Warsaw Business Journal October 2020 #60

WARSAW

BUSINESS JOURNAL S i n c e 1 9 9 4 Po l a n d ’ s l e a d i n g

OCTOBER 2020 ~ No. 10 (60)

business magazine in English

For daily news visit us at wbj.pl

POLAND’S BUILDINGS KEEP RISING DESPITE THE CRISIS Panattoni Europe’s success story among these Covid times Top experts discuss Poland’s economic future

OCTOBER

4 In The Frame

Modular homes in allotments Simple House by Jakub Szczęsny

7 In Review

News Ambassadors’ page Challenges and changes faced by countries

20 50

15 In Focus

Covid & the economy State benefits Covid & the economy Consumer spending habits Covid & the economy Unemployment rate Covid & the economy Enterprises under lockdown

32 Talking Points

Interview Małgorzata Kidawa-Błońska, opposition politician

37 Tech

32

News Feature Medtech

54

43 Lokale Immobilia

News Interview Robert Dobrzycki, Panattoni Interview Christopher Zeuner, Amstar Logistics market update Residential market update Warsaw office market scene

65 Life+Style

Restaurant review Klonn, Warsaw Restaurant review Naboku, Warsaw Travel diary Podlasie region, Poland

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70 Events

Past conferences COVER PHOTOGRAPH BY JASIEK ZOLL W B J OCTOBER 2020

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PUBLISHER'S NOTE

Morten Lindholm Editor-in-Chief/Publisher mlindholm@valkea.com

Back to business

Sankhyayan Datta Managing Editor

sdatta@valkea.com

Krzysztof Maciejewski Business & Web Editor

kmaciejewski@wbj.com

Kevin Demaria Art Director

kdemaria@valkea.com

VIRUS STRIKES AGAIN For me, September also included (once only) self-isolation for a week when a coworker tested Covid-19 positive (fortunately, without any dramatic related issues).

At another time, I had to accept a week-long quarantine officially ordered by the State Sanitary Inspection (sanepid) when my kids’ school closed down due to the positive test of a teacher. At work, we ended the month with a computer virus affecting our servers. Must I say, I feel the challenges of the new era we live in where “flex-jobbing” and remote business management are the new normal.

COMMUNICATION POWER Another reflection about the present times is how much power and influence communication has over people. It’s no longer just the media. The hype and hysteria concerning the pandemic truly shows how media effectively can create a narrative that keeps the audience addicted to the news, statistics and some sensational stuff.

Modern communication channels also allow users, influencers, news spreaders (inlcuding fake news) and bots to meditate and direct conversations in very powerful ways.

LAST BUT NOT LEAST – REAL ESTATE IS STILL THE BIG THING! The main topic of this issue – and for clear reasons too – is that if there’s a sector that still shows progress, it surely is the real estate. In Poland, particularly in Warsaw. It isn’t the case just in developing countries. It’s an opportunity to catch up with new ways of life that has been speedily pushed forward by five years due to the crises – home office, “flex-office,” technology in living and working spaces, the rising popularity of e-commerce, retails changes, last-mile delivery and more.

Exciting times!

Right, I wish you a great read and best of luck in the exciting but challenging times.

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MORTEN LINDHOLM

Contributors

Kamil Antosiewicz Ewa Boniecka Juliette Bretan Katarzyna Dębkowska Sergiusz Prokurat Beata Socha Alex Webber Adam Zdrodowski Jasiek Zoll Sales

Adam Fogler afogler@valkea.com Magdalena Klimiuk mklimiuk@valkea.com Katarzyna Pomierna kpomierna@valkea.com PR & Marketing

Dominik Grudziński dgrudzinski@valkea.com Print & Distribution

Krzysztof Wiliński dystrybucja@valkea.com Event Director, Valkea Events

Magda Gajewska mgajewska@valkea.com Contact: phone: +48 22 257 75 00 fax: +48 22 257 75 99 e-mail: wbj@wbj.pl

WBJ.pl For subscriptions-related enquiries, please email us at wbj@wbj.pl WarsawBusinessJournal

@wbjpl

All photographs used in this issue are courtesy of partners and companies unless specified otherwise.

Copyright © 2020 by Valkea Media SA All rights reserved. This publication or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permissionof the publisher.

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Valkea Media S.A.

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PORTRAIT BY KEVIN DEMARIA

SEPTEMBER IS USUALLY dedicated to “back to business.”

This year, though, it felt different. Is it appropriate to ask your employees to come back to the office? Can you expect clients and business partners to be interested in having in-person meetings? Is there any sentiment to seal new business deals, or is everyone sitting around and waiting for further effects of the pandemic and better clarity and transparency for the future? It has, for sure, been an unusual “back to business” month.

On trend Allotments have always been popular in Poland.

However, in recent months, due to the pandemicinfluenced travel restrictions, interest in allotments and their demand have soared. Featured is a modular home by Simple House. Its chief designer, architect and artist Jakub Szczęsny, best known for Keret House – reportedly the narrowest house in the world – has authored all Simple House prefab home projects.

PHOTOGRAPH BY KEVIN DEMARIA

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POLAND IS FACING A RECESSION FOR THE FIRST TIME IN 30 YEARS!

Don’t miss key Polish economics and business insights Buy Warsaw Business Journal daily newsletter Poland A.M. Go to WBJ.PL/REGISTER TO SIGN UP

NEWS HIGHLIGHTS OF THE PAST MONTH FROM WBJ.PL

“Mr Kaczyński, Ireland is a modern, progressive country where people can be who they are or who they want to be. You can be LGBT and Catholic, Catholic and not LGBT, LGBT and not Catholic, or none of the above.

Thankfully we are a pluralistic Republic and I think that’s great”

TOP SHUTTERSTOCK, PRESS MATERIAL

Billy Kelleher MEP representing Ireland South took to Twitter to slam Jarosław Kaczyński, Poland’s pintsized de facto autocratic leader. Kaczyński claimed Ireland has become a “Catholic wilderness with rampant LGBT ideology.”

ART & CULTURE

‘The Pianist’ Szpilman’s piano sells for PLN 1.3m A fountain pen, silver pocket watch and other prized possessions of the late JewishPolish composer Władysław Szpilman, the real-life hero of the Oscar-winning film

“The Pianist,” went under the hammer in Warsaw. The renowned musician, who died in 2000, came to the world’s attention in Roman Polański’s film based on Szpilman’s autobiography, which has been translated into some 40 languages. Like every Jewish resident of the Polish capital, the pianist and his family were forced into the Warsaw Ghetto established by the Nazis in 1940.

He made ends meet by playing the piano at whatever cafes remained open. In 1942, his relatives were sent to their deaths at the Treblinka extermination camp, but Szpilman was spared after a Jewish police officer recognized him from a concert and pulled him from the transport line at the last minute. Szpilman managed to escape the ghetto the following year, just before the Germans liquidated and abolished the Jewish district. He survived the rest of the war, thanks to the help of friends, by going from hideout to hideout, until he ended up

at an empty apartment, totally cut off from the outside world.

ART & CULTURE

JPII sculpture makes waves A new statue that depicts the late pope St John Paul II throwing a boulder into red water has provoked debate in his native Poland and revived memories of a 1999 Italian sculpture that showed him crushed under a meteorite, to which the new work was intended as a counter-statement. The statue by Polish artist Jerzy Kalina, titled “Poisoned Well,” was inaugurated on September 24 in front of Warsaw’s National Museum to mark 100 years since the much-loved pope’s birth on May 18, 1920. Kalina, 76, said the installation in the museum’s fountain relates to JPII’s efforts in the 1980s to help free Poland from communism, which is symbolized by the red color the water has from a red fabric placed on the fountain’s bottom.

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In Review | NEWS BUSINESS & ECONOMY

Karpacz, southern Poland. She added that the program also offers fast-track visas.

Poland’s economy is expected to contract by less than 3.5 percent in 2020, Prime Minister Mateusz Morawiecki has claimed.

The revised draft budget for 2021 adopted recently forecasts a 4.6-percent GDP decline. “Based on the incoming and available data, we can say that the decline in Poland’s GDP will likely be less than 3.5 percent,” Morawiecki assured.

BUSINESS & ECONOMY

GDP may fall by less than 3.5% in 2020: PM

Poland’s unemployment rate at 3.1% in August Poland’s seasonally adjusted unemployment rate reached 3.1 percent in August, down from 3.2 in July, Eurostat, the EU’s statistical office, has reported. The number of unemployed registered in labor offices stood at 530,000 in August against 544,000 in July, Eurostat said. According to Poland’s Central Statistical Office (GUS), Poland’s unemployment remained flat at 6.1 percent m/m in August 2020. The discrepancy between GUS and Eurostat figures results from the use of different methodologies.

The eurozone (EA19) seasonally-adjusted unemployment figure rose to 8.1 percent in August 2020 against 8.0 percent, corrected from 7.9 percent, in July. The EU27 average unemployment rate in August increased to 7.4 percent from 7.3 percent in the previous month.

will be closed. According to the newspaper, most employees of Tesco in Poland will work for the new owner and approx.

7,000 jobs will be transferred to Netto’s 301 stores, two distribution centers and the head office.

GEOPOLITICS

Report finds waning of democracy in Poland Democratic standards are facing “important challenges” in some European Union countries, particularly in Poland and Hungary, where the judicial systems are under threat, the EU’s executive commission has stated in its first report on adherence to the rule of law. The European Commission depicted a bleak situation in the two countries. Its wide-ranging audit found that prosecution of high-level corruption in Hungary “remains very limited,” and deemed Poland deficient in the four main areas reviewed: national justice systems, anti-corruption frameworks, media freedom and checks and balances. Meanwhile, the German presidency of the EU has said that the EU procedure over breaches of the rule of law in Poland and Hungary will continue after the EU executive showed neither had made sufficient improvements.

BUSINESS & ECONOMY

Allegro raises over PLN 9bn in largestever Warsaw IPO E-commerce platform Allegro raised about PLN 9.2 billion in Warsaw’s largest-ever listing after selling more shares than planned thanks to strong demand for technologyrelated stocks in Europe. Allegro sold 213.5 million shares at PLN 43 each, the top end of a marketed range, the company said in a statement. The group increased the total deal size by 14 percent. The company raised PLN 1 billion by selling 23.3 million new shares, while the remainder came from Allegro’s private equity owners Cinven, Permira and Mid Europa Partners. The stock is set to start trading on October 12.

BUSINESS & ECONOMY

Program for Belarusian firms to be launched Polish Deputy PM and Development Minister Jadwiga Emilewicz has stated that “a program is being launched in Poland directed to companies, startups and freelancers who feel the political uncertainty in Belarus today and are seeking safe harbor.” Emilewicz made the statement during a press briefing on the sidelines of the Economic Forum in

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GEOPOLITICS

Polish production plant for patriot missile parts

BUSINESS & ECONOMY

Tesco to cut jobs, close more stores The British supermarket group Tesco has announced plans to cut jobs, close its online store and a few other hypermarkets in Poland, the “Puls Biznesu” daily has stated. According to the Polish paper, Tesco announced in June that the Danish Sailing Group, the owner of Netto discount stores, would take over most of Poland’s Tesco group. Puls Biznesu added that the layoffs involve almost 900 people and would be carried out from September 21 until the end of the year, whereas the online store will run until October 31. Also on that day, six hypermarkets belonging to the chain

Military Aviation Works (WZL1) and American aerospace and defense company Lockheed Martin (LM) have launched the construction of a production plant in eastern Poland to produce components for missiles selected as armaments for the Polish Patriot anti-aircraft and missile system. According to LM, the new plant in Dęblin is the implementation of industrial and offset agreements signed with LM as part of the “Wisła” anti-air and missile program in March 2019. Around 20 Polish workers are to be employed in the new 3,000-square-meter facility in 2021.

WZL1 and LM started cooperation in 2018 under an offset agreement signed by LM with the Polish State Treasury.

GEOPOLITICS

EU’s top court to rule on extradition of Pole On October 12, the European Court of Justice (CJEU) will hold a hearing on the extradition of a Pole to Poland, which had been previously refused by a Dutch court

SHUTTTERSTOCK (3), EXPCEPT OPPOSITE PAGE TOP BY KEVIN DEMARIA

WBJ

over concerns that Poland’s courts are no longer independent. In January 2019, the Netherlands suspended the extradition of 11 suspects to Poland. In a statement on the matter, the Amsterdam-based International Legal Aid Chamber (IRK) wrote that the decision arose from concerns about the independence and fairness of Polish courts.

The chamber stated that it needed more information about the cases from the Polish side before deciding further in the matter.

The EU has triggered Article 7 procedures – dubbed the “nuclear option” – against Poland for reforms the country undertook, which the bloc says undermine judicial independence. Brussels has also launched legal actions against Polish laws that allow ordinary court judges to be disciplined on the basis of their judicial decisions and lower the retirement age of Supreme Court judges.

HISTORY

Poland commemorates WWII Prime Minister Mateusz Morawiecki took part in commemorations in Wieluń, the first Polish city to be bombed by the German Nazis at 4.40am on September 1, 1939.

Meanwhile, President Andrzej Duda, along with officials including Defense Minister Mariusz Błaszczak, took part in ceremonies on the Westerplatte peninsula in the northern city of Gdańsk. The first bombs of WWII fell on a hospital in Wieluń, killing 32 people, including 26 patients. In all, the Germans killed around 1,200 in the city that day, according to estimates. Wieluń, in central Poland, was located close to the PolishGerman border before national boundaries shifted after the war. The Gdańsk commemoration, meanwhile, traditionally started at 4.45am, the time on September 1, 1939, that the German battleship Schleswig-Holstein began shelling a Polish military depot on Westerplatte in the first battle between Polish and German soldiers of WWII.

CLIMATE & ENVIRONMENT

Climate activists protest govt inaction A few hundred Polish climate activists blocked traffic in downtown Warsaw early September to spur the government into better protection of the environment. It was the second action recently by Poland’s chapter of the international Extinction Rebellion climate protection group that says world leaders are not doing enough to counter climate change. With chants and banners saying “we are rebelling in order to live,” the group blocked a major street in the capital holding up morning traffic. The police checked their documents and carried them to the side to clear the way. Largely powered by coal, Poland has some of Europe’s worst quality air. Also, water in many of its rivers and lakes is below the required quality standards.

have supervisory authority over the defense, justice and interior ministries, according to Polish media reports. There is to be only one woman in the government – the minister for family and social policies.

POLITICS

Kaczyński joins new Polish Cabinet Polish Prime Minister Mateusz Morawiecki presented a reshuffled Cabinet that formally brings the conservative ruling party’s leader into a government position, together with a new education minister who has said LGBT people are “not equal” to others.

Jarosław Kaczyński, the behind-the-scenes strategist of the government since his Law and Justice (PiS) party came to power for the second time in 2015, will be a deputy prime minister under Morawiecki. He will

of fur clears legal hurdles soon. The Polish bill, dubbed “five for animals” – because it has five main objectives, including the ban – was tabled in early September, much to the dismay of fur farmers. The bill was announced as undercover footage from the largest fur farm in Poland was released, which campaigners said appeared to show “cannibalism, aggression, self-aggression, open wounds and paralysis of minks’ limbs.”

The bill, which was put forward by Poland’s ruling rightwing coalition, led by Law and Justice (PiS) party, seeks to ban breeding animals for fur in just one year following the law’s entry into force. PiS’s chair Jarosław Kaczyński, a self-confessed animal lover, announced the bill himself.

RELIGION

Father Rydzyk’s pandemic picnic POLITICS

Poland aims to ban fur farming Poland’s fur farms could be in their final year in operation if a bill banning the production

Father Tadeusz Rydzyk, founder and director of the ultra-conservative Radio Maryja station, invited his followers to a picnic in Toruń in north-central Poland during the coronavirus pandemic. Among the patrons

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In Review | NEWS of the event was Mariusz Błaszczak, defense minister. “Let’s not panic, let’s not be fooled by the propaganda that you can only get infected in the church,” claimed Rydzyk.

During the picnic, Jarosław Kaczyński, Poland’s de facto ruler thanked Rydzyk for opposing the evil offensive.

sis of ethnic origin, gender, disability or age.

