WBJ #21 2013

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VOLUME 19, NUMBER 21 • JUNE 3-9, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Since 1994 . Poland’s only business weekly in English

COURTESY OF LOT

Tusk on the ropes Down in the polls and facing a revolt in his own party, Prime Minister Donald Tusk is under more pressure than ever

Ready for takeoff LOT’s Dreamliners are finally set to begin flying once again 3

Butt out, Brussels

8-9

MEP and leader of the PJN party, Pawe∏ Kowal, calls for less Brussels and more economic freedom 11-12

Plus: • Makeup in the Middle East • Poland bucks FDI trend • ‘Game of Thrones’ tech • Ban trade on Sundays?

Slow going

In this issue

Poland’s economy continues to grow, but much slower than previously 7

Baby maker?

RAFA¸ OLEKSIEWICZ/REPORTER

News . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . .7 Cover Story . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . . .10 Interview . . . . . . . . . . . . . . . .11-12 Lokale Immobilia . . . . . . . . .13-15 The List . . . . . . . . . . . . . . . . . . . .16 Markets . . . . . . . . . . . . . . . . . . . .17 Sports & Lifestyle . . . . . . . . . . .18 Last Word . . . . . . . . . . . . . . . . . .19

The Sejm overwhelmingly passed legislation to extend parental leave 3

NEWS

www.wbj.pl

IN THE SPOTLIGHT

Numbers in the News

Economics and Tiananmen Square

was the growth rate of Poland’s economy in Q1 2013, after the Central Statistical Office revised its flash estimate upward by 0.1 percentage point.

About a quarter of Polish vodka producers did not make any profit in 2012, according to data from the Polish Spirits Industry (PPS) association. The organization said that 74% of sector companies were profitable in 2012, compared to 58% in 2011.

The total net profit of the spirits industry amounted to z∏.200 million, PPS said. In 2011, the sector had a net loss of z∏.326 million.

is how many Poles have a positive opinion of President Bronis∏aw Komorowski’s work, according to pollster TNS Polska.

877 is how many companies in Poland went bankrupt in 2012, according to a recent Coface report.

Tiananmen Square

Civic Platform MP John Godson, criticizing the attitude of some of his party colleagues.

Figures in focus Glaring emissions CO2 emissions from energy use in selected EU countries in 2012 (in 1,000 tons of CO2) 800,000

728,065

700,000 600,000 471,530

500,000

* Highest in EU ** Lowest in EU

365,688

400,000

332,295

300,000

296,817 257,760 157,115

200,000

99,646

100,000

43,175 2,720

**

ary

lta Ma

ng Hu

an ds Re pu blic

erl

Sp ain

Ne th

nd

ly

nce

Po la

Fra

Ita

m

0

Cz ech

Remi Adekoya

“We were elected to serve and not to become barons that drink wine and smoke cigars.”

Source: Eurostat

On WBJ.pl

Arctic treasure What is the influence of the Arctic Council over an area where 13 percent of the world’s undiscovered oil and 30 percent of its undiscovered natural gas reserves are located?

Log on to WBJ.pl for a Stratfor analysis.

EBRD to focus on energy in Poland The European Bank for Reconstruction and Development plans to shift its activity in Poland from the financial sector to the energy industry, Lucyna Staƒczak, the EBRD’s director for Poland and the Baltic States, told Reuters. “We are working on a few projects in renewable sources of energy and distribution,” she said.

The bank will provide loans to major Polish utilities Enea and Energa for the modernization of their distribution networks. ●

also spoke out on the issue.

“We did not discourage a visit in that period; the anniversary will make the Polish voice sound louder,” the ministry’s spokesperson Marcin Bosacki said. Mr Bosacki added that over the past two years, Polish-Chinese relations have picked up significantly ever since a strategic agreement was signed between the two countries during President Bronis∏aw Komorowski’s visit to China in 2011.

Proof of this was the opening of a direct railway line between China and the Polish city of ¸ód˝ this year. In January, the first cargo train completed the 10,000-km journey from the world’s second-largest economy to Poland.

do

Polish People’s Party, have announced they will not be sending any of their members as part of the delegation.

Nevertheless, Ms Kopacz defended her decision. “Our privileged relations with China allow us to speak to our Chinese partners on all issues.

Even a whisper about human rights on that symbolic day there in China will have a greater significance than a scream about human rights elsewhere,” said Ms Kopacz.

However, the parliamentary speaker made it clear where she felt Poland’s priorities should lie on this issue.

“During a crisis, we Poles should be cunning enough to pursue the interests that can be beneficial for Poland,” she said.

Poland’s foreign ministry

ing

A planned visit to China next week by Polish parliamentary speaker Ewa Kopacz during the anniversary of the Tiananmen Square Massacre has stirred debate regarding the role of human rights in Poland’s relations with China.

Although Ms Kopacz has said she will touch on the issue of human rights in China, she admitted the visit was a “business” trip.

Coincidentally, June 4, the day of the Tiananmen Square Massacre, is also the anniversary of Poland’s first democratic elections after the collapse of communism. Ms Kopacz has been criticized by several members of the media for going to China on that particular day. MPs from Law and Justice as well as from the junior coalition partner, the

Quote of the Week

an y*

Poland could generate up to z∏.73 billion from expanding its offshore wind energy program, provided that sea-based turbines with a total capacity of 6 GW are built by 2025, Ernst & Young wrote in a report prepared for the Polish Wind Energy Association.

Such development could also provide over 31,000 jobs and z∏.15 billion in tax revenue, the report said.

54%

dK

z∏.73 billion in wind energy?

is how many years the European Commission has given the Polish government adjust the country’s deficit-to-GDP ratio to EU requirements.

ite

Defense industry group Polski Holding Obronny (PHO, formerly Grupa Bumar) signed an agreement with BritishSwedish industry giant BAE Systems for the joint production of tracked battle vehicles. The two companies will cooperate in producing a new line of military vehicles of over 25 metric tons each in weight.

2

SHUTTERSTOCK

PHO and BAE sign agreement

0.5%

Ge rm

Vodka producers’ headache

JUNE 3-9, 2013

Un

2

Calendar

June 6

ECR FORUM FOR COOPERATION

Event:

This forum is an annual conference for top managers from the FMCG sector. Participants represent manufacturers, retail chains, agents, small retailers, distributors and providers of logistics, marketing and IT services.

Hotel Marriott, Warsaw www.ecr.pl/forum2013

Location: Web:

7-9

WALLSTREET CONFERENCE

Event:

This conference is the largest meeting of individual stock exchange investors in Poland, organized annually by the Association of Individual Investors. It provides an

Location: Web:

opportunity to meet prominent analysts and to participate in discussion panels.

Hotel Go∏´biewski, Karpacz www.sii.org.pl

24-26 EUROPEAN FINANCIAL CONGRESS Event:

Location: Web:

This congress, organized by the Gdaƒsk Institute for Market Economics – Gdaƒsk Academy of Banking, provides opportunity for pragmatic debates of business, political and academic circles. This year’s edition will focus on financial security and European integration.

Sopot www.efcongress.com

Company index Accession Mezzanine Capital ....................6 Allianz ........................................................13 Allianz Capital Partners..............................6 Apsys..........................................................13 Atlas Estates..............................................14 BAE Systems ..............................................2 Banco Santander ........................................6 Bank Pekao SA............................................6 Bank Zachodni WBK ..............................6, 7 BASF ............................................................7 Boeing..........................................................3 Borealis........................................................6 BRE Bank ..................................................17 Brewery Ommegang ................................19 BSH Bosch und Siemens Hausgeräte ......5 BUPA............................................................6 CBRE..........................................................13 Citi Handlowy ..............................................7 Coface ......................................................2, 5 Cushman & Wakefield ..............................14 Deloitte ........................................................6 Deutsche Telekom ......................................3 Dom Development ....................................14 Echo Investment........................................13 Eiffage Budownictwo Mitex ......................14 EMC Instytut Medyczny ..............................5 Emes Mining Service ..................................4 Enea ............................................................2 Energa ........................................................2 Ernst & Young..............................................2 Espirito Santo Investment Bank ................6 Ethiopian Airlines ........................................3 Euris/Rallye Group ....................................13 Euromonitor ................................................5 Eveline Cosmetics ......................................5 Farmona Natural Cosmetics Laboratory ..5 GTS Central Europe ....................................3 IKEA ..........................................................19 Immofinanz Group ....................................13 Inglot............................................................5 Inter IKEA Group ......................................14 Ipsos ............................................................7

Itella Group ................................................13 Jones Lang LaSalle ..................................13 JSW ............................................................17 Katowicki Holding W´glowy ........................4 KBC ..............................................................6 Kompania W´glowa ....................................4 LOT ..............................................................3 LUX MED......................................................6 Mid Europa Partners ..................................6 Millennium ..................................................6 Millennium Logistic Park..........................14 Mostostal Warszawa ................................17 Nordea Bank ..............................................6 North China Power Engineering Co ........17 Penta Investments ......................................5 Pil-Building................................................13 Piotr i Pawe∏ ..............................................14 PKN Orlen....................................................5 PKO Bank Polski ........................................6 Polski Holding Obronny ..............................2 Rabobank ....................................................6 Rafako ........................................................17 Redknee ....................................................13 Robyg ........................................................14 RWE ............................................................6 Sandvik ........................................................4 Savills ........................................................13 Skanska Property Poland ........................15 SMG/KRC ....................................................8 SwedeCenter ............................................14 T-Mobile ....................................................18 The European Bank for Reconstruction and Development ........................................2 TNS Polska ..................................................2 Turret Development ..................................14 Ulysse Nardin ............................................19 Union Investment Real Estate ..................13 Warsaw Stock Exchange ..........5, 13, 14, 17 Waterloo ......................................................6 X-Trade Brokers ....................................9, 17 Zelmer ........................................................5

NEWS

JUNE 3-9, 2013

Demographics

www.wbj.pl

3

Airlines

Prime Minister Donald Tusk meets with parents ahead of the vote

The government hopes that extending infantcare leave to a full year will encourage Poles to have more babies Parents in Poland will be able to take a full 52 weeks of paid leave to take care of their newborns – an extension from the previous 24 weeks – after the country’s lower house of parliament, the Sejm, overwhelmingly passed legislation mandating the change. All 409 MPs present voted in favor of the new rules, and the legislation is expected to be passed by the upper house, the Senate, and signed by the president. The rules will apply to the parents of all children born after December 31, 2012.

