starogard Gdaƒski is scheduled

to launch in Q3, with delivery expected in the first quarter of 2013. The shopping center will have 55,700 sqm of total space, of which GLA will comprise 22,600 sqm. It will host around 110 shops, and Parkridge aims to include a multiplex, supermarket, electronics retailer and other staple tenants.

Parkridge has already built four Focus Mall projects in Poland, in Rybnik, Bydgoszcz, Zielona Góra and Piotrków Trybunalski. Others are in the process of being developed in Pi∏a, Gliwice, Jelenia Góra, Ostrów Wielkopolski and Tomaszów Mazowiecki.

EBB

Property-related stocks Security

Closing price on Feb 17

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏.mln)

BUDIMEX

96.00

0.52

77.50

106.10

23.16

25,530,098

2,450.89

CELTIC

22.65

20.48

17.43

60.55

N/A

34,068,252

771.65

DOMDEV

47.25

-1.56

38.52

61.00

9.88

24,560,222

1,160.47

ECHO ELBUDOWA

4.62

6.21

3.86

5.40

14.07

420,000,000

1,940.40

159.00

-5.69

155.00

188.40

-3.05

4,747,608

754.87

ENERGOPLD

3.83

0.79

3.57

4.50

-13.35

70,972,001

271.82

ERBUD

49.48

-1.24

47.00

61.00

3.08

12,602,711

623.58

GANT

16.36

-0.79

15.69

26.00

-16.91

20,499,953

335.38

GTC

20.90

-0.71

20.25

25.00

-2.97

219,372,990

4,584.90

HBPOLSKA

2.72

6.67

2.54

3.90

-30.61

210,558,445

572.72

JWCONSTR

14.89

6.74

11.40

18.69

22.55

54,073,280

805.15

LCCORP

1.60

6.67

1.41

1.73

9.59

447,558,311

716.09

MARVIPOL

9.39

1.84

8.83

22.31

-43.26

36,923,400

346.71

MIRBUD

4.75

11.76

2.71

4.75

63.79

75,000,000

356.25

MOSTALWAR

47.96

-0.50

46.91

77.00

-28.42

20,000,000

959.20

MOSTALZAB

2.95

7.66

2.63

4.84

-30.59

149,130,538

439.94

ORCOGROUP

32.25

-0.68

19.00

34.20

12.41

14,053,866

453.24

PBG

199.90

1.78

192.00

252.00

1.06

14,295,000

2,857.57

PLAZACNTR

4.10

0.00

4.10

6.52

-34.40

292,647,720

1,199.86

POLAQUA

19.10

-7.24

16.00

22.50

12.95

27,500,100

525.25

POLIMEXMS

3.57

-0.83

3.38

5.29

-13.56

521,035,327

1,860.10

POLNORD

31.80

0.06

31.41

44.00

-5.07

22,242,031

707.30

RANKPROGR

10.00

-1.96

9.59

10.96

N/A

37,145,050

371.45

ROBYG

1.84

-0.54

1.70

1.94

N/A

257,390,000

473.60

RONSON

1.40

0.00

1.36

2.10

-9.09

272,360,000

381.30

TRAKCJA

3.85

5.48

3.63

4.97

-2.28

160,105,480

616.41

ULMA

81.00

-0.98

70.00

86.20

4.11

5,255,632

425.71

UNIBEP

9.44

-1.26

6.43

10.30

45.90

33,927,184

320.27

WARIMPEX

10.60

2.42

7.64

10.85

28.02

54,000,000

572.40

ZUE

13.70

-3.18

13.59

15.14

N/A

22,000,000

301.40

COURTESY OF GANT

Digisport joins Jantar

Gant plans 100,000 sqm in new projects this year COURTESY OF PARKRIDGE HOLDINGS

Brokerage Kancelaria Brochocki recently facilitated a number of lease deals in Warsaw and Wroc∏aw for a total of approximately 7,500 sqm of space. The largest transactions involved Towarzystwo Ubezpieczeƒ Wzajemnych “TUZ” and Towarzystwo Ubezpieczeƒ i Reasekuracji “Partner” in Warsaw’s Poleczki Business Park (2,000 sqm), Nomi in Warsaw’s Mon Grand Plaisir (1,200 sqm) and Solid Security on Wroc∏aw’s ul. ˚migrodzka (1,100 sqm).

FEBRUARY 21-27, 2011

Phase II of Kaskada na Woli will be delivered in mid-2012 Gant Development is planning to launch 10 projects this year, totaling 100,000 sqm. New investments will appear in Kraków and Gdaƒsk, as will the second phase of the company’s flagship “Kaskada na Woli” investment in Warsaw.

These investments involve a total of 1,500 apartments and 4,900 sqm of commercial

space. Gant estimates the cost of building all 10 projects at around z∏.340 million.

In order to finance existing projects and purchase new ones, especially those which already possess building permits, the stock-listed developer intends to issue shares worth around z∏.100 million.

In 2010, meanwhile, Gant

Development sold 979 apartments, a figure up about 40 percent on the previous year.