The data for 2017 and 2018 was compared with the data for 2007 and 2008.

SOCIETY

LGBT+ march on Polish-German border Led by drag queens in glitter suits and towering high heels, some 2,000 demonstrators marched from Poland to Germany recently in a landmark joint Pride parade to symbolically bridge the two countries’ deepening divide over LGBT+ rights. Amid fears of a possible attack by Polish nationalists, riot police lined the streets at the start of the parade and led the marchers slowly across a blue, steel arch bridge spanning the River Oder, which marks the border between Poland and Germany. Chanting in defiance, with rainbow flags fluttering in a light breeze, the Pride marchers peacefully passed a small group of about 20 Polish counter-protesters, holding banners and singing hymns, as well as a van daubed in anti-LGBT+ slogans.

SOCIETY

Poland not friendly to immigrants, minorities, LGBT+ Despite the progress, Poland has been performing worse in recent years in terms of diversity, acceptance for ethnic minorities and migrants, according to a report by the Organization for Economic Co-operation and Development (OECD). Less than 20 percent of Poles believe that their local area is a good place to live for ethnic and racial minorities, gay and lesbian people, and immigrants. That is the third-lowest figure in the OECD – an intergovernmental economic organization with 37 member countries founded in 1961 to stimulate economic progress and world trade – and a decline from 10 years earlier when the figure for Poland was over 30 percent. The report entitled “All Hands In? Making Diversity Work for All” checked, among others what is the situation on the labor market for groups that may be discriminated against on the ba-

QUOTE OF THE MONTH

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mutual recognition of family relations in the EU. “If you are a parent in one country, you are a parent in every country,” she emphasized.

SOCIETY

EU boss decries ‘LGBT-free zones’ The European Union’s chief executive has said there was no place in the bloc for so-called “LGBT-free zones,” a pointed criticism of Poland’s rightwing nationalist and populist government pushing to curb the rights of lesbian, gay, bisexual and transgender people. “LGBTQI-free zones are humanity free zones. And they have no place in our (European) Union,” European Commission President Ursula von der Leyen told her annual policy speech to the European Parliament. “Breaches of the rule of law cannot be tolerated,” she added. Recently, Poland’s justice minister said a town that had lost EU funding after dubbing itself a zone free of “LGBT ideology” would receive government financial support. Von der Leyen said the bloc’s executive will soon present “a strategy to strengthen LGBTQI rights” in the bloc, as well as pushing for

SOCIETY

Sewage plant malfunction contaminates river Polish authorities warned residents in cities along the Vistula river that runs into the Baltic Sea of a “crisis” situation after Warsaw’s new sewage collection plant malfunctioned.

The health minister and local authorities said they have been closely monitoring the levels of contamination north of the Polish capital, including by nitrogen, since the problem began. The sewage was discharged at about 3,000 liters a second at Warsaw’s northern edge and went north without affecting the city’s waters, authorities said.

SOCIETY

Polish town votes to stay ‘LGBT-free zone’ Councilors in eastern Poland voted narrowly recently to keep a motion declaring their town “free from LGBT ideology,” as international pressure grows on dozens of Polish municipalities that have made similar declarations. The mayor’s office in Kraśnik said councilors had voted 11 to nine to keep the symbolic anti-LGBT+ motion that was

“Poland’s ‘A-’ rating reflects its diversified economy with a track record of stable growth and sound policy framework, coupled with EU membership. These are balanced against lower GDP per capita and relatively high (albeit declining) net external debt compared with the ‘A’ category peers” Fitch Ratings affirmed Poland’s rating with a “stable outlook” on September 25. Meanwhile, Fitch’s competitor S&P Global has upheld Poland’s rating at A- for long-term liabilities in foreign currency, with a stable outlook.

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Curated from: afp.com, apnews.com, bloomberg.com, cnbc.com, euronews.com, fitchratings.com, theguardian.com, nytimes.com, pap.pl, pewresearch.org, pinknews.co.uk, polskieradio.pl, reuters.com, skysports.com, thehill.com, tvn24.pl, twitter.com/koronawirus_xy, uefa.com, wiadomosci.radiozet.pl, wsj.com, wtatennis.com, wyborcza.pl

SHUTTTERSTOCK (4)

WBJ

passed in May 2019, which declared that the town would defend itself from “radicals striving for a cultural revolution.” The vote on whether to repeal the motion followed an announcement by Norway that it would not grant funding to any of the nearly 100 Polish municipalities that have issued LGBT-free resolutions. Bartosz Staszewski, a campaigner against the so-called LGBT-free zones, said the decision was against the best interests of Kraśnik’s roughly 35,000 residents. Poland is the largest beneficiary of the Norway Grants. It has been allocated €411.5 million during the current 2014-2021 funding period.

SOCIETY

Calls for Children’s ombudsman to resign Poland’s commissioner for children’s rights has refused to back down after a fact-checker debunked his wild claim that teachers are “stuffing [children] with drugs to change their gender.” Mikołaj Pawlak appeared on TV to oppose the teaching of sexual education in schools. While being interviewed for TVN24 News, a private Polish broadcaster, Pawlak lied that sex educators were giving young trans children hormone therapy without the consent of their parents or doctors.

SOCIETY

Poland ranks low for child wellbeing: UNICEF report

INTERNATIONAL

Former Polish ambassadors write to Joe Biden Three former Polish ambassadors have written an open letter to Joe Biden, former US vice president and the Democratic presidential nominee for the 2020 US election, running against the incumbent, Donald Trump. The letter signed by Piotr Ogrodziński, former ambassador to Canada, Ryszard Schnepf, former ambassador to the US, and Jan Truszczyński, former ambassador to the EU was published by the well-known Polish daily “Gazeta Wyborcza.” The trio stated: “We hope that your victory will halt the wave of populism.” They added: “We know that you want to restore America’s leadership, but in this best sense, as a leader of freedom and democracy, not just a guardian of its own interests. We believe that it is possible to rebuild the Transatlantic Community.” According to a report published in July by Pew Research Center, an American think tank, roughly half (51 percent) of Poles view Trump favorably, the highest share across the EU countries surveyed in 2019.

With many US states already voting and about a month remaining until Election Day on November 3, surveys have found a stable advantage for Biden over Trump. Several surveys have found continued disapproval of the president’s response to the coronavirus pandemic, including to his own diagnosis with the virus, first announced in the early hours of October 2.

Out of 38 surveyed EU and OECD countries, Poland ranks 31 in the index of the quality of life of children, according to UNICEF in its latest report. The ranking was developed on the basis of indicators concerning the quality of life of children in three areas: mental well-being, physical health, and social and educational competences. Suicide, dissatisfaction with life, obesity, and low social and educational competences are becoming more and more common problems of children and young people in rich countries, according to the UNICEF report “The world of dependence.

Factors influencing the quality of life of children in rich countries.”

an hour and seven minutes. Unseeded and ranked 54 in the world, Świątek, the only teenager who reached the fourth round, will take on Italian qualifier Martina Trevisan for a place in the semi-finals. The Warsawborn tennis star won the junior Wimbledon tournament in 2018.

SPORT

SPORT

Polish teenager Iga Świątek produced a stunning performance to knock out top seed and title favorite Simona Halep in the fourth round of the French Open. The 19-year-old thumped 30 winners and outplayed Halep in all areas of the court to win 6-1 6-2 in just

Bayern forward Robert Lewandowski has been named UEFA Men’s Player of the Year for 2019-2020. The Polish international, 32, beat off competition from Manchester City midfielder Kevin De Bruyne and Bayern teammate Manuel Neuer. The award was

French Open: Iga Świątek tosses out Simona Halep

announced during the 2020-21 UEFA Champions League group stage draw in Geneva. The Warsaw-born striker is the captain of the Poland national team.

Lewandowski UEFA Men’s Player of the Year

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Ambassadors’ Corner Top diplomats in Warsaw tell the WBJ about...

the challenges and changes their countries

face due to the ongoing pandemic

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Werner Almhofer Austrian ambassador

What have been the biggest challenges faced by your country in the last six months?

Protecting society as a whole against the effects of Covid-19 proved to be a gigantic task. Providing adequate medical supplies as well as protective personal equipment (PPE), introducing a furlough system for employees, giving financial support to companies and enabling the education sector to use distance-learning as a primary tool during lockdown were among the measures taken by the Austrian government. Efforts to contain the pandemic as well as to mitigate its effects continue without interruption and are constantly adjusted to the current situation.

What changes did your country’s education system have to adapt to make sure that students are safe?

Schools in Austria have introduced measures to effectively contain the spread of Covid-19. These range from using face masks, frequent hand sanitization, social distancing whenever possible, frequently airing classrooms, closely monitoring the state of health of schoolchildren, etc. Special attention (including distance-learning) is paid to pupils and teachers who are considered to be at a high risk of contracting Covid-19 or might be affected by the disease in a particularly adverse way. All measures are aimed at ensuring maximum safety while trying to minimize any kind of disruption to the regular curricula.

Which companies and/or industries in your country witnessed growth in business because of the pandemic?

In Austria, the online entertainment industry, pharma companies and supermarkets, for example, managed to prosper during the pandemic. We see a faster than expected recovery of the economy: Austria’s GDP is forecast to grow by 4.3 percent in 2021. The Austrian government set up aid programs worth EUR 57.6 billion during the crisis and has now introduced an ‘Investment Premium.’ Companies receive either 7 percent or 14 percent (climate protection, digitalization, life sciences and health investments) discount on any new investment in any industry. These efforts are supposed to motivate companies to invest further in Austria.

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Edgars Bondars Latvian ambassador

Eduardas Borisovas Lithuanian ambassador

The outbreak of the Covid-19 pandemic has shown us how important it is to ensure a coordinated approach while facing serious challenges at the regional, EU and global level. The decision-making had to provide an unprecedented response to several important issues. They had to stop the spread of the virus. They had to ensure the functioning of the single market, including the free movement of people and goods. They had to think in the long-term to ensure the economic recovery following the related economic downturn.

The biggest challenge is that nobody knows how long this pandemic will last and how devastating it can turn. Such unpredictability forced Lithuania to put all efforts and resources to overcome challenges and to adapt to the upcoming changes. The strategy aimed to pool the efforts and initiatives of all central and local authorities, medical professionals, socio-economic partners and society to fight the common threat was challenging but it proved to be a success that helped us overcome the situation with minor losses.

Schools in Latvia are well-prepared for the new, unusual school year. During the summer the education ministry developed three possible scenarios of how work in schools might be organized – onsite learning, a combination of on‑site and remote learning and purely remote learning. From September 1 most schools are teaching onsite but larger schools are combining onsite and remote learning. The onsite learning process at all levels of education includes the necessary safety measures: timely information, hygiene, monitoring of personal health and distancing. If the epidemiological situation deteriorates, schools will be ready to switch to remote learning.

We were among the first to reintroduce the attendance of schools before the summer break. Our new school year started normally at the beginning of September, but remote learning might be reinstated in specific schools if they become Covid-19 hotspots. Schools may make it mandatory to wear face masks if the infection rate in the municipality reaches 16 and may switch to online teaching if it rises to over 25. Students who have been in secondary contact with coronavirus patients are not required to quarantine, meaning that if they self-isolate, their parents won’t be eligible for paid childcare.

The pandemic has caused unpleasant shocks in the Latvian economy, but recovery from it may be the beginning of a period of rapid growth. The situation in the Latvian economy is not homogeneous. The situation tends to be different in every sector of the economy.

Industries including chemical, building materials, pharmaceuticals, electronics and IT have survived the crisis relatively well. Exporting companies were the first to adapt to the new situation. The recovery in the industrial sector has been rapid and the data for July already show that compared to 2019, there is even a slight increase.

Manufacturing (except for oil products) surprised positively – in June it was already 5.9 percent higher than a year ago. Export was another important pillar of such a prompt economic recovery. During the pandemic, the export of food, chemical products and medical devices performed the best. The export of lasers almost doubled, sales of chemical products and respiratory equipment grew to such amounts that companies such as Thermo Fisher and Interurgical increased employee numbers by several hundred. The resilience of our economy can be explained by the massive broadbased government stimulus, very low dependence on incoming tourism and favorable export structure.

BOOK OF LISTS 2019/2020

A GUIDE TO POLISH BUSINESSES AND INDUSTRIES

25

years on the market

70

rankings and alphabetized list

WWW.BOOKOFLISTS.PL

1,000+

firms included

IN FOCUS

COVID & THE ECONOMY

SHUTTTERSTOCK

Poland’s economy is still holding up well as compared to many of its peers in western Europe and the rest of the world. In the following pages, experts discuss whether doling out more state benefits is a viable option to beat crises, prevailing consumer sentiment across the country, why unemployment numbers could surge and how Poland has battled the crises for over six months already.

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IN FOCUS COVID & THE ECONOMY

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OCTOBER 2020 W B J

SPENDING SPREE Governments are desperate to revive tourism. All around the world they are offering incentives. The Czech Republic has released 250,000 spa vouchers. Taiwan has pushed millions of night market shopping coupons. Poland decided to dish out tourist vouchers. Is the Polish program a giant step for the travel industry on the path back to normalcy or is it just an expensive social program that will burden future generations? BY SERGIUSZ PROKURAT

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here’s no such thing as a free lunch, stated economist Milton Friedman. As it turns out, for slightly over a year and a half at least, there will be free holidays in Poland. From August 1, the Polish government ensured the extension of the 500+ child benefit program – under which families receive PLN 500 per month for each child until the age of 18 – by tourism, creating the Polish Tourist Voucher (PBT). The program grants a one-off payment of PLN 500 for each child up to the age of 18 (additionally, another PLN 500 benefit for disabled children), to be used by March 2022. It is a new form of support, worth PLN 4 billion, in a situation where the economy is weakened by the Covid-19 pandemic.

The question is: is rewarding people for leisure instead of work, even if it helps the tourism sector, a step in the right direction?

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TOURISM JOBS ON THE LINE

While much attention has focused on international tourism, domestic tourism has also been severely impacted

by Covid-19. Before the crisis, domestic tourism accounted typically for 75 percent of tourism expenditures on average in OECD countries.

This figure varies highly among the

member nations, but in Poland, it’s 40 percent. Typically, tourism contributes 6.9 percent of employment in OECD countries. However, many jobs are now on the line. Throughout 2020, the world economy will shrink by an estimated 4.9 percent, but in the eurozone, along with the UK, this decline is expected to amount to 10.2 percent and in the US by 8 percent. The first stage of the crisis was triggered by government-imposed lockdowns, while in the coming months, importance will be attached to consumer concerns and restrictions on industries such as tourism, travel, entertainment and hospitality.

The idea is nothing new. This is a variation on the idea popularized

by British economist John Maynard Keynes and his students – to stimulate demand. But first, it could mean playing with fire, because more demand, given the same supply, could translate into higher prices.

Secondly, according to official data, 60 percent of Poles prefer holidays abroad, e.g. in Greece, Italy, Egypt, because of the guaranteed good weather, remarkable views, at comparable or even lower prices.

BUMPY RIDE

The implementation of the PBT program has not been smooth. It turned out next to impossible to develop an IT system in a short time.

The technical solution was therefore transferred to Poland’s social security institution responsible for the payment of pensions – ZUS. Therefore, PBT is distributed via the IT platform of an institution, whose official role is different than providing Poles with holidays. Since the beginning of the program, ZUS staff have recorded a gigantic number of complaints – several tens of thousands, from people who are entitled to get the tourist voucher and have not received it yet. Similarly, the website that allows you to review the registered places where you can redeem the received travel voucher looks raw – it does not resemble a catalog from a tourist office. Rather a sorrowful phone book with company details. The technical problems are a consequence of the fact that politicians were in a hurry to put pressure, not giving enough time to technically refine the solution. After all, free holidays are a reward for the result of the presidential election (the runoff in July 2020) expected by the current government.