With a fertility rate of 1.31 children per woman, Poland is 212th out of 224 countries sur-

veyed in 2013, according to the CIA World Factbook. Perhaps tellingly, 10 out of the 20 countries with the lowest fertility rates in the world are postcommunist nations from the CEE region and neighboring countries, such as Armenia.

In a recent interview with WBJ, Leszek Balcerowicz, the chief architect of Poland’s transformation from communism to a free-market economy, pointed out that the Polish labor market will have lost roughly one million workers by 2020 if demographic reforms are not enacted quickly. The extension of parental leave is Prime Minister Donald Tusk’s first major policy response to the problem.

Two types of leave There will now be two types of paid leave: maternity leave and parental leave. Parents will be entitled to 20 weeks of mater-

nity leave, 14 weeks of which will be available only to the mother. The remaining six weeks of maternity leave can be taken by either the mother or father. Either parent will then be able to take an additional six weeks of extra maternity leave (for a total of 26 weeks of maternity leave).

Thereafter, the parents will be able to make use of an additional 26 weeks of parental leave between them. Both parents will be able to make use of the various leaves at the same time, but the total leave combined cannot exceed 52 weeks.

The allowance for maternity leave will equal 100 percent of the person’s salary while the parental leave allowance will equal 60 percent. However, if the mother uses all 52 weeks of the available leave, the allowance will equal 80 percent of her salary for the entire periRemi Adekoya od.

The pan-European telecommunications giant Deutsche Telekom is in talks to take over GTS Central Europe, The Wall Street Journal Deutschland reported, citing sources close to the deal.

GTS is a Warsaw-based broadband optical and IP network provider and voice and data communications service owned by several investment funds. It owns and operates a large fiber-optic and data-center network throughout the Central and Eastern Europe region. Last year it recorded €387 million in revenue.

According to analysts, this deal, along with one in the Czech Republic, in which Deutsche Telekom plans to buy the remaining 40 percent of stock in its subsidiary TMobile Czech Republic, shows that the telecommuni-

COURTESY OF DEUTSCHE TELEKOM

Deutsche Telekom plans €600 million acquisition in Poland – report

Will Deutsche Telekom expand its reach in Central Europe? cations giant plans to streamline some of its operations and strengthen its position in core markets.

It is yet unclear when the deal might take place or whether there are other bid-

ders, according to the The WSJ Deutschland report. As of press time, neither company had made any statement confirming or denying the planned transaction.

Jacek Ciesnowski

The financially troubled carrier was set to resume flights with its new planes four days ahead of schedule Polish state-controlled airline LOT announced last week that the company was set to resume its Dreamliner flights on June 1, four days ahead of schedule. As of press time, the first flight was scheduled from Warsaw to New York.

All Boeing 787 Dreamliners, including two belonging to LOT, were grounded in January after it was discovered that their lithium-ion batteries were overheating. After a months-long wait, the two LOT planes were finally refitted and in mid-May the airline received a third Dreamliner, which arrived with new batteries already installed. Since then, Polish pilots have conducted numerous training flights on Dreamliners to get better accustomed to the planes.

LOT is one of the last airlines to put its Dreamliners back in the air. The first one to

COURTESY OF LOT

COURTESY OF THE PRIME MINISTER’S CHANCELLERY

Sejm passes extended LOT’s Dreamliners back in the air parental leave

LOT’s Dreamliners were due to begin flying last weekend do so was Ethiopian Airlines, which resumed its flights with new Boeing planes on April 27. LOT has ordered eight of the planes in total. With three already in LOT’s fleet, the fourth is scheduled to be delivered in July.

The Polish airline is in deep financial trouble and hopes that the newest planes will boost business. At the end of last year it received z∏.400 million in aid from the Treasury and recently Polish authorities confirmed that the airline had

asked another loan, reportedly for an additional z∏.400 million.

The company’s management confirmed that it will ask Boeing for compensation for losses incurred while the Dreamliners were grounded, but the details of the claim have not been made public.

Boeing spokesperson Daniel Mosely said the company has been in close communication with its customers regarding compensation since January.

Jacek Ciesnowski

Karpielówka Restaurant Our name comes from an area in Zakopane, and in our restaurant you can feel the air and the atmosphere of the Tatra Mountains.

With our original highlander décor and the climate of an outlaw’s cottage, it’s the perfect place to dine on traditional dishes including our specials: dumplings, knuckle baked with onion, dishes with oscypek cheese and much more.

We can organize wedding dinners, conferences and banquets, as well as picnics with BBQ and bonfire. Check our lunch menu, our delivery service and catering options. ul. Indiry Gandhi 11, tel. 22 644 85 10 | Imielin Metro Station, close to Multikino; City Hall Ursynów; 5 minute walk towards St. Thomas the Apostle Church Open 12:00-last guest. | Reservations: +48 22-644-85-10 or karpielowka@home.pl www.karpielowka.com.pl | Check our Facebook page

4

NEWS

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JUNE 3-9, 2013

Politics

A multi-partisan initiative in Poland’s parliament is trying to stop trade on Sundays A group of conservative MPs from four different parties, including several from the ruling coalition and some from opposition parties, have proposed a draft that would ban trade in retail facilities on Sundays. Gas stations would be exempt from the rule.

Proponents claim that it would bring “a new quality of life for Poles,” claiming that they could spend more time with their families instead of

doing shopping or “being forced to work on Sundays.”

They also explained that in most EU member states restrictions on Sunday trade exist in various forms.

The proposal immediately sparked heated debate. The Polish Organization of Trade and Distribution estimates that if the new law was passed, the weekly revenue of trade facilities would drop by 3-7 percent, leading to redundancies of up to 10 percent of workers employed in the sector.

Others deemed the proposal unfair, saying that while

people working in retail would have work-free Sundays, people employed in other facilities like restaurants, museums or cinemas would still have to work on that day.

Small chance of success Minister of Labor W∏adys∏aw Kosiniak-Kamysz was skeptical and said that the current labor law already had solutions that benefit people working on Sundays.

“Employers need to provide those working on Sundays with a day off during the week. If they fail to do that, they have to pay high over-

time (an extra 100 percent of their regular wage),” Mr Kosiniak-Kamysz said in an interview with TVN24.

Even though the multipartisan draft was supported by 86 MPs, the chances of it passing in the Sejm are slimto-none. Spokespeople from both coalition members, Civic Platform and the Polish People’s Party, announced that their parties will not support the draft, which was signed by 11 MPs from Civic Platform and seven from the Polish People’s Party.

Current Polish law prohibits large retail units from

SHUTTERSTOCK

Politicians propose banning trade on Sundays

Retailers claim that the proposal would cost thousands of jobs remaining open on national holidays. There are 13 such days a year.

Only local, family-run

shops are allowed to stay open on these days, provided the workers’ contracts allow for it.

Jacek Ciesnowski

Corruption

Another bribery scandal hits Polish mining sector A machinery producer claims he spent z∏.10 million bribing mining firms’ executives to buy his equipment Andrzej J. (last name withheld in accordance with Polish privacy laws), the former president of a number of mining machinery producers, was arrested in his home in Vienna

last week. During an interrogation, Mr J., who has dual Austrian and Polish citizenship, revealed that when he was working for Voest-Alpine Technika Górnicza i Tunelowa he spent up to z∏.10 million on bribes for executives of mining companies, so that they would have their firms purchase equipment from his company.

Voest-Alpine Technika Górnicza i Tunelowa is owned by

Swedish engineering group Sandvik.

Andrzej J. struck a deal with Polish prosecutors, whereby in exchange for detailed information on who he bribed and how much, he was granted immunity. As a result of the information he revealed, four executives have been taken into custody so far, daily Gazeta Wyborcza reported. But that might be just the

tip of the iceberg, as the newspaper reported that Mr J. revealed the names of 40 people to whom he paid bribes.

The investigation is ongoing. Prosecutors say there are several lines of investigation being followed and that Mr J.’s statements have allowed them to re-open older cases.

One of these reportedly includes a deal between Polish miner Kompania W´glowa

and Voest-Alpine Technika Górnicza i Tunelowa for servicing mining machinery. The contract, worth z∏.10 million, was signed without any tender. The deal was scrutinized four years ago, but the investigation was closed for lack of evidence.

The companies involved in the process refuse to comment on the ongoing investigation.

The case is just the most recent bribery scandal to hit the Polish mining sector. In January, an indictment was brought against several former executives of Kompania W´glowa and another Polish mining firm, Katowicki Holding W´glowy. They are charged with accepting z∏.3 million in bribes from Polish firm Emes Mining Service.

Jacek Ciesnowski

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BUSINESS

JUNE 3-9, 2013

www.wbj.pl

Bankruptcies

Penta to acquire EMC

More bankruptcies to come Amidst the continuing global slowdown and the crisis in the euro zone, Central and Eastern European companies are becoming increasingly vulnerable Poland, so far considered one of the more resilient economies in the CEE region, seems to be increasingly susceptible to the global downturn, according to a recent report by factoring and insurance firm Coface. As many as 877 companies filed for bankruptcy in 2012, 21.3 percent more than a year earlier, and 113 percent more than in 2008.

In the entire CEE region there were 38.7 percent more bankruptcies in 2012 compared to 2009. In most countries of the region the number of insolvencies rose in the last year, the report found, with the biggest surge recorded in Bulgaria and Croatia – 243.3 percent and 174.2 percent respectively.

