WBJ #49 2011

Economists call Poland’s budget plan for 2012 ‘realistic’

Copper mining giant KGHM has agreed to take over another industry titan

Was Poland an honest broker at the Durban climate-change talks?

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WWW.WBJ.PL

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VOLUME 17, NUMBER 49 • DECEMBER 12-18, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Right to disagree

Since 1994 . Poland’s only business weekly in English

Foul play

Law and Justice spokesperson Adam Hofman tells WBJ that the party can resurrect Poland’s right 8-9

Allegations of corruption within Poland’s national soccer association have struck at its core just months before Euro 2012 kicks off in Warsaw

REAL ESTATE Lokale Immobilia

COURTESY OF BRANDLAB

12-13

SHUTTERSTOCK

• Miasteczko Orange sale • Royal Wilanów permit • Foreigners buying apartments 16-19

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Luxury in Focus . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . . .16-19 Markets . . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

UK bows out

Russia on edge

Most EU countries look set to approve new measures to bring them closer to a fiscal union. But the UK isn’t one of them 3

What do the post-election protests in Russia mean for the country’s March presidential elections?

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NEWS

www.wbj.pl

z∏.16,000

is the average individual debt in Poland, with 2.1 million Poles currently struggling to meet their debt payments.

30

is the number of Polish companies which have already purchased licenses to use the proprietary marks, slogans and images associated with the forthcoming 2012 European soccer championship.

Quote of the Week

December 13 will mark the 30th anniversary of the imposition of martial law by Poland’s communist authorities. One of the most tragic dates in modern Polish history will be remembered across the country, with numerous special events scheduled to take place.

These will include historical debates, film screenings, exhibitions and reenactments.

In Warsaw, for one, a reenactment of a street battle between anti-communist opposition members and communist police is being planned.

Like every year, a protest is expected to take place in the capital in front of the house of Wojciech Jaruzelski, Poland’s last communist leader who, in 1981, declared martial law.

Some leftist sympathizers of

avoid a potential Soviet invasion of Poland. Mr Jaruzelski has insisted that the decision was a “lesser evil.”

While the exact number of casualties resulting from martial law remains unknown, a special Sejm committee working from 1989-1991 concluded it amounted to no less than 91 people. Approximately 10,000 opposition members were interned over the period.

In March of this year, Poland’s Constitutional Tribunal ruled that the imposition of martial law in 1981 had been contrary to both today’s constitution and the one in force during the communist period. It also ruled that it was in violation of international law.

The Telegraph reported a comment made by an unnamed French diplomat on the demands the UK made during negotiations over an EU deal for closer fiscal ties. In the end, the UK chose to opt out of the agreement.

Figures in focus Perceptions of poverty Percentage of respondents who strongly or somewhat agreed with the statement that “in this city poverty is a problem,” selected EU27 cities in 2009 100 *Highest in the EU27 **Lowest in the EU27

80

60

40

Alice Trudelle, Adam Zdrodowski

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On WBJ.pl Warsaw Christmas market Some of the most famous Christmas markets in Europe have been running since the late Middle Ages, and they can draw upwards of a few million visitors during December. Warsaw has joined the ranks. Follow WBJ as we take you on a quick tour of the Polish market in Warsaw’s Old Town.

High-speed railway plans shelved Poland’s Minister of Transport S∏awomir Nowak has announced that plans to build a new highspeed railway network between Warsaw, Poznaƒ and Wroc∏aw by 2020 have been canceled until some point after 2030. “The railways need massive modernization and, in order for its effects to be visible as soon as possible, Poland needs to focus on modernizing existing railways and not spend money on new projects,” Mr Nowak said. ●

the general are also expected to be there.

This year, December 13 will also see an initiative organized by the opposition Law and Justice party. The goal of its Independence and Solidarity March is to commemorate the martial law anniversary and also focus on what the party sees as today’s threats to Polish independence.

In force between December 13, 1981 and July 22, 1983, martial law was introduced in order to counter growing unrest against the communist regime and suppress any potential uprising. At the time, the opposition Solidarity movement was gaining support and momentum.

A number of former communist dignitaries have long maintained that the imposition of martial law was necessary to

“[The UK is acting] like a man who wants to go to a wife-swapping party without taking his own wife”

sa (Pl) w

The leaders of Croatia and the European Union have signed a treaty confirming Croatia’s future accession to the bloc. Croatia is due to join in July 2013, when it will become the European Union’s 28th member.

Croatian President Ivo Josipoviç and Prime Minister Jadranka Kosor signed the treaty along with President of the European Council Herman Van Rompuy and representatives from all other EU member states.

“It is a day of joy for Croatia, and for the EU as a whole,” Herman Van Rompuy said in a speech.

80%

is the proportion of Polish households that donated money to a charitable organization in 2010.

Pr (P ag l) ue Aa Ou (Cz) lbo lu rg (Fi (D n) en )**

Croatia signs EU accession agreement

€114.7 billion

is how much Europe’s banks must find to withstand the euro-zone debt crisis and restore investor confidence, according to results of stress tests carried out by the European Banking Authority.

ar

Poland’s largest opposition party, Law and Justice (PiS), has seen its support drop below 20% in the latest TNS OBOP voter survey, published last Wednesday. The poll has the ruling Civic Platform supported by 36%, followed by PiS with 19% support. For PiS, this represents a drop of five percentage points since the last poll, which was published two weeks ago.

The anniversary of the imposition of martial law in Poland

(H un L Bu isbo )* da n ( pe Po st r) At (Hu he n) n Br s ( us Gr se e) ls (B e Pa l) ris Be (F r Gl lin ( r) as Ge go r) w Lo (U nd K) on Vie (U n K Kr na ( ) ak Au W ó w s)

PiS support below 20%

Numbers in the News

sk olc

The new leader of the Democratic Left Alliance (SLD) was due to be chosen at a party convention last Saturday.

Former Polish Prime Minister Leszek Miller officially announced last Thursday that he would run for the position. SLD came in fifth in the October 9 parliamentary elections with 8.2% of the vote.

IN THE SPOTLIGHT

Mi

Miller to contest SLD leadership

DECEMBER 12-18, 2011

COURTESY OF FLICKR/MINISTRY OF FOREIGN AFFAIRS

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Source: Eurostat

Company index ACTEEUM Central Europe ........18 Euromedic

Allianz ..........................................8 GN Invest....................................19 PKO BP ......................................12 Aviva Investors ..........................17 Groupama ....................................6 Bank Pekao ................................19 Helix Ventures ............................14

DATELINE

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BPCC BUSINESS BREAKFAST

Event: This event, entitled: The euro-zone crisis and its impact on Poland – economic prospects for 2012” aims to answer questions such as: How will the euro-zone crisis end? How will it affect Poland in 2012? Will Poland’s economy maintain sufficient momentum to avoid going into recession? A panel led by PwC’s chief economic adviser, Prof Witold Orlowski, will offer insights into the way Poland’s economy is likely to perform and the factors that will

Polidea........................................15 Prudential ....................................6

Bank Zachodni WBK....................6 Heyka Capital Markets Group ..14 PZU ..............................................8 Beiten Burkhardt ......................16 Homplex ....................................14 Qatar Holding ............................16

December/January DECEMBER

PGE Energia Jàdrowa ................16

Aegon ..........................................6 International Polska ..................16 PKN Orlen ....................................5

Biedecki......................................19 ING Securities..............................5 Quadra FNX Mining ....................5 BIG InfoMonitor............................8 Inso/Consorzio Cooperative

influence its performance.

Location: British Embassy, ul. Kawalerii 12 bpcc.org.pl

Retail Spirit Polska ....................18 Blackstone ................................18 Costruzioni ................................19 Bouygues Immobilier Polska ....16 InterRisk ......................................8 Capital Park Group ..............16, 18 JEMS Architekci studio..............16

JANUARY 12 TAXATION AND ACCOUNTING CONGRESS Event: This event aims to deepen participants’ knowledge on recent developments in the field of tax and accounting, as well as to create a platform for comprehensive exchange of views on the practice of implementing the provisions. Location: Hotel Hilton, Warsaw kpmg.com/pl

Sud Architectes..........................18 Telekomunikacja Polska............16

CBRE ..........................................16 Jones Lang LaSalle ..................16 TheWandCompany ....................23 CBRE Global Investors ..............18 KGHM ..........................................5 Traxxas ......................................23 Damax ........................................17 Marvipol......................................17 Uniqa ............................................8 Diamonds International

Master Management Group ......18 Warsaw Stock Exchange ..........15

Corporation ..................................7 night Frank ................................16 Warta ............................................8 EDF ..............................................5 Orco Property Group..................19 Erbud ..........................................19 Patron Capital Partners ............16 Ergo Hestia ..................................8 peter nielsen & partners ............6

Wierzbowski Eversheds ............13 X-Trade Brokers ....................3, 20

NEWS

DECEMBER 12-18, 2011

www.wbj.pl

Euro-zone crisis

A closer union – without the UK president of the EU Council, said at a press conference that “except for one, all are considering participation.”

COURTESY OF WIKIMEDIA COMMONS

On the periphery

David Cameron vetoed an agreement on fiscal union

As the EU moves towards closer integration, the UK steps to the sidelines As WBJ went to press, all indications suggested that every European Union nation except the UK was ready to work towards creating a fiscal union that would tighten budgetary and financial coordination

between its members.

As of press time, Hungary, which was initially against the agreement, signed on, and the Czech Republic and Sweden who had also initially declined, agreed to consult their parliaments on the matter. That left the UK potentially standing as the odd man out on a Europewide agreement.

Herman van Rompuy, the

The key moment came in the early hours of Friday morning when UK Prime Minister David Cameron effectively vetoed any agreement on fiscal union that would include all 27 member states, after he failed to win opt-outs and vetoes for the UK on financial regulations in an effort to protect his country’s financial center, the City of London.

Among Mr Cameron’s demands was that “any transfer of power from a national regulator to an EU regulator on financial services would be subject to a veto.” French President Nicolas Sarkozy – widely viewed as a victor in the negotiations – said later that the British demands were “unacceptable.”

In response, Mr Cameron stated that what was on offer “wasn’t in Britain’s interests so I didn’t agree to it.”

If 26 EU countries do eventually decide to join, the UK would be left on the outside of a fiscal union, looking in.

Whether that will end up being to the country’s benefit or harm remains to be seen, but the euro-zone economies – led by Germany – were determined to press on with or without London on board.

German Chancellor Angela Merkel expressed her confidence that a fiscal union would

be achieved, and that it would mark the beginning of the end of the euro crisis. “We will have a euro currency within a stable union. We will have stronger budget deficit regulations for euro-zone members ” she said at the summit.

bers outside the euro zone.

Also, the European Stability Mechanism, the permanent rescue mechanism due to come into force in July 2012, will be capped at €500 billion until March 2012, when it will be reviewed.

New budget rules

Polish reaction: nothing new for us

The agreement also requires that member states guarantee the balancing of their budgets by introducing the appropriate legislation within their national legal systems. Also, they would have to report national debt issuance plans in advance.

Commenting on the summit’s results, Prime Minister Donald Tusk said there was a “speeding up,” which now created the chance for inter-governmental agreement “which would not be for only euro-zone members

Mr Cameron said that what was on offer “wasn’t in Britain’s interests” If a member state breaches the 3 percent budgetdeficit ceiling enshrined in the EU’s Growth and Stability Pact, there will be automatic penalties, including possible sanctions, unless a qualified majority of members of the fiscal union vote against such measures.

At the summit, the EU countries also agreed to provide €200 billion in bilateral loans to the IMF to help tackle the debt crisis, with €150 billion of the total coming from the euro-zone countries and the rest from mem-

but also for countries which aspire to join the euro zone, which is what Poland mainly wanted.”

Mr Tusk added that “from the Polish point of view, the decisions made at the summit to increase fiscal discipline are no sacrifice. We long ago implemented deficit ceilings into our constitution.”

The fiscal union agreement will now have to be ratified by the parliaments of all the countries wishing to join. The agreement is scheduled to be ready

by March next year.

Remi Adekoya

2012 budget

Budget plan foresees 2.5% GDP growth

Polish Prime Minister Donald Tusk’s government has adopted a 2012 budget plan which predicts GDP growth of 2.5 percent and an inflation rate of 2.8 percent next year. The deficit is forecast to be no higher than z∏.35 billion.

In the end, the government decided to base its budget on the more moderate of the three economic scenarios proposed by the Finance Ministry in November. The most optimistic had predicted 3.2 percent growth, while the most pessimistic had forecast a 1 percent contraction of the Polish economy.

“A crisis [period] is no time for revolution but for embarking on responsible measures,” said Prime Minis-

COURTESY OF KPRM

The government has adopted an updated budget plan that economists have labeled “realistic”

The PM and the finance minister appeared as moderately optimistic as their budget plan ter Donald Tusk at a press conference last week where the budget plan was unveiled.

Mr Tusk said that two main factors had been taken into consideration when prepar-

ing the budget, namely “the safety of public finances and the safety of citizens.”

Finance Minister Jacek Rostowski, who was also present at the conference, said, “if

the budget needs to be amended – probably in the middle of next year in my opinion – we will not hesitate to do so.”

Economists generally reacted positively to the pro-

posed budget.

“The macroeconomic figures are fine, very realistic. In fact, I think inflation will be slightly lower than 2.8 percent while nominal growth should be similar to what the government predicts,” said Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers.

Mr Kwiecieƒ added that when it comes to the projected z∏.35 billion deficit, it was too soon to comment as a lot depended on how determined the government would be to implement the changes it has promised to reduce spending and increase revenues.

Government revenues for 2012 are estimated at z∏.293.8 billion while spending is expected to stand at z∏.328.8 billion. Reforms, spending cuts and tax increases are expected to reduce public debt as a percentage of GDP from 53.7 percent in 2011 to 52.4 percent in 2012.

Remi Adekoya

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Regional wealth divide growing The gap between the richest and poorest regions in Poland is widening, Dziennik Gazeta Prawna reported.

The Central Statistical Office announced that during the 2009 crisis, the Kujawsko-Pomorskie, Âwi´tokrzyskie, Lubelskie and Opolskie voivodships experienced drops of GDP per capita of between 0.3% and 1.3%.

Lower global gas prices Despite a growing oversupply of natural gas in global markets that is putting downward pressure on the prices, Polish consumers don’t stand to benefit. This is because Poland is tied to an expensive gas deal with neighboring Russia until 2022, reported Dziennik Gazeta Prawna.

PGE: no to Lithuania nuclear project Polish energy company PGE has said it will not help build a planned nuclear power plant in Lithuania. It had been invited by the Lithuanian government to participate in a project to construct a 1.3-gigawatt plant by 2020. “In the face of conditions that PGE found unacceptable at this stage and taking into account other key projects, we have decided to suspend our participation in this project before its takes the form of any formal obligations,” PGE CEO Tomasz Zadroga said in a statement.

Illegal spirits sales According to the Public Opinion Research Center (CBOS), up to 15% of all spirits retailed in Poland are sold illegally. What’s more, approximately 4% of illegally purchased alcohol is smuggled into the country, reported Parkiet. Distillers lose around z∏.2 billion annually as a result of counterfeit sales and smuggled liquor. ●

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NEWS

www.wbj.pl

DECEMBER 12-18, 2011

Russia elections

A state crackdown on demonstrations has led to widespread condemnation, but Poland has so far failed to comment Large-scale protests were planned in Russia’s capital last Saturday, with over 30,000 people scheduled to participate. If that were to come to fruition, the demonstrations would be the biggest in Russia since the fall of the Soviet Union 20 years ago.

Dissenters had been protesting all last week against alleged fraud and vote-rigging in the December 4 elections for the State Duma, Russia’s lower house of parliament. Russian police made numerous arrests, with independent rights group Agora estimating that as many as 1,000 people had been detained by last Thursday.

US Secretary of State Hillary Clinton was quick to condemn the Kremlin, saying the US had “serious concerns about the conduct of those elections,” with “independent political parties denied the right to register and reports of attempts to stuff ballot boxes, manipulate voter lists, and other troubling practices,” she

said in a statement. “Russian voters deserve a full investigation of electoral fraud and manipulation. They deserve fair, free, transparent elections and leaders who are accountable to them.”

European Parliament President Jerzy Buzek echoed these sentiments, when he said he was concerned about the detention of opposition activists and intimidation against independent election watchdog GOLOS and cyber attacks on leading independent news websites.

Poland remains silent As WBJ went to press, Poland had made no official statement regarding the election or the ongoing protests.

“It is a sensitive issue to comment on elections in an independent country, but with Polish journalists on the ground and Polish diplomats’ excellent contacts, the government knows what is happening, and there should be a sort of condemnation, at least regarding massive arrests,” said Adam Bodnar, member of the board at the Helsinki Foundation for Human Rights in Warsaw.

“I don’t understand how Poland can promote human rights and democracy in

Eastern Partnership countries and be silent regarding what is happening in Moscow right now,” he added.

One explanation might be that Poland is wary that Russia could punish any perceived criticism by blocking Polish exports, a tool it has used in the past.

“There is no point, especially for neighboring countries, to underline their own position towards Russia,” said Jaros∏aw åwiek-Karpowicz, program coordinator on Eastern and Southeastern Europe at the Polish Institute of International Affairs. He added that Poland was choosing to be active through EU institutions for the time being.

Setback for Putin Saturday’s protests are planned to coincide with the release of the final election results.