Another observed bunch of problems is contained in questionable legal solutions. Pursuant to the Act on PBT, it must be redeemed for the child for whom the voucher has been granted, and the person entitled to do so must pay with the voucher. Therefore, both buying and

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selling the voucher as well as using someone else’s voucher is illegal and the penalty for breaking the law may be as high as PLN 1 million.

Only that the possibilities of control are limited – officials will not have the time or the capacity to check whether the reality is the same as guaranteed by the Act. It is true that the voucher cannot be sold, but you can use it to pay for specific tourist service and then apply for a refund (assuming it is possible under the tourist service regulations). This way all the cash from the travel voucher goes back to the payer – it works a bit like a cashback payment. It is also possible to assign a tourist event.

Therefore, there may be attempts of taking up unofficial negotiations between the voucher beneficiaries and people who would like to redeem it. A black, underground market created by tourist voucher institutions is slowly emerging. It also encourages the creation of “laundries,” i.e. the cash will go to companies that will run fictitious tourist resorts, which in fact will be in agreement

with the voucher beneficiaries. In the worst-case scenario, ill-managed institutions, creating poorly-thought out incentives, will be accompanied by people receiving social benefits, although they do not need them.

It will be a bit like patients, about whom the popular House, MD series says: “everybody lies.” Of course, when it is convenient for them or they have an interest in it.

‘LEAKY BUCKET’

If we consider that the tourist voucher is not a form of supporting the tourism industry but a “porkbarrel” social program – just like the 500+ program is not a demographic program, contrary to what the government declared, only a social one – then the tourist voucher is a rather wasteful move, a massive burden on the country’s budget. Expensive and ineffective. Why ineffective? Well, it is enough to quote the famous anecdote featuring “Okun’s bucket.”

Arthur Okun, an American economist, in his 1975 publication “Equality and efficiency, the big tradeoff,” noted

that the loss of efficiency goes along with the redistribution process. He visualized tax collection as a “leaky bucket” in which the government takes water from a well. Okun wrote that we transfer money from the rich to the poor in a leaky bucket. Some of it just leaks along the way, so the poor won’t get all the money taken from the rich. The loss results from the administrative costs of taxation, but also from the very transfer of the “bucket,” and from the loss of incentives for the poor and the rich.

There is no quick panacea for the pandemic because the coronavirus will remain a burden for the economy for a long time – companies will close, people will lose their jobs and banks will be left with bad loans. It cannot be denied that a great experiment is taking place all over the world, as a result of which governments give away money in the form of programs similar to PBT, or give financial support to companies, and central banks “print money.”

This phenomenon has reached Poland as well. The new paradigm, the crisis economics, seems to be saying that debts can go infinite.

For example, Poland’s central bank (NBP) can buy any number of assets and thus finance government debt.

Such activities lead us to pay a price that is invisible at first glance. The creation of money leads to the fact that the government may incur debt and the costs of servicing this debt are small. Unfortunately, it also hits savers, making it more difficult for them. A crisis is a time to spend money – governments can generate demand and stimulate development through large infrastructure projects or projects such as tourist vouchers.

Many are glad to receive the help that will only be a short-term relief.

Unfortunately, the sad news is that in the long run debt will, just like a virus, infect entire sectors of the economy. Zombie jobs and even zombie companies – kept alive and fed with government subsidies –

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SHORT-TERM RELIEF

have been created. They look great on the paper but they are worse off in real life. It is enough to disconnect the drip keeping them alive and they will die. Low interest rates and government subsidies for years to come can lead to sustaining this condition. Added to all this is the pressure to blur the problem of proper risk assessment, which is a natural part of entrepreneurship, which, as a consequence, leads to ineffective allocation of resources in the market. Globally, when large zombie companies employing zombie employees are waiting for the mandatory state feed, it translates to harder times for startups and small businesses. Indebted and under-productive sectors will therefore endure rather than collapse, creating an incentive to commit investment errors and misallocate capital. Productive sectors will suffer from the increasing tax burden.

Recession is clearly visible when we compare data not year on year, but quarter on quarter. In Q2 2020, the economy in the euro area shrank by 14.7 percent compared to the same period of last year. We are witnessing a gigantic increase in public spending and a decline in production that will lead, accord-

Free holidays are a reward for the result of the presidential election expected by the current government ing to IMF calculations, to a global increase in government debt to over 100 percent of GDP. The balance sheets of major central banks including the US Federal Reserve, Bank of Japan, European Central Bank, Bank of England and People’s Bank of China have grown by a total of USD 20 trillion and the fiscal easing programs announced by major governments exceed 7 percent of global GDP according to Fitch Ratings. Together, these plans create the largest stimulus package ever. If we sum up government and private debts together, it will be over USD 200 trillion of debt, a global increase of over 35 percent of GDP, much more than the 20 percent seen after

the 2008 crisis, and all in a single year.

Additionally, the gap between what is happening in the economy and the behavior of investors is presented in the chart showing the real GDP growth and the capitalization of the main US index – S&P 500. US GDP fell by around USD 2 trillion in the second quarter and, at the same time, the capitalization of the top 500 companies on Wall Street increased

by USD 4 trillion. Price scissors have diverged to historic levels. Where has this gap come from? Stock exchanges are flooded with cheap money from central banks and this currently determines the level of investors’ appetite in the world. There is also a gift for a common consumer – a free tourist voucher helps sweeten the difficult crisis period.

Perhaps some of the beneficiaries will go on vacation this year, forgetting that another social program of this type exacerbates the harmful claimant attitude. People are told that they “deserve something” by virtue of their very existence. This is a very dangerous tendency to encourage living at the expense of others.

Meanwhile, vouchers will contribute to creating a debt that will be paid for by future generations.

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E G D E S ’ E F I N K A N O

recent t of the n I . g n s lo us for roring the re ction r i v a n ro ir fe e of co rocketed, m ell of low in pled over v a w s p y u p a serio bers have skgly lengthy sregularly to ckwave e p a c s n o e i m e r v . h u ouldn’tntry’s case n ing a reassu ne, cases ha has sent a s a knife edge c d n a l d o n l is u n Po ence o days a And th , the co t and e weeks an continen the past few on the rise. sumer confid Europeath rates. In aths are alsog Polish con and de 00 mark. De abits, leavin the 3,0 h spending h throug N LIET

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E TA TE BR

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MORE POSITIVITY With no major increase in case numbers – even after the Polish presidential election – and infection rates decreasing elsewhere across Europe, anxieties melted away, replaced with the sunny, carefree optimism of the holidays. The summer months brought more positivity and confidence, with Poles seeking to return to old spending habits. Shopping malls, once neglected during the height of the crisis, saw footfall return. Data from the Polish Council of Shopping Centers showed all surveyed centers in Poland recorded an increase in daily visits, with statistics for August showing 1,400 more people had shopped than in July. Other surveys point to Poles no longer being cautious about money. As reported

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entral Eastern Europe has been touted as one of the world’s success stories for their approach to the first wave of the virus. With countries – including Poland – enacting strict and early lockdowns, the region quietly got the virus under control, a stark contrast to the chaos in Western European nations and in the US. From spring, Poland’s coronavirus case numbers were relatively steady at a few hundred a day, a pattern that lasted until mid-summer. But despite low numbers of infection, surveys of consumer attitudes from spring point to a considerably more anxious approach to spending.

Nielsen, a New-York-headquartered global measurement and data analytics company, recorded lower levels of consumer optimism, with buying habits changing to a focus only on essentials. “In the second quarter, consumers’ shopping moods in Poland drastically decreased. The Consumer Confidence Index, run by Nielsen, recorded the highest drop among all European countries,” says Konrad Wacławik, head of Nielsen Retailer Services in Poland. “Above all, Poles began to negatively assess their prospects on the labor market and the upcoming financial situation of their households – which are components of this index. Only 16 percent of consumers in the second quarter of 2020 vs. 61 percent a year before had a positive opinion of their situation on the labor market,” he adds.

NEW TRENDS An April survey on “Polish consumer sentiment during the coronavirus crisis” by McKinsey & Company, a US-based management consulting firm, found that more than half of Poles were being careful about spending their money, whilst 47 percent reported they were cutting back completely. The survey also found that over 80 percent of Polish consumers were unsure or pessimistic about the future of the Polish economy.

Those anxious spring months led to the development of new consumer trends, too. A report on Poles’ trust in retail chains during the pandemic by the Catchers, an internet marketing service, and IPC Research Institute found that consumer confidence in retail chains had declined, with 40 percent saying this was due to non-compliance with rules on the numbers of people in stores.

Instead, most Poles turned to local stores, with 63 percent using these to buy fast-moving consumer goods, such as packaged food. According to the Havas Media Group’s “Meaningful Brands” report, the uncertainty of the pandemic has caused consumers to rethink their approach to life, adopting more socially-conscious and safe habits – so brands have been encouraged to turn to community-based and online offerings to meet these new demands. Aside from consumer behavior, the situation on the shop floor was also concerning. With a decline in demand for some products, inflation has been rising and the prices of fresh produce have also been affected by the triple disaster of drought, heavy rains and a lack of migrant labor, which has devastated crop collection. But everything changed with the arrival of the hot Polish summer.

“CONCERNS ABOUT by “Gazeta Wyborcza,” a well-known Polish daily, only 14 percent of Poles said they intended to continue saving, compared to a global average of 28 percent, with consumer confidence rising throughout the summer months.

But the summer hope inevitably waned and as holidays ended and children returned to school, anxieties also mounted again. From a more positive position, consumer confidence suddenly slipped, particularly in terms of current household financial situations. The September reading of the GfK Consumer Moods Barometer indicated a worsening downward trend in the Polish consumer climate, with Poles less eager to buy – fearing a rise in coronavirus cases and fears of new restrictions or second lockdown. A CBRE survey separately found Poles were less keen to buy homes or take out loans. “If the reversal of the trend in consumer sentiment persists or even deepens in the coming months, then the negative effects of this tendency will also be observed on the consumer demand side,” says Maciej Siejewicz, marketing and communications manager at GfK. “The first symptoms of this trend are already visible in the current barometer reading, in the value of the component illustrating the respondents’ willingness to buy. Consumers’ uncertainty about the current financial condition of their households and the future situation of the entire Polish economy is clearly returning.”

With cases now on the rise again, concerns are also growing about the economic impact of coronavirus rules. The Londonbased Financial Times newspaper warned recently that governments across Central Eastern Europe have faced falling economic outputs – with a decrease of 8.9 percent in Poland – meaning governments do not want to impose tough lockdown measures again.

But high infection rates may leave them with little choice, and again causing an aftershock to consumers. “In a situation where the public opinion is particularly sensitive to signals coming from various parts of the market, a further increase in the number of negative news will undoubtedly have an immediate effect on cooling the moods,” adds Siejewicz.

This, he says, will also impact retail, contributing to existing competition and struggles as a result of the rising online shopping industry. “The condition for improving the mood is

THE IMPACT OF THE PANDEMIC ARE STILL SHOWING SIGNS OF PROMISE”

clarification and crystallization of the situation related to the success (or failure) in managing the next wave of infections at the national level.

In other words, it is important to what extent the government will operate efficiently and inform (and not just inform) about it,” he adds.

“If the moods collapse, then the confidence that has been rebuilt in recent months (MayJuly) and is necessary to re-create consumer demand, will collapse too.”

The current Polish consumer situation is, therefore, now in a very precarious situation – and experts are awaiting what will happen next. According to Wacławik, concerns about the impact of the pandemic are still showing signs of promise, with people less worried about the financial and health impact of the pandemic.

But the situation is still uncertain and may even remain this way for a long time yet. “It should be remembered, however, that while the economy may rebound relatively quickly, the return of consumer moods to positive ones may take a long time,” Wacławik notes. “In the case of a decline in Polish consumers’ moods caused by the financial crisis of 2007-2009, the return to an optimistic perception of their financial and purchasing situation took nearly seven years.”

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Challenges ahead Wide diversification has made Poland seemingly resilient to an economic crisis which in turn could raise the unemployment rate. However, as Covid-19 cases see a fresh spike across the country, without any government support in sight, fall and winter will be challenging, states Tomasz Budziak, VP, Family Business Initiative Association (IFR).

INTERVIEW BY SANKHYAYAN DATTA

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WBJ: How is the Family Business Initiative Association (IFR) any

different than dozens of other trade organizations operating across Poland?

Tomasz Budziak: IFR is not a trade organization but an alliance of family entrepreneurs aimed at increasing the chances of not only the survival of a family business but its expansion from one generation to the next. The instruments for overcoming this challenge are increasing specific managerial skills that successfully enable combining family input and assets with a business as well as creating a friendly environment for family entrepreneurship in many dimensions including social, political and educational. IFR does not compete against other trade organizations but looks for allies and connections.

It’s been six months already since the Covid-19 outbreak in Poland. How badly have family businesses been affected? What has it meant in terms of unemployment numbers?

IFR doesn’t have any special researches about that because Poland’s stats office GUS or labor offices didn’t collect data indicating the state of family business.

The level of affliction depends rather on the industry than on being a family business or not. Industries such as gastronomy, hotel, arts and entertainment and tourism have been affected more due to government restrictions than by Covid-19. It’s a fact that these industries are mostly run by families. But family farms and agriculture companies have remained relatively unscathed.

In the case of unemployment in family businesses in Covid-19 times, there are two dimensions: first, there are employees, and second, family members are involved in running a daily business. In the latter, they are employed without any formal employment contract. They share profits and losses as owners. Many family microbusinesses run operations without any employees and when affected family members are not reported as unemployed.

According to a World Bank economist, Poland’s economy is more resilient

than others in the region and could even benefit from the situation.

Unrelated reports have stated that the Polish GDP would be among the least affected in the EU. However, times are not easy for family businesses, states an opinion on Forbes. How optimistic or gloomy is the future for family businesses? Also, IFR board member Agata Hagno said in an interview for Gazeta Wyborcza that it’s easier to overcome crises in family businesses?

The structure of the Polish economy seems very resilient because of wide diversification between many industries and regions. The Polish specialty is manufacturing in SMEs located outside big cities. This makes the control of Covid-19 easier and more efficient. The diversity of the economy combined with quite a large internal consumer market as well as with good local supply chains created probably greater resilience. The additional factors are the Polish spirit of entrepreneurship. Endurance grew from lessons of crises of the late 1980s. And in the case of family businesses, high motivation for survival – their own future and next generation’s. In my opinion, the Polish family businesspeople knew that support from the government cannot recover all damages. So essentially, a business should help itself. Moreover, some plans of tax changes could hit many family businesses run in the form of limited partnership business entities (in Polish: spółka komandytowa). We know that at the end of the day, the grants dished out by the government in the form ‘rescue packages/shields,’ shall be refinanced by higher taxation of businesses but not regular employees. Therefore, IFR launched many actions supporting family businesses by imparting knowledge and driving inspirations about adapting to the ‘new reality,’ and enabling sharing and exchanging experiences between family entrepreneurs.

In April, over 85 percent of Polish family entrepreneurs had a very negative opinion of the actions of the ruling PiS party and the so-called anti-crisis

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Covid-19 has not only devasted lives and families but people’s livelihoods. What can be done to minimize the levels of unemployment and help employees and family entrepreneurs bounce

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back to pre-pandemic levels?

Also, while the hospitality industry (HoReCa) took a severe beating, some others (tech companies such as Zoom) have thrived. How does the situation look from the perspective of family businesses?

What are the kinds of family firms that grew due to the pandemic?

As said by Winston Churchill, never waste a good crisis. In another context, Churchill’s insight on human nature can also be applied to the crisis we face today. Entrepreneurs should redefine their business models. It could be that in the HoReCa industry, big and crowded hotels or restaurants would be replaced by spaces enabling social distancing.

In heat of the crisis, agrotourism somewhere deep in forests became very popular. This shall take time for changing people’s preferences but cheap and massive flight tourism may not come back quickly. As the last summer showed, because of transport restrictions many people spent holidays in Poland and not abroad. This could be an opportunity for Polish family businesses.

A BBC poll and other data have confirmed that the coronavirus hits the poorest hardest. Closer home, despite Poland’s govern-

Tomasz Budziak is vice president of the Family Business Initiative Association (IFR) – a Warsaw-based alliance that groups entrepreneurs who own family businesses, as well as experts and scientists who support this community.