However the highest number of companies filed for bankruptcy in Romania with as many as 23,665 companies going belly-up. The only countries in the region where the number of bankruptcies fell were Ukraine, Estonia and Latvia.

Despite the increase in the number of insolvent companies, Poland had the lowest ratio of

bankruptcies to the number of active companies in 2012, a mere 0.04 percent. By comparison, Serbia had a ratio of 7.93 percent, while Romania’s was 5.67 percent.

The industries with the highest number of bankruptcies were construction (30 percent of all filings), retail trade (23 percent), production and wholesale trade. The relatively safest industries include IT, telecommunications, education and health care.

In Poland and throughout the CEE region, the number of bankruptcies is expected to increase in 2013. Polish companies are expected to bear the full brunt of the country’s

Spectacular collapses The biggest bankruptcies in the CEE region in 2012 Company

Country

Industry

Workforce

Hidroelectrica SA

Romania

energy

5,243

Bomi SA

Poland

retail trade

1,748

Minimax Discount SRL

Romania

retail trade

1,323

Malév Magyar Légiközlekedési Zrt.

Hungary

transport

1,213

Confort SA

Romania

construction

956

Hydrobudowa Polska SA

Poland

construction

920

Poldim SA

Poland

construction

550

Metalurg Immo s.r.o.

Slovakia

metals

550

ARZENÁL Kereskedelemfejleszt Kft.

Hungary

wholesale trade

504

PBG SA

Poland

construction

393 Source: Coface

recent poor macroeconomic performance, with the number of bankruptcies rising by as

much as 25-30 percent, the report predicts.

Beata Socha

Exports

Polish cosmetics firms set sights on Middle East

Poland is Europe’s sixthbiggest exporter of cosmetics, with over €1.9 billion worth of products sold abroad in 2011 (most-recent available data).

While some 60 percent of Polish cosmetics is exported to EU markets, Polish companies are eying other markets where they can expand their presence, with a particular focus on the Middle East. The region is currently the fastestgrowing cosmetics market in the world, according to market research firm Euromonitor.

Poland therefore sent a significant contingent of representatives to Beautyworld Middle East in Dubai, one of

ORGANIZATOR

SHUTTERSTOCK

A Polish firm’s success has inspired others in one of Poland’s biggest export sectors

The Middle East cosmetics market is the fastest growing in the world the biggest cosmetics fairs in the region, which took place at the end of May. Most of the Polish firms with representatives at the fair were making

their first appearance in the region, but a few already have a strong presence there.

“In Dubai alone we have 120 retail outlets. Our main

sp ONs ORZy I pARTNeRZy

5

objective now is to solidify our position in the region, and the fair in Dubai offers a very good opportunity to meet our clients,” said Filcho Komov, export development director at Eveline Cosmetics.

Polish companies are looking to follow in the footsteps of Inglot, which introduced a “breathable” type of nail polish that has become a hit among Muslim women. Muslims must wash hands prior to daily prayers, and the water must touch every part of the hand, including the nail.

Inglot’s product allows water through to the nail, while leaving the polish intact. The polish has been approved by Muslim clergy, and Inglot’s success has inspired other Polish firms to have a go at the Middle East market.

“The Middle Eastern client, when buying body-care products, pays special attention to the intensity of fragrance – so we have expanded our offer accordingly. We will also present skin-whitening creams and sunscreens with strong filters,” said Dana Bartoszewicz, export manager at Farmona Natural Cosmetics Laboratory.

The market for color cosmetics in the Middle East and Africa is expected to reach $2.3 billion by 2014, which is a 35 percent increase since 2009, according to Euromonitor.

With many international giants already making their move to secure the biggest possible slice of that pie, Polish companies need to act quickly to get in the game.

Jacek Ciesnowski

Private equity group Penta Investments announced a tender offer for 85.4% of the shares in listed Polish medical services company EMC Instytut Medyczny.

The price offered amounts to z∏.18.80 per share. The shares account for 79.51% of the vote at general shareholders’ meetings.

Subscriptions in the tender will be carried out between June 19 and July 18. If successful, Penta will hold 100% in EMC Instytut Medyczny.

Zelmer to exit the WSE The management board of the Warsaw Stock Exchange has decided to withdraw shares in household appliances producer Zelmer from trade as of June 11, 2013.

The company was recently acquired by German sector firm BSH Bosch und Siemens Hausgeräte. BSH, which launched the acquisition process in November 2012, completed its final tender offer for Zelmer in April.

Orlen bonds sell well Poland’s biggest oil company PKN Orlen ended bond subscriptions on May 31, instead of June 14, as demand from individual investors exceeded expectations, the company said in a statement. The firm offered bonds worth z∏.200 million as the first tranche in a program that will be worth z∏.1 billion in total. ●

6

BUSINESS

www.wbj.pl

M&A

JUNE 3-9, 2013

Banks

Hopes rise in private Banco Santander has big plans for Poland equity market

Private equity investors have grown more optimistic about the CEE region in the last six months, according to a survey carried out by Deloitte. A 30point rise in the Central Europe Private Equity Confidence index points to a significant change in investor sentiment, with fewer predicting further decline in the region’s economic outlook, and most of them optimistic about the efficiency of financial investments.

The number of investors planning to buy more than they sell over the next six months has increased.

December 2012 saw Poland’s largest PE deal in years take place when Mid Europa Partners and Accession Mezzanine Capital sold LUX MED to BUPA for €400 million. The sale was not only a success for investors in those funds, but showcased the inter-

national allure businesses in the region can have. More recently, Allianz Capital Partners teamed up with Borealis to buy RWE’s Czech gas grid, Net4Gas, in a €1.6 billion deal.

Better than last year Roughly 10 percent of those surveyed by Deloitte said they expect economic conditions to improve in the region in the coming months. Although this is hardly overwhelming, in the fall of 2012, not a single respondent expected economic improvement in the coming months. Also, private equity deal-doers are now less pessimistic, with 21 percent expecting things to worsen, compared to 69 percent a year ago.

A lack of overwhelming, across-the-board enthusiasm is unsurprising given the sluggish growth rate in most CEE countries. For example, Poland’s economy expanded at a rate of just 0.5 percent in the first quarter of the year, according to Poland’s statistics office.

New deals anyone?

“Several PE funds are currently focused on fundraising and

we expect that, once completed, fresh pools of capital could translate into reinvigorated deal activity,” wrote Deloitte, commenting on the survey. Is that optimism warranted?

“Not necessarily, because the situation on the market is complicated. Many PE funds have already invested all the money they raised in the years 2006-08 and are now planning new fundraising efforts for the second half of this year, ” said ¸ukasz Paw∏owski, director of M&A at Espirito Santo Investment Bank.

However, Mr Paw∏owski said, “On the other hand, there are new players who have just successfully raised some significant funds, such as Waterloo in Poland.

But Mr Paw∏owski admitted that his firm was receiving “negative signals” from the market as most investors expect an economic slowdown in Poland. “And so one cannot expect a significant increase in activity regarding M&As. In our opinion, this year will be similar to last year regarding the number of transactions in Poland,” he said.

Remi Adekoya

The bank wants its Poland unit to become the biggest Polish lender, via acquisitions Over the past two years, Spain’s Banco Santander has made a significant mark on the Polish market. By purchasing Bank Zachodni WBK and the Polish unit of Belgium-based KBC, it created the country’s thirdlargest bank, with z∏.101.8 billion in assets (under the Bank Zachodni WBK brand).

The bank’s management has even more ambitious plans, though. “We want to grow and in the longer term become one of the top two banks in Poland,” said BZ WBK’s CEO Mateusz Morawiecki in an interview with The Wall Street Journal.

However, the distance it has to make up is big: Poland’s second-largest bank, Bank Pekao SA has z∏.146 billion in assets while Poland’s biggest lender, PKO Bank Polski, has some z∏.190 billion in assets.

BZ WBK plans to achieve its goal gradually and currently wants to concentrate on internal restructuring and delivering synergies in the next 12-18 months, but after that it will

COURTESY OF BZ WBK

There is evidence of a moderate increase in optimism amongst investors in recent months. But don’t expect too many deals this year

Santander took over BZ WBK in 2011 likely go on a spending spree.

“Looking at the [other banks’] assets, the distance is very large and I have no illusion that it can be covered only with organic growth. Thus in order to meet our goal we will be again interested in takeovers in the longer term.” concluded Mr Morawiecki.

So which banks could potentially be up for grabs? It has been widely reported that Sweden-based Nordea Bank plans to withdraw from the Polish market (z∏.35.3 billion in assets). The Netherlands’ Rabobank, which owns Bank

Gospodarki ˚ywnoÊciowej (z∏.37.2 billion) is also reportedly considering selling its Polish assets. Moreover Portugal’s Millennium bcp, which controls Millennium Bank in Poland, could be forced to sell off its Polish assets in order to pay back state aid it received.

Nevertheless, other large banks in Poland are looking for acquisitions as well – PKO BP’s search for acquisition targets has been highly publicized – so a bidding war is expected if any of the lenders decides to put its operations up for sale.

Jacek Ciesnowski

FINANCE & ECONOMICS

JUNE 3-9, 2013

www.wbj.pl

Pension system review postponed

Economic growth

Q1 GDP figures confirm slow growth year may mean that GDP growth will not exceed 1 percent in 2013 as a whole,” wrote economists from Bank Zachodni WBK. In a report released last week, the Organisation for Economic Co-operation and

Development lowered its forecast for Poland’s GDP growth this year to 0.9 percent from 1.6 percent previously.

Analysts widely regarded the data released Wednesday as leaving room for further interest-rate cuts by Poland’s

Monetary Policy Council at its meeting in June. Most expect another cut of 25 basis points, after the council cut rates by a total of 1.75 percentage points since November last year, to a record low of 3 perKW, AK cent.

Slowly – but steadily?