It’s sales target for this year is set at around 1,200 units.

The company wants to remain active not only in Warsaw, but also to develop its presence in Kraków, Tri-city, Poznaƒ and Wroc∏aw.

Katarzyna Piasecka

Panattoni Europe announces two new projects in Silesia Panattoni is planning to build two warehouse parks with a combined space of 30,600 sqm near Gliwice, in Silesia voivodship. The new investments, Panattoni Park Gliwice I and Panattoni Park Gliwice II will comprise a total of three buildings.

Panattoni Park Gliwice I will have two buildings – a 11,165-sqm BTS facility dedicated to a logistics client and a building offering nearly 11,500 of speculative space. Construction work is scheduled to start in April.

Panattoni Park Gliwice II, meanwhile, will comprise one 8,000 sqm warehouse and office building. The construc-

COURTESY OF KONKRET PR

16

Panattoni Park Gliwice I will comprise 22,665 sqm of space tion start is scheduled for March.

Both parks will be located within the Katowice Special Economic Zone, allowing tenants to benefit from spe-

cial tax breaks. The first tenant, Saint-Gobain Glass Polska, will take up 4,000 sqm of warehouse and 250 sqm of office space in Panattoni Park KP Gliwice II.

Inpro’s WSE debut disappoints Gdaƒsk-based developer Inpro entered the Warsaw Stock Exchange last Thursday, becoming the fourth debutant on the main market so far this year. However, its IPO didn’t live up to the company’s hopes.

Prior to book-building, Inpro had hoped to earn about z∏.100 million from the listing of over 10 million series-B shares. In the end, it took home a little over z∏.66 million.

The stock’s initial performance was somewhat disap-

pointing for investors too, as the stock dipped immediately after trade began, falling from z∏.6.60 to z∏.6.56. It rallied later in the day, though, returning to its debut price.

At end of trade on Friday, Inpro’s stock closed at z∏.6.70.

Inpro has a detailed plan for spending its funds, earmarking some for projects such as Osiedla City Park in Gdaƒsk, Osiedla Chmielna Park on Granery Island and a condo hotel in Miko∏ajki. Other IPO funds will be used for land pur-

chases and a 51-percent stake in developer Domesta.

In a statement commenting on Inpro’s IPO, Pawe∏ Grzàbka, chairman of CEE Property Group, noted that Inpro is one of the few companies joining the bourse in search of money to develop luxury projects such as aparthotels.

“However ... the market will not be able to recover from crisis as quickly as expected,” he said, noting that developers will have difficulty KP financing aparthotels.

LOKALE IMMOBILIA – REAL ESTATE

FEBRUARY 21-27, 2011

www.wbj.pl

17

City rankings

Warsaw ranks high in a recent listing of the most attractive real estate destinations in Europe, but the city shouldn’t rest on its laurels Warsaw is among the top five cities in Europe in terms of development prospects, according to new research by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI). “Warsaw is regarded as having better prospects than the rest of the region,” reads the companies’ report, and the city considerably outranks regional siblings Prague and Budapest in the ratings.

The “Emerging Trends in Real Estate Europe 2011” report ranks Poland’s capital fourth in Europe for development potential, behind Istanbul, London and Munich. Warsaw’s ranking remained unchanged since the 2010 report, but its overall score rose nonetheless. In terms of opportunities for new property acquisitions, Warsaw ranked

sixth, improving two spots on 2010.

The Polish capital was leastwell regarded in terms of its prospects for existing property performance, ranking 10th of 27. However, this marked an improvement of three spots over its 2010 ranking. Munich, Istanbul and London, meanwhile, topped the list this year.

PwC and ULI’s research presents a rating of European cities’ investment prospects based on macroeconomic data and the opinions of more than 600 investors, developers and financiers.

“Poland has not really had a crisis, more of a slowdown” and “I don’t see Poland’s great run ending” were among the anonymous comments.

Jaros∏aw Zagórski, commercial and business development director at developer

Ghelamco Poland, noted that the Polish commercial real estate market had ceased to be perceived in the same way as the markets in the Czech Republic, Hungary, Lithuania or Latvia. Warsaw’s location in the heart of the CEE and its huge development potential have been crucial for the city’s investment prospects.

“Warsaw is one of few large cities in this part of Europe that still offer investors attractive post-industrial lands in the city center and in other attractive locations,” Mr Zagórski said. He pointed to the S∏u˝ewiec and Wola areas of the Polish capital, parts of which have been transformed into modern business districts in recent years.