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shield to save jobs and companies in Poland. The results of a survey conducted by IFR and published in April show that more than half of Polish family businesses said that they would not survive the following 12 weeks (July?). It's September already. How do the numbers match?

The ‘rescue packages/shields’ only gave first aid to businesses and in most cases enabled surviving the worst weeks. But this has ended already. The government has said that no more grants of such volume would be repeated anymore. So fall and winter will be real challenges.

Especially for those entrepreneurs who have not changed their way of doing business. It means deeper digitalization, well-organized remote work, reviewing of supply channels among others. Some industries could suffer when the disease would raise infection numbers in the next weeks and the government would introduce restrictions again but without any support.

ment efforts, small travel agencies are reportedly terrified of the future. What has been done by PiS to make sure that small family companies stay afloat? Is that enough? If not, what more can be done?

In my opinion, there are two possible answers depending on future predictions. The first assumes that the world after Covid-19 stays more or less the same as before [pre-pandemic]. In this case, a crucial issue is when it could happen. If quickly, then the government should financially support a standby for keeping workplaces. But if the crises are longer than half a year or the predictions show that the economy would not bounce back to the previous model of services then travel agents should feel encouraged to close their businesses and support opening new ones in other industries. Why the government is keen on financing coal mining but not the tourism industry which brings much more employment and added value than miners?

[Poland’s miners have traditionally supported PiS.]

POLISH ENTERPRISES UNDER LOCKDOWN: HOW POLAND HAS COME THROUGH THE CRISES? The Covid-19 pandemic has significantly affected the economic and social situation of all European countries. Restrictions introduced by the governments of particular countries in order to contain the spread of the SARS-CoV-2 virus led to the freezing of a major share of economic activities.

By Katarzyna Dębkowska, head of economic foresight team, PIE

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he Polish Economic Institute is a public economic think tank dating back to 1928.

Its research focuses on trade, macroeconomics, energy and the digital economy, with strategic analysis on key areas of social and public life in Poland. The Institute provides expertise for implementing the Strategy for Responsible Development and helps popularize Polish economic and social research in the country and abroad.

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Business surveys on the situation of Polish enterprises conducted for the Polish Economic Institute (PIE) and the Polish Development Fund (in Polish: Polski Fundusz Rozwoju, or PFR for short) were carried out in the period from early April to early July 2020 in six survey measurements (six waves).

Every survey concerned a representative sample of 400 enterprises of varying size (micro-, small-, medium-sized and large enterprises) and from different economic sectors (trade, services and production). In order to summarize the opinions of undertakings expressed during the six survey waves, a composite Business Sentiment Index (BSI) was built to reflect opinions on the value of sales, the number of new orders, subjective assessment of liquidity and planned changes in employment and pay. Changes in business sentiment, shown through the BSI computed for all the survey waves, are presented against the backdrop of the dates of introducing subsequent solutions under “anti-crisis shields” and of freezing and unfreezing the economy (Chart 1).

The BSI values determined for each of the six survey waves clearly show an improvement in business sentiment in the period covered. In particular, a marked change in business sentiment can be observed from mid-May when further stages of unfreezing the economy allowed undertakings to restore economic activities. The improvement in business sentiment was also closely related to the aid measures introduced by the

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CHART 1. Business sentiment measured by the BSI in the six survey waves against the backdrop of anti-crisis shields, the freezing and unfreezing of the economy 20 26-29 May 5th wave 5.8

10

1-3 July 6th wave 9.9

12-14 May 4th wave -6.1

0 -10

15-17 April 2nd wave -22.7

-20

28-30 April 3rd wave -19.4

1-3 April 1st wave -36.1

-30 -40 15 March Freezing of the economy started

1 April Shield 1.0

15 April Shield 2.0

20 April Unfreezing of the economy started

16 May Shield 3.0

9 June Financial Shield

19 June Shield 4.0

Source: prepared by the PIE on the basis of surveys conducted in collaboration with the Polish Development Fund.

Polish government in the form of “anti-crisis shields” and the “Financial Shield.” Further changes and extensions of the adopted solutions allowed a greater number of enterprises to benefit from real assistance, which translated into better self-assessments of the business situation in subsequent survey waves. The BSI shows that large- and medium-sized undertakings have coped with the crisis better than small and micro-enterprises. In the case of larger firms, the BSI indicated better business sentiment for large undertakings in each of the survey waves. A marked improvement in sentiment for production enterprises could be seen in May, whereas for commercial entities – as late as June.

Broken down by sector (Chart 2), the surveyed enterprises showed gradually improving business sentiment and from the fifth wave, the BSI values turned from negative to positive.

Interestingly, a clear improvement in business sentiment for production enterprises could be seen from the fifth wave (the data cited in the report is without seasonal or calendar adjustment), and for commercial undertakings – as late as the sixth wave. The abolition of the limit on the number of shoppers in the last phase of the unfreezing of the economy brought about a further significant improvement in business sentiment in trade and made it markedly better than in production and services.

The value of sales in the surveyed enterprises: the worst situation was observed in late April when more than two-thirds of firms noted decreases in sales, whereas merely 7 percent had registered increases in the previous month. In May, due to the unfreezing of the economy and the implementation of subsequent “anti-crisis shields,” the situation began to improve.

CHART 2. Business Sentiment index for the six survey waves by sector 30 19.6 20 11.0

8.5 10

5.4

4.2

3.7

0 -2.6 -10 -20 -30 -40 -50

-4.7 -9.6

-17.3 -24.5

-16.3 -19.0

-23.2

-27.5

-30.5 -35.1 -39.8

1-3 April 1st wave Trade

15-17 April 2nd wave Production

28-30 April 3rd wave

12-14 May 4th wave

26-29 May 5th wave

1-3 July 6th wave

Services

The question remains how the sentiment of entrepreneurs will look in the fall, as the number of infections increases

Source: prepared by the PIE on the basis of surveys conducted in collaboration with the Polish Development Fund.

In late May, 43 percent of firms declared a fall in sales, whereas 20 percent reported an increase. Early July witnessed further improvement.

The share of entities indicating decreases in sales dropped to 36 percent, whereas it was 57 percent in early April.

Subjective assessments of liquidity: the worst situation was observed in mid and late April when 1 out of 10 firms declared having no financial reserves, whereas only 4 out of 10 estimated to have funds sufficient for more than three months. In late May, only 5 percent of the firms assessed stated that they had no funds, whereas the proportion of those who believed they would be able to survive for a period exceeding three months rose to 54 percent. The worst selfassessments of the financial situation were declared by micro- and small enterprises, whereas large entities were the most optimistic.

Planned personnel changes: in subsequent survey waves, there was a steady decline in the share of firms planning to cut employment – from 28 percent in early April to 6 percent in early July. In late May, no large firm was planning to reduce employment, although in the first wave such measures were indicated by as many as 20 percent of large enterprises. The percentage of entities planning employment reductions was pushed down by the introduction of solutions under “anti-crisis shields,” comprising financial and liquidity instruments subject to efforts by enterprises to maintain employment.

Planned employee remuneration changes: in early April, half of the undertakings planned pay cuts, but in early July such plans were only expressed by 12 percent of entities. Plans of enterprises with regard to salaries and wages suggest that the labor

market situation has started to normalize. In early July 2020, for the first time since the outbreak of the pandemic, more firms were planning pay rises (14 percent) than pay cuts (12 percent).

The survey of entrepreneurs’ sentiment was completed this summer, the question remains how the sentiment of entrepreneurs will look in the fall, as the number of infections increases. It is true that we do not expect complete freezing of the economy, but will the epidemiological conditions allow companies to operate freely in the coming months? We will try to answer this question by continuing our research in the near future. More information from the research can be found in the report entitled “The economy under lockdown.

Poland compared to the rest of Europe.” Copyright owned

by Polish Economic Institute, Warsaw, August 2020. Visit pie. net.pl for more.

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EXCLUSIVE INTERVIEW

Marcin Turski is the sales and customer service director at Fresh Logistics Polska – an integral part of Raben Group. He has been with Raben since 2001.

has been undertaking activities aimed at building awareness and popularizing standardization of processes, as well as promoting logistics in the spirit of paperless. One example of such activities is the promotion and support in the implementation of the Order-2-Cash (O2C) solution.

What’s Order-2-Cash?

Refreshingly fresh

How does Fresh Logistics Polska outdo competition while delivering on its promises of timely transportation of fresh products? Marcin Turski explains in great detail.

INTERVIEW BY SANKHYAYAN DATTA

WBJ:Tell us more about Fresh Logistics Polska (FLP).

Marcin Turski: Fresh Logistics Polska,

part of Raben Group, was established in 2002 and it offers comprehensive logistics of fresh products that require controlled

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temperature. The goods are handled in two temperature ranges: from 0-2C, the so-called Ultra Fresh (fresh meat and fresh fish) and from 2-6C (dairy products, meat products, ready meals as well as vegetables and fruits). For many years now, FLP in cooperation with its expert partners

O2C is a solution that uses a number of GS1 global standards to improve the physical flow of goods and accompanying information – starting from the electronic placement of the order to the delivery notice, proof of delivery and ending with the automatic booking of payments. The solution consists of two key elements: the GS1 logistics label and Electronic Data Interchange (EDI) messages. EDI is the exchange of documents in the form of standard electronic messages directly between the ERP systems of business partners. Standard electronic documents ensure simplified and automatic exchange of information necessary from the point of view of the process (and at its interface), e.g. the ordering or delivery process, and reflect the physical flow of goods, the individual stages of which are recorded by scanning the logistics label by each of the participants in the supply chain.

How’s O2C any better than other options out there?

It should be mentioned that individual elements of O2C have been implemented for many years. Now, the difference lies primarily in the approach – the promoted benefits apply to the entire supply chain, and the communication of opportunities, as well as the way they are achieved, takes place through joint, synchronized actions of representatives of individual elements of the whole process, i.e. food producers, logistics operators and customers, e.g. retail chains. The innovative O2C solution offers a number of process and economic benefits. Digitization of each stage of the process from the order to the payment is a guarantee of quicker execution of the order and better quality, e.g. through

efficient and fast goods acceptance process or elimination of manual data entry, which reduces the risk of errors during deliveries.

O2C saves time and reduces costs related to handling paper invoices. The development of new technologies supports logistics. This support is necessary because, in the face of the growing customer expectations and the pressure to reduce cost levels, a logistics operator is forced to continuously optimize its processes so that the words ‘better,’ ‘faster’ and ‘cheaper’ are not just catchphrases but tangible benefits for customers.

FLP was founded in 2002. How has it grown since then?

During these almost two decades, the company has grown enormously. Currently, there are eight depots in Poland.

The company employs about 650 people.

Annual revenue exceeds PLN 400 million and the customers have about 600 means of transport and over 55,000 sqm of warehouse capacity at their disposal. All operations and procedures are focused on the temperature-controlled supply chain. The company specializes in B2B services and it offers domestic and international distribution and warehousing services for fresh food producers throughout Europe such as dairy, meat, fish, ready-to-eat meals as well as vegetables and fruit manufacturers.

“The most important from the customer’s perspective is the high quality of provided services

What influences fresh deliveries?

So what are the biggest challenges faced by the company?

The logistics operator has the task of delivering more, more often, more accurately, without errors and damage. Customer expectations over the past years have evolved toward higher quality, increasingly shorter response times to changing needs, with unlimited flexibility and pressure on the cost level of logistics services. Growing requirements are dictated by the growing expectations of customers, i.e. retailers and end consumers. Food retailers expect, above all, quick response to changes in demand, i.e. ensuring greater availability of goods on the store shelf. The key issue for them is to deliver within 24 hours, seven days a week, so as to minimize any losses

(picking of a mixed or homogeneous pallet), loading and delivery to the consignee.

The most important from the customer’s perspective is the high quality of provided services – this applies both to warehousing services (quantitative and assortment consistency in prepared deliveries) and transport services expressed in timeliness, increasingly often measured on an hourly basis. The answer is more and more frequent optimization programs introduced by logistics operators manifested by the use of lean management tools and the automation of warehouse processes. FLP has been implementing the ‘Better Every Day’ business improvement program for years now. It is the approach to managing the company which focuses on elements and stages of logistics processes that provide customers with added values by continuous improvement of business processes, building innovative solutions and identification and elimination of waste. As part of the program, we use lean tools to map value streams, we describe processes using the language of facts and we organize daily briefings for employees. During team workshops, we work together on optimizing our work and on how to use our initiatives to bring value to customers.

due to past-best-before-date products.

Deliveries at a specific time, i.e. ‘delivery time slots’ are becoming more and more popular and it is undoubtedly a major challenge for the logistics operator. In the case of the distribution of fresh products with extremely short shelf life (several to over a dozen days), the delivery time from the logistics warehouse to the consignee is critical. Deliveries in a 24-hour or less regime are becoming a standard, whereas this time includes sending an order by the customer, preparation of the shipment in the warehouse of the logistics operator

The smooth and timely functioning of fresh logistics is influenced by many factors, such as the know-how and experience of the operator, the degree of technological advancement, the appropriate infrastructure, the desire for continuous development, etc. However, these factors would not play their role if it were not for the crucial value of cooperation and the will to move in the same direction. At FLP we are aware that only through joint actions and synergy, each of the participants of the supply chain is able to succeed and thus meet the expectations of its customers. The synergy is based, above all, on partnership and, what is most important, it is possible thanks to mutual trust. The overriding aim for each participant of the fresh supply chain should be to ensure the best possible quality of the product that gets ‘from farm to fork.’

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Talking Points

Poland has earned kudos at the economic front.

However, at the political front, the brickbats have outnumbered the plaudits. Małgorzata Kidawa-Błońska, a well-known politician, provides important insights.

INTERVIEW BY EWA BONIECKA

WBJ: How do you assess

your present role in politics after the victory of Andrzej Duda in the presidential election? You were the opposition’s candidate for the presidency of Poland in the 2020 elections until you resigned in May. How do you personally look at your decision?

Małgorzata KidawaBłońska: I don’t have any personal bitterness. I was active in supporting Rafał Trzaskowski [who replaced Kidawa-Błońska] in his presidential campaign and now he can also count on my help in building a civic movement and rebuilding the party. [Civic Platform (PO) constitutes Poland’s biggest opposition party.]

I decided to resign because for me the aim was to change the president in the last election. When it was clear that the support was bigger for Trzaskowski

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[than for me], I thought there was no sense to compete within our party because the whole opposition had to concentrate on the fundamental matter of electing a new president. I also took the important decision that the presidential election could not be performed in May because people would not be able to take part in it due to the coronavirus. So I insisted that I would boycott it. When later Trzaskowski became our candidate I backed him. At the time the people I talked to thanked me saying I had the strength and courage to take such a decision and that I thought about them. I always think about people and will work for them in politics.

You are the deputy speaker of Sejm [the lower house of parliament]. How do you see the work of Sejm in the present political situation in Poland?

Nowadays, Sejm is not the place that it used to be. During the last terms and in the last months it was not the place of debate. The legislation forced by PiS [Poland’s governing rightwing populist and nationalist party] is accepted during late night hours and in an unprecedented short time. The members of the opposition are not respected. So the citizens who voted for them are also not respected. Sejm has a bad reputation today.

We have roughly three years to the next parliamentary election [fall 2023].

How do you see your role in helping Trzaskowski to build a social solidarity movement? In what direction should the changes be made in PO? The changes are always necessary because people in Poland are changing, as is the situation in the country and in the world. And so

How to make those changes in PO. What will you do to organize a social movement and encourage people to be involved in it?

The most important thing is to have permanent and personal contact with people. I have built such contacts in the last three years. I would go to the places that hadn’t been visited by politicians to talk and listen to people.

Certain groups of citizens get information only from one source, which is most often the so-called public television [that acts as PiS’s mouthpiece]. They are excluded from other information and personal contacts.