Poland’s GDP growth (quarterly, y/y) Q1 2007-Q1 2013 8 7 6 Source: Central Statistical Office

Poland’s economy grew at a rate of 0.5 percent in Q1 2013 year-on-year, statistics office GUS announced last week.

The figure revises upward a flash estimate published earlier in May, which saw Q1 growth at 0.4 percent y/y.

GUS said that the difference was due to new information available after the estimate was published, especially public finance statistics and final data on non-financial enterprises employing over 49 persons.

In quarterly terms, Poland’s gross domestic prod-

uct grew by 0.1 percent in Q1 2013 compared to 0.0 percent in Q4 2012. This figure was in line with the flash estimate.

“This shows the country has once again avoided technical recession and quarterly growth started to accelerate compared to weak Q4,” said economists from Citi Handlowy in an e-mailed statement.

Fixed investments contracted by 2 percent, while Citi had expected a contraction of 6 percent. The result “could be a sign that investments in machinery and equipment are holding up better than expected,” the economists wrote.

“The upcoming quarters should bring a slow economic recovery, fueled mainly by reviving foreign demand, but the weak beginning of the

5 4 3 2 1 0 Q1 20 Q2 07 20 0 Q3 7 20 0 Q4 7 20 07 Q1 20 Q2 08 20 0 Q3 8 20 0 Q4 8 20 0 Q1 8 20 Q2 09 20 0 Q3 9 20 09 Q4 20 0 Q1 9 20 Q2 10 20 1 Q3 0 20 1 Q4 0 20 10 Q1 20 Q2 11 20 1 Q3 1 20 1 Q4 1 20 11 Q1 20 Q2 12 20 1 Q3 2 20 1 Q4 2 20 12 Q1 20 13

Poland’s economy will continue to expand at a low rate, possibly less than 1 percent for the entire year

Competitiveness

Poland up in competitiveness ranking Poland is seen as more competitive worldwide, but needs initiatives aimed at boosting its innovativeness

In a recent World Competitiveness Ranking prepared by IMD, a Swiss business school, Poland placed 33rd, one spot up from the previous year and as many as 10 spots up since 1997, when the ranking first Poland climbing up included both adThe World Competitiveness Ranking vanced and emerging (selected countries) economies.

Country Rank The ranking, pub2013 2012 1997 lished for the 25th USA 1 2 1 time this year, anaSwitzerland 2 3 12 lyzes and ranks counHong Kong 3 1 3 tries not only by their Sweden 4 5 19 GDP and productivity Singapore 5 4 2 results but also takes Norway 6 8 5 into account how they Canada 7 6 6 cope with political, UAE 8 16 social and economic Germany 9 9 16 challenges. It comprisQatar 10 10 Lithuania 31 36 es four main groups of Poland 33 34 43 indicators: governCzech Republic 35 33 33 ment efficiency, infraEstonia 36 31 structure, economic Latvia 41 performance and Source: IMD business efficiency.

In 2013 the US managed to dethrone last year’s number one, Hong Kong, and reach the top position. Meanwhile Switzerland came in 2nd, a remarkable surge since 1997 when it was ranked 12th. Sweden, which ranked 4th, can also boast a sizable leap in the past 16 years (it placed 19th in 1997).

Fifteen European countries are seen as more competitive than Poland, however, among CEE countries only one, Lithuania (31), came in higher, while the Czech Republic (35) and Estonia (36) ranked lower than Poland.

Even though Poland lost some of its allure due to its continuing fall in the category of economic performance for the past four years (Poland was ranked 24th in 2010, and 36th in this year’s ranking), it made up for its poor macroeconomic results with improvement in

other areas. In government efficiency, Poland ranked 27th, a 17spot jump from 44th in 2009. In business efficiency it rose from 50th in 2009 to 35th this year. In terms of infrastructure, Poland’s position remained unchanged in relation to 2012 (36th) and only slightly better than five years ago (39th in 2009).

Poland starved for innovation According to the IMD report, Poland’s attractiveness lies in its dynamic and resilient economy, cost competitiveness and supply of skilled workforce, as well as unencumbered access to financing. Its entrepreneurial climate and adaptability of companies, as well as exchange rates favoring exports are also considered as some of its main strengths.

Poland’s major weaknesses include the high risk of production, services and R&D facilities

relocating to other areas, as well as poor results in the country’s efforts to attract and retain talented people. The country’s bad track record in joint public and private sector ventures also weighed Poland down, as did its low innovative capacity and knowledge transfer.

The major challenges the Polish economy will face in 2013 include securing sustainable economic growth, which may not be an easy fit considering the sharp decrease from some 4 percent in 2011 to below 2 percent in 2012.

It will also have to pay attention to the growing public debt to GDP ratio, which has been on the rise in the past year.

Other tasks the Polish government will have to undertake involve long-term social policies aimed at increasing the birth rate and reducing youth unemployment, as well as cutting red Beata Socha tape.

Foreign investments

Poland is one of just a few countries in the world that increased its number of foreign direct investment projects last year, according to a recent report compiled by the Financial Times. “All global regions experienced a decline in FDI. The main exceptions were Chile, Spain, Indonesia, Poland and Oman, all of which experienced strong growth in

inward FDI,” the study read.

It continued: “Poland increased its number of FDI projects by 4.87 percent (with 237 projects in 2012), and its market share of capital investment grew to 6.54 percent.”

Poland also increased its share of jobs created in Europe to 12.7 percent, indicating the attractiveness of Poland for large-scale projects in both manufacturing and services.

Overall, in Europe the number of FDIs fell by some 20 percent.

The report includes only new projects and significant

expansions of existing ones, and puts an emphasis on their number, rather than value.

By this measure, Poland was sixth in Europe, behind the UK, Germany, Spain, Russia and France.

However, early estimates for the value of FDI in Poland last year put the figure at €5 billion, a huge drop compared to €13.6 billion in 2011. The NBP will release its official FDI figures for 2012 in August.

But even if those forecasts prove correct, the report states that the worst is yet to

come. The authors expect a sharp decline in greenfield FDI of about 20 percent in 2013, with all regions of the world impacted. “We expect most locations will struggle to maintain their 2012 levels of FDI,” the report concludes.

According to the Polish Information and Foreign Investment Agency (PAIiIZ), the biggest foreign direct investment in Poland in 2012 was a €150 million investment

by BASF to build a catalytic converter plant in Âroda Âlàska, in southern Poland.

Jacek Ciesnowski

Top FDI destinations in Europe in 2012 Country

Number of projects

UK

812

Germany

410

Spain

278

Russia

265

France

244

Poland

237

Ireland

147

Netherlands

145

Romania

138

Turkey

The government will publish its review of the pension system in midJune, Deputy PM and Finance Minister Jacek Rostowski said. Currently, the Labor Ministry and the Finance Ministry are working on the document.

In early May, PM Donald Tusk had said that a review of the pension system would be ready before the end of May.

Consumer optimism on the rise According to pollster Ipsos, consumer optimism continued to grow in May. The consumer optimism indicator grew by 5.31 points to 82.66 points (on a scale of 0-200). This is the indicator’s highest level since June 2012. The economic climate indicator improved by 8.79 points month-on-month to 68.57 points. Ipsos said that the percentage of Poles pessimistic about the country’s outlook decreased to 66%, compared with 72% in April.

Rostowski: Poland undervalued Finance Minister Jacek Rostowski told Bloomberg in an interview that in terms of treasury bonds, Poland has been undervalued. “There’s no reason why we should be paying a penny more on our bonds than the Czechs,” he said. “On domestic debt the current difference is probably due to the level of the official interest rate. The difference is much smaller on euro-denominated debt,” he added.

RPP members divided

Number of FDI projects in Poland rises Poland was one of the only countries in the world to see more FDI projects in 2012 than in 2011

7

133 Source: fDi Markets

Some Monetary Policy Council (RPP) members are skeptical about the expected rebound in Poland’s economy, while others expect GDP growth to accelerate slowly in the coming quarters, according to the minutes of the RPP’s May 8 meeting.

According to the minutes, the RPP rejected a motion to cut interest rates by 50 basis points.

It then passed another one to lower rates by 25 points. ●

8

COVER STORY

www.wbj.pl

JUNE 3-9, 2013

Politics

Tusk faces backlash from party, populace Remi Adekoya

Since taking power in 2007, Donald Tusk and his Civic Platform (PO) party have never been so unpopular. A recent spate of opinion polls show opposition party, the right-wing nationalist Law and Justice (PiS) now steadily ahead of PO by anything from 3 to 5 percentage points.

Meanwhile, a May SMG/KRC survey revealed 58 percent of Poles believe Mr Tusk is a “burnt out” political leader, while only 17 percent see him as the best man available to run Poland.

The opposition PiS ruled between 2005 and 2007 along with a far-right party and a rural-nationalist party. The coalition was known as the “scandal-a-week government” and had a reputation for being backward and petulant. But the fear that PiS could regain power – a tool that Civic Platform and Prime Minister Tusk have used extensively to gain support – has dissipated.

While 43 percent of Poles still say they are afraid of PiS returning to power, more than half say they are not.

This is especially true of the young, hit hardest by Poland’s 14 percent unemployment rate. Some two out of three voters between the ages of 1824 have no qualms with PiS running the country. PiS leader Jaros∏aw Kaczyƒski is now backed by more young people than is Prime Minister Tusk.

This must be particularly worrisome for the prime minister, who has always presented PO as the party of the young: forward-looking and modernist, in contrast to PiS’s image as a throwback to the pre-World War II era of nationalism and romantic ideology.

Back to their roots Mr Tusk also has to deal with his former justice minister and current rival, Jaros∏aw Gowin.

Mr Gowin, regarded as the leader of a strongly conservative faction within PO, was dis-

COURTESY OF THE PRIME MINISTER’S CHANCELLERY

Sinking in the polls, Prime Minister Donald Tusk is now being openly challenged by members of his own party

Prime Minister Donald Tusk is in a tough spot missed from his post in April and has hardly been quiet since.