More to do Others, however, were less optimistic. Some of those polled for the PwC and ULI research worried that Warsaw’s good fortunes may not

Where Warsaw stands The top 10 cities for real estate investment in selected categories Development prospects

Investment prospects – new properties

Investment prospects – existing properties

1. Istanbul

1. Istanbul

1. Munich

2. London

2. London

2. Istanbul

3. Munich

3. Munich

3. London

4. Warsaw

4. Stockholm

4. Paris

5. Zurich

5. Berlin

5. Stockholm

6. Stockholm

6. Warsaw

6. Hamburg

7. Paris

7. Hamburg

7. Berlin

8. Hamburg

8. Paris

8. Frankfurt

9. Moscow

9. Frankfurt

9. Helsinki

10. Berlin

10. Copenhagen

10. Warsaw Source: “Emerging Trends in Real Estate Europe 2011” report

Katarzyna Piasecka, Adam Zdrodowski

SHUTTERSTOCK

Capital potential

Warsaw has the fourth-best development prospects for real estate among European cities, the report showed last. “People maybe think they can raise money if they say ‘We like Poland.’” commented one respondent. Another worried that Warsaw is just the “flavor of the month.”

According to Jacek Kamiƒski, an associate director in the evaluation department of King Sturge, the majority of the investors who positively assessed Warsaw took Poland’s very good macroeconomic results into account. Poland, he pointed out, is maintaining a high growth rate with inflation and unemployment at moderate levels.

“Institutional investors interested in investing in Poland perceive Warsaw as a relatively large and liquid market, as well as one that is a ref-

erence point for the regional cities,” Mr Kamiƒski said. He added that European cities such as Prague and Budapest, not to mention Dublin or Athens, which were hit harder by the crisis, helped Warsaw secure its good position in the ranking.

Large investments including the National Stadium, the second subway line and the A2 motorway, work on which has accelerated in recent years due to the Euro 2012 soccer tournament, which Poland will be co-hosting along with Ukraine, have positively influenced the assessment of the investment climate in Warsaw, Mr Kamiƒski said.

However, he added that it will be difficult for Warsaw to

retain its position over the next few years. The economic growth cannot last forever, and a time will come when Warsaw’s authorities will have to pay back the loans they have taken out for the investments currently underway in the city.

Also, many investors are put off by the general lack of a zoning policy in Warsaw, as well as the lack of infrastructure in some of the fast-developing parts of the city.

“Except for Istanbul, the first positions in the ranking are occupied by highly developed Western European cities which are characterized by larger stability and decisively smaller investment risk,” Mr Kamiƒski concluded. ●

18

TAX

www.wbj.pl

Inflation to surpass 4% After last week’s surprise inflation numbers, ING Bank Âlàski and Citi Handlowy were predicting that inflation would soon reach 4%, probably in February. Citi Handlowy said, “The inflation rate in Q2 2011 will probably exceed 4% and could approach 4.5%, unless the zloty strengthens substantially.” ING noted, “CPI should reach 3.94.0% y/y in February and remain close to 4% until April, and for the end of the year we expect 3.6%.”

Big dividend payouts Altogether, the 40 largest firms listed on the WSE could devote as much as z∏.16 billion to dividend payouts this year, Parkiet reported.

The 40 largest companies paid out z∏.11.4 billion in dividends at the start of 2010. Analysts expect shareholders could receive more this time around, since a number of large entities coming off successful financial years have yet to make dividend announcements. ●

FEBRUARY 21-27, 2011

Tax Eye

Lithuania: changes for the better Richard Wernick is managing director of Totalserve (Polska) Sp. z o.o.

He is a chartered tax advisor and a registered trust and estate practitioner and has been practicing in Poland since 1997 As Poland tightens the fiscal noose – with a one percentage point increase in the standard rate of VAT last month, another one percentage point hike likely later this year and plans to renegotiate several double taxation avoidance treaties to the detriment of taxpayers – Lithuania has taken the opposite route, with a raft of tax breaks introduced this year.

It seems hard to believe, but Lithuania now has one of the lowest personal income tax rates in the world. In order to encourage residents to create new businesses, the personal income tax rate on independent economic activity has been slashed to five percent from the former rate of 15 percent. This applies to all types of businesses except the liberal professions (lawyers, accountants, tax consultants, architects, engineers, psychologists, etc.) which remain subject to a 15 percent rate.

The corporate income tax will be maintained at 15 percent, but farming companies (defined as companies that derive 50 percent or more of their profits from agriculture) will continue to be taxed at a special rate of five percent

VAT and withholding taxes The Lithuanian parliament (Seimas) also voted to keep reduced VAT rates on certain goods and services in force for the whole of 2011. Heating and hot water supplies, as well as hotel accommodation, will be subject to a rate of nine percent, while pharmaceuticals and medical supplies will be subject to a five percent rate. Books and non-periodical information publications will be subject to a nine percent rate for the indefinite future.

The standard rate remains 21 percent and the registration limit is LTL100,000 (approx

imately €29,000).

Withholding taxes are also subject to liberalization this year. Withholding tax on royalties, copyrights and know-how will be abolished on July 1, 2011, in respect of such payments made to a

“It seems hard to believe, but Lithuania now has one of the lowest personal income tax rates in the world” company resident in another EU member state. This brings Lithuania’s transitional period with respect to the EU Interest and Royalties Directive to an end.

Lithuania has already abolished withholding tax on interest paid to a company resident in another EU member state.