They often do not talk to truly democratic, honest and progressive politicians. I will engage myself to change it, to discuss their problems and aspirations, to reform the functioning of our party and make changes to it. I think that it will be time to reduce the activity of some of our officials and pres-

SHUTTERSTOCK

A LONGING FOR HONEST POLITICS

do political parties. The strength of the PO is that we are open to people and new environments. Now is the time to enforce these changes. I am in favor of further development of the party and changes in the structure. On the other hand, there are lots of people who want to act but not necessarily be a member of any party. They want to act outside but support the ideas of a chosen party according to their wishes.

That was shown when 10 million people (slightly below 50 percent) voted in the presidential election second round for Trzaskowski.

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ent young members of the party with their drive for personal communication with people who want democratic changes.

How do you assess the still existing deep division among Poles, division between the rich and the poor, the elite and the common people? Is it histori-

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cal, cultural, religious or mostly a civilizational character division? How should politicians and the PO react to all those divisions?

That division of society is not, in my view, only of a civilizational character.

Such an approach is a simplification. Poland is divided in all segments: between

people with higher education and the less educated, the rich and the poor, the old and the young. The church is divided as are Polish culture and history.

I think about the values which can connect the groups attached to democracy with the groups that are indifferent. I think that it is difficult to describe

because they have a different perception of the world and philosophy of what Poland should be.

But I am always looking for it when I am in big and small places or when I am talking to top professionals and homemakers, daily wage earners and businesspeople. Such dialogue is very impor-

THIS PAGE SHUTTERSTOCK, OPPOSITE FACEBOOK

Talking Points

The situation in Poland in the coming months will be very difficult in all aspects

tant. There is a need to use in it a humane and honest language and not arrogant speech. In those meetings and when expressing my views, I stress the need for democracy, attitude to lawful social life, respect for the rule of law, respect for people of various skin color and various sexual orientations. And it is important in every place in our country. I believe that Poles are thinking about such problems.

Some are ready to change their views on various matters and it could prevail over PiS’s policy.

PiS’s rightwing coalition government has now some internal problems. There are divisions between the factions led by Zbigniew Ziobro [far-right Solidarity Poland], who is fighting against LGBT+ rights and demanding other revolutionary steps, and that led by Jarosław Gowin [conservative Agreement] who holds a critical attitude toward the limitation on the number of ministers. Will it have any impact on how PiS wants to conduct its policies in the years before the next parliamentary election?

PiS led by Jarosław Kaczyński [de facto leader and strongman] and the government of Mateusz Morawiecki will conduct an aggressive and unlawful policy. They will reconstruct the government but not change their policy. They love power, extreme rightwing ideas and their party’s material interests. So they do everything to maintain power and win elections.

The situation in Poland in the coming months will be very difficult in all aspects.

The judiciary system will be further abolished. Local governments, free nongovernmental organizations and free media will be attacked and taken under PiS’s control. The working conditions of people, the situation in the economy, the deficit in the state budget and the effects of the coronavirus in schools will lower the living conditions of the whole society. Our relations with the European Union will also be under stress as the government ignores the strong reaction of the EU toward all unlawful steps in PiS’s policy.

tion parties and the role of the PO and Trzaskowski in order to build a strategy for common victory in the parliamentary election?

Of great importance will be the building of a large citizens’ solidarity movement and cooperation between all opposition parties to create among all Poles the need for a democratic and just country. The 10 million who voted for Trzaskowski are waiting for him now to integrate those who want a different Poland – one that is open to people with a democratic attitude toward all matters, one with lawful functioning of all institutions, culture, understanding of our difficult history and national identity in the outside world. I believe that Trzaskowski will build a

social movement and will act to change the PO. He has the strength and honesty to do everything to engage Poles in making changes to the country and win the parliamentary election. It is important that Trzaskowski is supported by a large number of people in the fields of science, culture and economy, and by women and young people living in all parts of the country, in small places and big cities.

Poles holding various jobs and positions and from different generations want to act for a democratic Poland that they love.

My last question is, when will all those efforts be made? Time is passing quickly. Concrete steps are needed to build the social movement to reform the PO and make other opposition parties support it in the name of democracy and progress. Nothing has been done yet?

There is a need to make it as quickly as possible. I am meeting with people everywhere. I know they are waiting for change and longing for an honest organization of a new activity of the whole democratic opposition.

Małgorzata Kidawa-Błońska is a Polish politician and member of the opposition Civic Platform (PO) party.

She is also the deputy speaker of the lower house (Sejm) of parliament.

And at that time, what will be the activity of opposi-

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TECH i n s i g h t s

TECH NEWS SHUTTERSTOCK

Cyberpunk 2077 publisher orders six-day weeks

Polish video game developer CD Projekt Red has told employees that six-day workweeks will be mandatory leading up to the November release of the highly anticipated Cyberpunk 2077, reneging on an earlier promise to not force overtime on the project. Red, a subsidiary of Poland’s biggest gaming company CD Projekt SA, has been criticized previously for engaging in “crunch,” an industry term for excessive overtime in game development. The practice often lasts for weeks and can stretch out for months or even years. CD Projekt Red co-chief executive officer Marcin Iwiński last year told the gaming website Kotaku that the company would be avoiding mandatory crunch and was “committed” to allowing employees to work without overtime.

>>>

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TECH

APPS

Plus supports Polish music with Tidal On the occasion of the Polish Music Day, celebrated for the second time on October 1, Polish mobile operator Plus encouraged users to use Tidal and listen to native performers. This was facilitated by a playlist created especially for this occasion. On the Day of Polish Music radio and television stations played mainly Polish songs and streaming services created a special commemorative playlist. Tidal, which has been actively supporting local artists for a long time and regularly presents Top 100 Poland with the most popular songs in the country, also participated in the action.

The playlist was constantly updated, allowing fans to discover many previously unknown artists. For Polish Music Day, Tidal created a specially dedicated playlist with songs by Polish artists, supported the promotion of native singers and bands on the pages of its application and in social media and encouraged users to play Polish music.

it easier to collect it. From now on, in the Żappka application, you can collect żapps, receive rewards, pay, as well as track and receive packages. The new feature, Żappka Post, will allow the network to streamline the process of collecting parcels. And for its customers, it means a convenient and safe collection of parcels next to their homes because it’s contactless. Żabka is a chain of convenience stores. There are more than 6,000 stores across Poland. It’s owned by CVC Capital Partners, a Luxembourg-based private equity company.

CRYPTOCURRENCY

Criminals scam pensioner An 82-year-old from the Kalisz district in central Poland was cheated of his cryptocurrencies and lost over PLN 60,000, a police spokesperson has said. Fraudsters called the pensioner, informing him that the value of the cryptocurrency he had purchased had increased sixfold and that certain data had to be obtained in order for the profit to be passed on to him. “The man, convinced that the information he provided would be used only to sell his cryptocurrency, gave it to the fraudsters.

In this way, criminals took control of his computer and successively made transfers from his bank account,” the spokesperson explained.

GADGETS

Lenovo Legion Duel arrives in Europe Lenovo long announced its entry into the segment of phones for players. In July, the Legion Duel phone arrived in China.

Now the manufacturer has introduced the device to Europe. The best-equipped version – 16GB RAM and 512GB – have hit the Old Continent. Of course, no one expects it to be cheap. In China this variant cost CNY 5,999, or about PLN 3,270.

In Europe (because of additional fees) the price will be €1,000. The smartphone can already be purchased in countries such as France, Germany, Spain and Italy.

GADGETS

Motorola Razr 5G now available in Poland The newest Motorola foldable smartphone, the Razr 5G model, has gone on sale in Polish stores. The design of the device is to be the starting point for providing a unique experience when using a smartphone. The new Motorola Razr 5G has the iconic, minimalist design associated with the legendary razor, while gaining new advanced features such as the external Quick View display, ultrafast 5G connectivity and an advanced selfie camera.

INNOVATION

DIGITIZATION

‘Forum G2’ a success

T-Mobile Polska has joined the Digitization Festival, which is the largest educational and technological initiative in Poland. The Germany-headquartered operator is a strategic partner of the event organized by the Digital Polska foundation. From October 1-10, Poland is the digital capital of Europe. The Digitization Festival is an ideal opportunity to overcome the fear of new technologies, such as 5G or artificial intelligence, to learn about leading trends and learn new useful skills.

On September 8, the first edition of the “Forum G2” economic and geopolitical congress took place at the Wrocław Stadium in south-west Poland. The conference, which is a new event on the congress map of Poland, was devoted to three topics – economy, geopolitics and innovation. During the discussions in the thematic panels, among others, special focus was paid to issues related to the impact of the pandemic on the development of companies in Poland, climate change and changes in the geopolitical power balance in Europe, cybersecurity and energy security.

T-Mobile strategic partner of Digitization Festival

APPS

New service in Żabka mobile app Żabka decided to facilitate and speed up the process of handling parcels by introducing a new function to its mobile application. Żappka Post allows you to track the ordered shipment and makes

Curated from: bloomberg.com, technologia.dziennik.pl, telepolis.pl 38

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NEWS

TELECOMMUNICATIONS

Iliad bids for 100% in Play

APPS

Over 100m daily TikTok users in Europe TikTok is one of those apps that the vast majority of young people have. In Europe, the situation is no different. TikTok already has over 100 million users on our continent. TikTok is, next to WhatsApp, the most downloaded app in the world. It is therefore no surprise that over 100 million people use it every day in Europe.

The overwhelming majority of them are younger than 24 years old. Most of the users of the application live in the UK. It is as many as 17 million people. France is in second place with 11 million. TikTok is a Chinese video-sharing social networking service owned by ByteDance, a Beijing-based internet technology company founded in 2012. Citing “national security risk,” the US banned TikTok following India’s lead.

INNOVATION

Intelligent car parks in Wrocław Together with the city of Wrocław, the Germany-based mobile operator T-Mobile has launched an intelligent system for monitoring the occupancy of parking spaces. This is to help, inter alia, people with disabilities, who can check in real-time which of the places reserved for them is free. It will be similar for coaches. The network of smart car parks will shorten the time of searching for a free parking spot and reduce unnecessary vehicle traffic in the city. It will include a total of 220 places: for vehicles with access to disability parking and spots for tourist coaches, among others.

INNOVATION

Chocianów to become smart It failed at Kazimierz Dolny, a town in eastern Poland, but maybe it will succeed in the town and commune of

Chocianów in the south-west. This is where the dream of a smart city will be realized, in which T-Mobile Polska will help. To begin with, the Polish arm of the German operator will create an extensive monitoring system. Under the agreement between T-Mobile Polska and the city and the commune of Chocianów located in the Dolnośląskie region, the operator will implement smart city solutions that will improve the life and safety of residents.

INTERNET

Online advertising wins The internet became the highest-grossing advertising market in Q2 this year, underlines the Polish Economic Institute.

According to PIE, the growing importance of online advertising, at the expense of traditional media, is in line with a longterm trend, but so far the expenditure on television advertising has maintained a high level.

French telecoms group Iliad is bidding for 100 percent of Polish peer Play Communications at PLN 39 per share, Play and Iliad have said in separate press releases. Play entered Poland's mobile market in 2007 and since then has built up 15 million subscribers and gained a 29-percent market share. Iliad has secured a deal to buy 40 percent of the firm’s capital from two key Play shareholders. The public offer is made by Iliad’s unit, Iliad Purple, Play said.

TELECOMMUNICATIONS

Tauron to serve 132 communes Tauron is currently building modern optical fibers. Now the infrastructure will be available to operators who will make an offer to end customers. Ultimately, the new network will cover over 205,000 households in 132 communes. At the beginning of September, Tauron obtained the approval of Poland’s Office of Electronic Communications for its reference offer. As a result, the company is launching a new offer for telecoms. Soon, both local and national telecommunications operators will be able to use the fiberoptic infrastructure under construction.

TELECOMMUNICATIONS

5G without Huawei means billions in losses Getting rid of Huawei from further work on building the 5G network and removing it from the current infrastructure will mean a three-year delay in implementing the new standard. This, in turn, may bring losses to the Polish economy of nearly PLN 22 billion, experts from Assembly Research, a London-based analyst firm, have calculated. The last days of consultations on the Polish government’s draft amendment to the Act on the National Cybersecurity System are underway. Possible classification of Huawei as a “high-risk supplier” in Poland will mean losses for the operators.

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JUST WATCH

AS THE WORLD GRAPPLES WITH THE SECOND WAVE OF THE PANDEMIC, TELEMEDICINE, WHICH SEEMED TO PROVIDE A TEMPORARY REPLACEMENT FOR CLINIC VISITS, MAY BECOME A PERMANENT FIXTURE IN PRIMARY HEALTHCARE. CAN TECHNOLOGY, INCLUDING WEARABLES, PROVIDE A BRIDGE BETWEEN THE PATIENT AND THEIR PHYSICIAN IN THE LONG RUN?

BY BEATA SOCHA

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W

ho hasn’t put off going to the doctor for regular checkups? Usually, it’s because we are too busy to be bothered, or because we just don’t feel like being poked and prodded if there is no immediate threat to our health. But this year is different. This year going to the doctor can be a risky endeavor. The fear of coming in contact with Covid-19 is a major detractor for many patients. People have been putting off planned surgeries,

important tests and vaccinations. Even if we do want to go, it’s not that simple either. Private and public health care providers have been recommending telemedicine consultations instead of regular appointments, in order to limit the risk of the infection spreading. Some tests, such as stress ECG (also known as a treadmill test) are still unavailable for patients unless it is urgently needed.

Scheduling a phone call with your doctor has become the first order of business for patients these days. Many rightly wonder how reliable a 15-minute phone conversation can be and whether it can really replace a standard checkup.

Telemedicine is definitely a vital stopgap when dealing with a pandemic, but

SHUTTERSTOCK

TECH

MEDTECH

WEARABLE MEDICAL DEVICES MAY QUITE SOON BECOME A STANDARD IN PROVIDING PATIENTS WITH ESSENTIAL HEALTH CARE, ESPECIALLY WHEN REGULAR APPOINTMENTS ARE OFTENTIMES TOO RISKY OR INACCESSIBLE

tients just want to ask about the dosage,” says Dr Piotr Soszyński, strategic medical advisory director at Medicover Polska.

As much as a quarter of all appointments among primary care physicians focus on simple problems, such as checking test results, issuing a prescription or ordering more tests, all of which can be dealt with remotely. Indeed, this year has shown that a wide variety of issues can be handled over the phone. And more technological options will expand the range of medical help we receive via chat or phone.

could it become more than that? What solutions would we need to implement for telemedicine to become a permanent fixture, convenient and safe but also reliable enough so that doctors can accurately diagnose conditions and make informed recommendations?

First of all, telemedicine is not supposed to replace face-to-face appointments with your doctor. At least not yet. “From the experiences we have at Medicover [a private provider of diagnostic and healthcare services in CEE], allowing a patient to contact their doctor via e.g. chat or mail, significantly increases patient’s safety, improves health care and first and foremost, eliminates thousands of unnecessary appointments, where pa-

WEARABLES ON THE RISE Tech companies and startups have been striving to offer novel technologies that could improve the standard of care amid the pandemic. Two out of three winners in this year’s Infoshare Startup Contest are in fact medtech companies: UKbased iLoF – Intelligent Lab on Fiber and Madrid-headquartered Medicsen, which has created the first needle-free and wearable drug delivery device, called Medicsen Smartpatch. Polish medtech startup GlucoActive which has developed a non-invasive wearable glucometer for diabetic patients also made it to the finals in the Infoshare competition. Infoshare states on its website that it is the biggest tech conference in CEE. The last conference was held online toward the end of September.

There are already plenty of medical wearable solutions either being developed or already marketed, which help detect epileptic seizures before they occur, monitor hypertension, prevent asthma attacks and even monitor women’s cycles to help them get pregnant. Wearable medical devices may quite soon become a standard in providing patients with essential health care, especially when regular appointments are oftentimes too risky or inaccessible. Between 2014 and 2018, the use of wearable devices in the US grew from 9 percent to 33 percent of the population, according to Accenture, a multinational professional services company. And the popularity of Fitbits – an American consumer electronics and fitness company – and smartwatches that can monitor our vitals, such as heart rate, continues to grow. According to the financial and business news website Business Insider, over 80 percent of consumers are willing to use wearables to monitor their health and fitness.