Last week, he held a press conference with John Godson, another conservative PO MP, urging reform within the ruling party in view of upcoming internal elections. This summer, PO’s 40,000-plus members will decide whether to keep Mr Tusk as party leader or to dump him.

Mr Gowin, who is expected to run against the PM, said he is “not fighting for the party’s leadership but its identity, soul and program.” He then castigated his party colleagues saying PO needs to “go back to its roots.”

“Let’s once again be an [economically] liberal, [socially] conservative, republican party of great hope and serious reform,” said Mr Gowin. “Our roots were steeped in removing the barriers blocking Poles, and in common sense regarding family issues and social values,” he added. The former justice minister also sent an open letter to PO members in which he accused them of “arrogance, thinking solely along party lines” and the “morally doubtful exploitation

of the privileges of power.”

Mr Gowin likewise took his party to task on its economic policies. “We were supposed to be the party of low taxes,

ferent from the one I joined 10 years ago. We were chosen to serve and not to be barons drinking wine and smoking cigars,” Mr Godson said.

“If PO’s support continues slipping and drops to 15 percent, then there is a possibility the party could disintegrate.” but we increased VAT, increased custom duties, froze the level of tax-free income and increased social security contributions for the disabled,” said Mr Gowin.

“Many say these actions were necessary because of the crisis, but the Swedes managed to decrease taxes despite the crisis,” he added. He also criticized his party for increasing bureaucracy and being slow to pass legislation making it easier for firms to exploit Poland’s shale gas reserves.

Mr Godson concurred with Mr Gowin in his assessment of PO. “The PO I see today is dif-

Mr Godson later told WBJ that “PO needs to focus on the major needs of society, power is about serving. We should return to our roots.” He has not ruled out exiting the ruling party altogether.

The prime minister, meanwhile, dismissed Mr Gowin’s letter, saying the former minister-turned-critic must have started his campaign for party leader, but “seems to be running for the leadership of another party, and not Civic Platform.”

Nevertheless, Mr Gowin is right that PO was established a decade ago as an economi-

cally liberal, but socially conservative party. But since then, two of PO’s other founders (Donald Tusk being the third) have been eased out of the party, which has now shifted ground somewhat to the center on social issues.

Mr Gowin and Mr Godson oppose this move.

One of PO’s founders, former Finance Minister Andrzej Olechowski, told news station TVN24 that he agreed with Mr Gowin. “When can one open a discussion in PO if not during an internal election? At other times, it is just not possible,” he said.

The good days are over The ruling party’s MPs habitually complain of being sidelined by Mr Tusk in both government and party affairs.

Resentment towards the PM has thus been growing steadily in his party, the difference being that his position has now weakened sufficiently enough to embolden his critics.

As for public opinion, there are several reasons for the ruling party’s present slump.

Poland’s economy grew a mere 0.5 percent in the first

quarter of 2013. Unemployment is high, at 14 percent.

Educational reforms meant to encourage parents to send their kids to school at 6 instead of 7 have been bungled and widely criticized. Some parents are now collecting signatures to force a referendum on the issue.

PO’s popularity has always been greatest in the big cities, especially in its stronghold, the capital Warsaw.

The capital is governed by Mayor Hanna GronkiewiczWaltz of PO, but Varsovians are growing increasingly exasperated with the slow pace of construction on the city’s second subway line and the transportation nightmare that involves. Many of Warsaw’s streets are blocked due to construction work and the delivery date for the line has been delayed from September this year to autumn 2014.

The government has also seemed overly self-assured at times, assuming that Poland’s middle-class pragmatists will always back it on election day, given the alternative: PiS and its erratic, bellicose leader Jaros∏aw Kaczyƒski who calls

COVER STORY

Poland under Donald Tusk “a Russian-German condominium.”

All these factors have combined to seriously dent the popularity of the PM and his party.

Possible scenarios So what happens next?

“If in subsequent polls, PO’s support continues slipping and drops to 15 percent, then there is a possibility the party could disintegrate,” said Sergiusz Trzeciak, an independent political consultant and lecturer at Collegium Civitas. “Donald Tusk could still win the leadership battle and keep power for a few months longer – but what then?”

“A lot depends on whether PO’s deputy leader Grzegorz Schetyna decides to run against Tusk or for example, backs Gowin,” he added.

Mr Trzeciak said another possible scenario could be Mr Gowin quitting the party with 15-20 MPs and then “striking a political deal with PiS.” This would force snap elections, as the ruling coalition has a razor-thin majority in parliament.

Mr Trzeciak said that up till now, one of Mr Tusk’s greatest strengths was that Poland’s economy was still doing much better than others in Europe.

“However, he cannot use this argument any more. His public promises are not credible

any more, people believe he is simply repeating the same old tricks, he has lost his credibility,” he said.

What do markets think?

Regarding possible economic consequences of the current political situation, Przemys∏aw Kwiecieƒ, chief economist at X-Trade Brokers, a large Warsaw-based brokerage, said that right now, markets are “not paying much attention to what is going on in Polish politics.”

Mr Kwiecieƒ said markets appreciate the fact that Mr Tusk’s government has made efforts to “trim down the country’s borrowing needs even though they sometimes used questionable methods, such as seizing the assets of private pension funds.”

However, he said, if PO were to find itself in so much trouble that snap elections are called, and it seemed like a party inclined to reverse the deficit-cutting trend and increase spending could likely win power, then “a negative market reaction could be expected.”

One of Poland’s greatest assets in recent years has been its political stability, no more a given in today’s troubled Europe. That stability has been guaranteed by the current coalition government, which has by and large functioned smoothly so far. It would be a pity for Poland to lose that

www.wbj.pl

9

competitive advantage.

However, that stability has come at the price of a lack of bold action. In a recent interview with WBJ, Leszek Balcerowicz, the chief architect of Poland’s economic transformation, called for urgent reform to tackle youth unemployment, housing problems, productivity and a shortage of private investment in Poland.

Don’t waste those skills But it would be unfair to say Mr Tusk has done nothing to tackle important issues. Last week, the Sejm, Poland’s lower house of parliament, passed legislation extending the period of paid parental leave from 24 to 52 weeks in an effort to tackle Poland’s looming demographic crisis (see article, p. 3).

Time will tell if this particular measure is effective, but on the other urgent issues, one can point to few tangible efforts on the part of the government.

Donald Tusk was the first prime minister to win back-toback elections in Poland’s postcommunist history. He is still easily the most skillful player on the political scene. But after six years of lax governing, it is time Mr Tusk employ his considerable talents in reforming Poland and making it more competitive, and not just in winning elections.

And for Poland’s sake, let us hope that Mr Tusk is not indeed burnt out. ●

COURTESY OF THE PRIME MINISTER’S CHANCELLERY/FLICKR

JUNE 3-9, 2013

Former Justice Minister Jaros∏aw Gowin is a top critic of the government inside the ruling party

10

OPINION & ANALYSIS

www.wbj.pl

JUNE 3-9, 2013

A bad week for Brussels

P

erhaps no other issue embodies the polarization of opinions regarding the European Union as much as the perennial discussion on Brussels’ role as the seat of the bloc’s government. Since its establishment as the center of most major European supranational institutions in the late 1950s, EU critics have decried what they have seen as a lethargic and ineffectual bureaucracy while the bloc’s supporters rallied around the idea of Brussels being a forum for harmonious and peaceful decision-making at the European level. Three events last week highlight the fundamental weaknesses of Brussels’ aspirations to be a meaningful decision-making center and a mediator for an increasingly strained Europe.

Unilateral moves First, German media reported that the German Development Bank was prepared to create a special credit program that would extend loans to small and medium-sized enterprises in Spain, Portugal and perhaps Greece. As nations in the euro zone periphery continue to slash their budgets to conform to European aus-

terity targets, the importance of revitalizing private small and mediumsized enterprises has become crucial in the uphill battle for economic recovery. Intriguingly, the German Development Bank initiative is unilaterally German in concept and execution, bypassing altogether the more conventional multilateral EU channels.

In parallel to the reports of the German Development Bank credit program, the past days have witnessed an aggressive rebranding of French President Francois Hollande’s public profile as the protector of youth employment on the Continent. Mr Holland announced several “new” measures against youth unemployment, measures already presented with little pomp by EU bureaucrats some months ago.

Meanwhile, after a series of long discussions with no compromise seemingly in sight, EU members voted to allow an arms embargo on Syria to expire in June. This leaves each member country free to pursue individual and collective policies regarding lethal materiel aid to moderate rebel groups, a marked departure from the collective bloc action

policy that had characterized the EU stance since the onset of the Syrian conflict.

These three developments highlight Brussels’ ever-declining clout as center of European decision-making, even among members staunchly supportive of the European project.

Brussels certainly never realized the EU founders’ dreams of being the supranational governmental core of the European project, but its perceived importance as the EU capital grew after the onset of the financial crisis in 2008.

Avoiding confrontation During almost five years of crisis, Berlin has tried desperately to shy away from the mantle of leadership its status as the Continent’s wealthiest and most powerful country accords it.

Germany had hoped to avoid any direct confrontation with its struggling neighbors. For years, Brussels was a convenient proxy for German efforts to salvage the European bloc via a strict diet of budgetary austerity and economic reform. As the crisis raged on, however, Brussels’ enforcement capabilities and overall credibility declined precipitously. The popu-

lation of peripheral European countries was quick to identify Berlin as the real architect of harsh austerity measures, essentially forcing Germany to deal with just the sort of backlash it had sought to avoid since the onset of the crisis.

Berlin’s wake-up call to its role in Europe has deeper implications than just a declining reputation among its neighbors. As the economic crisis continues to morph into a social and political cataclysm across the Continent, the lack of consensus within the executive and legislative seats of Brussels, as well as the EU mandate to equitably represent the interests of 27 different nations, is threatening to collapse the entire modern European system.