Capital gains and property taxes There has been a tightening up of regulations concerning the taxation of capital gains on the sale of real estate, which is intended to combat speculation in the small and sensitive Lithuanian real estate sector. To avoid issues with non-discrimination the new regulations apply to real estate owned anywhere within the EU and EEA. A tax-free sale of land or building purchased on or before December 31, 2010, will be possible after three years of ownership, but any purchase on or after January 1, 2011, will attract this relief only after five years of ownership. In any case, if the taxpayer has maintained a principal private residence for at least two years, the gain will be tax free. Even if that two-year period cannot be met, then, provided all the sales proceeds are used to buy anoth-

er principal private residence within 12 months of the sale, no tax will be due on the capital gain.

Excise on fuel and double-tax treaties In a green transport initiative, excise duty will no longer be charged on natural gas, which is used by many city and suburban buses. This should mean that fares will be maintained at the same level or services may be expanded. At the same time, the excise duty on diesel will be increased, since the transitional phase granted by the EU has ended.

Lithuania will continue to add to its network of double taxation avoidance treaties in 2011. It is hoped that the joint efforts of the three Baltic states (Estonia, Latvia and Lithuania) to conclude a treaty with Cyprus will be finalized.

This will allow for more FDI to be efficiently routed into the region. ●

BUSINESS ENVIRONMENT

FEBRUARY 21-27, 2011

www.wbj.pl

Uniformed services 12.2%

Government gears up for tough pension negotiations

Warmińsko-Maz Warmińsko-Mazurskie

hodnioZachodniopomorskie

Kujawskoomorskie Pomorskie

13.2% Podlaskie

16.6%

become eligible after just 15 years of service, when they can receive 40 percent of their most recent salary. They can receive the maximum pension – 75 percent of their most recent salary – after 29 years of service. For special units such as counter terrorism, the process is faster.

Members of the uniformed services are also entitled to do more work than ordinary Poles while receiving a pension. This also applies to around onethird of uniformed services employees who are part of the administration and perform the same tasks as other state administration clerks.

However, Pawe∏ Soloch, an expert in the field of national security and administration at the Sobieski Institute think-tank, said that the most important problem is the fact that retirement bene-

Soon to lose some privileges?

Mazowieckiee 9.4%

9.2%

15.6%

¸ódzkie

13%

Lubelskie

12.1%

Lowerr Silesia 13.1% Opolskie

13%

14.7% 9.9% 15.8%

10.4% Ma∏opolskie

Poland 12.3%

Podkarpackie Podkarpack

Unemployment rates in Poland, December 2010

EU help for career change

Alice Trudelle

SHUTTERSTOCK

Within the next few weeks, the government will present an outline to reduce pension benefits for the country’s uniformed services. Reform is essential if Poland is to keep its ballooning budget deficit in check, but it will be politically difficult to achieve.

Pensions for police, prison officers, firefighters and armed services currently cost the Polish state about z∏.8 billion a year. Slashing early retirement and above-average pensions, which are paid directly from the state budget, could save over z∏.16 billion by 2060, according to government calculations.

Their privileges are indeed plentiful. Before becoming eligible to receive a pension, most Polish men and women must work until the ages of 65 and 60, respectively. However, soldiers, police and firefighters

fits are paid directly from the state budget, rather than from a pension fund.

“This means that the government can’t plan budget spending in the long term, and this is not a very healthy or reasonable situation,” he said.

A recent poll by CBOS found that the majority of Poles believe that the members of Poland’s uniformed services should contribute to, and receive their pensions from, the national pension insurance fund, ZUS, just as most other Poles do.

Fixing the system rapidly is out of the question, and major changes will probably have to exclude employees currently in the uniformed services. But implementing changes for new employees by 2012, as has been suggested by the government, could be feasible, according to Mr Soloch.

This should be a priority since, he warned, the current system will only become increasingly difficult to fix.

Source: Central Statistical Office

The government must cut the pension privileges of the country’s police, firefighters and armed services to improve the country’s finances, but negotiations will be difficult

Dishonest workers hurt firms

20%

Pomorskie

17.4%

The European Commission has approved the Polish government’s request for aid for the worst off of 594 workers in the southern voivodship of Podkarpackie who were laid off during the financial crisis.

A total of 200 former employees of plants producing construction, road and mining machinery will receive aid.

“In the wake of the crisis, the Polish machinery industry has seen exports plummet and its workers are losing their jobs,” said EU Commissioner for Employment, Social Affairs and Inclusion László Andor upon announcing the news. “I am confident that today’s decision will help these workers return to employment by improving their skills.”

No order was given to redirect or train these 200 people in a specific sector, said Leszek Bigos from the Ministry of Regional Development. But with important regional invest-

19

ments in the aerospace, automotive and IT industries, workers have several options to choose from. Including contributions from the Polish government, the total aid package amounts to nearly z∏.3 million and should last until at least the end of 2011.

The former employers – Huta Stalowa Wola, HSW – Gear and Transmission Plant and Dezamet Metal Works – were originally among companies established by the Polish state in the inter-war period for the production of armaments and high-tech goods.