Of course, there is a giant leap between patients using wearables to stay on top of their health and doctors being able (and legally allowed) to use their collected data for diagnosis and treatment. But perhaps the experiences of 2020 will have taught us that we are quite capable of making headway and adapting to new conditions when faced with an unforeseen threat and adversity.

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IC L B PU 928.

A IS TO 1 E T U ACK T I T S NG B N I IC DATI M NO ANK O C E K-T H S I THIN L O P MIC E H T ONO EC

Its research focuses on trade, macroeconomics, energy and the digital economy, with strategic analysis on key areas of social and public life in Poland.

The Institute provides expertise for implementing the Strategy for Responsible Development and helps popularise Polish economic and social research in the country and abroad.

For more information https://pie.net.pl/en/ or contact us by email : sekretariat@pie.net.pl

PRESS MATERIAL

NEWS Part of SKYSAWA constructed The first, lower part of the Warsaw office and retail complex Skysawa has reached its target height, WSE-listed developer Polski Holding Nieruchomości (PHN) reported. The project, which is being implemented at Świętokrzyska 36, will ​​ consist of two parts – a lower four to nine overground stories and a 155-meter tower.

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LOKALE IMMOBILIA | NEWS “Remote work in the home office model may be difficult to reconcile with the activity of other household members, e.g. when children return from school. Especially when you need peace of mind to concentrate on work. An office by the hour is then the best solution” - Magdalena Śnieżek, director for the southern Poland region at CitySpace

MIXED-USE BRIEF

OLSZTYN CENTAURUS UNDER WINGS OF CBRE

International consulting company CBRE took over the function of the manager of part of the Centaurus complex, located in the very heart of Olsztyn, northeastern Poland.

It is a unique property on the scale of the entire WarmianMasurian region, which includes commercial and service premises, offices, residential and hotel parts.

OFFICE BRIEFS

The challenges of the coronavirus pandemic have revolutionized the traditional work model. “As a result, the role of the office is evolving.

While before Covid-19 it was all about community and flexibility, today it’s more about health and safety requirements. With work from home and rotation models, an integrated work-life balance is also important,” Hubert Abt, founder and CEO of New Work, an independent operator of flexible spaces in Central and Eastern Europe, said. A new generation of serviced offices is the answer to these needs.

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BAIN GETS NEW ADDRESS

Bain & Company, an international strategic consulting company, has moved its key operations support center to the Szucha Premium Office building in Warsaw. The new office, almost twice as large as the existing one, will occupy two floors and have a total area of ​​over 2,000 sqm.

In the process of choosing a new location and renting an office, Bain was advised by CBRE.

MINDSPACE’S OFFER OF AMENITIES EXPANDING

Flexible lease agreements, comfortable, fully equipped private offices and designed common areas: these are just a few examples of what Mindspace, a global boutique flexible office space provider, offers its members.

From the very beginning, the aim of Mindspace’s founders has been to strengthen the sense of community and have a positive impact on the way people work, learn and grow, by providing members unique and functional interior design and personalized services. For this purpose, it has recently launched an online location, VIRTUAL by Mindspace. This is yet another tool helping integrate its members.

CPIPG MANAGES CONCEPT TOWER

The largest commercial real estate owner in the Czech Republic, Berlin and Central and Eastern Europe, CPI Property Group (CPIPG), has taken over the management of the newly acquired Concept Tower office building, a few weeks after purchasing it. In this way, it continues to achieve one of its key goals for this year, which is self-management of the buildings in the company’s portfolio.

PRESS MATERIAL

WORKSPACE ORGANIZATION CHALLENGING

RESIDENTIAL BRIEFS

ROBYG RECEIVES BUILDING PERMIT FOR MODERN SPACE R

Robyg has received a building permit for Modern Space R in Warsaw’s Włochy district. It will cover 189 units with areas ranging from 17.21-39.94 sqm. Construction is due to start in August 2020 and the completion of works is scheduled for the second quarter of 2022. Modern Space micro-apartments in the vicinity of the City Sfera project are an excellent investment in terms of capital allocation – the first offer of apartments in Warsaw, in the most sought-after small area, with a high standard of finish and a package of additional services.

PLN

MURAPOL LAUNCHES PREMIUM OFFERS IN BYDGOSZCZ

One of the leading residential developers, Murapol, is launching the presale of residential premises in north-central Poland. As part of the first stage of the premium project in Bydgoszcz – Murapol Osiedle Akademickie, 170 apartments in two five-story buildings will be available to customers, equipped with innovative solutions – an anti-smog package and the smart home option.

295,000,000

In the first half of 2020, Robyg recorded sales revenues worth PLN 295 million.

The net profit was PLN 30.3 million and the net profit attributable to the shareholders of the parent company was PLN 27.6 million.

LOGISTICS BRIEF SOLTEC TO UP WAREHOUSE SPACE The distributor of photovoltaic components, Soltec, has leased approx. 4,100 sqm of warehouse and office space in Prologis Park Warsaw II. The tenant was represented by real estate advisory firm Cresa Poland during the negotiation process. Soltec is one of the oldest companies operating in the photovoltaic industry in Poland.

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LOKALE IMMOBILIA | LOGISTICS

A FLOURISHING TALE Despite the pandemic-fuelled economic downturn, Robert Dobrzycki, Panattoni Europe’s boss states that the logistics sector has flourished as compared to the retail and office sectors.

INTERVIEW BY SANKHYAYAN DATTA

WBJ:

tics sector turned out to be more resilient to the restrictions of the pandemic than the rest of the real estate asset classes. Moreover, in comparison to the retail and office sectors, which have been the most affected, it has flourished. Over the first half (H1) of 2020, Panattoni signed lease contracts for more than 1 million sqm, which is more than

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PRESS MATERIAL

How does the forecast for Q4 2020 look? How is the logistics sector doing compared with other asset classes? Do you see anything fundamentally changing?

Robert Dobrzycki: The logis-

A2 Warsaw Park, Grodzisk Mazowiecki AdamĂłw

twice the space leased over the same period of 2019. This is due to several factors and changes in the market. We have seen a shift in consumer behavior as they switch from classic channels to the internet on a large scale. As a result, e-commerce has been developing very rapidly – investment in this segment accounts for nearly 50 percent of the projects Panattoni currently operates. Specifically, the demand that comes from online shopping is much bigger than the loss of demand from traditional retailers.

What is the most important lesson Panattoni has learned from the pandemic and how have the relationships been with the tenants?

In difficult and changing circumstances, the most important thing is the ability to act flexibly and react to changes in trends on an ongoing basis. Therefore, as soon as the pandemic

took hold in March, we started helping our clients to endure this difficult period. This mainly involved renegotiating contracts we had signed with our tenants. In the case of the industry that has been most hurt, which is the retail sector, we have held discussions individually about deferring the rents so that they will be able to quickly return to their normal activities as soon as the economy revives. It is worth pointing out that the effects of the pandemic and the ensuing restrictions intensified during the initial phase. Currently, the number of our customers in a difficult situation is much smaller.

What investments are in the pipeline and how do the finances look? Are deals being driven by rental growth projection?

By the end of June, Panattoni had 857,395 sqm under construction in Poland. By the end of this year, the total supply of indus-

trial space in Poland will be over 20 million sqm. Under current circumstances, rental growth is one key metric for companies seeking to thrive in an ever more demanding market. Definitely, we are going to see it growing steadily, especially in locations where land supply is tightest such as urban areas or clusters around large cities. We have seen an increasing allocation of capital coming from other sectors because the logistics market has remained open, unlike retail and some office markets. After the pandemic, we should see further growth in capital flows since investors really want to allocate more to logistics assets. In particular, when it comes to interest rates, there is still a positive yield gap between cap rates and bond yields. This gives investors confidence and helps to attract capital to the sector.

What potential is there in last-mile opportunities alongside bigger box outof-town formats? Is there a settled definition of the last mile?

Environmental, social and governance (ESG) factors are becoming one of the top priorities for developers, tenants and investors

Last-mile should be treated as something more than just simply delivering an order to the final customer as quickly as possible. In a time of rapidly developing e-commerce and changes in consumer attitudes, you also need to think about handling returns and complaints quickly.

For this to happen, such points must be equipped with the technology to handle the quick rotation of goods. For this reason, smaller warehouse centers located within city limits, perhaps even in the centers of large urban areas are gaining key importance and their use is also becoming more diverse.

They can be used both for storage and light production, as well

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LOKALE IMMOBILIA | LOGISTICS

of ‘Good’ has become mandatory for all our newly-built facilities.

as for creating distribution or sales points in a city. Such centers usually have a large office component so they can serve as the headquarters of a company.

City locations work well for many types of service companies as well as for showrooms and, of course, startups. There is also interest from local businesses, such as cosmetics or pharmaceutical firms, whose customers and suppliers are nearby.

The potential of the urban facilities can be clearly seen with our City Logistics concept.

So far we have delivered seven such complexes in Łódź, Warsaw and Wrocław. The next ones - City Logistics Katowice and City Logistics Warsaw V are in the pipeline. The total space we offer in this format in Poland, in both completed and pipeline developments, will be around 217,000 sqm.

What role does ESG play?

Environmental, social and gov-

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ernance (ESG) factors are becoming one of the top priorities for developers, tenants and investors. While keeping a focus on employees in mind Panattoni introduced such solutions as glazed facades, increasing natural lighting in a building and we enlarged the green zones and the relaxation zones by moving the parking areas farther from the buildings. In the warehouse and industrial space market segment, Panattoni has submitted many more projects for certification than any other developer. So far over 30 centers in Poland (with a total area of 1.6 million sqm) were delivered in compliance with BREEAM and LEED guidelines and another 1.7 million sqm of space is currently under the certification process.

This means that already onethird of our investment projects have met these strict environmental criteria. From the beginning of this year, BREEAM certification with a minimum rating

In comparison to the retail and office sectors, which have been the most affected, the logistics sector has flourished

Do 3PL and end-users also recognize the need to introduce environmentally-friendly solutions in the facilities they order?

More and more investors want their warehouses and production halls to be constructed in accordance with sustainable development principles. And this is especially true considering that the transition to green energy also entails a significant reduction in operating costs.

As a result, there is increasing pressure from customers and the logistics operators (3PL) acting on their behalf for such solutions not only when it comes to constructing warehouses and production halls, but also in the very way goods are transported. Panattoni is also following the market's needs, introducing sustainable development concepts and creating a new standard for its warehouses in Europe. That minimizes the impact of a project on the natural environment.

For example, all the facilities built by us have extra insulation in their roofs and walls and the buildings are airtight which reduces exhaust gases and CO2 emissions and can add up to 20 percent in energy savings when heating the facility.

A good example is the logistics center for Reconext, which is currently under construction in Bydgoszcz. On the tenant’s explicit request we are going to install solar panels of capacity 300 kWp. Additionally, all our newly built projects implement numerous modern technologies, such as automated electricity management and systems to minimize water consumption, not to mention the mandatory BREEAM certification.

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LOKALE IMMOBILIA | LOGISTICS

MARKET UPDATE

Despite the economic turbulence caused by the outbreak of a global pandemic, Poland’s warehouse property market put up a strong performance in H1. The prospects for the sector remain positive.

BY ADAM ZDRODOWSKI

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T

SHUTTERSTOCK

VIRUS-PROOF SHEDS

his year has – perhaps a bit surprisingly when one takes into account the number of businesses hit hard by the coronavirus crisis – so far been a very good period for the Polish logistics property market with experts expecting the market to continue to hold its own in the months to come. Unlike some of the other commercial real estate sectors in the country, the industry not only proved largely resilient to the Covid-19-induced slowdown, but it actually attracted a record amount of tenant interest in the first two quarters of 2020.

“POLAND IS LIKELY TO BENEFIT FROM THE EXPECTED DRIVE OF GLOBAL MANUFACTURERS TO GEOGRAPHICAL DIVERSIFICATION”

ROBUST ACTIVITY

Approximately 2.4 million sqm of warehouse and industrial space was leased across Poland in H1, which marks a 25 percent increase year-on-year (y/y), according to Savills data.

The figure also represents an all-time high when it comes to historic January-June logistics take-up volumes recorded in the country. New agreements and expansions (net take-up) accounted for the bulk of the volume with renegotiations having covered around 600,000 sqm. The highest lease levels were seen in Warsaw, central Poland and Silesia.

At the end of H1, the vacancy rate stood at 6.6 percent, which was 1.5 percentage points more than a year before. Interestingly, the market witnessed more leasing activity in Q2 than in Q1, which well demonstrates its resilience to the disruptions caused by the Covid-19. However, the uncertainty in the economy at large did have an impact on the warehouse space leasing patterns in the first half of the year with analysts talking of a rising popularity of short-term (below one year) commitments.

CAUTIOUS DEVELOPERS

Aversion to risk could also be found on the supply side. Cushman & Wakefield data show that developers completed over

1 million sqm of new space in the January-June period, which brought the total existing stock to almost 20 million sqm. At the end of Q2, projects covering a total of 1.9 sqm million of the new area were under construction, which still reflected intense development activity but also marked a drop from the more than 2.2 million sqm recorded a year earlier.

Most of that space was located in Silesia, the Warsaw area and western Poland.

Notably, some 60 percent of the under-construction volume was covered by lease transactions – this means that developers have in recent months become less ready to launch speculative schemes. In the second quarter of this year, developments totaling approximately 350,000 sqm came under construction with the figure representing significant y/y (by a third), and q/q (by half) decreases.

OPTIMISTIC INVESTORS What will the coming months bring? In spite of the solid H1 results, analysts refrain from forecasting that the entire year 2020 will be a record year for the warehouse property market. They point out that such industries as the automotive and production sectors have suffered losses caused by the pandemic. On the other hand, however, there are also posi-

tive signals from the market as businesses gradually learn to adapt to the new situation.

Besides, the Polish market still has assets that are highly attractive from foreign companies’ perspective.

“The long-term outlook for the Polish industrial market remains very positive. Poland is likely to benefit from, among other things, the expected drive of global manufacturers to geographical diversification,” argues Kamil Szymański, the head of the industrial agency at Savills.

In his opinion, new companies may decide to enter Poland in the near future, attracted by the size of the Polish market, the relatively low logistics costs and the growth of the e-commerce sector.

For now, the continued investor interest in warehouse properties in Poland seems to be one of the best indicators of the sector’s strength and good prospects for the future. In the first half of this year, the warehouse and industrial property market attracted investment transactions valued at a combined €1.15 billion, an almost 155 percent increase y/y. Experts explain that the boom in the e-commerce sector, which the coronavirus pandemic has helped accelerate, is increasingly turning investors’ attention to warehouses as a relatively safe and promising asset class.

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LOKALE IMMOBILIA | RESIDENTIAL

MARKET UPDATE

Poland’s residential real estate sector has managed to survive the first wave of the pandemic without sustaining deadly losses. It could make a modest recovery in the coming months.

BY ADAM ZDRODOWSKI

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SHUTTERSTOCK

HOME AND DRY?

he Polish housing property market has been suffering from the outbreak of the coronavirus pandemic, but the impact has so far been smaller than had been expected. After the initial shock, buyers and developers alike stepped up their activity giving room for hope that the sector can go through the crisis seeing only a moderate slowdown. While it is still too early to make long-term forecasts, the facts that prices have remained stable and demand has perked up again seem to bode well for the industry’s near future.

“SALES ACCELERATED IN THE SECOND HALF OF Q2 AFTER THE MOST RESTRICTIVE REGULATIONS WERE LIFTED”

BOTTOMING OUT

A total of 6,900 new apartments were sold in the six largest housing markets in Poland – Warsaw, Kraków, Wrocław, the Tri-City, Poznań and Łódź – in the second quarter of this year, a 64 percent decrease year-on-year, according to JLL data. The drop may seem significant, but one needs to remember that during the first few weeks of Q2 Poland was under lockdown. Sales accelerated in a visible way in the second half of the quarter after the most restrictive regulations were lifted.