According to the preliminary results, United Russia, the party of current Prime Minister Vladimir Putin, garnered 49.3 percent of the vote. This is a significant fall in support from the 63 percent it won in the last election four years ago. However, some observers have argued that the real figures could probably be much lower, at around 30-35 percent.

“This is an interesting prel-

COURTESY OF PREMIER.GOV.RU

Massive protests against alleged vote-rigging

The Dec. 4 elections have set the stage for Mr Putin’s return to the presidency in March ude to the March 4 presidential elections. The Duma elections have revealed how the situation has changed in the last four years. Support for the ruling team – United Russia, Vladimir Putin, Dmitry Medvedev – is crumbling,” said Jadwiga Rogo˝a, an expert on Russia at Warsaw’s Center for Eastern Studies.

No alternative, yet Although Ms Rogo˝a said she

believed Mr Putin was not set to rule for two consecutive terms, she does believe that Russia’s current PM is bound to win next March’s presidential election.

“There is no alternative candidate as popular or as influential, and the state currently has all the tools to suppress protests and punish any possible candidate. But the legitimacy of the ruling camp has been significantly weakened, and in a few years I

think we will see the emergence of some formal political opposition – not necessarily with democratic views – who will try to challenge the existing leader,” said Ms Rogo˝a.

She also said that Russia’s government is now fully aware that Mr Putin’s potential victory in March will require a significant effort, and a great deal of manipulation in order to ensure a favorable outcome.

Alice Trudelle

Climate change

Poland sticks to the script in Durban

As the UN Climate Change Conference in Durban drew to a close last Friday, it seemed as if the Polish presidency was fulfilling its role as the coordinator of a common EU position.

However, things did not begin too well for Poland at the start of the two-week summit, with Climate Action Network, an NGO, giving it a “Fossil of The Day” award for “endangering the credibility of the EU.” The “award” is given to countries “who have per-

COURTESY OF WIKIMEDIA COMMONS

But the country still came under attack at the climate change conference for its emissions record and reliance on coal as an energy source

Poland produces more than 95 percent of its energy from coal formed badly in the climate change negotiations,” the organization writes.

“While EU diplomats are

trying to find solutions, the Polish Presidency has decided to support ‘the European Coal Days’ by using its Presidency

logo,” the organization said in a statement. But the Polish government later sent a letter to the organization explaining that the logo was used without its permission.

As WBJ went to press, newly appointed Environment Minister Marcin Korolec’s rhetoric suggested Poland was following the line officially agreed to by the 27 EU members. The EU wants to negotiate for an extension of the Kyoto Protocol, establish a road map for a legally binding agreement that includes emerging economies, and lay the foundations for a fund which would provide $100 billion annually to help emerging countries adapt to climate change.

“We need to ensure that through our decisions this

week, we take a further step towards the establishment of an ambitious and global regime,” Mr Korolec said in a statement.

‘Coal, coal, coal’ Not everyone seemed so sure of Poland’s true intentions, however, with John Prescott, the UK’s former deputy prime minister and a current member of the House of Lords, telling the Financial Times that Poland was all about “coal, coal, coal,” and that the negotiations would be going better with another country at the helm.

Krzysztof Bobiƒski, president of the Unia i Polska Foundation, echoed this sentiment, saying, “Poland’s record on climate change is abysmal and it couldn’t possibly be a

constructive player in Durban.”

But Artur Gradziuk, international economic relations and global issues program coordinator at the Polish Institute for International Affairs, said that “only after the summit will we be able to assess Polish efforts.”

Poland’s dependence on coal has often led it to clash with EU environmental legislation. The country produces over 95 percent of its electricity using coal, and World Bank figures show that transitioning to a lowemission economy would put a significantly higher burden on the Polish economy – possibly leading to lower GDP growth, job cuts and a rise in electricity prices – than on the economies of other European countries.

Alice Trudelle

BUSINESS

DECEMBER 12-18, 2011

Copper

www.wbj.pl

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Corruption allegations

KGHM in z∏.9.46 billion deal Four detained in Orlen for Canadian copper miner corruption probe A member of the board is facing charges of accepting bribe money

pany says. KGHM also estimates that after the acquisition, operating costs will fall by more than 20 percent come 2018.

As far as the impact of the deal on KGHM’s share price goes, the outlook is positive overall, Mr Knigawka said.

“The market needs time to digest the news but based on our most bullish copper-price forecast, earnings per share could rise by 7 percent.”

In the long term, Mr Knigawka said, Quadra could become a significant source of cash for KGHM. “First, however, the company needs to make sure that key people at Quadra stay by incentivizing them. It also needs to ensure the gamechanging Sierra Gorda project is successful,” he added.

Poland’s Internal Security Agency (ABW) has made four arrests in an investigation into alleged corruption related to contracts signed by Polish oil refiner PKN Orlen.

Among those who were detained is a board member of Orlen’s petrochemicals division, two subordinate managers and a businessman.

Citing its own findings, Rzeczpospolita wrote that the ABW secured documents relating to contracts entered into by Orlen.

The orders were reportedly implemented by a firm connected with 39-year-old businessman Pawe∏ M., the coowner of several companies from P∏ock and Warsaw that carry out renovation and construction work.

Under Polish law, only the first name and the first letter of the surname of a suspected criminal may be written out in full in an article appearing in the press.

According to Polish media,

Gareth Price, Alice Trudelle

COURTESY OF KGHM

Polish copper producer KGHM has entered into a conditional agreement to buy Canadian mining group Quadra FNX Mining. The value of the transaction is $2.83 billion (z∏.9.46 billion), according to KGHM, and will be financed by the firm’s own cash resources.

If the deal goes through, it would be the single largest foreign acquisition made by a Polish company.

The deal would also make KGHM, currently the world’s ninth-largest producer of copper, number four globally.

“We are investing in this project to make KGHM more competitive as well as more

resistant to downturns in the copper price cycle,” Herbert Wirth, president of the management board at KGHM, said in a statement.

Quadra FNX has mines in Canada, the US and Chile. In Chile, the company is beginning a new project in Sierra Gorda, the site of one of the world’s largest copper deposits. This is a potentially lucrative project, but it is not without its difficulties.

“It is in the middle of the desert, and the company would need to build a 150 km water pipe from the Pacific Ocean to make it work,” said Andrzej Knigawka, an analyst at ING Securities.

The acquisition of Quadra FNX will increase KGHM’s copper production levels by 25 percent next year and by nearly 50 percent by 2018, the com-

The deal will make KGHM the fourth-largest copper producer in the world

Power-plant investment

EDF announces €1.8 billion investment in coal-fired plant Four old power units will be replaced with a single block at a plant in Rybnik French energy giant Électricité de France (EDF) will invest around €1.8 billion to build a 900-megawatt coalfired power plant in Rybnik, southern Poland.

The project entails replacing the four oldest of the plant’s eight power units with a single, more efficient one.

EDF, which holds a controlling stake in the plant, will use “supercritical” technology in the new unit. The technology allows combinations of fuel to be burned more efficiently, thereby producing significant-

ly lower carbon emissions than technology used in a standard coal-fired unit.

French engineering group Alstom will supply the unit’s boiler island and turbine hall.

Construction on the project will take six years, with the launch date not yet known.

EDF wrote in a statement that the investment is part of a strategy to help “reinforce its position in Central Europe.” It will fund the project using its own cash, sourced from within the group.

By 2020, the company wants to bring its total installed power generation capacity in Central Europe to 200 gigawatts, 25 percent of

which it aims to source from fossil fuels.

EDF is making the investment to capitalize on expected growth in demand for energy of 3 percent per year in Poland, and on new environmental directives that require the oldest production units to be shut down from 2016, thus reducing supply. Électricité de France has been present in the Polish market for 12 years. It says its activities provide 10 percent of output in the country’s energy market and 15 percent of district heating. It buys some seven million metric tons of coal per year.

Izabela Depczyk, Gareth Price

COURTESY OF ORLEN

The Polish firm looks set to become the world's fourth-largest copper producer

Orlen owns around 1,700 gas stations in Poland it has been alleged that Marek S., a board member responsible for Orlen’s petrochemical operations, took bribes from Pawe∏ M., who was hoping for preferential treatment when contracts were being negotiated.

Both men are facing charges of corruption, for which they could spend up to eight years in prison. The two

managers who report to Marek S. are also linked to the case, but have been released on bail.

Orlen revealed in a statement that its supervisory board had unanimously adopted a resolution to suspend a management board member, “due to detention of him by the Internal Security Agency.”

Gareth Price

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BUSINESS

www.wbj.pl

DECEMBER 12-18, 2011

Inflation

COURTESY OF MSZCZONÓW MUNICIPALITY

RPP keeps rates on hold for sixth straight month

Mr Greidinger speaking at the launch of the zone last week

Investment incentives

Economic Activity Zone launched near Warsaw The z∏.2.2 billion Park of Poland theme-park investment will be sited in the zone The Polish government has established a 3,200-hectare Economic Activity Zone in an area located in the west of the Mazowieckie voivodship.

Called Western Mazovia, the new zone is located in the Mszczonów, Radziejowice and Puszcza Mariaƒska municipalities. It is earmarked to host tourism, retail and entertainment investments.

Unlike a special economic zone, Western Mazovia will not provide tax incentives for investors. Instead, the government has promised to improve infrastructure in the area.

Plans are afoot to build more roads, modernize railway infrastructure, and probably build an airport, said Moshe Greidinger, owner of Global

Parks Poland, the first company to sign a letter of intent for investing in Western Mazovia.

“Aside from the immediate population of seven million people, access to a highway and railway, we have received great support from the local communities and the government which has promised to strengthen the infrastructure in the area,” Mr Greidinger told WBJ. Global Parks will develop a theme park in Western Mazovia that will include roller coasters, a water park, two hotels, and shops. The scheme is expected to cost z∏.2.2 billion and attract four million visitors every year. It will be one of the five largest amusement parks in Europe.

The first stage of the park is planned to be completed by 2015, with the investor intending to expand it four years later.

“Park of Poland is to become the engine of the economic activity zone,” Mr Greidinger said.

He added that the company first thought about building a theme park five years ago, and that it has spent a lot of time looking for the right location.

Mr Greidinger said that after meeting with Józef Kurek, the mayor of Mszczonów, he was convinced that the west of Mazowieckie was the best area in Europe in which to invest.

“Our zone has a major growth potential, we have a great location, and the perspectives for huge investment,” Mr Kurek said.

“By 2015 the zone should have created over 2,000 new jobs and will have attracted z∏.3.8 billion of incoming assets,” Mr Kurek added.

Izabela Depczyk

Prudential returning to Poland following absence of more than 70 years?

The insurance business of British financial services company Prudential plc may be coming back to the Polish market in 2012 after an absence of more than 70 years. According to unnamed sources cited by business daily Puls Biznesu, head hunters have already started the process of recruiting people to help build the insurer’s business in Poland.

Prudential did not respond to WBJ’s requests for a comment on the reports.

In addition to Prudential, French insurance firm Groupa-

ma is also reportedly preparing to enter the Polish market.

Both companies would be following in the footsteps of Aegon, an insurer headquartered in the Netherlands, which has opened a branch in Poland.

In April this year, it was also reported by the Polish media that Prudential was interested in entering the Polish market.

Prudential left the Polish market 70 years ago due to the then complicated geopolitical situation.

Prior to World War II, the

company offered insurance services in Poland through Prudential Assurance Company Limited and its subsidiary PrzezornoÊç. The two companies were merged in 1937, occupying the Prudential building – an iconic skyscraper located on Plac Powstaƒców along ul. Âwi´tokrzyska.

Assets belonging to Prudential’s Polish business were seized by the occupying Nazi authorities following their invasion of Poland in 1939.

Remi Adekoya

Despite signs the economy is starting to slow down, Poland’s rate-setters are still worrying about high inflation Poland’s rate-setting Monetary Policy Council (RPP) chose to keep interest rates unchanged at a meeting last week, saying that despite indications economic growth is starting to ease, inflation is still too high. The Council has not changed rates since raising them by 25 basis points in June.

In line with analysts’ expectations, the RPP kept Poland’s headline interest rate steady at 4.5 percent.

Annual CPI (consumer price index) figure increased to 4.3 percent in October, remaining well above the

National Bank of Poland’s inflation target of 2.5 percent.

The RPP said it aims to keep inflation in check in future months, without being more specific about its intentions. “The Council does not rule out the possibility of further monetary policy adjustments in the future, should the outlook for inflation returning to the target deteriorate,” the RPP wrote in a statement explaining its decision.

The Council said, however, that it expects inflation to ease due to the expected economic slowdown and government belt-tightening.

“In the opinion of the RPP, in the medium term inflation will be curbed by gradually decelerating domestic demand amidst fiscal tightening, including

reduced public investment spending, and interest rate increases implemented in the first half of 2011, as well as the expected global economic slowdown,” the Council wrote.

The significant monetary policy tightening implemented in the first half of 2011 should enable inflation to return to the target in the medium term, the RPP said.

Bank Zachodni WBK analysts wrote in a market report, “We maintain the view that there will be two interest rate cuts in 2012, each by 25 basis points.

However, due to a worse outlook for the z∏oty, which will slow down inflation’s return to [the central bank’s] target, the first decision may take place only at the end of Q2 2012.”

Gareth Price

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

Incorrect instructions by a court won’t affect appeals deadline On November 22, 2011 the Supreme Court ruled that a failure by a court to correctly instruct a party which is involved in court proceedings without a professional attorney about both the deadline for an appeal and the manner in which it should be filed, will not affect the time period for filing the appeal.

In the Polish legal system the deadline for filing appeals is specified under legal provisions and as such may not be changed or prolonged even if the deadline is not met due to the fault of the court.

In the case of incorrect instructions or a failure to instruct the said party about the deadline and the manner in which the appeal should be filed, the party which failed to file the appeal within the deadline may file a motion for reinstatement of the deadline. This motion needs to be approved by the courts.

Budget-Related Act approved In order to stabilize public finances the government approved the Budget-Related Act on November 22. The act aims to prevent public debt from increasing next year. The draft act provides that the excise tax on diesel and bio-composite fuels will be increased. Moreover, it will no longer be possible to avoid paying 19 percent tax on profits from deposits.

Creditor of shareholder has the right to complain about resolutions Pursuant to the Supreme Court’s resolu-

tion of November 25, the creditor of a shareholder in a joint-stock company may appeal resolutions agreed to at a general shareholders’ meeting if those resolutions threaten his or her being able to retrieve the money they are owed. This is the case even if a court has appointed an official to make sure the creditor gets the money owed to them.

Earlier retirement for employees On November 17 the draft legislation on changes to the Act on Retirement Benefits and Disability Pensions from the Social Insurance Fund received its first reading. The draft provides that women who have been in employment for 35 years and men who have been in employment for 40 years may retire earlier than the standard retirement age.

The provision is designed to help employees who have been insured for a long period to receive retirement benefits earlier. The changes are intended to improve the situation of employees who, due to their long periods in certain types of employment, often have health problems that affect their ability to work properly. The authors of the draft argue that many of these types of employees go on sick leave more frequently than other workers. As a result their efficiency at work is reduced.

Higher real estate tax in 2012 Next year the rate of tax on real estate in Poland will increase. As a result most local government authorities have already increased or are set to increase the tax rate by 4.2 percent. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

LUXURY IN FOCUS

DECEMBER 12-18, 2011

www.wbj.pl

7

Diamonds

The world diamond trade continues to grow due to increased demand from Asia and the Middle-East Despite the difficult global financial situation, demand for diamonds is set to grow by more than 6 percent a year over the next decade due to an increasing desire among Indian and Chinese consumers for the precious stone. That’s according to a new report compiled by Bain

& Company and the Antwerp World Diamond Center.

Annual growth is predicted to average 6.4 percent, and will reach a total of 250 million carats a year by 2020.

But with demand set to far outweigh supply due to a lack of new mines in the market, some consumers could be priced out.

Premysl Synek, director general of Diamonds International Corporation (DIC), a Czech-based company specializing in the production and sale of original diamond

profit over the same period, making diamonds the thirdmost valuable investment opportunity.

For those curious to find out what millions of euros worth of diamonds actually look like, one of the biggest diamond exhibitions in Europe is taking place at the DIC showroom in Warsaw from December 10 to 20.

The 320 unique diamond exhibits featured are worth a total of €20 million, and include rare stones such as a 23-carat black diamond and a 15-carat yellow “Sun

jewelery, believes that in investment terms, “diamonds are still the most valuable investment instrument as their price in the last hundred years has never diminished.”

However, gold and platinum still remain the best investments according to figures published on DIC’s website, with a $1,000 investment in January 2001 yielding a $4,112 and $1,779 profit respectively by December 2010. The same investment on a five-carat diamond brought $1,527

Polish art market

SHUTTERSTOCK

Demand for diamonds set to grow despite harsh economic forecast

Diamonds are in high demand in India and China Drop” diamond. The exhibition will also feature luxury jewelery and the crown of

the winner of the 2010 Miss World competition.

David Ingham

Luxury for pets

Art prices in Poland on the rise New pet club near Warsaw

offers pet pool, daycare There’s also a fitness center and a hairdresser

COURTESY OF ABBEY HOUSE

Those who are missing a place in Poland to pamper their pets now need look no further than Bone Pet Club, a new pet hotel and play center near the capital.