Among the largest industrial facilities in Poland, they are still big local employers.

But the period of transition following 1989 and more recently, the global crisis, have taken their toll, and today the region’s GDP per capita is among the lowest in the country, with unemployment well above the national average.

Alice Trudelle

More than three quarters of Polish companies have suffered losses in the past two years resulting from employee fraud.

Rzeczpospolita reported that the number of new cases is dropping, but that the problem remains significant. Losses for the retail sector alone are expected to reach z∏.2.6 billion per year.

Businesses still under the weather Only 46% of Polish business owners say that their situation is better than a year ago, a study conducted this month by D&B Poland showed. As many as 54% of businesses participating in the study were found to be in bad or very bad financial condition.

Procter & Gamble to invest z∏.100 million In addition to the diapers it already produces, American Procter & Gamble (P&G) will now also produce baby care tissues in the ¸ódê Special Economic Zone (¸SSE), Puls Biznesu reported. “P&G declares [that it will] invest z∏.100 million and create 20 more jobs on top of the current 40,” said Krzysztof Grzywaczewski, deputy CEO of the ¸SSE. ●

Media Patronage

The Mister and Junior of Export competition returns in 2011 The “Mister and Junior of Export” competition is making a comeback after a three-year absence.

The Polish Chamber of Commerce (KIG), in association with Valkea Media (publisher of Warsaw Business Journal), is holding the competition again in 2011 under the aegis of the Economy Ministry. Because export serves as a powerful engine for Poland’s economic growth, these parties are creating a unique opportunity for Polish exporters to promote their products and their businesses.

Moreover, this year’s competition will have a broader scope

compared to years past, involving small and medium-sized enterprises as well as large companies of all branches and specializations.

Placing an emphasis on quality and innovation, the jury will award export products which have performed well.

Organized around the shared objective of enhancing export potential, the contest will also provide a vibrant platform for the exchange of opinions and experiences.

“It will give companies the opportunity to learn from their competition and colleagues – to see what other firms are doing

and learn what some of the best export practices are,” explained Andrew Kureth, editor-in-chief of Warsaw Business Journal.

“The event will once again turn the spotlight on the Polish export market” The “Mister and Junior of Export” competition is accompanied by a number of other important undertakings which together form the Polish Export Promotion Program. One of these will be the

publication of Made in Poland, a comprehensive analysis of the leading sectors in the Polish export market created by Warsaw Business Journal in cooperation with KIG. Made in Poland will also offer readers invaluable insights into the legal and financial dimensions of export activities, and acquaint them with trends and data in bilateral trade.

Made in Poland will be launched at the beginning of April and will be accompanied by a conference covering a wide array of topics related to the role of export as a major agent of economic growth.

Warsaw Business Journal will also be publishing supplements dedicated to various export sectors throughout the year.

A gala evening scheduled for June 2011 will crown the Polish Export Promotion Program. During the ceremony, the jury will announce the final results of the “Mister and Junior of Export” competition and Economy Minister Waldemar Pawlak will hand out the accolades. Bringing together prominent figures from the worlds of politics, media and business, the event will once again turn the spotlight on the Polish export market. ●

20

THE LIST

www.wbj.pl

Book of Lists

FEBRUARY 21-27, 2011

Book of Lists is a comprehensive, detailed and constantly updated guide to more than 2,000 companies operating in the Polish market. Key enterprises are divided by sector into more than 65 ranking lists that include information such as the names of top managers, major clients, activities, the number of employees, completed projects and full contact details. This week’s edition examines travel management companies.

For more information about Book of Lists contact Joanna Raszka, tel. 22 639–8567 ext. 119; jraszka@valkea.com

Travel Management Companies Ranked by number of tickets issued in 2009 (1)

Visa services / Conference organizing / Training

Incentives / Additional insurance / IATA licensed ticketing agents

Online corporate reservation system / Global hotel programs / 24/7 emergency assistance

Other

1

Carlson Wagonlit Travel Sp. z o.o. ul. Tamka 38, 00-355 Warsaw 22 556-2200/22 556-2299 cwt@carlsonwagonlit.pl www.carlsonwagonlit.com

109,185 126,628 120,630

WND WND 8.7

WND WND 23.3

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Business trip program creation and management; expense analysis and optimalization; rail tickets in Poland and abroad; ferry tickets

Carlson Wagonlit Travel

11 135

135 1919 1947

Carlson Wagonlit Travel - WND % Compagne Internationale Wagonlit Travel - WND %

2

Weco Travel Sp. z o.o. ul. TaÊmowa 7, 02-677 Warsaw 22 520-2800/22 520-2886 info@weco.com.pl www.weco.pl

68,954 69,893 55,000

WND WND WND

WND WND 98.2

✓ ✓

✓ ✓ -

✓ ✓ ✓

✓ ✓ ✓

WND

Radius - The global travel management company

4 WND

WND 1992 1992

None Weco - Travel CEE 75%; JJ Singh - 25%

3

Fly Away Travel Sp. z o.o. ul. Po∏czyƒska 31A, 01-377 Warsaw 22 478-6300/22 478-6399 flycenter@flyaway.pl www.flyaway.pl