Berlin and Paris, the centers of gravity of the European Union, are realizing that a coalition based on bilateral mutually beneficial policies may be difficult to achieve, but would at least would be a much more direct and effective way to manage the crisis than a string of slow-paced EU summits.

Instances of this new model for Europe appeared when France and Germany moved to create a financial

Stratfor transaction tax despite opposition from a good half of the European Union’s members. This does not, of course, mean that EU institutions’ end is coming anytime soon. It does mean, however, that as the crisis deepens, the extraordinary gravity of the situation will require extraordinary actions.

Risks and rewards As the core European nations face an array of pressures to take matters into their own hands for more efficient decision-making, potential risks and rewards loom. Many constraints will continue to reinforce the structural problems afflicting Europe. But at the very least, a growing tendency to bypass increasingly irrelevant layers of bureaucracy will enable European countries to address the core issues at hand. More independent decisionmaking, however, could well increase the friction between France and Germany, the very scenario the European Union was created to prevent. ● This edited version of “A bad week for Brussels” is reprinted with permission of Stratfor Stratfor.com

Europe’s troika should grow up

In

early 2010, a group of men (and a few women) in dark suits landed in Athens. They belonged to a global institution, the International Monetary Fund, and to a pair of regional ones, the European Commission and the European Central Bank. Their mission was to negotiate the terms and conditions of a financial bailout of Greece. A few months later, what became known as the “troika” was dispatched to Ireland, then to Portugal, and later to Cyprus.

Wide implications This endeavor was bound to have wide implications. The troika negotiated what ended up being the largest financial assistance packages ever: loans to Greece from the IMF and European partners are set to reach €240 billion ($310 billion), or 130 percent of the country’s 2013 GDP – far more in both absolute and relative terms than any country has ever received. Loans to Ireland (€85 billion) and Portugal (€78 billion) are also significantly bigger than those usually provided by the IMF. Moreover, cooperation between the three institutions is unprecedented. Back in 1997-1998, during the

Jean Pisani-Ferry Asian crisis, the G-7 flatly rejected Japan’s proposal for an Asian Monetary Fund. Now the IMF has even accepted a minority-lender role, with the bulk of assistance coming from the European Stability Mechanism (ESM), a new institution often viewed as an embryonic European Monetary Fund.

Economic adjustment is necessarily slower within a monetary union than it is for countries with their own currency, because, even for very flexible economies, prices change more slowly than the exchange rate. Delivering the same result therefore takes more time, and requires keeping countries in intensive care for longer – and at higher cost.

Mixed results Three years later, the results are mixed at best. Unemployment has increased much more than anticipated and social hardship is unmistakable. There is one bright spot: Ireland, which is set to recover from an exceptionally severe financial crisis.

But there is also a dark spot: Greece, where GDP has shrunk by 20 percent since 2009 and where the public debtto-GDP ratio is now higher than anticipated at the launch of the pro-

gram, despite the debt reduction negotiated with private creditors in February 2012. This is not because of a lack of fiscal consolidation. On the contrary, the Greek authorities have done more than planned on this front.

But the collapse of GDP has necessarily implied a rising debt ratio, driving the country into a recessionary spiral as economic contraction forces further spending cuts.

Could the troika have done better? It was not responsible for existing monetary conditions – a currency union with a central bank focused on price stability. But European officials’ hesitant response to the crisis added to the difficulty. Prolonged controversies over the terms and conditions of assistance and the absurdly high interest rate initially set on official loans exacted a heavy toll on countries already under stress.

Three mistakes Furthermore, the troika made three mistakes. First, Greek debt reduction was postponed for too long. Once it became clear that the burden was unbearable, debt should have been cut expeditiously. Too many creditors were reimbursed at par on their maturing claims.

Second, the troika based its programs on overly optimistic assumptions. It misjudged the consequences of fiscal consolidation and credit constraints, underestimating the contraction of employment and overestimating exports and privatization receipts.

Finally, not unlike what happened during the Asian crisis in the late 1990s, the troika took country cases one by one. As a result, it did not pay enough attention to cross-country spillovers and deteriorating conditions in the wider euro zone.

Operationally and financially, the IMF has become much more involved in Europe than its global shareholders deem sustainable. It should become a catalytic lender whose participation in euro zone programs remains desirable but not indispensable – giving it the possibility to disagree and walk away.

The ECB is in an odd position as well, but for different reasons. As the euro zone’s central bank, rather than a lending institution, it does not have a clear role in negotiations on behalf of creditors. If it remains in the troika, its participation should be mostly silent.

Finally, Europe should transform the ESM into a European Monetary

Fund capable of providing policy assessment and advice, as well as financial assistance – possibly drawing on European Commission staff.

Functional cooperation Beyond European specifics, the troika experiment answers a question of major importance to other parts of the world: Can the IMF cooperate with regional institutions? The answer is yes – but not easily. The troika has proved functional, and Europe would have been at pains to provide conditional assistance to euro zone countries without the IMF’s participation and support. But cooperation has proved to be difficult, if only because each participating institution has rules and constraints that are not easy to reconcile with the others’. ● This column draws on a Bruegel report co-authored with André Sapir and Guntram Wolff.

Jean Pisani-Ferry is professor of economics at Université ParisDauphine and currently serves as director of economic policy planning for the prime minister of France.

Copyright: Project Syndicate, 2013.

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AGNIESZKA KUCZY¡SKA (AKUCZYNSKA@WBJ.PL)

AGNIESZKA MICHALIK (AMICHALIK@VALKEA.COM)

Prenumerata realizowana przez RUCH S.A: Zamówienia na prenumerat´ w wersji papierowej i na e-wydania mo˝na sk∏adaç bezpoÊrednio na stronie www.prenumerata.ruch.com.pl Ewentualne pytania prosimy kierowaç na adres e-mail: prenumerata@ruch.com.pl lub kontaktujàc si´ z Telefonicznym Biurem Obs∏ugi Klienta pod numerem: 801 800 803 lub 22 717 59 59 – czynne w godzinach 700 – 1800. Koszt po∏àczenia wg taryfy operatora.

The Winners of the Zacznij.biz competition were selected on May 23, 2013 during the Final Gala.

MEDIA PATRONAGE: ZACZNIJ.BIZ A special media patronage supplement on promoting enterpreneurship

JUNE 3-9, 2013

Zacznij.biz – idea – business – success, is a business competition organized by the Polish Confederation Lewiatan and Lewiatan Business Angels. The idea behind the contest is to promote entrepreneurship, assist in preparing business plans and attract investors – business angels – to work with the best ideas. A good idea is a necessary but not sufficient condition to receive funding – the ability to execute, experience, commitment (including a financial commitment), and a proper business model are of key importance.

TOMASZ MATEUSIAK

On December 1, 2012, the third edition of the Zacznij.biz competition was launched.

The past two editions saw over 300 projects submitted, representing different business sectors. The prize for those who enter the best ideas into the competition was to interest potential investors from Lewiatan Business Angels (LBA) – the most active Business Angels network in Poland.

Zacznij.biz – idea – business – success, was aimed at: • micro- and small enterprises with big growth potential, operating in the hitech sector, seeking to raise capital for development and implementation of new technologies • academics: researchers, graduate students and students of technical universities, who want to commercialize their innovative ideas • entrepreneurs with the projects operat-

ing in the ICT sector with global growth potential Members of the Jury of Honour of the Zacznij.biz competition were: • Bo˝ena Lubliƒska-Kasprzak, President of the Polish Agency for Enterprise Development • Henryka Bochniarz, Ph.D., President of the Polish Confederation Lewiatan • Professor Krzysztof Jan Kurzyd∏owski, Director of the National Centre for Research and Development In the early stage of the competition the jury selected 126 participants out of more than 150 applications. Members of the Zacznij.biz jury included: Szymon Kurzyca (LBA), Jacek Aleksandrowicz (AIP Seed Capital), Krzysztof Gawrysiak (Business angel), Aniela Hejnowska (Groupon Polska) and Maciej Strz´bicki (Tomorrow Consulting).

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MEDIA PATRONAGE: ZACZNIJ.BIZ

Innovatorium I and Innovatorium II i.e. presentation of their ideas to the potential investors – business angels.

Both workshops were conducted by Szymon Kurzyca (LBA) and Maciej Strz´bicki, a marketing expert cooperating with LBA.

Selected contestants were invited to take part in the Innovatorium I workshop. The purpose of this workshop was to deliver understanding of business angels' expectations regarding business models, marketing aspects, competitors or financial projections and valuations. After Innovatorium I, which took place on February 14-15, 2013, participants had time to improve their business plans, which were then voted on by the jury. The jury chose 25 projects to take part in the semifinal phase of the competition. Prior to the semifinal presentations, these projects were invited to participate in Innovatorium II. The purpose of this workshop (which took place on April 4, 2013) was to prepare the participants for the pitch,

TOMASZ MATEUSIAK

TOMASZ MATEUSIAK

All the participants then prepared for their project presentations in front of the jury – which took place on April 24-25, 2013. Each of the contestants had 15 minutes to make their pitch, and a further 15 minutes for a question-andanswer session, just as in the case of real pitching to investors. Jury members admitted that selecting the finalists was a very difficult task mainly because each project was in a different industry. The jury's assessment was done according to how appealing the projects would be to investors. After two days and over 20 project presentations, the semifinal stage of the Zacznij.biz competition revealed three finalists.

PIOTR GAMDZYK

Apart from the finalists, the jury also decided to reward eight semifinalists. The finalists as well as the chosen semifinalists had the opportunity to showcase their ideas at a stand at the Gala.

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TOMASZ MATEUSIAK

On May 23, 2013 in the Copernicus Science Centre in Warsaw the Competition Final Gala took place. The Gala was hosted by Cezary Szymanek, editor-in-chief of Bloomberg Businessweek Polska. The Finalists presented their projects to potential investors. The winners of the competition were selected in a live voting by all the guests attending the Final Gala. Among the voters there were members of the Jury of Honor, the Jury, business angels associated with Lewiatan Business Angels, venture capitalists as well as members of both private and state organizations specializing in supporting entrepreneurship and innovativeness.