Launched in August, Bone Pet Club recently branched out from its original pet hotel services and now also provides pet daycare, a fitness center and a pool. The fee for the hotel per night is z∏.95 and the pass for the pool is z∏.15 per hour.

“Generally pet hotels in Poland are weak, they keep animals, but they do not really take care of them,” said Aneta Cholewa, an animal behaviorist and the owner of Bone Pet Club.

Polish artists are attracting more interest from buyers but prices still lag behind the world’s major markets Poland’s artists are beginning to see higher prices paid for their works. There have been examples of contemporary Polish artwork selling for six figure sums in recent years.

Between 2009 and 2010, 10 Polish artists sold works at auction priced from z∏.100,000 to z∏.470,000.

Zuzanna Sokalska, director of Galeria Art NEW media, said that “the most expensive works sold in Poland are equivalent to the price of a luxury vehicle.” But while such prices are high for the Polish market, they are small change in comparison to the prices paid in some of the larger art

markets around the world, such as the US, UK, or China.

Nevertheless, interest in art in Poland is rising. According to Ms Sokalska, “in Poland there has never before been such an interest in art.”

One artist who has managed to find financial success with her artwork is Agata Kleczkowska, who while still in her fifth year of university study sold a piece for approximately z∏.160,000.

While that purchase should be seen as an encouraging signal, the reality remains that the Polish art market is still relatively immature compared to those in the US or the UK. In the West, buyers tend to favor abstract art, which also commands the highest prices.

“In Poland the most expensive paintings are older works and there is a preference for 19th century art,” said Ms Sokalska, adding, “In Poland

abstract art is still not wellenough understood.”

However, the immaturity in Poland’s art market extends further. Ms Sokalska said that in Poland, there is also a lack of awareness and desire for art. “In Poland, people don’t wait in line to get into museums. There is also not enough education about art,” she said. And that, as a result, impacts the price of art.

Moreover, while some Poles are waking up to the fact that they can purchase art as an investment, most are still unaware of the opportunities. That goes for businesses as well as individuals, who are currently the main buyers of art in Poland. Polish corporations “don’t want to spend money on something that they don’t consider serious,” Ms Sokalska added.

Ella Pa∏ka

countries for Christmas,” she said.

The club owner added that aside from peak seasons, everyday clients are usually wealthy people who work late, and who do not want to leave their pets all alone for the day, or people who “love their animals so much” they want to provide them with the best entertainment, regardless the price.

The pet club is also open for owners who just want to drop in to have some fun with their pets.

“Wintertime, when it is too cold to be outside, is a time when more people come with their dogs, either to watch them play or to play with them,” Ms Cholewa added.

COURTESY OF BONE PET CLUB

Agata Kleczkowska’s painting sold for z∏.160,000

“We have a different approach. We are not just providing a ‘storage room,’ but also entertainment, activity, training and in general, happiness for pets,” she added.

Aside from the hotel, daycare, pool and fitness area, the Bone Pet Club offers a pet hairdresser, dog training and a pet-taxi service to pick the animal up from home.

Ms Cholewa said that the pet club has been very successful.

“Our two peaks are during the summer and Christmas holidays. In the summer we have a lot of Poles leaving their animals while they go abroad on vacation, whereas Christmas time is when we get a lot of ‘foreign dogs,’ those which belong to expats who fly back to their

The Bone Pet Club offers recreational activities for your pet

Izabela Depczyk

8

INTERVIEW

www.wbj.pl

Banking sector profits grow The Polish banking sector’s combined net profit during the first 10 months of this year amounted to z∏.13.3 billion, according to the Polish Financial Supervision Authority.

Profits were 39.2% higher than during the same period of last year.

Revenues from interest were 11.8% higher y/y.

Two million struggling with debt Almost 2.1 million Poles are experiencing difficulties in paying off their debts, according to a survey conducted by economic data company BIG InfoMonitor. In total, debt held by individual Poles currently amounts to z∏.34.35 billion, and is rising by an average of z∏.1.5-2 billion every three months.

Uniqa joins z∏.1 billion club There are only five companies in Poland’s property insurance sector that manage to sell policies worth a total of more than z∏.1 billion each year. These are PZU, Warta, Ergo Hestia, Allianz and InterRisk. However, by the end of December, Uniqa is set to join the insurance elite, reported Puls Biznesu. Uniqa’s board announced last week that the total amount of insurance premiums collected by the firm this year will exceed z∏.1 billion. ●

DECEMBER 12-18, 2011

Law and Justice

Resurrecting the Polish right Adam Hofman, spokesperson for the Law and Justice party and a member of its political committee, talks to WBJ about the situation on Poland’s political right, mistakes made in the last election campaign and the party’s strategy for achieving success Ewa Boniecka: As Law and Justice (PiS) leader Jaros∏aw Kaczyƒski has admitted, mistakes were made during your party’s October parliamentary election campaign. Arguably one of the biggest of those was the publication of a book in which Mr Kaczyƒski plays on anti-German sentiment. Why didn’t you, as one of the most prominent faces of PiS’s campaign, try to stop this? Were you afraid to do so, as some critics of PiS say?

Adam Hofman: It is not true that we were afraid, we expressed our remarks freely while talking with Jaros∏aw Kaczyƒski. In the case of the remarks about [German Chancellor] Angela Merkel, it seemed to us that Poland should be a free country in which the independent leader of the biggest opposition party can say what he likes about the German chancellor. Unfortunately, it turned out that he cannot, because the harsh election battle and overblown reaction of some politicians from other parties, and from the hostile media, was so furious that we lost the election.

That incident was a bitter lesson for us all.

In a letter to members of PiS, Jaros∏aw Kaczyƒski remarked that the main reason for the failure of the right in the last election was the ambition of politicians in charge of many

small right-wing parties, which led to the division and weakness of the Polish right as a whole. How do you plan to prevent such a scenario from occurring again and lead PiS to success when a number of your party’s former members have established separate rightist organizations, such as Poland Comes First (PJN) and Solidarity Poland?

The bitter scenario should be treated as … a warning, yet the situation in Poland is now quite different. Political parties have become professionalized and financed from the state budget, and PiS, a party which has the support of 30 percent of the electorate, is the essential force of the right.

So the recipe for success is to build unity around PiS, because we are the only professional conservative party in Poland and those who are trying to break us are in fact radical opponents of the right. So, we will not pay attention to those small emerging splinter groups, but will proceed and realize our aims. Poland needs a strong conservative opposition and PiS is the only party which can provide this.

What would be your party’s attitude towards Solidarity Poland if that organization were to make it into parliament?

We would not conduct negotiations with Solidarity Poland

in parliament because to us it is a group with an unknown program, while PiS has a welldefined rightist conservative program. According to it, we would act in parliament only [in areas] where our one serious competitor – Civic Platform (PO) – operates.

Solidarity Poland cannot be seen as our competitor and I will make a comparison here to the producer of Coca-Cola, which does not enter into competition with small and unknown firms who produce a similar beverage, because it knows that these are false brands that cannot compete with a genuine, strong one and will fail.

returned to power stronger than before. The conclusions from this are obvious.

Will PiS adopt a totally negative approach towards all government proposals?

No, it will not be total negation, we would perform our role as a strong opposition party ... evaluating the government’s proposals according to our own principles and program. I think there could be some issues in the economic and social domains in which we could cooperate with the government. Yet there would be one condition: that the governing party should get rid of its conviction that the opposi-

“We would not conduct negaotiations with Solidarity Poland just as Coca-Cola does not enter in to competition with small unknown firms” Law and Justice is a wellrooted party, firmly established on the sharply-divided Polish political scene, which reflects real social divisions.

Being a serious rightist-conservative party, PiS might be compared to the Republican Party in the US or the Conservative Party in Britain, and if I hesitate to elaborate further on these comparisons, it is only because those parties have been in politics much longer than we have. ... Yet looking at their experiences is an edifying exercise because those parties have also been through periods when they were not in power, as we are not presently, yet they

tion – and this means Law and Justice – should be destroyed.

If Civic Platform rejects this conviction and recognizes the opposition as a respected element of a democratic system, then we could talk with it about some of the problems we consider to be important for the country. In the present situation, when PO is waging war on us and wants to destroy PiS, cooperation is out of question.

It seems that PiS is prepared to criticize itself in some respects, but are you convinced that your party actually wants to make fundamental changes and reform itself?

Some changes must be introduced in our party to allow us to work more effectively in the present environment, where parties are professionalizing, the media is influential and there is aggression by mainstream thinkers against PiS. But we need one important thing to achieve victory: social change in Poland along with changes in attitudes towards the role and obligations of the state towards citizens. While the present formula of Law and Justice is earning us the support of 30 percent of the electorate, we have to gain more in order to win.

I am certain that the financial and economic crisis approaching our country and affecting ordinary people will galvanize certain social changes in Poland. That crisis is already bringing about social changes and ... anger in several European countries. The confusion of political elites has led to the fall of some governments in the EU – Poland is not an island.

The Democratic Left Alliance and Palikot’s Movement have presented certain proposals for changes related to moral and ethical matters, like financing in vitro fertilization and legalizing same-sex civil unions. Many sociologists are even claiming that there is some kind of revolution in thinking concerning these issues. Maybe our society is not as conservative as it once was …

I believe that Poland is a country where a traditional model of thinking [normally] prevails.

That is now being strongly negated by certain political

INTERVIEW

COURTESY OF ADAM HOFMAN

DECEMBER 12-18, 2011

Mr Hofman says social change is needed in Poland before PiS can win groups. Yet in my view these moral and ethical changes are being forced on our society by political elites and are not changes that come from the grass-roots of society.

We see the need to contradict these forced changes and I am saying this not only as a politician, but also as a young man with conservative views who has a family with two children. And I do not want my children to move away from the traditional model of looking at the world; I hope that they would not be forced by their schools and the media to reject traditional values. I believe the conservative model of life and thinking is the one which guarantees strong social links and those social links guarantee that Poland will be an independent country that is difficult to defeat economically and in all other fields.

So I think that even when some of these ethical changes are forced through parliament – because Prime Minister Donald Tusk‘s [PO] will be obliged to do so to win the support of the Democratic Left Alliance and Palikot’s Movement in certain matters – … it will end in failure. Like for [former Prime Minister] Zapatero in Spain it will end in Prime Minister Tusk’s final

defeat because our society is quite conservative. While the big cities are presently driving towards liberal and leftist values, the electoral vehicle will later turn to our, conservative side.

So if PiS wins the next election, would such changes be rejected?

Yes, and the status pro ante will be restored.

It is assumed by many that PiS’s electorate comprises people who are disappointed with life, feel neglected by society and the state, and who have received little education and have no drive to achieve things or change things for the better. Why does your party not appeal to people who have achieved success?

This characterization of our electorate is a myth, created by Civic Platform and it is one of the elements used to discredit and destroy our party. I know very well the structure of our electorate and in it there are people who are disappointed by changes in Poland and feel pushed to the economic margin, but in [the main] there are people from the middle class, or who aspire to it, some welloff businesspeople, lawyers, doctors, other professionals and educated young people

who share conservative views and a determination to change our country for the better. So it is not so, as PO politicians claim and the mainstream media likes to portray, that people voting for PO are nice and successful and those who vote for PiS are nasty and backward.

Let’s move on to PiS’s economic and business policies, one of which is a proposal for the re-polonization of banks.

What is the merit of this proposal?

We want to provide the state with certain mechanisms to fight the financial crisis and one such mechanism could be the re-polonization of our banks. Due to an incorrect policy … our banks were sold to foreign lenders and through this Poland has lost much of its influence over its banking sector. Now, 67 percent of Polish banking assets are in foreign hands. PiS’s proposal for their re-polonization does not mean that we want to take back the banks from private hands, but that in a time of financial crisis we want to restore some Polish control over the activity of banks operating in our country. … We think that it would be helpful for strengthening our economic competitiveness and financial standing. ●

www.wbj.pl

9

10

OPINION & ANALYSIS

www.wbj.pl

DECEMBER 12-18, 2011

An Arab Lesson for Russia’s government Alina Inayeh

Public protests Earlier this year, people took to the streets in several Russian cities, as in many other cities around the world, in response to economic hardships.

But the grievances of Russian protesters did not resemble those heard in London or Berlin. Instead they mirrored those in Cairo and Tunis, with people demanding civil rights and freedoms in addition to jobs and pensions. Their discontent was felt in regional elections, where Mr Putin’s United Russia performed poorly.

The Kremlin failed to respond to

this show of public dissatisfaction and Mr Putin’s plans to return to the presidency only further alienated the public.

Subsequent protests have become more vocal and widespread. The cultural elite, usually an ally of those in power, put up a silent and largely unnoticed protest by refusing to promote United Russia, as has previously been customary.

Images of popular singers, ballerinas, and gymnasts – whose endorsements carry weight in this culturally sensitive country – were largely absent from United Russia’s publicity posters.

Ever since the Rose and the Orange Revolutions in Georgia and Ukraine, the Kremlin’s anxieties have increased. Wary of people taking to the streets in protest against electoral fraud, it overreacted to allegations and evidence of electoral fraud during the latest elections and attempted to silence observers.

Following previous elections during Mr Putin’s tenure, such allegations were met with indifference and cold superiority. Disputes and appeals were dealt with quietly and

amassed militia forces to crack down on protesters in the main squares of Moscow and St. Petersburg, and many have already been imprisoned.

A sympathetic approach

COURTESY OF WIKIMEDIA COMMONS

G

iven the traditional electoral model in Russia – where voting is generally not as important as how the votes are counted – the December 4 elections were nothing out of the ordinary. The manipulation of elections is an intrinsic part of Russian history, and it has usually bothered only a few zealous and diligent activists. It is no wonder then, that the ongoing protests have come as a surprise to the Kremlin. What is really extraordinary is how oblivious Russia’s leaders have been to history’s recent lessons. The Arab Spring and the Color Revolutions offer considerable material on how nondemocratic governments should approach elections, yet Prime Minister Vladimir Putin and President Dmitry Medvedev seem not to have studied for this test.

implacably by electoral commissions and the judiciary, while domestic and international election monitors were simply dismissed. Drawing the wrong lessons from the Color Revolutions, the Kremlin decided not to decrease fraud this time around, but to hide it, with the predictable outcome that it revealed itself even more.

GOLOS, the nationwide election monitoring group that was so obsessively harassed during these elections, denounced fraud on election day, and this activism was followed by thousands of protesters taking to the streets. As in several Arab countries earlier this year, protesters have used social media tools to communicate and organize. In response, the Kremlin has

The lesson that autocratic governments such as Russia’s are tempted to take away from this year’s Arab revolts is to crush protests mercilessly, before they get out of control. But as Egypt, Libya, and Tunisia demonstrate (along with East Germany, Romania, and Yugoslavia before them), success is not always guaranteed – and the strategy almost inevitably eventually backfires.

The correct lesson of the Arab revolts, and a much wiser choice for any government, is to be sympathetic to the underlying reasons that motivate protesters to take to the streets and address them. This means not tightening the regime’s grip on power, but relaxing it.

This is not to say that spring has come to Moscow, or that the protests of the last two days will necessarily turn into a revolution. Mr Putin

Ukraine on the edge S

even years ago, Ukraine’s Orange Revolution inspired hope that the country was moving towards genuine democracy. Since then, democratic freedoms have been curtailed, the former prime minister

“Ukraine is becoming a toxic mix of authoritarianism and corrupt capitalism” and co-leader of the revolution, Yulia Tymoshenko, has been imprisoned, and President Viktor Yanukovych’s regime has become internationally isolated. Ukraine is unraveling.

Today, a small group of oligarchs clustered around Mr Yanukovych have captured power. They manipulate elections, control the media, and are shaping the country’s institutions to further their own business interests.

Condemnation by the West has had no impact. So long as they control the country’s industries and natural resources, they will maintain their grip

on power – the approach perfected by their role model, former Italian Prime Minister Silvio Berlusconi.

Dangerous precedent Whatever one thinks of Ms Tymoshenko, she was not imprisoned for any ostensible crimes she committed while in power. She is in prison because she lost that power. This sets a dangerous precedent, for it creates a powerful incentive – winner takes all, loser goes to prison – for ruthlessness.

It is difficult to predict how Ms Tymoshenko’s case will play out – whether Mr Yanukovych will succumb to pressure from the European Union and the United States to release her, or to the forces that want to exclude her from politics forever. Until recently, Ukrainian leaders were accustomed to more efficient means than prison for dealing with inconvenient opponents. In 2000, for example, the journalist Georgiy Gongadze was kidnapped and beheaded after publishing online reports about high-level government corruption. During the ensuing investigation, former Interior Minister Yuriy Kravchenko died of two gunshots to the head hours before he was to testify.

Perhaps Ms Tymoshenko herself did not understand how sharply her country had turned away from democratic norms when she mocked Mr

Yanukovych and her opponents during her trial. Indeed, her first brief imprisonment in 2001 furnished her with political capital and pushed her into the democratic opposition’s front ranks.

Perhaps Mr Yanukovych himself did not foresee the consequences of Ms Tymoshenko’s arrest, trial, and imprisonment. Some Ukrainian conspiracy theorists – of whom there is no shortage – maintain that Mr Yanukovych was tricked by skillfully prepared misinformation provided by the officials around him.