55,314 71,625 59,090

WND WND WND

WND WND WND

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

WND

GlobStar Travel Management

6 66

70 1990 1990

WND - 100% None

4

Centrum Podró˝y Air Club Stanis∏aw Modliƒski ul. Senatorska 28, 00-095 Warsaw 22 829-9500/22 829-9550 info@airclub.com.pl www.airclub.com.pl

42,191 53,719 51,743

65.2 82.1 78.0

WND WND WND

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Individual tourism; Club Med trips; incentive parties; convention; train tickets; bus travel; ship travel; cruises

BCD Travel

1 13

85 1990 1990

5

Bankowe Biuro Podró˝y TRAVELBANK Sp. z o.o. ul. Waliców 11, 00-851 Warsaw 22 654-3525/22 654-6650 info@travelbank.com.pl www.travelbank.com.pl

39,600 34,200 30,800

WND WND WND

WND WND WND

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Air Cargo; complex business trip service; sale of holiday catalogs

Global Market Specialists

1 40

40 1991 1991

WND - 100% None

Wanda Konopka

6

Netmedia Business Travel Sp. z o.o. ul. D∏uga 44/50, 00-241 Warsaw 22 314-7200/22 314-7205 handlowy@nbt.pl www.nbt.pl

34,590 35,680 33,172

2.8 3.2 3.1

29.0 27.0 23.6

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Outbound tourism

Lufthansa City Center

7 18

55 1985 1990

Netmedia - 100% None

Marian Szypu∏a

7

Supertour Lufthansa City Center/Supertour DMC Poland ul. Niemcewicza 26, 02-306 Warsaw 22 556-6300/22 556-6310 super@supertour.pl www.supertour.pl

22,000 29,500 30,000

36.0 43.0 46.0

50.0 61.0 62.0

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Business trip management; cost optimalization according to reports and analysis; internal trainings; external trainings; seminars; account manager protection

Luthansa City Center International (LCCI)

4 30

42 1990 1993

Bogdan Wieczorek; Wojciech Wojdat WND% WND

8

FCm Travel Express al. Jana Paw∏a II 19, 00-854 Warsaw 22 453-5353/22 453-5301 travel@pl.fcm.travel www.fcmtravel.pl

21,000 23,000 25,500

WND WND WND

52.0 60.0 56.0

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

VIP service; customized travel management reporting and analysis; cost savings initiatives

FCm Travel Solutions

1 40

40 1994 1995

WND

9

Blue Sky Travel Sp. z o.o. ul. Roosevelta 2, 60-829 Poznaƒ 61 841-0900/61 842-0343 office@bluesky.pl www.bluesky.pl

20,848 26,866 25,889

2.3 3.9 3.1

12.4 22.8 15.7

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

WND

-

3 17

42 1990 1992

Jerzy Ruszkowski 60.1%; Jerzy and Ewa Ruszkowski - 39.9% None

Biuro Podró˝ników Flugo Sp. z o.o. ul. Marii Sk∏odowskiej-Curie 10, 85-094 Bydgoszcz 10 52 345-5814/52 341-7505 andreo@flugo.com.pl www.flugo.com.pl

3,996 3,974 2,216

5.1 5.4 4.9

9.2 12.0 10.3

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Ski conferences; trips for product launches; reference visits

Alians Polska Sieç Biur Podró˝y

1 10

10 1998 1998

Andreo Grz´bowski 60%; Micha∏ Brzozowski - 20%; Andreo Grz´bowski Cezary Wilemajtys President 20% None

Mazurkas Travel Biuro Podró˝y Sp. z o.o. ul. Wojska Polskiego 27, NR 01-515 Warsaw 22 536-4600/22 839-2090 mazurkas@mazurkas.com.pl www.mazurkas.com.pl

WND 2,800 2,700

WND 1.9 1.8

WND WND WND

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓

WND

-

WND WND

158 1990 1993

Andrzej Bartkowski 50%; Andrzej Hulewicz - 50% None

Trip Club Sp. z o.o. ul. Smolna 34/1, 00-375 Warsaw NR 22 257-0919/22 257-0918 tripclub@tripclub.pl www.tripclub.pl

WND WND WND

WND WND WND

WND WND WND

✓ ✓

✓ ✓ ✓

✓ ✓ ✓

✓ ✓ ✓

Event organization; individual luxury trips; tour operator services

-

1 WND

WND 2008 NA

Jerzy Baran - 100% None

Rank

Hotel reservations / Car lease intermediation

Corporate services

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

Number of Turnover tickets from tickets issued sales (mln z∏)

Total revenue (mln z∏)

Global travel management network

Number of Total number of agency-owned employees in TMC offices in Poland / Poland / Year founded in Number of TMC Poland / employees in Year IATA license Poland obtained

Ownership: Polish / Foreign

Top local executive / Title

2009 / 2008 / 2007

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in March 2010. Number of employees and ownership structure are as of March 2010. All information pertains to the companies' activities in Poland. Companies not responding to our survey are not listed.