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The Gala

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MEDIA PATRONAGE: ZACZNIJ.BIZ

The Winners

‘Innovative REHACT Energy System (RES)’ An innovative combination of ventilation, cooling and heating in one economical system. The system is built around the REHACT Ventilation Unit exchanger, which maximizes the heat efficiency in a building. The exchanger gives the building's residents great comfort and utilizes the building's heat to significantly lower energy consumption necessary for its ventilation, heating and cooling. www.inergy.pl

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1st Place ‘Innovative REHACT Energy System (RES)’

Jerzy Hawranek (‘Innovative REHACT Energy System (RES)’)

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‘A diabetic mug’ A start-up offering an innovative solution for diabetics on a strict diabetic diet. It allows them not only to eat or drink a wide range of foodstuffs with varying carbohydrate content, but also to find their carbohydrate equivalents quickly and easily. www.mediseb.pl

Sebastian ¸aêniak (‘A diabetic mug’)

‘Anshar Studios - SDU: Division Alpha’ This business concept is to develop a start-up company specialised in producing advanced strategy video games which will be distributed on mobile devices (iOS, Android, Windows 8) and on PCs. Anshar Studios' up-and-coming product will be called “SDU: Division Alpha” and will be targeting core players. www.anshar.eu

TOMASZ MATEUSIAK

3rd Place ‘Anshar Studios SDU: Division Alpha’

¸ukasz Hacura and Krzysztof Biegaƒski (‘Anshar Studios - SDU: Division Alpha’)

During the Final Gala the prizes for the best women’s projects were handed out by a representative of the Partner of the Zacznij.biz competition – The Polish Network of Women Entrepreneurs. Two projects were awarded: ‘Design your own jewellery’ and ‘dropRound System’.

The additional prizes for the Winner were provided also by the competition’s Partners: AIP Business Link and HR Projekt and CC Innovations.

Rewarded semifinalists were: ‘Brain Tracking®’, ‘Operatorio’, ‘Taryfowa Platforma Energii’, ‘Homepose’, ‘MyProject 3d’, ‘Libentis. Asystenci personalni’, ‘Magazyn produktów online’, ‘Design your own jewellery’.

TOMASZ MATEUSIAK

PIOTR GAMDZYK

2nd Place ‘A diabetic mug’

Mira Por´ba, Maria MaciejewskaSzostak (‘Design your own jewellery’) and Justyna Morman (‘dropRound System’).

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Organizers of the competition The Polish Confederation Lewiatan The Polish Confederation Lewiatan was established in January 1999 as a nationwide representation of employers to the state and trade unions. Today it is an organization of 62 sector and regional associations of private employers and 25 individual members. Thus, in total there are about 3,750 companies employing over 700,000 workers. Each association is an autonomous organization that associates individual enterprises, each possessing its own statute and management. The representatives of the associations form the Main Board, which elects the Management Board, the President and the Consultation Council, consisting of the representatives of regional associations. The Management Board is headed by the President and supervised by the Main Board.

Lewiatan runs its own office and employs professionals experienced in a wide range of issues such as: labour relations, macroeconomics, the small and medium-sized enterprises sector, and the European Union. The Confederation participates in Social Dialogue, taking part in the Tripartite Commission for social and economic issues.

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MEDIA PARTNERS

The Polish Confederation Lewiatan contributes to many international activities. As a member of BUSINESSEUROPE Lewiatan is able to influence regulations at the international level.

Lewiatan supports the day-to-day activities and interests of its members and provides trade organizations with expert reviews. The Confederation facilitates business contacts and, owing to the membership in international institutions, offers its members access to international standards and know-how.

For more information visit: www.pkpplewiatan.pl Lewiatan Business Angels Lewiatan Business Angels (LBA) is the largest and most active Business Angels network in Poland. It was established in 2005 with the use of EU funds under the brand of The Polish Confederation Lewiatan (konfederacjalewiatan.pl). LBA matches entrepreneurs who have innovative ideas and ambitious development plans with private investors – Business Angels).

Its main goals are to promote the Business Angels

PARTNERS

investing in Poland, match private investors (Business Angels) with companies seeking growth funding and exchange experience and encourage best practices.

LBA assists in gaining capital for companies on an early stage of their development, including startups, which are not financed by banks (due to the lack of sureties) nor by venture capitals (the investments are too small in scale), and helps to identify the best source of Angel financing for each individual business. Many entrepreneurs underestimate the importance of having their idea properly thought through and presented in a spreadsheet and on paper.

Examples of companies that have received financing due to LBA are: W Biegu Café, Ekobilet, getMelon, inKantor, MEDICALGORITHMICS, LEGIC Luxury Goods Import Company Ltd., Air Ventures.

For more information visit: www.lba.pl On behalf of the Confederation ‘Lewiatan’ and Lewiatan Business Angels, we would like to congratulate the winners and thank all of our Partners:

INTERVIEW

JUNE 3-9, 2013

Europe

COURTESY OF PAWE¸ KOWAL

Kowal: Europe needs less interference from Brussels

Member of the European Parliament Pawe∏ Kowal sees unemployment as the biggest problem facing the EU

Pawe∏ Kowal, MEP, former deputy foreign minister and now leader of the center-right Poland Comes First (PJN), sits down with WBJ to talk about the EU’s political makeup, Polish strategy in Europe and the current political scene in Poland Ewa Boniecka: The economic crisis is affecting the entire European Union and dividing members of the euro zone: the once close German-French alliance has weakened, the United Kingdom is drifting away from the EU and national interests are increasingly at the forefront. Who can speak for Europe today?

Pawe∏ Kowal: The Lisbon Treaty established EU institutions responsible for foreign policy: the office of the High Representative of the Union for Foreign Affairs and Security Policy and the European External Action Service. This was however not followed by the creation of a common foreign policy for the EU. Paradoxically, the Lisbon Treaty, by not fully clarifying the competences and powers of these new institutions, created a structural hybrid which could be compared to the Polish political setup, where the prime minister shapes the foreign policy of the country, but the president also has prerogatives in that field.

In the EU there is now a formal “foreign minister,” who should speak on behalf of the

entire EU, but in reality the EU’s foreign policy depends on the positions of its members. So for instance, the Chinese or the Americans would not call Brussels to discuss foreign affairs, but instead they would call Berlin, Paris or sometimes even Warsaw.

Do you agree with the Polish government’s strategy of sticking close to Germany and opting for deeper integration

“The European Union developing at two different speeds is becoming a fact, and I think that we just have to learn to live with it.” within the EU, including the vision of federalism, as Foreign Minister Rados∏aw Sikorski has laid out, or do you think that we should look for other ways to secure Poland’s position in the EU? I think that those who press constantly for speeding up

integration very often harm the European idea and in their haste they often make mistakes which are difficult to reverse. Although Poles are a pro-European society, the dogma of “more integration” at the present level of development could mean losses for Poland, not only in terms of sovereignty, but also economically.

The tendencies to over-regulate life in the European Union destroy the foundation on which the Union was established – competitiveness. Let’s look at the political makeup of the EU in light of the economic theory of optimum currency areas. Its author [and Noble prize winner], Robert Mundell, in a way predicted the troubles in the euro zone.

We cannot expect countries with different fiscal regulations, different legal systems and different mentalities to suddenly adopt a unified legal structure and a single currency and function equally efficiently. Let’s imagine gears moving at different speeds. What would happen if we suddenly combined them? The entire system would be damaged.

You can’t will something into existence. And hoping that something will work is not going to make it happen. The climate policy of the EU is the best example here. So the European Union developing Continued on p. 12 ➡

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➡ Continued from p. 11 at two different speeds is becoming a fact, and I think that we just have to learn to live with it.

President Bronis∏aw Komorowski’s recent visit to France shows that Poland wants closer cooperation with France in the EU to counterbalance the role of Germany.

How could Poland capitalize on building strategic relations with France in order to increase its influence on the shaping of EU policy?

In my view, a closer alliance with France in the EU could only bring us additional economic and political benefits, if Polish leaders are clever enough to profit from it. But Poland should not try to bite off more than it can chew. The multilateral diplomacy that Poland is pursuing requires a lot of skill and coordination.

In practice we have stronger economic relations with Germany than with France, and this is the main argument for Warsaw sticking together with Berlin in the EU. You chair a group of MEPs promoting EU-Ukraine integration. When the EUUkraine Association Agreement is signed, what do you think it will mean in political and economic terms for Ukraine, the EU, Poland and also for Russia, which wants to keep Kiev in its sphere of influence?

Ukraine would like to be the Switzerland of Eastern Europe. Because of its geographical location, its specific mentality, the several languages used in Ukraine and its different religions, some of the political elites in Kiev want to see their country in the middle, always neutral. This is because Ukraine is reluctant to take a decisive stand on any of the matters it is involved in.

The truth is that from the outside, Ukraine’s position of “being in the middle” simply smacks of indecisiveness.

It is harmful to the country’s development, because it is being pulled in two opposite

directions. On the one hand, there is a determined Russia, on the other – a constantly undecided and divided European Union. I call it “Russian order versus acquis communautaire [the body of European Union law].” It is a conflict of civilizations.

When it comes to official declarations, Ukraine has made a pro-European Union choice, but now this must be followed by concrete actions.

The first of these should be significant improvement in the way its legal system functions.

It’s not possible to sit on the fence for too long.

The role of the European Parliament has increased significantly, including in shaping the EU budget, but it seems that in Poland, political parties concentrate only on preparing candidate lists for the EP, instead of discussing the issues. How do you see it?

The role of the European Parliament indeed increased after the Lisbon Treaty, but in practice all the most important legislative votes that can change things in the EU are usually conducted by national institutions. As a result, the EP is not fully living up to the role that was laid out for it.