Enduring damage If the EU refuses to sign an Association Agreement with Ukraine at the upcoming Ukraine-EU summit in Kiev on December 19 because of Ms Tymoshenko’s imprisonment, the damage to the country will be vast and enduring. But, with every month that Ms Tymoshenko spends in jail – more than three so far – her martyrdom grows, making it harder for Mr Yanukovych to free her. Mr Yanukovych has become hostage to a situation that he created – and thus has done nothing to extricate himself from it.

Russia’s then-president, Vladimir Putin, put himself in an analogous bind in 2003 with the arrest of the oil oligarch Mikhail Khodorkovsky. At

the time, Mr Khodorkovsky was the wealthiest man in Russia and an open critic of the Russian government, so his arrest triggered a storm of international protest. Like Mr Yanukovych, Mr Putin is under pressure from the West to release his opponent, but the political risk is too great.

Mr Yanukovych’s goals are unclear. He does not respond to European pressure, even though Ukraine would gain political leverage from closer EU ties. Perhaps he simply dislikes the EU because it applauded his defeat in the Orange Revolution, and because he makes embarrassing gaffes whenever he goes there.

Then again, perhaps he has learned from Belarusian President Alexander Lukashenko that the EU has little influence over non-EU countries’ internal politics. At the first positive sign from Belarus, the EU forgives and forgets. Indeed, even without a positive signal from Ukraine, the European Parliament has recommended that negotiations on the Association Agreement begin.

Toxic mix Generally, Mr Yanukovych’s foreign policy appears reactive. In 2010, for example, he bowed to Mr Putin’s pressure to extend the Russian lease on naval facilities in Crimea to 2042, whereas Ms Tymoshenko and others

thrives on crisis and he may well find ways to solve this one as well. But if he is to take away one lesson from the Arab revolutions earlier this year, it is that the last few days do not constitute a temporary eruption of anger. He did not just experience and steer his way past another ordinary election. The protests made an irreversible fissure in the political establishment, and helped ensure that fraud and repression are no longer publicly acceptable.

Mr Putin would do well to dust off current President Dmitry Medvedev’s speeches and bring about some of the measures that were so eloquently addressed there, such as more media freedoms, free and fair elections, greater independence for the judiciary, and the modernization of the economy. As things stand now, Putin has only two choices: repress opponents and dissidents, manipulate elections, and fear revolt in the days after; or start liberalizing Russia’s society and modernizing its economy, while standing in (and probably winning) Russia’s first free and fair elections. ● Alina Inayeh is director of the Black Sea Trust for Regional Cooperation and the Bucharest office of the German Marshall Fund of the United States.

Copyright: German Marshall Fund of the United States gmfus.org

Tatiana Zhurzhenko pointed to the treaty’s unconstitutionality.

Mr Yanukovych also undermined Ukraine’s geopolitical strength vis-a`vis Russia by rejecting NATO’s invitation to join in 2010. Even if the Kremlin is not particularly happy with the planned EU-Ukraine Association Agreement, it has little reason to worry as long as Mr Yanukovych remains a weak president in a divided country.

Ukraine is thus becoming a toxic mix of authoritarianism and corrupt capitalism. In Belarus, an impoverished President Lukashenko increasingly resorts to brute force to maintain his rule – breaking up peaceful demonstrations, imprisoning political opponents, and terrorizing the intelligentsia. Compared to him, Mr Berlusconi is a shining example of good government. But, as Mr Yanukovych and his backers are well aware, Mr Berlusconi is gone, and President Lukashenko is not.

Tatiana Zhurzhenko is a political scientist at the University of Vienna.

Her most recent book is Borderlands into Bordered Lands: The Geopolitics of Identity in Post-Soviet Ukraine.

Copyright: Project Syndicate, 2011.project-syndicate.org

OPINION & ANALYSIS

DECEMBER 12-18, 2011

www.wbj.pl

A summit to the death

As

many feared and most expected, the just-concluded European summit left much to be desired. Once again, Europe’s national leaders showed themselves to be in denial about what underlies the euro zone’s economic, banking, and sovereign-debt crises.

One lesson that the world has learned since the financial crisis of 2008 is that a contractionary fiscal policy means what it says: contraction. Since 2010, a Europe-wide experiment has conclusively falsified the idea that fiscal contractions are expansionary. August 2011 saw the largest monthly decrease in eurozone industrial production since September 2009, German exports fell sharply in October, and declines in euro-zone GDP are being predicted.

A second, related lesson is that it is difficult to cut nominal wages, and that they are certainly not flexible enough to eliminate unemployment. That is true even in a country as flexible, small, and open as Ireland, where unemployment increased last month to 14.5 percent, emigration notwithstanding, and where tax revenues in November ran

1.6 percent below target as a result. If the 19th “internal devaluation” strategy to promote growth by cutting domestic wages and prices is proving so difficult in Ireland, how does the EU expect it to work across the entire euro-zone periphery?

tainly be transfers from Germany to the periphery in 2011, but a properly designed setup would have ensured flows to Germany in the 1990s, as it struggled to cope with the costs of reunification with East Germany.

With this in mind, the most obvious point about the recent summit is that the ‘fiscal stability union’ that it proposed is nothing of the sort.

Rather than creating an inter-regional insurance mechanism involving counter-cyclical transfers, the version on offer would constitutionalize pro-cyclical adjustment in recessionhit countries, with no countervailing measures to boost demand elsewhere in the euro zone.

Many will argue that such arrangements are needed to save the euro zone, but what is needed to save the euro zone in the immediate future is a European Central Bank that acts like a proper monetary authority. True, Germany is insisting on a ‘fiscal stability union’ as a condition of allowing the ECB to do even the minimum needed to keep the euro afloat; but this is a political argument, not an economic one.

Cost-benefit analysis The euro-zone members’ loss of ability to devalue their exchange rates is a major cost. Governments’ efforts to promote wage cuts, or to engineer them by driving their countries into recession, cannot substitute for exchange-rate devaluation. Placing the entire burden of adjustment on deficit countries is a recipe for disaster.

In such a world, fiscal union is an essential counterpart to monetary union. If the gumbo industry goes into decline, driving the US state of Louisiana into a recession, residents will pay fewer federal taxes and receive more fiscal transfers. These financial flows are a natural countercyclical mechanism that helps local and regional economies to weather bad times. In a hypothetical European fiscal union, there would cer-

Survival requirements What is needed to save the euro zone in the medium term is a central bank mandated to target more than just inflation – for example, unemployment, financial stability, and the survival of the single currency. A common framework for regulating the financial system is also required. This will require a minimal fiscal union; a full-scale fiscal union would be better still. Yet none of this was on the summit’s agenda.

An immediate breakup of the euro zone would be a catastrophe, which is why the European Council agreed to a “fiscal stability union” in exchange for some movement by the ECB. This may indeed prevent collapse in the short run – though that is far from certain.

In the slightly longer run, such a deal, assuming that it goes ahead, will mean continued austerity on the euro-zone periphery, without the offsetting impact of devaluation or stimulus at the core. Unemployment will continue to rise, placing pressure on households, governments, and banks. We will hear

Kevin O’Rourke much more about the relative merits of technocracy and democracy.

Anti-European sentiment will continue to grow, and populist parties will prosper. Violence is not out of the question.

This summit should have proposed institutional changes to avert such a scenario. But if such changes are politically impossible, and the euro is doomed, then a speedy death is preferable to a prolonged and painful demise. A euro-zone collapse in the immediate future would be widely perceived as a catastrophe, which should at least serve as a source of hope for the future. But if it collapses after several years of perverse macroeconomic policies required by countries’ treaty obligations, the end, when it comes, will be regarded not as a calamity, but as a liberation.

And that really would be worse. ● Kevin O’Rourke is Chichele Professor of Economic History at the University of Oxford, and a fellow of All Souls College. Copyright: Project Syndicate, 2011. www.project-syndicate.org

Central Europe caught in the middle

In

a meeting with military attaches in Moscow last Wednesday, Russian General Nikolai Makarov, chief of the General Staff of Russian armed forces, said that the Russian military has begun to implement several military measures in response to US ballistic missile defense (BMD) plans in Europe. These measures, which Russian President Dmitri Medvedev outlined in a televised address two weeks earlier, include activating an early warning radar in Kaliningrad and strengthening Russia’s defensive capabilities for strategic nuclear forces installations.

In the same speech two weeks ago, Mr Medvedev stressed Russia’s desire to cooperate with Washington in a joint BMD framework, and said measures such as deploying advanced offensive systems – including Iskander mobile short-range ballistic missiles – would only be enacted if “the aforementioned measures prove to be insufficient.”

But Russia has wasted no time following through on many of those harsher measures. On the same day as Makarov’s statements, the press service of Russia’s Western Military District said that an S-400 surface-toair missile regiment will be placed on combat duty in the exclave of Kalin-

ingrad, which borders Poland, before the end of the year. Meanwhile, the chief of the Belarusian Armed Forces’ General Staff said his country expects to receive Tor-M2 surface-toair missile systems from Russia this month, adding that an Iskander deployment to the country would soon follow.

Russian opposition to US BMD plans is nothing new. For Russia, the fundamental issue at hand is not the BMD system itself (which is nominally geared toward countering the ballistic missile capabilities of states like Iran), but the US military presence the system would bring with it. US BMD plans are focused on Central Europe, which abuts Russia’s former Soviet periphery. Moscow can’t help but feel threatened by the US military commitment to the region that the system represents.

Russia escalates its opposition While Russia has publicly expressed its opposition to US BMD plans on many occasions over the past few years, last Wednesday marked a clear escalation by Moscow on the issue, particularly since Russia softened its stance on US missile defense after the so-called “reset” in Russo-American relations in 2009. The timing of this escalation is important. On

Thursday, a foreign minister-level Russia-NATO Council meeting will take place in Brussels, and Moscow has grown increasingly frustrated with Washington’s unwillingness to even discuss the BMD issue with Russia in the weeks leading up to the meeting.

According to STRATFOR sources, the United States has also been preparing to take BMD off the agenda for Thursday’s meeting, and possibly even exclude it from the more significant NATO-Russia summit slated for March in Chicago. Russia continues to press the issue and demand talks, with Russian Foreign Minister Sergei Lavrov stating that he plans to clarify Mr Medvedev’s position on the issue during Thursday’s meeting.

More important than the timing of the upcoming meeting is the development of a more significant shift, between Washington and Moscow, over the position of US BMD. Washington has no shortage of issues to deal with. It must wrap up the war in Afghanistan; address Iran’s increased influence in strategic Middle Eastern countries like Iraq and Syria; shift its focus to the Western Pacific region; and prepare for a possible economic collapse in Europe that would have global implications. These concerns have served to distract Washington

and limit its room for maneuver outside of the theaters it is already committed to. The last thing the United States needs is another crisis on its hands.

Conversely, Russia has seen its position steadily improve. Unlike the United States, the Russian military is not drawn into protracted conflicts far from home. Russia is flush with cash from energy revenues and has been looking to take advantage of the crisis raging in Europe. Most importantly, Russia has increased its leverage vis-`a-vis Washington thanks to the United States’ increased reliance on the Russian-dominated Northern Distribution Network (NDN), at the expense of Pakistan-based supply lines into Afghanistan. Moscow has already begun threatening to close the NDN if its interests over BMD are not taken into account.

Central Europeans are caught in the middle. In the face of a resurgent Russia, a concrete security commitment from Washington is exactly what these countries need, and the BMD system has come to serve as a symbol of that future commitment.

Russia knows this and has worked to chip away at this commitment by attempting to wedge the United States between two bad scenarios: either abandon the BMD system and

11

STRATFOR

with it the Central Europeans, or risk a potential disruption to Washington’s pressing commitment in Afghanistan. Essentially, Russia is attempting to force the United States to make a decision – over whether it wants the NDN now or BMD later – hoping that Washington leaves the Central Europeans out to dry.

Yet Russia knows that whatever levers it may hold against the United States, it is not immune to global economic problems and to blowback from Afghanistan. Moscow knows it must be careful not to press its current advantage too far. The United States, despite its current relatively poor position, is still the dominant power on which the global system pivots. It can bring a range of forces to bear against Moscow if it deems them necessary. Ultimately, in any sparring match between the United States and Russia, neither player can deliver a knockout punch. And however long the match between the two powers drags out, it is the Central Europeans that will continue to be caught in the middle. ● This edited version of “Central Europe Watches as Washington, Moscow Clash Over BMD” is republished with permission of STRATFOR stratfor.com

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According to ratings agency Fitch, the prospects for Poland’s credit ratings are stable thanks largely to the country’s relatively strong economic prospects. “We don’t see grounds for any ratings action now. The risks to our rating [of Poland] are in balance.

There are sufficient domestic strengths to balance out the negatives coming from the external environment, so the net result from that is the stable outlook we attach to our rating,” said Matteo Napolitano, director, Europe, the Middle East and Africa, sovereign ratings at Fitch Ratings.

Europe’s banks need €115 million The European Banking Authority says stress tests it carried out in November suggest that Europe’s banks will need to raise an extra €7 billion in capital to enable them to withstand shocks emanating from the eurozone debt crisis, and restore investor confidence. In October, when the last stress tests were carried out, the EBA analyzed the condition of 71 banks from 21 European countries, including Poland’s largest bank, PKO BP. According to a press release from PKO BP, the bank “passed another test by a wide margin.”

Polish business schools in FT ranking The Warsaw School of Economics (SGH) and the Leon Kozminski Academy (ALK) were named in the Financial Times’ list of the 75 best business schools in Europe this year. Ewa Barlik, spokesperson for ALK, told Rzeczpospolita that the “FT’s ranking reflects not only the position the school has against other educational institutions in Europe, but also the economic situation of a given country.” ●

DECEMBER 12-18, 2011

Polish soccer

Polish soccer’s governing body muddied by controversy Liam Nolan Allegations of corruption have hounded the Polish Football Association, raising questions about its future Just days before the group stage draw for next summer’s Euro 2012 championships, Poland’s image as co-host of Europe’s premier international soccer tournament received a damaging blow. Secretly filmed footage showing the Polish Football Association’s (PZPN) secretary-general Zdzislaw Kr´cina and its president Grzegorz Lato allegedly discussing corrupt practices, was turned in to the country’s Ministry of Sport.

The ensuing controversy led to the dismissal by the PZPN board of Mr Kr´cina as the body’s secretary-general.

In addition, Minister for Sport Joanna Mucha passed on the

recordings to the Central Anticorruption Bureau (CBA), which will investigate the allegations of corruption. Following Mr Kr´cina’s sacking, Mr Lato, a former star of the Polish national team, was summoned to a meeting at the Sejm, Poland’s lower house of parliament, to discuss the issue.

The scandal has thrown the future of the PZPN into doubt, with some politicians suggesting that the organization needs a total shake-up.

“This is the beginning of a debate on changes within the Polish Football Association,” said Ireneusz RaÊ of the Civic Platform (PO) party at the beginning of a recent special hearing into the matter by the Sejm’s Committee on Sport, Culture and Tourism.

New structure needed Pressure is mounting from inside the ranks of PZPN for a

change in the structure and leadership of the organization.

“More than half the members of the management board would like to see changes in the structure of the PZPN,” Jacek Masiota, a member of PZPN’s management board, told WBJ. But Mr Masiota is convinced that Mr Lato will not leave his post until after Euro 2012. “I’m quite sure that we have no possibility now to end Mr Lato’s presidency. Those changes will occur after Euro 2012 when we will elect a new president of the PZPN in October,” he added.

Mr Masiota believes the association needs “structural changes” and argues that the PZPN president currently enjoys too much power.

“The president has the power to make some decisions when the management board is not present,” he said.

And Mr Lato has used this

Grzegorz Lato – the player rzegorz Lato is widely considered to be one of Poland’s greatest-ever soccer players, due to his performances during the so-called golden era of Polish soccer in the 1970s and early 1980s.

During an illustrious playing career which saw him score 45 goals in 100 appearances for his country, Lato won an Olympic gold in 1972 and a silver medal at the 1976 games. He represented Poland in three World Cups (1974, 1978, 1982), helping his country achieve third place finishes in both 1974 and 1982. He also finished the 1974 finals as winner of the Golden Boot, after scoring seven goals.

Lato spent the majority of his career playing for Polish side Stal Mielec, rather than for one of Europe’s elite clubs, as at the time the PZPN prohibited players

G

under the age of 30 from being transferred outside of Poland. He did eventually move abroad but soon ended his career after short spells playing in Belgium, Mexico and Canada, before going on to manage a number of Polish club sides, including Stal Mielec and Widzew ¸ódê. ●

power in the past. In 2009, he signed a 10-year deal with Sportfive, a German sports marketing and distribution company, without consulting the board.

Time for change?

Members of PZPN stood up and took notice of the furor surrounding the organization’s own image by washing its hands of Zdzis∏aw Kr´cina, a decision that was publicly announced by Mr Lato outside the association’s headquarters. And in a statement published on its website, the association subsequently announced that it was “committed to taking actions that will improve the image of the PZPN.” The association has also decided to enact new measures aimed at preventing a similar type of situation from occurring in the future. “The PZPN board will, within the

next few weeks, develop a new disciplinary code for the organization,” reads the statement.

But changing the structure of the PZPN could prove to be a difficult task. “A lot of people working for the PZPN have been there for 15 or 20 years.

It’s a disadvantage because there are no vacancies for new people. If they look to hire new people, changes in the organization could be possible but at the moment it’s hard to say [if they would be implemented],” said Wojciech Szaniawski, editor-in-chief of the Polish edition of soccer magazine FourFourTwo. A common complaint is that PZPN is stuck in the past.