Footnotes: (1) When The List was compiled, first place was held by PBP Orbis Sp. z o.o. The company declared bankruptcy on September 29, 2010.

Pawe∏ Rek General Director

JJ Singh CEO

Bart∏omiej Budzyƒski Director; Board Member

Stanis∏aw Modliƒski Stanis∏aw Modliƒski 100% President None

President

President

Bogdan Wieczorek President

Tim Hyland President

Jerzy Ruszkowski President

Andrzej Hulewicz Vice President

Jerzy Baran President

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2010, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

A guide to Polish business and industry

Przewodnik po polskim biznesie i gospodarce

The official launch of Book of Lists 2011

Rankings revealed • Top companies recognized • WBJ Awards handed out Warsaw, March 3rd, 2011

Order now!

Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

Launch Event Partners:

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22

ARTS & CULTURE

www.wbj.pl

FEBRUARY 21-27, 2011

Music

Concert

Going baroque in Mazovia

Tango électrique “Gotan Project” Palace of Culture, Congress Hall (Sala Kongresowa) February 22, 8 pm

COURTESY OF MCKIS ARCHIVE

Fusing Argentinian tango,

“Mazovia Goes Baroque” Mazovia Region Centre of Culture and Arts, (Mazowieckie Centrum Kultury i Sztuki), Feb 26-27, 6 pm The Mazovia Goes Baroque project is grounded in the

idea that interest in musical folk traditions has existed as long as European musical history itself.

The next concert being held under the aegis of the project will see French folksters Les Musiciens de SaintJulien take the stage in War-

1999. Their second album, “Lunatico,” came out in 2006 and with it came one of the band’s biggest hits to date: “Diferente.” Gotan’s most recent release, 2010’s “Tango 3.0,” features a notably slower style. ●

Film festival

Other culture

saw. The group takes its name from a brotherhood of musicians founded in Paris in the middle ages. They will perform two concerts with two themes: folk music of the Parisian salons and Folk Music from the heart of France, respectively. ●

“Eyes and Objectives” VIII Ethnographic Film Review The Warsaw Ethnographic Museum February 25-27 Launched in 2004 as a way to familiarize the public with otherwise little-known and rarely shown anthropological films,

Film

electric violin and jazz – and doing it with panache – is what Gotan Project does best.

With an instantly recognizable style derived from their accordion and piano mashups, the Franco-Swiss/Argentinean band formed in Paris in

this niche affair has since become the biggest event of its kind in Poland. The scope is also extensive: subjects from all corners of the globe are showcased, placing man at the forefront of contemporary issues.

The event was originally the initiative of students enrolled in the University of Warsaw’s ethnographic and cultural anthropology departments.

Yet, despite the festival’s large student draw, the showings are open to all. That includes English-speakers too, as the films are subtitled. So get out of the house and take in some ethnoculture this February with these documentaries. ● Free entry for all showings.

For more information: www.oczyiobiektywy.art.pl

Bareja on the big screen

This 1973 classic by Stanis∏aw Bareja explores the theme of role reversal. The plot, in a nutshell, is this: Art museum assistant Stanis∏aw Maria

Rochowicz (Wojciech Pokora) is forced to go into hiding as a housemaid after his malicious boss accuses him of stealing a priceless work of art.

You can see this and other famed Polish films with English subtitles on a bi-monthly basis at Kino Alchemia. ● For more information: www.filmowawarszawa.org

COURTESY OF ALINA KACZMAREK

“Man – Woman Wanted” (“Poszukiwany, Poszukiwana”) Kino Alchemia February 21, 7 pm

Art exhibition

Listen to the art beat “The Heart Archive” Centre for Contemporary Art, Ujazdowski Castle through March 20

Contemporary French artist Christian Boltanski’s newest project is a “sound library” of heartbeats: over 30,000 individual recordings at present. Viewers are invited to participate in

the project when visiting the exhibition, in which Boltanski continues to pursue themes of memory, loss and death. The exhibition visits Warsaw for the first time this month. ●

Photography

Embracing the past perfect ¸ukasz Sieradzki was born just two years shy of 1980, yet this exhibition of Polaroid photography constitutes a sentimental attempt to return to the halcyon era of the 1970s. Cue the retro photography, mad travel footage and otherwise everyday life from a different decade – all courtesy of Sieradzki’s imagination. ●

COURTESY OF MCKIS ARCHIVE

“Vehicle of Time” Galeria Mazowiecka through March 11

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl

Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul.

Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl

Galeria 65 ul. Bema 65 www.galeria65.com

Le Guern Gallery ul. Widok 8, www.leguern.pl

Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com

Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl

Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu

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

Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl

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

Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl

Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl

Some content provided by the Warsaw Insider.

For more information on culture and entertainment in Warsaw this month, pick up the February issue.