The number of new units that came under construction in Q2 in the six markets in question amounted to 10,500 and was 19 percent lower than the number recorded in Q1 (when compared against the average quarterly number for the last three years, the decrease stood at over 30 percent). Nevertheless, experts argue that these results are still better than the forecasts made in the initial phase of the pandemic and reflect an improving sentiment on both the supply and the demand side.

Importantly, while the onset of the pandemic made it difficult for some developers to stick to their previously adopted completion schedules, the first six months of 2020 did not see housing developments being put on hold or abandoned altogether.

The number of units on offer in the biggest residential markets in Poland (nearly 49,000) was over 10 percent higher at the end of Q2 than a quarter earlier, but it was still lower than the

average level for the last three years and remained at what experts see as a healthy level.

Notably, while buyers have been expecting the crisis to bring about a major drop in apartment prices, nothing of this kind has actually taken place. At the beginning of the year, prices were rising due to demand for apartments exceeding supply and after the start of the coronavirus pandemic most large cities saw prices stabilize or even continue going up slightly. However, as the turnover in Q2 was relatively low, it remains to be seen how developers will shape their pricing policies once sales and completions have returned to more or less “normal” levels.

BUILDING AGAIN

There are still too many unknowns to foresee exactly when such a return could happen.

Much will certainly depend on the availability of bank lending.

At the beginning of Q3, demand for mortgage loans increased significantly (after a major decrease in the spring) with the number of applications filed in June having exceeded the number recorded a year earlier. However, as one could have expected, banks have reacted to the ongoing market uncertainty by increasing margins and tightening lending procedures in order to minimize their own risks.

On the other hand, with a lot of capital available in the market and investors still viewing residential property as a

relatively attractive investment product, many apartment purchases in Poland are these days financed with cash, rather than bank loans. In its H1 financial report, Dom Development, the country’s largest residential developer, revealed that transactions financed with cash accounted for approximately 40 percent of all the apartment sale transactions concluded by the company in the period.

This could change if the situation in the rental market and thus the profitability of buying apartments for investment purposes deteriorated. For now, the general picture remains optimistic with the European Commission expecting Poland to witness a recession this year that will be one of the mildest among all EU countries. The Polish economy should rebound clearly in 2021. Developers seem to have already started launching and planning new residential schemes more boldly.

Kazimierz Kirejczyk, vice president of the management board at JLL, pointed to positive Statistics Poland (GUS) data for the January-August period. The number of new apartments that came under construction in that period was only down 14.4 percent y/y and the figure for August was similar to that for August 2019.

The number of units for which developers got building permits between January and August was down 6 percent y/y. These data show the considerable resilience of the housing sector, Kirejczyk argued.

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LOKALE IMMOBILIA | RESIDENTIAL

STORIED SUCCESS

Travel restrictions and Poland’s continued spat with the EU have deterred foreign investors. But Złota 44 – a 192-meter tall 54-story residential skyscraper in central Warsaw – still remains a success story among domestic buyers. Christopher Zeuner, head of Europe of Amstar, one of the co-owners of the Złota 44, shares his views.

mentioned in July, Złota 44 withstood the crisis. Moreover, we noted that this was the best first half of the year in our history. The success came mainly from the first quarter of 2020 and sales of large spacious apartments in the second quarter directly translated into the high number of closed transactions and record value thereof. There was a moment of standstill during lockdown but as restrictions have been lifted, sales have resumed at a pleasing pace.

While confined to our homes we used technology and stayed in touch with potential buyers. Also, we noticed increased traffic in

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online channels where we moved and diversified our communication mainly with high-quality video and photos of interiors also in the form of VR.

Has pricing been influenced by the crisis?

No, not really. Złota 44 is a luxury product incomparable to anything else on the Polish market.

For many of the purchasers, their home in Złota 44 is one of several properties they own. As one has seen in past times of economic challenges, luxury real estate has held its value well and we are seeing this is the case with Złota 44 as well. The luxury real estate market proves to be an area of limited risk, resilient to a

crisis as history shows. Besides, we still have a long way to reach European prices.

What trend do you observe in terms of interest and finalization of transactions?

As mentioned earlier, there is an increase in interest in larger units. I believe many people reviewed their work from home situations as a result of Covid-19, and as a result, concluded they needed better space and more space at home to work most effectively. Most of the residents and buyers in Złota 44 are very successful business people and entrepreneurs, for whom such considerations are very important. The finalization of the trans-

PRESS MATERIAL

WBJ:

What impact has the crisis had on your sales?

Christopher Zeuner: As we

actions has also changed since we have now more quick decisions and cash transactions.

Changing consumer behaviors – home office and convenience living. Have you noticed this influencing your business and sales, and evolvement of your product?

Yes, we have. As mentioned before, the size of units which are most in demand currently has changed. I have also read some articles about people wanting to move from living in the city center. But frankly, we do not see this as being the case for Złota 44. Złota 44 offers a holistic approach to the needs of residents. Encourages to lead an active and healthy lifestyle, regardless of the time of day or even the year. The exclusive recreation, business and sports zone with an area of 1,800 ​​ sqm is available only to residents and offers a swimming pool with an impressive length of 25 meters, a well-equipped gym with a fitness room, a home cinema and a golf simulator, Finnish sauna and steam bath, VIP lounge with rooms and conference facilities, a playroom for children. Złota 44 is a complete space where life goes on under one roof. In safe conditions.

How much of the apartment sales are investments and how much is for daily living?

The majority of interest comes from people who want to make Złota 44 their home, but of course, some investors recognize how resilient top-end real estate can be and also realize that while prices in Złota 44 are higher than other products of different quality in Poland, prices are far below comparable products in Prague, Berlin, Munich or London, for example, and they see the case which supports that there could be strong price growth on this basis in the medium term. A luxury property is an excellent investment alternative but also a

good place to call it home. However, you have to be aware of what characterizes real luxury: perfect, central location, amenities available for residents only, best quality finishing. Złota 44 apartments were designed by the renowned London architectural studio, Woods Bagot. They are equipped with Gaggenau home appliances. Air is filtered – air supply units are equipped with special anti-dust filters.

More advanced solutions are used in laboratories and hospitals’ operating rooms only. The water in the building is additionally treated. Access to fresh air is guaranteed by tilted panels.

The quality and quantity of these amenities make the definition of a luxury property and are the basis of everyday comfort while living at Złota 44.

Has the number of potential interest/buyers from abroad decreased during the last six months?

Yes, there has been a decrease.

Travel restrictions have impacted foreign buyers and investors. Also, Poland’s continued disagreement with the EU regarding a multitude of issues is having a negative impact on how Poland is perceived by for-

eign investors. But truth is that most of our buyers have always been Polish and this didn’t change. After lockdown, they have returned to business and transactions.

Have your sales processes changed, as face-to-face marketing and sales have been more difficult during the lockdown and social distancing?

A luxury property is an excellent investment alternative but also a good place to call it home

Yes, all people entering the property must wear masks and sanitize their hands at the many sanitization points throughout the building. Physical distancing is practiced by all. The number of events organized for residents has changed and many have gone online. The well-being of our residents, guests and team is of utmost importance and we take these precautions and any guidance or rules made by the WHO or Sanepid [Poland’s state sanitary body] very seriously, and in many cases, we have implemented measures that go above and beyond such recommendations. We have offered our residents and employees the opportunity to test for the presence of antibodies of Covid-19. Many people took advantage of this proposal.

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LOKALE IMMOBILIA | OFFICE

SOLID FUTURE

Despite that the ongoing global economic and humanitarian crises put a slight dent in Warsaw’s real estate office market, they have failed to dampen the spirit of property pundits. And a return to a fast-growth track is very likely in the near future, experts claim.

Golub GetHouse's Mennica Legacy Tower

PHOTOGRAPHS BY KEVIN DEMARIA

BY ADAM ZDRODOWSKI

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W

arsaw’s office sector was until recently defined by truly spectacular figures with record-high take-up (878,000 sqm) and record-low vacancy rate (7.8 percent) figures having been recorded in the city last year. The market’s rapid growth has been reflected by the large number of very bold projects that are now under construction or have just been completed in the Polish capital. Indeed, never before has Warsaw’s skyline been changing so fast due to the development of new office towers.

Developers such as Ghelamco, Golub GetHouse, HB Reavis, Karimpol and Skanska have all been busy building new office skyscrapers in Wola and other parts of central Warsaw in recent years. A number of highrise schemes are in the pipeline and could be launched in the coming months. Will the current crisis end the bonanza and shatter developers’ ambitious plans?

Not necessarily, maintain real estate analysts, predicting only a short-lived slump and a gradual recovery in the short to mediumterm perspective.

Ghelamco Poland's Warsaw UNIT

MARKET RESILIENCE

In the first half of 2020, Warsaw’s office property market remained relatively resilient to the effects of the coronavirus pandemic with experts predicting that the full impact of the crisis on the sector will only be seen in the coming months. The H1 leasing activity in the Polish capital reached a decent level of 334,800 sqm, which marks a 17 percent decrease year-on-year, according to Savills data. At the end of June, the vacancy rate across the city stood at 7.9 percent (representing only a slight quarter-on-quarter increase), but it is expected to

The office sector’s fundamentals are strong and solid

go up later this year.

Despite the growing uncertainty in the market, the first half of 2020 saw the conclusion of several major lease deals. Five transactions exceeding 10,000 sqm were signed in the period in question, of which four were signed in Q2 when the global scale of the pandemic was already evident. Paradoxically, the second quarter witnessed the signing of the biggest lease deal in the entire history of the Warsaw office market. Insurer PZU pre-leased 46,500 sqm in the Generation Park project, which is being developed by Skanska.

On the supply side, too, hardly any signs of a slowdown have been spotted so far. The amount of under-construction office space in Warsaw is still impressive – at the end of H1, the volume exceeded 700,000 sqm.

Importantly, the bulk of that space is covered by pre-lease deals or letters of intent. Fears that the new office towers which are currently being built in Warsaw will remain vacant thus seem unsubstantiated. This does not mean that the sector will not see major changes in leasing patterns in the months to come.

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LOKALE IMMOBILIA | OFFICE

HB Reavis's Varso

ing desk density in offices.

In a pessimistic scenario, assuming that the home office concept will become a permanent solution rather than just a temporary alternative and companies will not start increasing their headcounts again anytime soon, tenants’ cautiousness concerning making long-term lease commitments could last longer. In that scenario, the vacancy rate could increase to between 12.4 percent and 16.6 percent by the end of next year. However, even that less positive market forecast envisions a drop in vacancies after 2021.

TWO SCENARIOS

Savills analysts see two possible scenarios here. In both of them, the company’s experts envision a short-term decrease in demand and long-term market resilience with the scale of the pandemic-caused market turbulence expected to depend on labor market trends. In an optimistic scenario, the 2020 and 2021 take-up levels could each reach approximately 710,000 sqm (which would be close to the ten-year average). Demand for new office space would rebound strongly in H2 after the temporary and relatively mild down-

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turn seen in H1.

Such a scenario, in which the office vacancy rate in Warsaw would go up to 10.3 percent at the end of 2020 and 11.3 percent a year later, is made plausible by factors such as the increasing number of short- and mediumterm lease renegotiation deals. It envisions only a limited impact of staff cuts and the implementation of the remote work model on companies’ space requirements.

On the one hand, working from home could well remain voluntary and temporary. On the other hand, social distancing rules could mean the need for reduc-

Much will depend on when and to which extent companies manage to bring their employees back to the office

How quickly the sector again experiences rapid growth will ultimately depend on when and to which extent companies manage to bring their employees back to the office. While no one today knows the exact answer to this question, there is no doubt that the comeback will happen. “Recent months have exposed many disadvantages of remote work that will prevent many companies from deploying this model on a large scale when it is no longer necessary for health reasons,” argues Tomasz Buras, the CEO of Savills Poland.

While the model will be in use to some extent as part of the broader trend towards flexibility in the workplace, which is expected by the younger generations of office workers, it is unlikely to bring about a complete reversal of the office work model as such. A global study by Cushman & Wakefield, conducted among 50,000 respondents, has admittedly shown that the home office model has, by and large,

PHOTOGRAPHS BY KEVIN DEMARIA

HOMEWORK FINISHED?

proved successful, but it has also revealed a number of the model’s drawbacks.

Those surveyed complained about their lack of personal interactions with other employees, as well as about limited opportunities with regard to improving one’s qualifications and gaining new professional experience, said Katarzyna Lipka, an associate director, head of consulting and research, at the company. Such findings allow one to assume that while remote work will be gaining significance, it will be part of a hybrid model in which traditional and flexible office space will also play a big role.

Skanska's Generation Park

SUPPLY GAP

Workplace trends aside, Warsaw will certainly remain an attractive location for business in the near future and will continue to attract new international tenants that will need office space for their operations. “The office sector’s fundamentals are strong and solid,” Buras claims. For now, the continued market uncertainty is leading some tenants to focus on cost optimization strategies. There is currently more interest in subletting surplus office space and choosing locations with moderate office rental levels.

When it comes to supply, one should not expect spectacular failures of already started developments as many of them, including high-rise investments, have already been largely commercialized. Some of the planned schemes could be affected, though. Those projects for which developers have already secured pre-lease agreements will likely be delivered according to schedules. “The completion of other schemes may be delayed and so we expect a supply gap in the market in the years 2022-2023,” Lipka says.

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LOKALE IMMOBILIA | EVENTS

REAL ESTATE

TOP LADIES! Within a few years, the Top Woman in Real Estate awards have become a brand for independent women in the real estate industry who are not afraid of challenges and are able to support each other. During the ceremonial gala that took place on September 26-27 in the Villa Foksal in Warsaw, the title of Personality of the Year was awarded to Katarzyna Zawodna-Bijoch (Skanska), while Sandra WrĂłblewska (Kajima Poland) won the Internet voting for Top Woman in Real Estate.

This year’s competition is the third edition of the event, which attracts more participants every year. The prestige of the title helps women to meet new challenges and builds self-confidence. This year, the statuettes were awarded in 18 categories, two of which went to companies.

Colliers International was awarded the title of Pro-women Company, while Greenberg Traurig Poland was awarded the title of Best Team for the real estate team managed by Jolanta Nowakowska-Zimoch.

The special attraction of the evening was the recital of Partycja Piekutowska, a world-famous violinist, president of the K.I.D.S. - Club of Innovators of Children's Hospitals.

K.I.D.S. introduces solutions that increase the comfort of work of medical personnel, reduce stress in patients and allow for faster hospital procedures. Two recitals by Patrycja Piekutowska for solo violin with the artist's entertaining repertoire from the album My Journey and two handmade ceramic bowls were auctioned for the association. In total, PLN 28,400 was collected. If anyone would like to join the group of the foundation's donors, please make a donation to the foundation's account: www.kids.org.pl/projects For all the goss, visit wbj.pl

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LOKALE IMMOBILIA | FROM OUR PARTNER

RETAIL

Largest Sinsay store in Poland to open in GALERIA PÓŁNOCNA Galeria Północna, a shopping mall north of Warsaw, has signed a contract with the LPP Group for the relocation of the Sinsay store. As a result, the largest store of the brand in Poland will be opened in an area of over ​​ 2,600 sqm. A diverse range of products, including fashionable Sinsay clothes and accessories, attractive prices and huge space. This is how you can briefly describe the new Sinsay store which will be opened on two levels of Galeria Północna. The grand opening is planned for midDecember this year.

“From the very beginning, we try to think out of the box. We are the first shopping center in Poland with a roof garden and a graduation tower. We were the only ones to have a butterfly house as well as an insect exhibition. The new Sinsay store is another project of this kind. None of the existing stores can boast about such a large area and a rich offer. We are glad that an important player on the market – the LPP group, has chosen Galeria Północna as the location of the largest Sinsay store in Poland. We believe that this will translate into an increase in the number of visitors to the store and the entire shopping center, as well as the level of customer satisfaction,” said Roman Bugajczyk, director of Galeria Północna.

LPP is a Polish apparel retailer dealing with the design, production and distribution of clothing. The company has five brands in its portfolio: Reserved, House, Cropp, Mohito and Sinsay.