“PZPN is one of the last relics of the communist days in Poland. A total modernization of the Polish Football Association is needed,” said Piotr ˚elazny, a soccer journalist for leading Polish sports publica-

Grzegorz Lato – the PZPN president

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Poland’s credit ratings safe

EASTNEWS

12

rzegorz Lato looked a tired man as he hauled himself in front of the Sejm Committee of Sports, Culture and Tourism at the end of November. It was hard to believe that this was the same man who had once skimmed past the world’s best defenses to score countless goals.

“We are truly open, we

G

don’t have anything to hide,” Mr Lato told the committee during an hour-long meeting, prior to informing MPs that he and his delegation were in a rush because they needed to catch a flight to Kiev for the Euro 2012 draw. Suffice it to say, it was not his finest public relations performance.

A number of public gaffes have helped to mar Mr Lato’s term as president of the PZPN. He once stood behind Polish reserve goalkeeper ¸ukasz Fabianski in the postmatch media zone and while a television crew was interviewing the player, Mr Lato made a curt remark about his ability as a player.

“Lato has not been competent. He has no public relations training and is just an ordinary guy who knows very little about politics,” said Piotr ˚elazny, of Przeglàd Sportowy.

On another occasion, a journalist quizzed Mr Lato on how fast he could run the 100 meters, to which Lato replied “three seconds” and made a gesture as if to down a shot of vodka.

And according to Jacek Masiota, a member of PZPN’s board, Mr Lato’s public errors have been mirrored by poor decision-making inside the boardroom. “The main problem is Mr Lato. I’ve been on the management board for two years and all of the economic decisions were bad.

There is no transparency,” he told WBJ. But perhaps Piotr Florek, publisher of Polish weekly soccer magazine Magazyn pi∏karski summed up public feeling about Mr Lato’s stewardship of PZPN best when he said, “He was a great football player, but he’s not fit for this position.” ●

COVER STORY

DECEMBER 12-18, 2011

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13

Legal Eye

Bribery laws

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Judith Gliniecki is a Partner with Wierzbowski Eversheds judith.gliniecki@eversheds.pl

Poland’s national team has been drawn with the Czech Republic, Greece and Russia at Euro 2012 tion Przeglàd Sportowy.

UEFA’s influence But just how much damage will the allegations do to Poland’s reputation and to the Euro 2012 soccer championships as a whole?

“The allegations will have no impact on the Euro [championships] and the staging of the Euro in Poland,” Mr Gianni Infantino, the general secretary of UEFA, European soccer’s governing body, told reporters in Kiev when asked about the recent scandal.

Piotr Florek, publisher of Polish weekly soccer publication Magazyn Pi∏karski, believes that UEFA does not want the recordings to damage Poland’s image as co-host of Euro 2012. “FIFA and UEFA will block the Polish government’s efforts to destroy this bad side of Polish football,” he said.

And although change at the heart of PZPN may be on its way, it will not occur immediately, according to FourFourTwo editor Wojciech Szaniawski. “I believe that the

government will try to reorganize PZPN after Euro 2012.

The public’s impression is that PZPN is corrupt but proof is now needed,” he said.

“I think that the future of the PZPN as an association is secure. It is cooperating very closely with UEFA and PZPN is UEFA’s only partner in Poland,” Mr Szaniawski added.

A stay of execution?

The Euro 2012 draw sees Poland pitted against Russia, Greece and the Czech

Republic, in arguably the tournament’s easiest group.

This likely came as a relief to Mr Lato following an earlier statement of his in which he said he would only resign as president of PZPN if the Polish team failed to qualify for the quarter-finals of the tournament.

Now that Poland has avoided playing any of the world’s major soccer powers in its opening three games, it seems possible that Mr Lato could hang on to power, at least until October. ●

The eagle has landed ... again Poland’s soccer players and fans alike must be wondering what the PZPN is playing at.

The video-tape scandal broke just weeks after the crowned white eagle, Poland’s national emblem, was removed from the national team’s shirts by the PZPN, before eventually being reinstated following widespread public outrage.

The removal of the eagle and its replacement with the PZPN’s own emblem caused a

wave of protests from Polish soccer fans, thousands of whom boycotted a recent friendly match against Hungary in Poznaƒ by way of protest. Even Polish President Bronis∏aw Komorowski was bemused as to why Poland’s “well-known, well-liked and loved symbol” had vanished from the national team’s shirts.

The eagle affair was yet another public relations deba-

cle for the PZPN, which cited marketing rights as the reason behind the emblem change.

But both PZPN and kit makers Nike underestimated the scale of discontent that would follow. “Someone was thinking in a strictly business sense,” Piotr ˚elazny, soccer journalist at Przeglàd Sportowy told WBJ. Following two weeks of intense criticism from fans, politicians and the media,

PZPN made a U-turn. “We made a mistake. The national emblem should not disappear from the Polish national team’s shirts,” a humbled Mr Lato, the body’s president, told reporters.

And to ensure such an incident never occurs again, President Komorowski last week signed a bill which requires all Polish national sports teams to display the eagle on their kits ●

The luck of the Polish The only recent saving grace for the PZPN and its president, Grzegorz Lato, was the outcome of the recent Euro 2012 draw in Kiev. Poland, classed as one of the tournament’s rank outsiders, was handed possibly the easiest of the four firstround groups, having been drawn against the Czech Republic, Greece and Russia.

“I think it is the best possible group that we could have gotten. In my opinion, we’ve got a good chance to advance to the next stage of the tournament. Russia is the strongest team, but I believe we can finish second,” said Wojciech Szaniawski, editor-in-chief of Poland’s FourFourTwo maga-

zine.

Poland may also field one of the youngest teams of the tournament. Only two of manager Franciszek Smuda’s current squad members were born before 1983 and some pundits believe the pressure of being a host team might be too much for the youngsters.

Defensively, the team is strong. Full-back Dariusz Dudka, the most capped player in the squad, is a reliable veteran, while Arsenal shot-stopper Wojciech Szcz´sny is currently seen as one of Europe’s best goalkeeping prospects.

Captain Jakub B∏aszczykowski and star striker Robert Lewandowski, both of whom

play their league soccer with German giants Borussia Dortmund, are key talents in the side.

However, Mr Smuda has faced criticism for his counterattacking style of play. “Smuda has a huge problem. After preparing to play teams like Germany and Italy for the past couple of years, we can only counter-attack,” said Piotr ˚elazny, a journalist at Przeglàd Sportowy.

“Right now we only have six months to learn how to play a different game, which is possession football,” added Mr ˚elazny.

Many Polish fans have also criticized Mr Smuda for opting

to use FIFA’s grandparent rule, which allows players to represent the country of the grandparents’ place of birth.

Central defender Damien Perquis and midfielder Ludovic Obranik are both French-Polish players, whose grandfathers are Polish. Neither player speaks Polish, which could make communication on the pitch tricky.

With less than six months left to go until the team plays its first match at Euro 2012 against Greece, the Polish squad will no doubt be hoping that it can concentrate on preparations rather than worrying about the latest controversy involving the PZPN. ●

A retrospective on 2011 could start with market uncertainty over the future of the euro and end with Poland’s euphoria about its fortunate group draw for the Euro 2012 soccer championship. This retrospective, however, would not be complete without a discussion regarding bribery.

Recently, the Polish Football Association (PZPN) found itself involved in the so-called “tape scandal,” relating to video footage allegedly showing the president and generalsecretary involved in corrupt ion.

While the “tape scandal” involves allegations of the improper passing of monetary payments, bribery can involve anything of value.

The UK Bribery Act 2010 adds a new category by creating liability for companies if they “fail to prevent bribery.”

In other words, companies need to be proactive on fighting corruption. However, the Bribery Act recognizes a defense if a company has “adequate procedures” in place to minimize the risk of bribery.

Polish rules Background Legislative efforts to curb bribery started in the 1970s with the US introducing the Foreign Corrupt Practices Act (FCPA). This granddaddy of bribery legislation still serves as a benchmark for antibribery laws today. In July, the UK Bribery Act 2010, which introduced one of the strictest anti-bribery regimes in the world, came into effect. Discussions about the UK Bribery Act 2010 often start by indicating how the UK’s law has a broader reach than the FCPA. The FCPA focuses on bribery of public officials by US companies or their subsidiaries around the world. It relates to both the giving and accepting of bribes to influence decisions or to obtain or maintain business activities.

The term “public officials” refers broadly to all those who could be in a position to represent the government, including current officials, those acting on behalf of a government (for example, advisers on a public tender), candidates for office and officers of political parties.

A key exception under the FCPA allows for certain “facilitation payments.” These are viewed as minor “greasing-the-wheel” payments to accelerate business matters.

An example cited is a small payment to a custom official to get cargo released.

The UK Bribery Act 2010 takes a more restrictive approach. It does not allow for facilitation payments. It also extends its reach to bribery in the private sector.

Various types The classic forms of bribery are the giving (active) and accepting (passive) of bribes.

Poland does not have its own separate anti-bribery law.

Instead, various provisions of the Criminal Code address several forms of public and private corruption.

With respect to giving and receiving bribes, Polish law generally follows the classic definition. The elements of a bribe are the giving or receiving of a financial or personal benefit involving a public official with the intent to obtain an advantage. For a claim of corruption, it is sufficient that a benefit was offered, but the advantage does not have to be received.

With respect to the public sector, Polish law also criminalizes influence-peddling and abuse of official position.

The latter refers to a situation of taking an extraordinary action or failing to act in the public or private interest in order to receive a financial benefit.

With respect to the private sector, the Criminal Code prohibits abuse of trust, which also involves misuse of a position held, in two different scenarios. The first relates to using authority granted for personal gain, while causing significant damage to the company. The key to this crime is the term “significant,” which is defined as 200 times the national minimum wage. As of January 1, 2012, this threshold will amount to z∏.300,000.

The second looks to relationships with a company’s contractors. As an example, managers may not accept or demand personal or financial benefits from customers, suppliers or others, in exchange for preferential treatment.

In all cases, Polish law provides for a potentially lengthy jail term for corruption. ●

14

DECEMBER 12-18, 2011

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Alternative investing

Angel investors fly higher when together There is no lack of available funds or ideas for potentially lucrative investments in promising Polish start-ups, but experts say those interested in riding the angel-investing wave should learn to invest in tandem with others to reap the full benefits Angel investors, high-net-worth individuals who invest directly in promising start-ups in return for a share of the company, are still relatively rare in Poland, but their numbers are growing. According to several investors spoken to by WBJ, conditions for angel investing are excellent, but in order to reach the next level angels in Poland must start investing together.

Jacek B∏oƒski, CEO of Lewiatan Business Angels (LBA), an organization which describes itself as the largest and most active business-angel network in Poland, says the number of applications for investment funding his organization receives is soaring.

“Awareness of angel investing in Poland is growing rapidly. We are organizing a lot of events and seminars among seed funds and incubators to show that angels now play a critical role in financing earlystage projects.” Another reason for the surge in applications, according to Mr B∏oƒski, is that government and European investments in R&D are starting to pay off.

“A lot of EU money was pumped into R&D centers. People started working in them and launching their own ideas, and it’s really helping us,” he said.

currently seem to prefer investing alone or in small groups.

Syndication makes particular sense for angel investing because it is an alternative form of investment rather than a full-time activity. For example, the European Business Angel Network advises investors to commit between three and 10 percent of their net wealth, excluding their own homes. Those in the angel investing community who are most active and knowledgeable invest up to 40 percent, but that’s not the norm, said Mr B∏oƒski.

Angel investing is also an especially risky form of investment, where businesspeople expect

above-average returns – often 25 percent or more – but also accept above-average risk. In the US, fewer than 10 percent of investments bring a greater-than fivefold return on invested capital.

“Risk mitigation is a major concern for any investor, and in particular for business angels because they invest in early-stage companies where risk is larger,” said Anna Hejka, an angel investor, as well as founder and managing director of merchant banking firm Heyka Capital Markets Group.

Syndication allows groups of investors to quickly build a portfolio of emerging companies, and combine relatively small sums of money to ensure a stronger negotiating position, and possibly gain stronger corporate rights within companies.

Combining capital also allows angels to take on larger projects, which can go some way towards bridging the equity gap between

managing director of Homplex, an online service for people looking to renovate their homes, says that the group of three angel investors who agreed to fund part of her firm provides a tailored mix of knowledge in the marketing, furniture and construction sectors.

In more developed markets, syndicates operate according to various models and can bring together up to several dozen investors. In Poland, it is still too early to say if a particular organizational model has taken hold, and the line between group investing and syndicates of investors still seems blurry.

individual business angels and venture capital funds. Mr B∏oƒski cited the example of Air Ventures Polska, in which venture capital fund Helix Ventures invested z∏.3.5 million in March, as a classic example of angels investing in a firm’s first-stage development, before bringing it up to a level at which venture capital funds find it attractive.

With syndication, angel investors can stay much longer with a company and become involved in the second, third, and fourth rounds of investment.

Syndication also enables investors to venture into different industries than ones they are familiar with. According to Mr B∏oƒski, while many Polish investors are well-versed in the ITC sector, it is almost impossible to find knowledgeable investors in Poland in biotech, medical tech or advanced materials.

Anna Walkowska, founder and

Good conditions

The next step

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According to Mr B∏oƒski, potential angel investors are also starting to get more curious as they are hearing about increasing numbers of success stories. But as angel investing becomes more widespread and more sophisticated, investors, experts say, should learn to mitigate risk by expanding their portfolios. This, however, is something few can do on their own.

That is where syndication, or investing in groups that combine the capital and business experience of several investors, comes in to play. The practice is already common in the US, where syndication deals account for the majority of angel investor deals, and is growing quickly in Western Europe. But it is still a marginal investment option in Poland, where the majority of investors BROUGHT TO YOU BY LEWIATAN BUSINESS ANGELS

Investors seem to agree that there is currently no lack of cash in Poland for new business projects.

Whereas only a few years ago Polish entrepreneurs suffered from a serious equity gap, today they have several options for finding a partner to help finance their projects.

“The Polish market is very interesting right now because there is plenty of money for start-up companies, even seed companies,” said Krzysztof Gawrysiak, an investor associated with three Polish angels networks. According to him, up to z∏.1.6 billion is currently available for start-ups or early-stage companies in Poland. Mr Gawrysiak said companies from places as far away as California had contacted him through business angels networks in search of funding.

Among potential sources of funding for start-ups are the over 40 business incubators that exist in Poland. These provide an array of business support resources and services to start-ups or earlystage companies. Each incubator usually invests up to €20,000 per project received, with each incubator investing in between five and 10 companies or business ideas.

Partnership between angel investors and incubators is particularly promising, according to Mr B∏oƒski, with LBA currently in the process of closing two deals, one in the chemical sector and the other in medical devices, that are co-investments between angels and incubators.

“Effective incubators do the preparatory work with entrepreneurs, and therefore when angel investors appear the company hopefully has an improved business model, better understanding of the business process, stronger

DECEMBER 12-18, 2011

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organizational structure, and better knowledge of the capital markets, all of which makes investing in such a company less risky for angel investors,” said Ms Hejka.

Other sources of funding for start-ups include several funds created by the National Capital Fund (KFK), which are able to invest up to €1.5 million both in start-ups and early stage companies, said Mr Gawrysiak. Add to this the 10 or so different angel investing networks and EU funds made available for young entrepreneurs through organizations like the Polish Agency for Enterprise Development, and “there is plenty of money for start-ups in Poland at the moment,” he added.

On top of this relative abundance of funding sources, wouldbe entrepreneurs now also have access to partners during every step of the business development process, said Mr B∏oƒski. “What we have today in Poland is a dream model where you have a partner on each stage of developing your project. In the initial stage you can enter incubators, and they have money and experts to polish your projects. Once the company is established you can find money from angel investors, and then you have the option to turn to KFK or venture capital funds for larger funding. Finally, when you are ready to exit, you can list on the Warsaw Stock Exchange’s NewConnect market.”

Angel networks and trust An increasing number of syndicate deals are likely to take place in Poland, experts say. However, a boom in syndicate investing is not expected just yet. One reason why it is taking a time for syndication or group investing to catch on

in Poland might have to do with the fact that it is still an emerging form of investment.

Because syndication is a new phenomenon in Poland, the different angel networks probably still feel a need to prove themselves and therefore have more of a competitive approach than a cooperative approach, explained Ms Hejka.

Mr Gawrysiak agreed that Polish business-angel networks compete for projects and angels, but added that there was cooperation to promote angel investing. “Chief operators of the different networks know each other, so I think on a level they cooperate, but it’s true, they are fighting for the best deals,” he said.

“There are almost no examples of angel groups calling one another to invest together, which is normal in the US,” said Mr B∏oƒski.

He added that LBA is working actively to change this. “We are the biggest network, are quite well established and are part of wider European associations, so I think it’s our responsibility to take care of the whole ecosystem of angel investing in Poland.”

According to Mr B∏oƒski, a major obstacle to increased cooperation among Polish business angels is a deeply ingrained lack of mutual trust. “I think it will take a long time to change.

Maybe it’s in the Polish mentality, maybe it’s related to our history, but many businesspeople assume that people will cheat them, and this mental block is a big challenge for us.”