State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.website.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 www.milanow-palac.pl www.postermuseum.pl Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

LAST WORD

FEBRUARY 21-27, 2011

www.wbj.pl

23

Tech Eye

online friends can see it. All we can say is, be careful if you are playing with it in the bathroom.

There’s no explanation as to why HTC felt compelled to name these things after Latin dances, but, just as on the dance floor, we prefer the ChaCha to the Salsa. It’s a bit stumpy looking, yes, but we’re into stumpy.

And keyboards. The phone also has a five-megapixel camera and runs Android. No price info yet, but it’s due out in Europe in Q2.

Then there’s the LG Revolution, also an Android phone, albeit one which touts a next-gen Snapdragon mobile system on chip. It’s got a 4.3inch touchscreen and a forward-facing camera (as well as the standard rear-mounted one), but more intriguing is the fact that it’s being talked up as a true 4G powerhouse.

While it doesn’t matter to Europe, at least not for the moment, the Revolution able to run a Netflix app which includes the much vaunted “watch instantly” option. This is something of a technical breakthrough, and Techeye would love to see it (or something similar) appear in Europe. Watch “Scooby-Doo and the Monster of Mexico” instantly? Yes please.

Perhaps curiously, given the BlackBerry brand’s business bent, much of the news last week focused on the fact that one PlayBook model will ship with “Need for Speed Undercover” and “Tetris.” That could be seen as an admission that tablets haven’t quite found their raison d’etre in the world of business, or

Hydrogen by the (Play)Book The Mobile World Congress 2011 hosted more phones than Florida has old folks, but there was plenty of other interesting tech to appreciate. Take, for example, the BlackBerry’s PlayBook tablet (launch date and pricing info TBD).

What to say about RIM’s first foray into the tablet market? Well, its offering is a bit smaller than Samsung’s Galaxy Tab, although both boast seven-inch touchscreens, and its 1-GHz processor is accompanied by substantially more RAM than, say, the iPad. The PlayBook has front (three-megapixel) and back (fivemegapixel) facing cameras, but RIM’s first tablet operating system faces strong competition from more seasoned systems, such as Apple’s iOS.

COURTESY OF LG

COURTESY OF HTC

For months, Techeye has had the ended the nightmares, but at least same nightmare. We’re in the Army our phone bill has dropped. and our drill instructor, dressed in orange camouflage, looks like Velma from “Scooby-Doo.” Or, rather, how Velma would look if she had a moustache and a bayonet.

“Ma’am! Isn’t orange camouflage kind of a bad idea, Ma’am?” we ask, innocently. “Not if you’re fighting in a Cheetos factory, you maggot!” comes the reply.

Then: “Take that stack of girlie magazines and get your worthless hide to Belgium. Don’t Calling all Walloons come back until you’ve forged a On an utterly tangential note, the sense of national unity!” annual Mobile World Congress took Next thing we’re in the Brussels, place in Barcelona last week. There sitting at a table between the Flem- were no reports of Belgian-on-Belings and the Walloons. There’s been gian violence, but there were plenty a breakthrough and a group hug is of Walloonatics drooling over new just seconds away, but for some rea- products and tech announcements. son Techeye’s left hand is glued to a One of the most visible trends at late-1980s mobile phone and our MWC 2011 was Facebook madness. right hand is stuck to the stack of It seems most phones, cameras and girlie magazines. Then Mum walks tablets these days boast Facebook in, and calls everyone a pervert. No one seems phased by this, but MYFC the talks collapse anyway Y OF RTES COU and the world ends in a Cheeto-colored ball of fire.

After enduring this dream for months, we finally went to see a psychiatrist (who said that we had a massive Oedipal complex) and a psyintegration, but chic (who advised us to phone-maker HTC is avoid French-owned mobile service taking things a step further by providers). launching a pair of handsets – the Taking all of this into considera- ChaCha and the Salsa – with dedicattion, we decided to sign Mum up ed “Facebook buttons.” Push the with a French carrier and never button and whatever you’re doing phone home again. This hasn’t goes straight up where all your

COURTESY OF RIM

Nightmares and wake-up calls

it could just be something to keep execs from getting bored during long meetings.

Finally, of all the sparkly gadgets in Barcelona last week, Swedish firm myFC’s PowerTrekk charger seemed particularly, well, green.

Designed for “outdoor enthusiasts” – although it presumably works just as well for those of us who enthuse beneath roofs – the PowerTrekk is both portable battery pack and fuel cell.

The chemistry behind the gadget is a little complicated, but suffice to say that water + power pack = hydrogen gas. In a good way. The PowerTrekk can be used to power mobile phones, cameras, GPS devices and so on, with the caveat that the device must have a USB slot.

Pricing and availability remain mysterious for now, but once available this item could be very handy for entrepreneurs in developing markets where electricity supply is unreliable. Or for people fascinated by hydrogen gas.

We’d recommend not messing about too much with the fuel cell, though. You risk causing a Cheeto-colored explosion. ●

Ever dreamed about a mustachioed Velma from “Scooby-Doo”? Let us know: techeye@wbj.pl sare_268x81.ai

22-03-10

13:25:37