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From the very beginning, we try to think out of the box. We are the first shopping center in Poland with a roof garden and a graduation tower

ADVERTORIAL

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ecco leather debuts the ‘ecco tannery series’ collection of shopper bags crafted exclusively from upcycled leather from its own tannery

The bags are exclusively available at the ECCO Store on Nowy Świat 43.

ECCO Leather stretches its appeal even further with a collection of bags cut from up-cycled leather from its own tannery. Making ecofriendly use of leather stock from the tannery’s innovation labs, the collection features an impressive range of experimental structures, vivid and newly developed colors, and high-quality classic finishes. The diverse collection shows ECCO’s commitment to both avant garde leather innovation, as well as more sustainable production – and gives customers the opportunity to elevate their essential shopper with bold and unexpected options.

The ECCO Leather tannery in the Netherlands creates a vast array of unique leather articles finishes per year. A hotbed of innovation, onsite designers craft leather samples that range from classic and premium to wildly experimental. “The ECCO Leather innovation

labs are like Charlie’s Chocolate factory. There are so many incredible leathers developed there, and we want do something special – and responsible – with the unused samples,” says Birgit Kröger, Product Director of ECCO Leather Goods.

The ECCO Tannery Series was created to showcase the eclectic array of leather design happening within the company. And the practical and aesthetically pleasing shape of the shopper seemed the ideal canvas to feature the leathers. Available in one generous size, the roomy carry-all has a democratic and unisex sensibility. The Upcycled Shopper bags are cut from raw-edge, premium leather in an array of leather styles, colorways and treatments and feature the bold ECCO Tannery Series brand mark along with the series number, starting this year with 001.

Life + Style

Klonn

PHOTOGRAPHS BY KEVIN DEMARIA

NABOku

Two on the town

With the onset of fall, evenings aren’t as balmy as a few weeks before. Nights are a tad nippy. However, it’s still warm enough to sit in the outdoor dining spaces of some parkside restaurant while tucking into delicacies and washing them down with your favorite tipple. Reviews of two such (unrelated) restaurants follow.

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What Am I Eating?

Modern, hybrid dining arrives with a bang…

Where Am I?

Lovers of the good life will already be familiar with the addy – once home to Poland’s original Michelin-starred restaurant, Atelier Amaro, Klonn finds itself planted inside a low-level building just a whisper from Ujazdowski Castle. Designed by co-owner Mirosław Nizio, it’s an interior that immediately seduces thanks to a slick, dark look that’s given oomph and adventure by its intelligent lighting and brash bursts of street art. That’s particularly noticeable outside where the façade outback has been reserved for “painting and graffiti” intended to reveal “the visionary potential of Klonn.”

What’s In A Name

Polish Lesson No. 284: Klonn means maple tree, and that’s exactly what you’ll find while lounging outside. Said to be 180-years-old (give or take the odd year or two), find it

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acting as the cornerstone of a back garden scattered with tables and bristling with greenery. If it looks good now, expect it to get even better once the so-called Golden Polish Autumn hits its true stride mid-October. And with an all-weather glasshouse in the pipeline, you can expect to be enjoying the area’s natural allure long into the year.

Oh, and the double N in the name? That’s a reference to its co-owners, Mirosław Nizio and Andrzej Nizio.

Who’s Cooking?

After ten years of cooking in some of London’s biggest ticket restaurants, chef Bartłomiej Brzuska has learned a thing or two and he utilizes that experience to present a menu that he calls hybrid in style: casual and accessible, yet also brimming with invention and appreciation for the product.

The Final Word

More often than not, places that rattle on about linking art with food just don’t deserve your trust: victims of their own hubris, they’ll often pan out to be an exercise in vanity that falls flat on its fate.

Not Klonn, though you probably guessed that. Managed by Arkadiusz Żochowski (also responsible for the group’s other two restaurants, the award-winning Zoni and Wuwu), high expectations are rightly met. Smartly thought out and brilliantly executed, in here everything joins together to form one natural whole – and yes, that means prices as well. Excluding your drinks intake, a memorable meal for two shouldn’t exceed much more than a couple of hundred notes – a spectacular deal given the quality that you face.

Klonn ul. Jazdów 1B, klonn.pl

PHOTOGRAPHS BY KEVIN DEMARIA

Klonn

Klonn’s aesthetics bridge casual with sophisticated and creative with understandable and that latent philosophy is echoed in a menu that’s in perfect step with the wider design. A harmony of flavors, that much is evidenced by starters such as a luxuriously creamy burrata served with caramelized figs and flowery greens. For mains, a beef fillet arrives with chanterelles and a red wine jus and is devoured in the kind of record time that usually needs a stopwatch.

More subtle in its beauty, sous vide salmon is a fantasy of skill featuring cameos from beer-braised chicory, crispy duck and fragrant Ras el Hanout curry, while on the other end of the scale, pizzas turn up drizzled with truffle oil, cured pork cheeks and lightly scorched onions – yes, please.

Desserts, meanwhile, are a fast track to happiness. Tied for first place, a slice of salted caramel tart with a yogurt sherbet competes against a rich chocolate mousse with blackberry jelly, chocolate soil and thyme basil oil. Both I’d return for in the good name of research and so too the drinks – sophisticated cocktails that are original and bold.

BY ALEX WEBBER

Naboku Everyone needs good neighbors...

The Back Story

Opened by a Danish-Polish couple around 2012, the story behind Nabo (in Danish: neighbor) is, in many ways, something you’ve probably heard before: husband and wife leave the corporate rat race to pursue their dream of running the kind of little place they’d hang about in themselves. So far, so normal.

What happened next was a little more unexpected. Cast out in the far reaches of Sadyba, what had been intended as a niche operation took Warsaw by storm. First came recognition from this humble publication, then top prize at the Polish daily Gazeta Wyborcza’s Knajpa Roku awards.

“Honestly speaking,” says Steffen, cocreator of Nabo, “that wasn’t something we ever expected.” At a stroke, the award(s) plunged Nabo into the spotlight, bringing with them all the pros, cons, pressures and attention usually associated with some kind of megabucks win on the lotto. “Our business plan never anticipated such a thing happening,” confesses the Dane, “but all of a sudden we were getting huge crowds of people turning up demanding some kind of grand restaurant experience – but that was never what we had in mind.”

So what exactly was Nabo about?

Committed to a family forward philosophy, it was simply meant as a comfortable meeting and eating venue. A place where you could sip coffee, grab breakfast, enjoy dinner or stop after work for a drink. “Like Cheers in the TV sitcom,” wrote the Insider’s reviewer at the time, “only Scandinavian in style.”

And it’s on this point we should linger.

If Nordic cuisine is now known the world over, back in those years it was recognized

only by the staunchest of local foodies.

Pre-dating Warsaw’s food revolution by about three milliseconds, Nabo acted as a precursor to what was to come by focusing on food that was simple, natural but beautifully composed. A showcase of the whole farm-to-fork philosophy that would later sweep the city, they were among the first crop of venues to repackage the concept of casual dining and take it into fresh, new directions. The awards that followed were well-earned indeed.

What’s Changed

Much, yet simultaneously not much at all.

After a good innings as Nabo, this summer saw a move of sorts and a subtle rebranding of what had come before. Shifting 20 meters to a slightly smaller neighboring unit in the same pavilion, Naboku (a Polish play on words meaning “to the side”) has retained much of the former’s spirit.

Entering via a sun-drenched woodendecked terrace, a rattly steel door clatters open to reveal a space that feels likable in an instant – geometric-tiled floors rescued from the PRL age, framed retro posters, super cool lighting and little bits and pieces such as a decorative miniature bike and tiny Danish flags. Despite that, you don’t need to be Danish to feel immediately at home. Entirely more conspicuous has been the shift away from being overtly kid-friendly. Sure, you can still bring the munchkins, just now it all feels a little more mature. “Our own kids grew up,” grins Steffen, “so we felt it was time for Naboku to grow up as well.”

Food & Drink

Smørrebrød – open-faced sandwiches –

were the specialty and they remain just that. For the uninitiated, they’re worth the trip alone. They sound basic (and yeah, they are) but it’s perhaps because of their simplicity that you notice just how much love has been invested into the ingredients that comprise them: pinkish roast beef with fried onions and remoulade sauce, curls of Bornholm herring with potato and beetroot salad, delicate, crispy fishcakes and goat’s cheese salad with indulgent ribbons of raspberry sauce. More, more, bring me more.

And speaking of more, yes there certainly is: when it comes to the substantial offerings, visit for a towering burger involving true, proper bacon, ribeye steaks or fish stew pimped up with chili, chives and garlic, and don’t think for a moment that drinks have been ignored. To Øl and Mikkeller remain on the frontline of craft innovation, and you’ll find brews by both represented in abundance.

The Final Word

In this little pocket of Denmark, a good mood prevails throughout and just by being here, you gain a little understanding of why the Danes are often cited as the happiest people alive. And why the hell not. If this is the food they eat, the drinks they drink and the kind of atmosphere they’re accustomed to, then you’d be pleased as well. Herein, lies a bloody important point: Naboku isn’t about the food and Naboku isn’t about the drink.

It’s about feeling fantastic and loving the moment.

Naboku ul. Zakręt 8, fb.com/naboku.restauracja

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Life+Style REGIONAL TRAVEL

Podlasie – The Alley of Miracles The rural and wild region of Podlasie reflects the cultural diversity of pre-WWII Poland. Small minorities of Muslim Tatars and Jews still live here, and it is common to hear Ukrainian, Belarusian or a local dialect (which sounds like a mix of the two, plus a pinch of Polish) when you take a stroll along food stalls on a local marketplace.

For ages, life hasn't changed much in the countryside here. You can still spot older residents sitting on a small bench in the front of wooden houses of various colors, with white, blue or green ornaments. The houses, many of them over 100 years old now, have been slowly disappearing from the landscape, being replaced by new ones or refurbished. Fortunately, plenty of them are saved by the younger generation who come back to live where their grandparents were born.

Religious tradition is alive and plenty of pilgrims visit local sites established after revelations of St Mary: small chapels, picturesque blue Orthodox churches and various holy places, sometimes marked by a single wooden cross, are scattered across the region. The idyllic landscapes are a part of Podlasie’s character.

Not that the region is free of other tourist attractions.

Four National Parks and low population density make it a perfect destination if you want to escape from organized tourism. The most popular destinations here include Białowieża National Park, which is the last primeval forest in Europe and habitat for European bison and other animals. The northern portion is dotted with lakes, attracting beautiful little lakeside towns and villages as

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well as Augustów Canal, a masterpiece of 19th-century engineering.

Białystok, the region’s capital, is a moderately attractive city and there are some charming small towns around, including Tykocin, Grabarka or Drohiczyn.

BY KAMIL ANTOSIEWICZ

Made in Podlasie Koryciński cheese: a trademark of the region and one of the oldest Polish yellow cheese. This fresh, ripening cheese is made with raw, full cow milk, rennet and salt. Moist or dry, mild or slightly nutty, depending on the age, it is manufactured by an association of 30 producers in the region of Korycin, Suchowola and Janów.

Look for it on local food markets or in stores across Poland.

Must see

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Białowieża Forest: one of the oldest forests in Europe, untouched by the human hand, is located on the border of Belarus and Poland.

Green, lush and mysterious, it begs to be seen.

Look for a lincensed guide in a local tourist bureau or walk on your own. Remember to wear hiking boots and watch out for bisons that wander around. You can charge your batteries in one of the restaurants in the magical village of Białowieża – a former tsar’s hunting destination. www.bialowieza-forest.com

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EVENTS

The WBJ relives or looks forward to the most important events from the world of business and economy

past events

REAL ESTATE

BUSINESS & ECONOMY

BUSINESS & ECONOMY

FiRE Real Estate Marketing Forum 2020

Economic Forum 2020 – Europe After Pandemic: Solidarity, Liberty, Community?

European Economic Congress and European Tech and Startup Days

September 8-10 Gołębiewski Hotel, Karpacz

September 2-4 International Congress Centre and Spodek

September 9-10 The Westin Warsaw

Details: The undisputed star of this year’s edition of FiRE was Zuzanna Skalska – a trend analyst in the area of innovation, design and business development. She drew attention to the fact that the pandemic will be a catalyst for major changes in global marketing. In her view, the needs of future generations will be radically different from those of the older generations, which will have a big impact on the real estate market – the possibility of sharing will continue to displace the need for ownership, more people will prefer to rent than buy.

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Details: This year, due to the pandemic, the Forum was moved from Krynica Zdroj to Karpacz.

The place of the conference was changed, but not at the expense of the selection of guests and a high level of discussion. The Economic Forum has been organized for almost 30 years. Its goal is to build a friendly environment for political and economic cooperation among the member states of the European Union and their neighbors. The Forum is organized by the Foundation Institute for Eastern Studies. Sviatlana Tsikhanouskaya, leader of the Belarusian opposition, was among the most important guests.

Details: Digital transition and green revolution – the trends whose significance has been proved and underlined by the crisis – will shape the future of Europe. This is one of the conclusions reached by representatives of the world of business, politics and science during the events that were organized in the hybrid formula – stationary and online. The European Economic Congress was inaugurated with a debate titled “Europe of the Future.” The speakers jointly discussed how to tackle the challenge faced by the Old Continent, whether the currently formulated priorities of EU policy are appropriate to the new challenges and whether the program for rebuilding the European economy after the crisis, the Next Generation of the EU, is a sound economic plan.

LAST WORD

recently said: “Positive emotion is good for you,” and have linked happiness to a longer life. Proving it scientifically can be tricky, however, reports the American weekly news magazine Time. Happiness studies usually rely on self-reported data, which is by nature subjective. Beyond that, it’s just difficult to navigate the channels of cause and effect, given the many factors that influence mood and health, adds Time. In an unrelated piece, the American business magazine Forbes has emphasized that employee happiness has increasingly become imperative in business. One study quoted by the magazine found that happy employees are up to 20 percent more productive than unhappy employees. And in the world of magic, it’s hardly a wonder, Harry was asked by his Defense Against the Dark Arts Professor Remus Lupin to concentrate on any strong happy memory to conjure a Patronus, a defensive spell (for the uninitiated), powerful enough to ward off Dementors, the evil soul-sucking gliding wraithlike creatures.

Considering the calamitous eons coupled with the dog-eat-dog world besides other turnstiles of vices mankind has lived in or gone through, the population of over 7.8 billion abounds in grief. To negate the negativity, we must look for our own Patronus(es), I JUST TALKED TO MY EX. The chat was far more however challenging it may seem. As for me, I don’t have a momentous than our usual chinwag. If I weren’t required paucity of pleasant memories to choose from. Right from to stick to a word count, given her permission, I could waking up on a Greyhound-like coach zipping past southhave shared the content of our conversation. The crux, you ern Indian forests to a song – that hasn’t since failed to insist? She reminded me of the popular witticism: when strike an emotional chord with my parents, sister and me the going gets tough, the tough get going. I became visibly – in a language entirely foreign to us except the first two pensive. What if you feel weak or aren’t stoic enough and words (possibly a name) and having family and friends express your sensitivities and emotions more readily than over from three continents in my wedding reception to most? You should practice gratitude, I was told. I had read doing impressions of some of the main characters from about the benefits of reflecting upon happy memories to Sonar Kella, a Bengali comedy-thriller, and putting on my be thankful for but I had never kept a gratitude journal. dancing shoes before hitting the now-defunct Walkabout, In my book, although the bad experience can be a good an Aussie-themed bar in Nottingham, England, with my teacher, I equate gratefulness to happiness. bestie and her mates from our university’s soccer teams, Long before the seemingly esoteric talk, I discovered there are more than just a few memories that crease me up. that happiness is claimed to be an elixir of life. Despite that And while my life has had several lows (read: I’ve had to a 2015 study published in The Lancet, a medical journal, deal with blows more times than I can count), after having stated that happy people didn’t live longer than sad people, welcomed a lovely bundle of joy around mid-September delivering a blow to Pollyannas everywhere, scientists – a first for my wife, me and us – practicing gratitude has researching happiness for about a decade have relatively never been easier - SD

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SHUTTERSTOCK

Precious little