But according to Ms Hejka, lack of trust is a general problem when it comes to investing, and Polish resistance might have more to do with a lack of experience. “In the US, syndication has been going on for many years

“What we have today in Poland is a dream model” – Jacek B∏oƒski, CEO of Lewiatan Business Angels

and therefore you have teams of people who already know each other, already know who likes to take care of which part of the investing process, and in which field. In Poland syndication is new and people don’t know each other that well.”

Syndication in Poland often ends up in a group of people who are willing to invest together but who only commit themselves to put the money or spend a very limited period of time on the project. Therefore, the burden of the investment process often falls on one person, something Ms Hejka says she has experienced personally.

Macro-level impact Distrust is not the only chal-

lenge facing angel investors in Poland. Government support in the form of tax breaks for individual investors would give a solid push to the movement, Mr B∏oƒski said.

Figures concerning the economic impact of Polish or even European angel investing are rare.

But the Center for Venture Research at the University of New Hampshire calculates that in the first half of 2011, total angel-funded investments in the Unites States amounted to $8.9 billion, an annual increase of 4.7 percent.

The center also estimates that angel investment is a significant contributor to job growth, estimating that the practice led to the creation of 134,130 new jobs in the US in 2011, or five jobs per

Polidea Polidea, an angel-funded firm operating on the mobile IT market, benefited from the combined knowledge of angel investors investors Krzysztof Gawrysiak and Tomasz Grzybowski in the tech and marketing sectors, respectively.

Lewiatan Business Angels provided z∏.100,000 in 2009, and the firm was already profitable after its first year. “We are still seeing strong, double-digit growth,” said Mr Gawrysiak. Although following the typical angel-funded investment pattern Polidea could now be ready for listing on the Warsaw Stock Exchange’s alternative market NewConnect, it is not in the immediate plans.

“We have thought about listing but we don’t need the money. The company is very profitable. Maybe if we will need some money injection for opening new branches, for example in the US, but for the moment we are not considering it,” said Mr Gawrysiak.

15

angel investment.

“On a macro level it’s worth it for the government to support individual investors who invest in start-ups with tax relief. It can create a real incentive. With examples from other European countries, we want to show these potential benefits to the Polish government.”

Mr B∏oƒski recognized this might not be easy. “It’s a political discussion, inevitably some people are going to say the government would be allowing rich people to save money, while failing to see that on the macro level it would create jobs and companies on which the government can levy taxes.”

That, though, is another discussion altogether.

Alice Trudelle

Homplex

Polidea has developed quickly by surfing on the latest trends on the mobile market, such as paper publications expanding or developing online.

Its platform Pixblish is used by several titles and publishing houses in Poland such as weekly Polityka, and the firm is also selling its application in Western Europe. “Digital technology is very interesting for publishers. It’s much easier and cheaper to reach their audience and update information, while also providing interaction with the reader,” said Mr Gawrysiak.

The firm is also working to provide IT solutions for a few US-based medical companies, and is currently working on a major transaction. “Polidea is perceived as one of the best mobile-software solution providers in Europe. Those companies are choosing us not because of price but based on quality,” said Mr Gawrysiak. ●

Anna Walkowska and her husband were both employed in the IT sector when they started renovating their home. Today they run Homplex, an online service aiming to offer comprehensive help for people looking to do the same. The project was partly angel-funded, and Ms Walkowska says it benefited from the mix of knowledge combined between angel investors Jacek B∏oƒski, CEO of Lewiatan Business Angels, Marcin Lorych (from the furniture sector) and Miros∏aw Ro∏ek (from the construction sector).

The idea for Homplex came from the founders’ own experience. “I wanted to have control over the whole renovation process, and I wasn’t interested in paying an interior architect for this information. I searched on the internet but the information wasn’t satisfying. So I had the idea of an application supporting the whole process starting from the

BROUGHT TO YOU BY LEWIATAN BUSINESS ANGELS

idea, and later managing tasks, planning the shopping, and managing relations with contractors, something like a virtual interior architect for people who can’t afford such a service,” said Ms Walkowska.

She did the research, and found that in Australia, the US and the UK, there was no competition for such a project. The pair then started looking for funding and after being rebuffed by banks, looked at both angel investing and venture capital groups. “We chose angel investing in large part because we retain control over the company.

Venture capital funds were asking for over 50 percent of the company, whereas our three business angels together took 40 percent. I didn’t want to give up so fast on my idea,” said Ms Walkowska.

Homplex is planning to expand to Germany and the UK in the near future. ●

The co-owner of multiplex chain Cinema City plans to build a new theme park in Poland

Orco Property Group has obtained additional funding to finish its Z∏ota 44 tower in Warsaw

18

19

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

Multikino in Mokotowska Square Multi-screen cinema operator Multikino will have its offices in the Mokotowska Square office building in Warsaw.

Following a lease deal the company signed with the project’s owner, Yareal Polska, the property is currently over 80% leased out, with its major tenants including PGE Energia Jàdrowa, Knight Frank, Euromedic International Polska and Beiten Burkhardt. The seven-storey Mokotowska Square development, which involved the revitalization of a building from the 1950s, comprises over 8,600 sqm of office and almost 1,300 sqm of retail space. ●

In this issue Miasteczko Orange sale . . . . . .16 Royal Wilanów permit . . . . . . .16 Luciano Capaldo interview . . .17 Property-related stocks . . . . . .17 New theme park in Poland . . .18 Galeria Pestka sale . . . . . . . . . .18 Ogrody mall extension . . . . . . .18 Foreigners in housing market . .19 Złota 44 financing . . . . . . . . . . .19

Qatar Holding buys Miasteczko Orange The project is due to be completed by the summer of 2013 Developer Bouygues Immobilier Polska has signed a contract to sell its under-construction Miasteczko Orange office complex in Warsaw to Qatar Holding, an investment company.

The cost of the transaction has not been revealed. The built-to-suit class-A office project, which is located on Al. Jerozolimskie in the capital’s Ochota district, is Qatar Holding’s first investment in Poland. It will house the headquarters of Telekomunikacja Polska (TP).

“We are very happy that Telekomunikacja Polska SA has chosen Bouygues Immobilier Polska to develop their headquarters in Warsaw …

This project is the first step in our development in Poland in the office market, where we intend to grow,” Laurent Tirot, managing director of Bouygues Immobilier Polska, said in a statement.

The project will comprise 43,700 sqm of leasable space all of which will be taken up

by TP. Just over 1,000 parking spaces will be provided at the site. The complex will include

The project, which is due to be completed in the summer of 2013, will comprise five buildings totaling 43,700 sqm of leasable office space,

a canteen, space to park bicycles, a garden, first-aid stations and meeting rooms.

Each of the buildings will have raised floors and sus-

pended ceilings, air-conditioning, a security system, and a telecommunication system.

“The complex and its immediate neighborhood is one of Warsaw’s prime noncentral locations that benefits from excellent road access and visibility,” Jones Lang LaSalle, the company which is advising Bouygues Immobilier Polska in the transaction, said in a statement.

The complex is going to be BREEAM certified, Jones Lang LaSalle said.

“We choose only prime properties and great covenant tenants. This investment proves that we believe in the Polish economy and its development potential.

Poland is coping very well with the overall economic slowdown in Europe, which is confirmed by strong economic indicators,” Navid Chamdia, head of real estate at the Qatar Investment Authority, which established Qatar Holding in 2006, said in a statement.

Izabela Depczyk

Office buildings

Royal Wilanów obtains building permit The facility will comprise 35,000 sqm of leasable space Real estate investor Capital Park Group has secured a building permit for its Royal Wilanów class-A office building project in Warsaw. Construction on the scheme, which will be located at the intersection of ul. Przyczó∏kowa and ul. Klimczaka in the capital’s Wilanów district, is scheduled to launch in the second quarter of 2012.

“Royal Wilanów is an alternative to facilities located in Mokotów, where more and more office space is being built.

We are offering a high-quality office and service building in a

prestigious location,” Dorota Ejsmont, leasing director at Capital Park Group, said in a statement. She added that the company hoped the investment would attract the most demanding clients.

Designed by the JEMS Architekci studio, the five-floor Royal Wilanów development will comprise 35,000 sqm of leasable space, including 28,000 of office space on four floors and 7,000 sqm of retail and service space on the ground floor. A three-level underground parking lot will provide spaces for 921 cars.

Capital Park Group has been active in the Polish property market since 2003, investing in cooperation with the

international private equity fund Patron Capital Partners.

The group’s investment portfo-

lio comprises 72 assets totaling almost 309,000 sqm of completed and planned space, more

than 80 percent of which is located in Warsaw.

Adam Zdrodowski

COURTESY OF CAPITAL PARK GROUP

CBRE has opened an office in Gdaƒsk after observing growing interest in real estate investments in the Tri-city area. Mariusz WiÊniewski, senior property negotiator at CBRE, will head the new office. Colin Waddell, managing director of CBRE in Poland, said that “opening an office in Gdaƒsk is the next step in the development of CBRE on the Polish market and allows us to extend our services in this region.”

DECEMBER 12-18, 2011, LI 16/49

Investment market

COURTESY OF BRANDLAB

CBRE opens office in Gdaƒsk

•

Construction on the class-A office building is scheduled to launch in Q2 2012

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 or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

DECEMBER 12-18, 2011

LOKALE IMMOBILIA – REAL ESTATE

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Architecture

New leases at Raszyn Business Park

A demand for design Ella Pa∏ka: What do you see in Poland that appeals to you?

Luciano Capaldo: You’ve got two advantages here, you are a big country. You’ve got a history behind you, a history which tells a lot of what you’ve been able to achieve. But I will say, if you take a place like Warsaw which was completely destroyed during World War II – and I sometimes compare Warsaw to Milan, which was equally destroyed, you can see that it was rebuilt in a very short time and therefore without taking too much notice of the design and the urban planning itself. The overall look of the built environment in Warsaw could really do with a good make over, a good revamp too.

Do you feel there is demand in the high-end residential market now?

The demand is extremely high and all indicators point to that direction. The GDP is rising constantly and with that the quality of life is rising too.

Are you designing any homes in Poland or have any projects planned?

Not at the moment, no. I’m not designing homes in Poland. We are researching this market between myself and my partner as we would like to enter this market too. Our main research is focused on the residential sector. I specialize in the toplevel market of residential design. We’re doing several projects in the UK at the moment but also projects in Italy, Cyprus and Romania. We tried to enter the Russian market a couple of years ago but it proved to be not an easy task.

properties, hotels. I see that as a major problem but also a major opportunity for re-designing them. Unfortunately there is still a strong demarcation between the rich and the poor in Russia and the rich segment is extremely thin when compared to the one in which people are just trying to survive.

Are you interested in designing residential properties in Poland?

I would love to, yes. I would love to implement my design if indeed it suits the lifestyle of those who will eventually occupy and live in what is designed.

Do you see the same amount of freedom in Poland that you would in the UK or in Italy in terms of design?

I would say so, yes, probably even more.

Is sustainability something that Poles are looking to incorporate when building their homes?

Absolutely, sustainability is something that you can no longer disregard.

“The demand here [for luxury] is extremely high” Are you noticing any trends in Poland that are coming from the West?

Well yes, there is influence from the West especially in the residential sector. Some of the styles and product designs are very much influenced by international trends and those present in the West of Europe. Let’s also not forget that some major Western Europe architectural practices have being designing in Poland for some time now.

When you think of the residential sector, do you find that Poles have a good idea of what they want in terms of design?

With the little experience I’ve had, you’re more concerned

It is increasingly evident that Poland is being affected by the financial crisis which is plaguing Europe. When do you expect a rebound from that crisis?

It is difficult to say. We are all watching with disbelief what is happening to the euro. In my view, a liability cannot be extinguished with another liability.

The crisis will come to an end the moment that production starts again, the moment we start to recreate wealth.

with the practical side rather than the design side of the living environment. But I think that’s a part of your history I suppose.

It takes a while to make the transition.

You design for Versace and other major brands in many parts of the world. Do you think Poland needs more boutique or designer hotels?

A boutique hotel is a different concept of hotel. I am sure Poland and in particular Warsaw is more than ready to have boutique hotels. Branding a hotel by linking its design to a major icon, be it in the fashion industry or other sectors is, in my view, a natural and somewhat forced transition that the Polish market and in the case the Warsaw market is ready for and probably with a great success too.

Developer Marvipol has obtained an occupancy permit for the first phase of its Apartamenty Mokotów Park residential project in Warsaw. The building, which is located on the capital’s ul.

Bernardyƒska, comprises 130 apartments, 121 of which have already been sold. Marvipol is now selling units in the second phase of the investment which is scheduled for completion in 2013. ●

Mr Capaldo has designed spaces for Versace all over the world

Property-related stocks

Why do you believe it would be more successful in Poland?

Because of the fact that there is a lot of investment and with that an international clientele that demands such needs coming into Poland but also the Polish the people are becoming more and more demanding in the quality they expect with the hospitality sector.

COURTESY OF LUCIANO CAPALDO

Mr Capaldo designs luxury residences in top markets

How, in your opinion, can we recreate wealth?

By investing in the right sector and at the same time admit that the high standard of living we have been used to has to take a step back before it can leap forward. We all have to take our share of the blame and go back to the basic economic principles which too often have been overlooked over the last 10 years. ●

Permit for Mokotów Park

How did you find the Russian market? You are there quite often not only as a designer but also chairman of RICS Europe.

The Russian market? A very bureaucratic one. Sometimes you have the feeling that very little has changed from the old regime.

So it hasn’t changed very much?

Do not get me wrong, there have been some great changes but the opportunities are reserved to a very small sphere of society. I am working in the retail sector in Russia and I find Russians are very open, they’re open to new ventures, they’re open to new design. Most of the commercial and old hospitality structures in Russia lack a focal point – especially commercial

Real estate investment manager Valad has, in partnership with Aviva Investors and on behalf of the Central European Industrial Fund, announced the lease of 1,480 sqm of warehouse and office space and almost 800 sqm of warehouse space to Polish retail operator Galaktyka and Chinese wholesaler Damax, respectively, at the Raszyn Business Park distribution facility near Warsaw.

COURTESY OF CISZEWSKI PUBLIC RELATIONS

Luciano Capaldo, architect and chairman of the Royal Institution of Chartered Surveyors Europe, talks to Lokale Immobilia about the high-end residential real estate sector and his outlook for Poland

17

Security

Closing price on Dec 8

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

73.60

1.45

64.00

109.20

-24.90

25,530,098

1,879.02

CELTIC

19.00

0.00

15.55

60.55

N/A

34,068,252

647.30

DOMDEV

30.59

-4.35

23.50

50.80

-26.11

24,560,222

751.30

ECHO

3.34

-1.76

3.22

5.55

-34.64

420,000,000

1,402.80

ELBUDOWA

95.90

0.52

94.50

170.00

-41.17

4,747,608

455.30

ENERGOPLD

2.13

-3.18

2.13

4.10

-46.21

70,972,001

151.17

ERBUD

16.10

-7.47

14.70

61.00

-71.75

12,644,169

203.57

GANT

6.09

2.35

5.95

17.60

-64.22

20,499,953

124.84

GTC

9.70

0.52

8.64

24.98

-60.71

219,372,990

2,127.92

HBPOLSKA

0.81

3.85

0.70

3.20

-74.61

210,558,445

170.55

JWCONSTR

4.36

-10.10

4.36

17.19

-74.64

54,073,280

235.76

LCCORP

0.89

-2.20

0.85

1.69

-41.83

447,558,311

398.33

MARVIPOL

9.03

-0.22

7.22

11.20

-18.06

36,923,400

333.42

MIRBUD

2.29

-4.58

2.10

4.75

-50.11

75,000,000

171.75

MOSTALWAR

19.12

-6.73

19.12

62.95

-67.97

20,000,000

382.40

MOSTALZAB

1.23

0.82

1.07

3.14

-62.50

149,130,538

183.43

ORCOGROUP

15.00

0.27

14.19

40.00

-49.17

17,053,866

255.81

PBG

68.55

-5.90

56.05

218.20

-68.83

14,295,000

979.92

PLAZACNTR

1.97

-1.50

1.80

5.15

-58.26

297,174,515

585.43

POLAQUA

6.16

-8.06

6.16

20.60

-65.78

27,500,100

169.40

POLIMEXMS

1.43

5.93

1.23

4.15

-65.29

521,154,076

745.25

POLNORD

13.35

-5.99

11.03

35.45

-61.17

23,798,439

317.71

RANKPROGR

8.89

-1.22

8.64

13.60

-17.15

37,145,050

330.22

ROBYG

1.12

0.00

1.04

2.13

-40.43

257,390,000

288.28

RONSON

0.91

0.00

0.84

1.58

-37.24

272,360,000

247.85

TRAKCJA

1.23

0.00

1.20

4.24

-71.33

232,105,480

285.49

ULMA

62.00

1.22

57.00

88.00

-24.85

5,255,632

325.85

UNIBEP

5.45

1.68

4.47

10.00

-45.39

33,927,184

184.90

WARIMPEX

3.78

-6.67

3.78

10.89

-59.66

54,000,000

204.12

ZUE

7.40

0.00

7.38

14.54

-49.76

22,000,000

162.80

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Amusement parks

Radom’s Vis a Vis mall open

Another theme park to be built near Warsaw The co-owner of Cinema City plans to invest z∏.2.2 billion to build the first stage of Park of Poland A large theme park, a water park and two hotels will be developed at a site in the Mszczonów municipality, located near Warsaw, by Global Parks Poland (GPP) which belongs to Moshe Greidinger who is also the co-owner of multiplex chain Cinema City Poland.

“Park of Poland will be the biggest amusement park in this part of Europe,” Mr Greidinger said at a recent press conference.

GPP will invest z∏.2.2 billion in the first stage of the project which is set to be completed by the summer of 2015. An extension to the

COURTESY OF KARAWELA

Karawela gets building permit

scheme is planned four years after the park’s opening.

Aside from roller coasters, the water park and hotels, the site will also feature a wastewater treatment plant, as well as shops, cinemas and other facilities.

“We have been working on this project for a number of years. The time is now to launch it. An investment like this one will transform the entire region and many sustainable jobs will be created,” Mr Greidinger said.

He added that as many as four million people are expected to visit the park every year.

Although Mr Greidinger did not reveal ticket prices, he said they would be around 25 to 30 percent cheaper than they are at other theme parks in Europe.

The new theme park is set to be completed in the summer of 2015 This is not the first project of its kind near Warsaw.

Luxembourg-based company

Las Palm is also planning to build Adventure World Warsaw, a theme park modeled

on Disneyland Paris.

Izabela Depczyk

Extension of Elblàg’s Ogrody Blackstone acquires Poznaƒ’s mall set to launch in 2012 Galeria Pestka King’s Street Retail, a fund managed by Blackstone Real Estate Group, has acquired Galeria Pestka, a shopping center in Poznaƒ. The value of the investment has not been revealed.

Master Management Group has taken over management duties at the shopping center.

Paul Kusmierz, principal of Master Management Group, said in a statement that, “We are enthusiastic about Galeria Pestka joining King’s Street Retail, as we see tremendous potential for growth in this already popular Poznaƒ mall.”

Galeria Pestka has 42,000 sqm of GLA, parking space for 1,000 vehicles and is a popular family-oriented center with stores that include

Carrefour, Saturn, Douglas and Rossmann.

“Applying our expertise in delivering the best retail experience to customers will result in the addition of some new highly-desired brands to Galeria Pestka, increasing the footfall and effectively boosting the turnover for the tenants,” Mr Kusmierz added.

The purchase marks an expansion of King’s Street Retail’s portfolio in Poland which also includes Magnolia Park in Wroc∏aw, Galeria Twierdza in K∏odzko and Galeria Twierdza in ZamoÊç, all of which were acquired in 2011. The company plans to purchase Galeria T´cza in Kalisz by the end of this year.

Ella Pa∏ka

ACTEEUM Central Europe will next year launch, on behalf of CBRE Global Investors, an extension of the Ogrody shopping center in Elblàg, Warmiƒsko-Mazurskie voivodship. The leasable area of the scheme is expected to double and reach 43,500 sqm giving the facility the character of a regional mall.

Built in 2002, the one-floor Ogrody scheme today offers 17,500 sqm of GLA housing 55 stores and points of service. As a result of the extension, the development will get an additional floor and the number of stores and points of service will increase to 130. The number of parking spaces will also go up, from today’s 901 to 1,200.

Currently, the main tenants of Ogrody include a 10,200 sqm Carrefour hypermarket, as well as Komfort, RTV Euro AGD, Deichmann and

Reserved stores. After the extension, which is scheduled to be completed at the turn of 2013 and 2014, those stores are going to be joined by, among other things, a multiscreen cinema and a two-level H&M store.

Elblàg has a population of 127,000 and is the second-

largest city in the Warmiƒsko-Mazurskie voivodship. The developer of the Ogrody shopping center estimates that due to the mall’s extension, the monthly visitor average will increase from today’s 390,000 to approximately 500,000.

Adam Zdrodowski

COURTESY OF MEDIADEM CONSULTING

The Vis a Vis shopping center in Radom, Mazowieckie voivodship, has opened for business offering over 3,600 sqm of leasable space. The scheme, which houses over 20 tenants, is a street mall, a retail format which incorporates small shopping facilities located on high streets.

Radom’s Vis a Vis belongs to Capital Park Group which plans to open another development of this kind on ul. Zgierska in ¸ódê.

The planned Karawela retail project in Toruƒ, Kujawsko-Pomorskie voivodship, has obtained a building permit. The mall, which is scheduled to open by the end of 2013 and is expected be the largest shopping center in the region, will comprise 60,000 sqm of GLA including a 40,000-sqm shopping gallery and a 20,000-sqm retail park. Lease agreements with a hypermarket and three large specialist stores are to be finalized soon.

The scheme, which is being developed by Karawela, was designed

by Sud Architectes and is being commercialized by Retail Spirit Polska. ●

DECEMBER 12-18, 2011

SHUTTERSTOCK

18

The extension is set to be completed by 2014

LOKALE IMMOBILIA – REAL ESTATE

DECEMBER 12-18, 2011

www.wbj.pl

Residential

Foreigners keep buying apartments in Poland But activity has dipped from its precrisis high while the purchase of homes for investment purposes has become much less popular

accounting for more than half of the volume, according to data from Poland’s Ministry of Internal Affairs.

Assuming that the average size of the units bought by foreigners is 50 sqm, the transactions volume would translate into 19,000 apartments, slightly more than the number of units delivered to the Polish market by developers in the first half of this year, real estate advisory Lion’s House said in a recent analysis.

Foreigners have purchased approximately 950,000 sqm of residential space in the Polish market over the last five years with British, Irish, German, Spanish and Italian buyers

In the years before the crisis, the activity of foreign buyers grew steadily. They accounted for the purchase of 134,000 sqm, 185,000 sqm and 225,000 sqm in 2006, 2007 and 2008, respectively.

After the onset of the global economic crisis, there was a visible drop-off in demand with 208,000 and 198,000 sqm of housing space acquired by foreigners in Poland in 2009 and 2010, respectively.

Still, this was not a major slump as the 2010 figure represents a decrease of just 12 percent on the record year 2008, Lion’s House noted in the analysis. It also pointed out that the official data are not complete in that they do not factor in transactions concluded by investment funds.

Foreigners mostly targeted the largest cities, with Warsaw being the most popular destination. In contrast to

the pre-crisis years, foreigners have recently tended to buy for themselves rather for investment purposes.

“For more than a year foreigners looking for real estate for investment purposes have been a rare sight. While buying [apartments] for themselves they usually choose large real estates in the best locations,” Rafa∏ Gójski, an advisor at Lion’s House, said in a statement.

Adam Zdrodowski

Developer Orco Property Group has obtained an additional z∏.190 million in financing from Bank Pekao to cover the remaining cost of building its Z∏ota 44 luxury residential project in downtown Warsaw.

An annex to the agreement with the bank will allow the firm to complete the z∏.700 million investment on schedule, Orco Property Group said in a statement.

The decision to provide the additional loan for Z∏ota 44 was influenced by a number of factors that, in the bank’s eyes, confirmed the stability of the investment, the company added. These included high engagement of Orco’s own funds in the execution of the project and a satisfactory level

COURTESY OF PR PREMIUM

Orco secures funds to finish Z∏ota 44 skyscraper

The 54-storey tower is set to transform the Warsaw skyline of apartment sales in the scheme.

“The provision of full financing for Z∏ota 44 is a huge success of Orco Property Group, espe-

cially when one takes into consideration the current difficult macroeconomic conditions, problems of the global banking sector and high competitiveness

of the housing market,” Tomasz Rusak, director of finance at Orco Property Group in Poland, said in the statement.

“The awareness that the

building will be completed in line with the schedule is important for both our current and potential clients. We are happy that we can offer this certainty to the future inhabitants of Z∏ota 44,” added Krzysztof GodleÊ, development director at Orco Property Group in Poland.

Located on ul. Z∏ota in Warsaw’s central district, the Z∏ota 44 development will rise 192 meters and offer 251 apartments. Designed by the renowned architect Daniel Libeskind, the 54-storey tower is being built by Italian contractor Inso/Consorzio Cooperative Costruzioni and is scheduled to be completed at the beginning of 2013.

Adam Zdrodowski

19

New contracts for Erbud Construction company Erbud has signed two new contracts concerning residential projects in Gdaƒsk and Warsaw. In Gdaƒsk, the contractor will build a housing complex for Warsaw-based developer Cedrowa for z∏.46.2 million. In Warsaw, Erbud has signed a contract with Sowiƒskiego Park for the construction of a multi-family residential building which is valued at z∏.20 million.

Point House ready for occupancy GN Invest, a specialpurpose vehicle belonging to developer Unidevelopment, has officially finished construction on its Point House residential project in Warsaw.

The development, work on which was started in August last year, has just obtained an occupancy permit.

Point House is located in the capital’s Mokotów district and comprises 235 apartments, over a half of which have already been sold. ●

Legal Forum

Copyright sharing in business Ula Kalata Gryko Attorney-at-law Who can be considered the author of a particular work? And who decides ownership of copyright of a particular piece of work?

The simple answer is that the copyright belongs to the creator of the work. The copyright may be shared, since a number people can be considered creators or authors.

Depending on the type of copyright involved, it can be transferred between co-authors or only exercised upon the author’s consent.

Who authored a work is a question of fact, not something negotiable between those who claim to be authors. Nevertheless, if disputes arise, a court examines the matter and makes an appropriate ruling.

Creative input When considering who is an author, the court takes into

account the creative input into the work. The person who is responsible only for the production of an already existing idea, for example a copywriter re-writing a manuscript, can not be considered an author.

The co-authors of a work may decide in a formal agreement who is the owner of the copyright and/or the person who is entitled to perform the work. This however depends on the kind of copyright involved (material or personal).

Personal copyright is the right to be called the creator (the author), the right to inviolability of the work (for example the right to demand the work is presented as it is, without any amendments, deletions or modifications) and its reliable use or right to decide on the first publication of a work.

The material copyrights are (i) exclusive right to use the work in every field of exploitation and (ii) the right to royalties for usage of the work.

Only material copyrights may be assigned. Personal copyrights may not be transferred and/or renounced. However, one coauthor may oblige him/herself in an agreement with the other coauthor that he or she shall not perform a work with a personal copyright. The other solution is that he or she shall provide (under a specific remuneration) a power of attorney for the other co-author to perform personal rights on his or her behalf. These kind of provisions may ensure a more effective way for entrepreneurs to make use of the work; it can mean, for example, that the first publication of the work is dependent on the decision of just one person.

These regulations may put into practice between the actual coauthors, who each put creative input into the work.

Copyright at work In many cases, however, the copy-

right is transferred by law to someone other than the original authors. Such situations come into play when, for example, the authors are working under an employment contract.

The copyright to work created by an employee can belong to the employer, not the employee. This refers to copyright from the work: (i) created as a result of an employee’s work obligations and (ii) made within the scope and purpose of the specific role as presented in the employment agreement.

The transfer of rights is effective at the moment the employer accepts the employee’s work.

Although it is possible to and would be favorable for the employment contract parties to spell out the matter in the employment agreement, the employer is not obliged to provide specific copyright regulations in the employment contract.

Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market.

The content is created in consultation with Warsaw Business Journal's editorial staff.

The transfer of copyright between the employee and employer relates only to material copyrights. The employee shall be fully entitled to personal copyright, which means that the employee shall in any case be considered as the author. In addition, when there are two (or more) employees who together create work for the employer, they shall also be deemed as co-authors, but only with respect to personal copyright. The material copyright shall be transferred to the employer.

As you can see, the regulations on transfer of copyright is more straightforward with regard to business activity. The actual co-authors may decide on this point in an agreement and in the case of the employment contract, the employer is by law granted with material copyrights to the work of his employees. ●

20

MARKETS

www.wbj.pl

DECEMBER 12-18, 2011

Stocks report

world stock indices DJIA

NASDAQ

11,997.70 (Dec 8 close)

S&P500

2,596.38 (Dec 8 close) -1.14% (for the week)

-0.19% (for the week)

FTSE100

DAX

5,483.80 (Dec 8 close)

1,234.35 (Dec 8 close) -0.82% (for the week)

-0.10% (for the week)

Crunch time

NIKKEI225 5,874.44 (Dec 8 close)

8,664.58 (Dec 8 close) 0.78% (for the week)

-2.67% (for the week)

CHANGE: 3.63%

CHANGE: -3.00%

CHANGE: -1.85%

CHANGE: -7.05%

CHANGE: -15.76%

CHANGE: -16.30%

(year to Dec 8)

(year to Dec 8)

(year to Dec 8)

(year to Dec 8)

(year to Dec 8)

(year to Dec 8)

52-week high: 12,876.00

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,404.49

52-week low: 2,298.89

52-week low: 1.074.77

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,135.79

Andrew Nawrocki, WBJ market analyst

Major indices WIG

38,474.28 (December 8 close)

WIG20

2,211.83 (December 8 close)

08.12

07.12

06.12

05.12

02.12

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

08.12

07.12

06.12

05.12

02.12

01.12

30.11

29.11

28.11

2,000

25.11

37,000

24.11

2,080 23.11

37,800

22.11

2,160

21.11

38,600

18.11

2,240

17.11

39,400

16.11

2,320

15.11

40,200

14.11

2,400

10.11

41,000

21.11

52-week low: 2,089.84

18.11

Change year to December 8: -19.71%

17.11

52-week low: 36,549.47

16.11

52-week high: 2,932.62

Change year to December 8: -19.26%

15.11

Change for the week: -2.35%

14.11

52-week high: 50,371.74

10.11

Change for the week: -1.89%

Top 5 BETACOM CEDC ABMSOLID PGODLEW BEST

Closing 6.65 19.80 1.93 1.30 14.40

% change (week) 52-week high 35.99 8.15 28.57 80.10 25.32 17.25 18.18 1.37 15.29 14.40

52-week low 4.15 9.27 1.49 0.69 4.60

Top 5 POLIMEXMS CYFRPOLSAT PGNIG PEKAO BZWBK

Closing 1.43 14.01 4.03 144.00 229.70

% change (week) 5.93 4.09 1.51 0.84 0.66

52-week high 4.18 17.69 4.65 189.90 240.00

52-week low 1.19 11.60 3.25 115.10 190.10

Bottom 5 DREWEX WESTAISIC PRONOX PBSFINANSE MIDAS

Closing 0.18 2.80 0.13 0.40 1.06

% change (week) -37.93 -30.00 -27.78 -20.00 -14.52

52-week low 0.16 2.70 0.10 0.32 0.62

Bottom 5 KGHM PBG GETIN ASSECOPOL PKNORLEN

Closing 123.50 68.55 6.34 47.30 37.99

% change (week) -6.79 -5.90 -4.95 -4.71 -4.43

52-week high 200.30 219.00 15.29 56.60 58.85

52-week low 115.40 53.70 6.02 34.50 30.33

52-week high 2.75 12.20 1.76 1.82 5.19

Currency report

EU treaty deal moves markets

Other indices sWIG80

8,544.80 (December 8 close)

WIG-Banki

08.12

07.12

06.12

05.12

02.12

01.12

30.11

29.11

28.11

25.11

24.11

23.11

22.11

21.11

08.12

07.12

06.12

05.12

02.12

01.12

30.11

29.11

28.11

25.11

24.11

23.11

5,100

22.11

40

21.11

5,240 18.11

5,380

41

17.11

5,520

42

16.11

43

15.11

5,660

14.11

44

10.11

5,800

18.11

52-week low: 4,944.19

17.11

Change year to December 8: -20.55%

16.11

52-week low: 41.09

15.11

52-week high: 7,387.49

Change year to December 8: -34.88%

14.11

Change for the week: -0.08%

10.11

52-week high: 64.04

unlimited bond purchases by the ECB, and possibly also euro bonds in the future.

They got none of these.

The EUR/USD climbed to almost $1.35 to finish the week at nearly $1.33. Uncertainty drove investors out from emerging markets, hurting the z∏oty. Despite Poland’s Monetary Policy Council leaving interest rates unchanged at 4.5 percent, and a generally optimistic outlook for the economy, the local currency tumbled. The EUR/PLN advanced from z∏.4.44 all the way to z∏.4.51, while the USD/PLN rose from z∏.3.30 to z∏.3.38.

As the end of the year approaches and with it the calculation of foreign currency denominated debt, it is likely the central bank will intervene soon to strengthen the z∏oty. ●

Instead of being able to wait calmly for Christmas, investors were bombarded with important news and events, triggering big movements in the currency markets.

Markets rallied but then retreated almost instantly after Mario Draghi, the ECB’s president, announced that lending channels are stuffed. That puts in doubt the possibility of the central bank taking strong action in the case of an immediate need for financial aid in the euro zone.

An important step was an agreement by European nations to sign an intergovernmental fiscal treaty. It will also be signed by non-eurozone countries (including Poland), but not by the UK. Investors were hoping for more radical steps such as changes to the EU treaty,

5,531.32 (December 8 close)

Change for the week: -0.41%

45

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

08.12

07.12

06.12

05.12

02.12

01.12

30.11

29.11

52-week low: 8,483.22

28.11

23.11

22.11

21.11

18.11

08.12

07.12

06.12

05.12

02.12

01.12

41.29 (December 8 close)

52-week high: 12,932.00

SOURCE: WSE

NewConnect

30.11

29.11

28.11

8,400

25.11

2,000

24.11

8,560 23.11

2,060

22.11

8,720

21.11

2,120

18.11

8,880

17.11

2,180

16.11

9,040

15.11

2,240

14.11

9,200

10.11

2,300

17.11

Change year to December 8: -30.24%

16.11

52-week low: 2,081.49

15.11

Change year to December 8: -22.30%

14.11

Change for the week: -1.86%

10.11

52-week high: 2,987.72

25.11

2,181.58 (December 8 close)

24.11

mWIG40 Change for the week: -0.09%

the day, as a weak German bond auction, as well as reports indicating concern on the part of German politicians about the new EU deal, dragged stock prices lower.

The WIG managed to close slightly higher, up nearly half a percent, with the WIG20 up 0.51 percent. Leading the way were shares of GTC, which closed 4.3 percent higher than the previous day.

Thursday saw investors dump stocks after Germany rejected proposals that would have bolstered the bailout fund. Adding to worries were comments by ECB President Mario Draghi, who said that the bank would not rush to buy up bonds.

The WIG finished 1.48 percent lower, while the WIG20 lost 1.85 percent. Friday, the WIG and the WIG20 closed slightly up. ●

Stocks throughout Europe had another bumpy week, with thin volumes showing how concerned investors are about investing in equities.

Monday began well, as Germany and France agreed on tighter fiscal control for the euro zone. Gains were shortlived though, with S&P placing Germany, France and other euro-zone nations on “credit watch negative.”

Indices tumbled on Tuesday, erasing gains from the previous session. The WIG fell nearly 2 percent, with the WIG20 (-2.18 percent) also dragged down by KGHM shares, which slumped 8 percent after Poland’s copper producer announced its takeover of leading Canadian firm Quadra FNX Mining.

On Wednesday stocks saw a strong opening. But gains dwindled throughout

currency rates 4.3031

4.2883

4.3087

06.12

07.12

08.12

09.12

4.2696 05.12

SOURCE: NBP

4.2696 02.12

0.1066

0.1074 09.12

4

4.3572

PLN-100JPY

5

08.12

0.1074

0.1068 07.12

06.12

05.12

0.1079 02.12

3.6107

3.6653 09.12

0.10

0.1078

PLN-RUB

0.12

08.12

3.6010 07.12

3.6089 06.12

05.12

3.6275 02.12

5.2489

5.2959 09.12

3.5

3.6155

PLN-CHF

4.0

08.12

5.2007 07.12

5.2257 06.12

05.12

5.2165 02.12

3.3359

3.3875 09.12

5

5.2059

PLN-GBP

6

08.12

3.3310 07.12

06.12

3.3276 05.12

3.3235 02.12

4.4692

4.5195 09.12

3.0

3.3429

PLN-USD

3.5

08.12

4.4690 07.12

4.4711 06.12

05.12

4.4812 02.12

4

4.4773

PLN-EUR

5

THE LIST

DECEMBER 12-18, 2011

www.wbj.pl

21

Motor Industry & Freight

Moving and Relocation Companies Ranked by revenue from moving in 2010

Customs clearance / Cargo insurance / ISO Certificate / Carrier’s insurance

30

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Relocation services (house and school search; bank account establishment; 24h telephone support); immigration services (verification of residence and employment); furniture renting (house, office and event)

48 1990

None Midwest Enterprises International 100%

55 5

40

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Van rentals; relocation packages sale

33 2002

WND None

✓ ✓ ✓ ✓

4 2

20

✓ ✓ ✓ ✓

✓ ✓ ✓

Relocation services

15 1991

Worldwide

✓ ✓ ✓ ✓

5 3

10

✓ ✓ ✓ ✓

✓ ✓ ✓

Full range of relocation services: work permits, preview trips, house and apartment lease; archiving services

10 2000

WND None

Wojciech Zacharski

3% -

Worldwide

✓ ✓

4 4

30

✓ ✓ ✓ ✓

✓ ✓ ✓

WND

12 1992

Lilla Witasiak 100% None

Lilla Witasiak

65% 33%

2% -

Worldwide

✓ ✓ ✓ ✓

4 2

26

✓ ✓ ✓ ✓

✓ ✓ ✓

Carton rentals; outdoor elector up to 7th floor

WND 1997

WND None

Piotr Grycza

3,000 5,000 280 WND

50% 45%

5% -

Poland; European Union

✓ -

3 1

16

✓ ✓ ✓ ✓

✓ ✓ ✓

Loading and unloading for companies

6 2008

Katarzyna WandeltBaraniak WND% WND

WND 0.7 0.5 0.5

WND 500 350 400

25% 70%

5% -

Poland and Western Europe

✓ -

3 1

14

✓ ✓ ✓ WND

WND WND WND WND

-

WND 1995

Tomasz Sidorowicz 100% None

WND WND WND WND

WND WND WND WND

420 950 850 900

WND WND

WND WND

Worldwide

✓ ✓ ✓ ✓

5 1

16

✓ ✓ ✓ ✓

✓ ✓ ✓ ✓

Relocation services; home search; artwork and antique packing and transport; vehicle registration; office and machine relocation

10 1992

None Mobilitas 99%; AGS Paris - 1%

Corstjens Worldwide Movers Group Sp. z o.o. ul. Nowa 23, Stara Iwiczna, 05-500 Piaseczno NR 22 737-7200/22 737-7277 info@corstjens.pl www.corstjens.com

WND WND WND WND

WND WND WND WND

135 330 400 445

25% 70%

5% -

Worldwide

✓ ✓ ✓ ✓

3 1

7

✓ ✓ ✓

✓ ✓ ✓

Full range of relocation for foreigners (documents, home search, preview trips); transport of pets and vehicles; packing and transport of artwork and antiques

10 1999

None Corstjens International 100%

Metro Management Piotr KliÊ ul. Barburki 11, 04-511 Warsaw NR 22 815-4114/22 815-4114 uslugi@metro.biz.pl www.metro.biz.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

97% 3%

-

Poland; Europe

✓ ✓ ✓ ✓

4 4

4

✓ ✓ ✓ ✓

✓ ✓ ✓

Complex service using an outdoor elevator that allows relocation without using inside elevators and staircases, up to the 4th floor

20 1992

Piotr KliÊ 100% None

Move One Relocations ul. Koszykowa 54, 00-675 Warsaw NR 22 630-8162/22 630-8166 poland@moveoneinc.com www.moveoneinc.com

WND WND WND WND

WND WND WND WND

250 450 450 420

5% 90%

5% -

Worldwide

✓ ✓ ✓ ✓

3 -

8

✓ ✓ ✓ ✓

✓ ✓ ✓

Door-to-door relocation; pet transportation; artwork and antique packing and transportation; work permits; residence permits; visas; preview trips; house and school search; vehicle registration; legalization of documents for foreigners

23 2000

WND

Piotr Piekarowicz

Pro Relocation Sp. z o.o.

Al. Jerozolimskie 65/79, 00-697 Warsaw NR 22 630-6100/22 630-6100 office@prorelo.com www.prorelo.com

WND WND WND WND

WND WND WND WND

WND WND WND WND

WND WND

WND WND

WND

✓ ✓ ✓ ✓

WND WND

WND

WND WND WND WND

WND WND WND WND

Preview trips; house and school search; work permits; visas; driving licences; bank accounts; 24-hour assistance for clients; registration of vehicles

WND 1999

WND

Anna Zagroba

Trans-Baga˝ Witold Ko∏akowski ul. Szynowa 27, 03-164 Warsaw NR 22 676-6069/22 676-6069 biuro@trans-bagaz.waw.pl www.trans-bagaz.waw.pl

WND WND WND WND

WND WND WND WND

WND WND WND WND

20% 40%

10% 30%

Poland; Europe

✓ -

7 1

12

✓ ✓ ✓ ✓

✓ ✓

Boxes delivery

12 1997

WND None

Rank

Furniture assembly / Packing / Cleaning / Warehousing

Services

Number of relocations per week

Revenue breakdown

www.bookoflists.pl

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

Revenue from moving (mln z∏.)

Total revenue (mln z∏.)

Number of Office and relocations industrial / Military / Areas served Residential Other

Modes of Own transport: vehicles: Road / Rail Vans / / Air / Sea Trucks

1st half of 2011 / 2010 / 2009 / 2008

1

Universal Express Relocations Sp. z o.o. ul. Szyszkowa 35/37, 02-285 Warsaw 22 878-3500/22 878-3501 office@uer.pl www.uer.pl

5.0 11.5 10.6 11.4

6.2 13.3 12.7 11.5

895 1,490 1,341 1,215

WND WND

WND WND

2

DTS Przyjemne Przeprowadzki Sp. z o.o. ul. Âwiatowa 22, 02-229 Warsaw 22 526-1000/22 526-1039 dts@przeprowadzki.pl www.przeprowadzki.pl

WND 7.8 6.1 5.4

WND 15.3 11.5 9.3

WND 2,090 1,950 2,080

55% 45%

3

Interdean Sp. z o.o. ul. Geodetów 172, 05-500 Piaseczno 22 701-7171/22 701-7177 warsaw@interdean.pl www.interdean.com

3.0 6.8 6.5 5.7

WND WND WND WND

460 1,050 850 770

4

BESTO RELOCATIONS Sp. z o.o. ul. Cha∏ubiƒskiego 8, 00-613 Warsaw 606-405-200/22 847-8878 warsaw@bestorelocations.com www.bestorelocations.com

3.5 4.5 WND WND

WND WND WND WND

5

Autor Przeprowadzki - Awiator ul. Wysoka 40/42, 90-037 ¸ódê 42 678-1611/42 209-1885 biuro@autor.pl www.autor.pl

1.1 2.7 2.8 2.6

6

Alfa & Omega Przeprowadzki ul. Hodowlana 15, 61-680 Poznaƒ 61 863-0001/61 863-0001 przeprowadzki@alfaiomega.pl www.alfaiomega.pl

7

Worldwide

✓ ✓ ✓ ✓

17 2

-

Worldwide

✓ ✓ ✓

20% 80%

-

Worldwide

1,000 1,800 WND WND

25% 70%

5% -

1.2 2.8 2.9 2.6

380 990 1,020 971

90% 7%

WND 0.7 0.7 0.6

WND 0.8 0.7 0.6

WND 1,500 1,400 1,350

123 Przeprowadzki Przedsi´biorstwo Transportowe Katarzyna Wandelt-Baraniak ul. Strzeszyƒska 100, 60-479 Poznaƒ 61 843-9161/61 843-9161 kontakt@123przeprowadzki.pl www.123przeprowadzki.pl

0.2 0.3 0.2 WND

0.2 0.3 0.2 WND

ZUH Sidor Transport ul. Piastowska 63/7, 50-361 Wroc∏aw 71 328-4302/71 328-4302 sidortrans@go2.pl www.sidor.pl

WND 0.3 0.2 0.2

AGS Warsaw Sp. z o.o. ul. Julianowska 37, 05-500 Warsaw NR 22 702-1072/22 702-1077 ags-warsaw@agsmovers.com www.agsmovers.com

8

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

Other

Full-time employees / Ownership: Polish / Year Foreign founded

Top local executive / Title

Kinga Motyka General Director

Pawe∏ Poradzki President

None Anthony Heszberger Iriben Limited Managing Director 100%

Board Member

Owner

Owner

Katarzyna WandeltBaraniak WND

Tomasz Sidorowicz Owner

Antoine Duquesnay Director

Piotr Dmowski General Director

Piotr KliÊ President

Country Manager

Operations Director

Witold Ko∏akowski Owner

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

22

LIFESTYLE

www.wbj.pl

Ballet

DECEMBER 12-18, 2011

Concert

Moscow City Ballet December 17, 6 pm PKiN Sala Kongresowa Pl. Defilad 1 Warsaw The world-renowned Moscow City Ballet will perform three of the most famous ballets of all time this December – “Romeo and Juliet,” “Swan Lake” and the “Nutcracker.”

Founded in 1988 by the distinguished Russian choreographer Victor Smirnov-Golovanov, the company has made its name abroad since performing for the first time in Seoul in 1989. And in recent years as many as 120,000 people have watched Russia’s premiere troupe performing in Poland. Tickets for the event are priced z∏.90 to z∏.250. ●

COURTESY OF MOSCOW CITY BALLET/ FACEBOOK

Ballet for the holidays ‘La Superba’ in Warsaw Montserrat Caballé December 22 PKiN Sala Kongresowa Pl. Defilad 1 Warsaw One of the world’s most famous living opera singers is set to make an appearance in the capital this month. Spain’s Montserrat Caballé has been entertaining crowds worldwide for over 40 years now, since she received a 25-minute

Moscow City Ballet For more information, log on to kongresowa.pl

Concert

New Year’s Eve Gala December 31, 8 pm National Theater Pl. Teatralny Warsaw For those unsure about their plans for New Year’s Eve, this event, which aims to commemorate the end of Poland’s

presidency of the EU council, will offer a great evening of entertainment. The performance, which is directed by Jaros∏aw Kilian, will see operatic and classical music performances of works from such esteemed composers as Ludwig van Beethoven, Wolfgang

Amadeus Mozart, Richard Wagner and Giuseppe Verdi.

The evening is hosted by presenter and journalist Monika Richardson and actor Piotr Polk. ● For tickets and more information, log on to teatrwielki.pl

UPG/REPORTER

A New Year’s Eve to remember

Montserrat Caballé

standing ovation for her 1965 debut as a soprano in New York’s Carnegie Hall. Her incredible voice and skills as an actress have since made her one of the most sought-after sopranos in the world and have won her numerous awards.

Ms Caballé’s talent has led to her becoming known affectionately in the opera world as “La Superba,” a sign that she

has now reached the status of diva. Arguably her most famous song is “Barcelona” which was recorded in 1987 with the late Queen frontman Freddy Mercury, and became an anthem for the 1992 Olympics, hosted in the song’s namesake, also her hometown. Tickets for the event are priced from z∏.130 to z∏.550. ● For more information, log on to kongresowa.pl

LAST WORD

DECEMBER 12-18, 2011

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23

Tech Eye

Here’s something for die-hard Harry Potter fans: the Kymera Wand (wand-control.com). Don’t get too excited though, it’s not a “real” wand made of orphan tears, dragon mung and the other magical ingredients we assume are part of Rowling’s lore.

Instead, it’s a wandshaped remote CO control which UR TE SY “recogOF TH nizes up EWAND C to 13 ges- OMPAN Y tures and sends the according infrared signals.”

There’s great potential for misadventure here. Imagine grandpa limps over for a visit and wants to

watch Animal Planet. You shout the magic words – “snarkus, barkus, banalio, mammalio!” – but accidentally flick up instead of left, giving grandpa a rheumy eyefull of Hustler TV. You’ve either got a heart attack victim on your hands or a new roommate.

So, on second thought, maybe the Kymera Wand is good for diehard Harry Potter fans with blind

many accounts, not very well crafted. But that doesn’t matter.

It’s got little old ladies in wheelchairs who go flying off the track with alarming (for bystanders) frequency.

The Granny Racers racetrack is available from Bits and Pieces for $26.99 (four AA batteries not included). It’s also on Amazon for $74.50, but you’d

COURTESY OF TRAXXAS

Techeye had something a little different in mind this week. Instead of a regular column, we planned to publish an open letter to Santa, calling him out over the Christmas of 1988, when our stocking was stuffed with deodorant and a leaky bottle of Old Spice aftershave. To this day the stocking smells like a World War II sailor on shore leave.

But something prevented Techeye from publishing that letter, something we call our “awfully wedded wench.” She said it would be naughty to publicly challenge Santa. This was confusing since she always says she likes it when we’re naughty, but then she said this would be an example of “bad naughty,” which is bad, instead of “good naughty,” which is nice.

Thoroughly nonplussed, we decided to stick with tradition. So here it is folks, the moment you’ve been awaiting since 148 words ago – part two of Techeye’s annual cavalcade of Christmas whimsy. This year with 28 percent more whimsy.

COURTESY OF BITS AND PIECES

Christmas whimsy and the malodor of antiquity

grandparents.

Cost: €57.75, with free worldwide shipping.

While we’re on the topic of venerated ancestors, here’s a toy that mocks them directly: the Granny Racers racetrack (bitsandpieces.com). This electric racetrack is pretty simple and, by

have to be senile to pay that much.

And now for something distinctly more whippersnappery: the XO-1 radio-controlled supercar (traxxas.com). If you’ve ever dreamed of owning a stupidly expensive toy car that goes pointlessly fast and will probably be

annihilated within a week because you don’t have an appropriate place to race it, then this is the stupidly expensive toy car for you.

The XO-1 goes from 0-100 in under five seconds, with the caveat that you need to be running the Traxxas Link App in order to achieve that speed. And you need to have an iPhone or iPod Touch to run the Traxxas Link App, which is kind of annoying. On the other hand, the type of person who spends $1,100 on an RC car is also pretty annoying, so maybe it all balances out somehow.

We’re not that fond of the XO-1.

But if you’re out there reading this, Santa, guess what? Techeye wants one for Christmas, if for no other purpose than to be annoying and create the illusion that we have money to waste.

Got that Santa? Good. Now try not to drench it in Old Spice, ok? ●

Ever struck a bystander with a little old lady in a wheelchair? Let us know: techeye.wbj@gmail.com

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl

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

Galeria 022, DAP, Lufcik Królikarnia National ul. Mazowiecka 11a Gallery www.owzpap.pl ul. Pu∏awska 113a www.krolikarnia.mnw.art.

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

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

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.we bsite.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl

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

Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl

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

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

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

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

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