While observing how it functions, it sometimes seems to me that it acts only when it wants to gain more power for itself. This is happening now, amidst deciding on the next financial EU period for the years 2014-2020. The President of the European Parliament Martin Schulz is using it to increase his influence and as a means of getting to the position of president of the European Council. Martin Schulz is very skilful in combining the efforts to increase the importance of the EP while advancing his own political position.

Unfortunately, very few Poles notice that the European Parliament is a forum where serious politics take place, as well as some tough fights for national interests. In fact, becoming an MEP is seen as a lucrative job or a safe retirement plan. Such an atti-

tude among our political parties is weakening our country’s position in the EU, because very often people who are sent to the European Parliament are completely unprepared.

Their roaming of Brussels’ corridors does little to promote Polish interests.

Poles are now concerned primarily with unemployment and the economic crisis. They

JUNE 3-9, 2013

Polish People’s Party (PSL) on preparing a common electoral list for the 2014 European Parliament elections and on establishing a new centerright party. How is that progressing?

We will be ready to act together provided we succeed in achieving a political agreement on realizing our common goals. For us it depends on whether these goals are possi-

“The rigid mechanisms and overregulation of the EU economy are some of the reasons why we are experiencing a crisis.” expect the European Union to have a coherent strategy to improve the situation. How should the EU respond?

The rigid mechanisms and over-regulation of the EU economy are some of the reasons why we are experiencing a crisis in the European Union. On the one hand it needs deregulation, on the other less interference from Brussels. To put it bluntly, Brussels should not try to interfere with everything, to come up with various strategies for achieving “balanced development” which are later never implemented, and should instead concentrate on establishing an economic and regulatory environment that will allow the EU to maintain competitiveness in emerging markets.

It is also necessary to have healthy economic competition within the EU. The efforts to standardize all economic regulations and all types of taxes across Europe will bring tragic results. In my opinion what we need is a reduction in the level of politicking in the EU and a return to the roots of the European Union’s success – the domination of the freemarket economy.

As the head of PJN, you are involved in talks with the current junior coalition partner and rural-based party, the

ble to achieve. PJN and PSL seem to be good partners for introducing common proposals aimed at strengthening the middle class in Poland, developing a pro-family policy, reducing unemployment and providing young people with easier access to apartments.

PSL is currently in the government and thus has some say on its strategy. But it has its own program and needs internal changes in order to move forward. It wants to change its somewhat outdated image and, while still caring for its rural electorate, open up to to new voters in cities, reach out to entrepreneurs and young professionals. Whether it succeeds in remodeling itself depends on its own efforts.

If PSL does in fact decide to build a coalition with PJN, there is a significant chance that we will be able to create a common voting list for the European Parliament elections in 2014. Whether it is followed by further political steps towards integrating our parties, we shall see.

The Polish political scene is still a battlefield between the ruling Civic Platform and the main opposition party, Law and Justice. Lately Civic Platform has been losing support, while Law and Justice is maintaining its conservative, nationalist base. Do you think that the recent changes on the left and the efforts to build a center-right alternative could bring change to the political scene?

It seems that the two main parties are both weakened, but, paradoxically, there is no third political force that could consolidate the political center. A party that would be constructive, opting for the free-market economy and being friendly towards EU integration.

The parties currently present on the left – the Democratic Left Alliance, Palikot’s Movement and the Polish People’s Party – do not have enough political strength to attract the electorate disappointed with Civic Platform.

These voters feel they don’t

COURTESY OF PAWE¸ KOWAL

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Mr Kowal believes the continuous pressure for closer integration is hurting the EU have a party to vote for, so either they will spend election day at home or they will find a new political alternative. And I believe that PJN can provide such an alternative which could be ready even this fall.

would have to present a coherent and responsible policy in order to inspire hope and gain the trust of Poles, which is crucial for mobilizing the energy of society and its involvement in political life.

What do you consider to be the most important political and economic challenges ahead of Poland in our domestic and European policy and who is, in your opinion, the most capable of dealing with them?

Unemployment among young people and among other groups is the most pressing problem in Poland and in the European Union. It is a problem that Europe is not capable of dealing with. There are a few exceptions among EU members, first of all Germany, which is doing better, but it has a solid economic and industrial base, and factories, which were so eagerly shut down in Poland in the 1990s.

Blind faith in privatization, which has been prevalent in Poland for so long, is bringing negative effects. Our industrial base is weak, our economy is not innovative, productivity is dropping, so we have 14 percent unemployment and a workforce of only 15 million out of a population of 37 million. We can now see deep structural problems in our economy. Therefore, the main challenge for our country is economic development and this should also be the main focus in our European policy.

The modern political center emerging now would have to take on the enormous task of dealing with economic problems which have been neglected for so long and with negative social sentiment. It

You are a politician, but also a historian. Drawing conclusions from our country’s past, do you think that Poles are now more inclined to link their patriotic pride with political wisdom?

Poles value our independence and our country’s sovereignty tremendously, even more so since we can now enjoy it after years of living without our own state. But they are also strongly attached to the European ideas of integration, because before the partitions in the 18th century, Poland was in fact a multicultural federation.

In my view, developing and strengthening Poland can be done by a leader who is able to harness two emotions that are deeply embedded in Polish hearts: the pride of having our own country and the will to participate in Europe’s integration.

I think that the same factors should play a role in our modernization process. On one hand, we are a Catholic country, and are seen as conservative in some matters. This should be taken into account.

But on the other hand, Poland was among the first countries in the world that granted all political rights to women after World War I. This shows that headway can be achieved in Poland by respecting and combining different traditions – conservative and progressive – and it is the way I choose to act as a politician. ●

Poland ranked among the lowest-risk global destinations to locate a data center

Dom Development’s new residential estate ˚oliborz Artystyczny will commemorate great Polish artists

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

Itella signs contract with CBRE CBRE will provide real estate services to Itella Real Estate Oy, part of the Itella Group, which offers solutions for managing information and product flows in Europe. CBRE will deliver a range of services across Itella’s portfolio, comprising 700,000 sqm of fully leased logistics and office properties in Russia, Germany, Poland, Sweden, Denmark, Estonia, Latvia, Lithuania and Norway.

Redknee in Wroc∏awski Park Biznesu I Provider of communication software products, solutions and services Redknee has leased nearly 3,300 sqm of space in Wroc∏awski Park Biznesu I. The class-A building offers 15,700 sqm of GLA. ●

In this issue Silesia City Center sold . . . . . .13 Osiedle Jaśminowe . . . . . . . . .13 Business Garden Poznań

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Żoliborz Artystyczny . . . . . . . . .14 Poland safe for data centers . .14 MLP Group . . . . . . . . . . . . . . . . . .14 Elena Madison interview . . . . .15

Silesia City Center to be sold for €412 million in record deal

Allianz is set to buy the biggest shopping center in Katowice

Nowe Centrum, a subsidiary of Austrian developer Immofinanz Group, will sell its Silesia City Center in Katowice to an international consortium of investors headed by German financial services group Allianz for €412 million.

On May 27 the companies signed a preliminary conditional sales agreement that is scheduled to be finalized in September this year but has yet to be approved by Poland’s competition watchdog.

The transaction is the largest in Poland so far this year, and is worth some €22 million more than last year’s record sale – that of the Manufaktura shopping center in ¸ódê by Euris/Rallye Group and Apsys to Union Investment Real Estate.

The Silesia City Center mall, located on ul. Cho-

rzowska 107 in Katowice, is the biggest shopping mall in the southern Polish voivodship of Silesia, comprising some 90,000 sqm of retail space and housing 340 stores.

It is fully leased, with the largest tenants including C&A, Cinema City, Pure Health & Fitness, Saturn, Smyk and Tesco.

Silesia City Center was built in 2005. It was acquired

by Immofinanz Group in 2006 and later expanded by an additional 60,000 sqm and 60 stores. The expansion cost some €50 million.

According to Eduard Zehetner, management board president at Immofinanz Group, the sale of the mall proves there is a rebound in the investment market in Eastern Europe.

He added he was sure that the firm would be able to close other sale transactions in the region this financial year.

Silesia City Center comprises 90,000 sqm of retail space and houses 340 stores “This transaction further enhances the position of Poland throughout Europe as a stable, transparent market with strong fundamentals

Jones Lang LaSalle advised the buyer in the transaction. Agata Seku∏a, JLL’s head of retail investment, Central Europe, said,

and development prospects, which are key factors for the investment activities of leading market players.”

Karolina Kowalska

Residential

Osiedle JaÊminowe launched in Poznaƒ The 14-building estate will be located near a resort Warsaw Stock Exchange-listed developer Echo Investment recently launched construction on its Osiedle JaÊminowe residential estate located in Poznaƒ’s Naramowice district, in western Poland. Pil-Building has been chosen as the general contractor for the project. The net value of the contract between the investor and the contractor amounted to z∏.19.29 million.

The project, located between ul. Karpia and ul.

Sielawy, will consist of 14 fivestorey multifamily buildings with quiet modern elevators.

The estate will feature a playground and communal areas.

The building will comprise a total of 375 apartments, ranging from 28 to 89 sqm.

Each of the housing units will have at least one balcony or a terrace, while the apartments located on the ground floor will have small gardens. The developer offers its potential buyers the option of purchasing two adjacent dwellings and joining them together into one larger apartment.

There will be a total of 564 parking spaces available, 195 of which in an underground garage. The estate will offer a video surveillance system and around-the-clock security service.

Osiedle JaÊminowe is situated in the northeastern part of Poznaƒ, in the vicinity of the ˚urawiniec nature reserve and the Warta riverbank, a popular place for jogging, picnics, weekend strolls and other family activities. It is also conveniently linked with the city center.

One of the largest property investors and developers with Polish capital operating in Europe, Echo Investment has completed more than 90 projects in Poland to date, with a total of over 900,000 sqm of space. The company is also active in the Romanian, Hungarian and Ukrainian markets.

Karolina Kowalska

COURTESY OF ECHO INVESTMENT

The value of deals in the Polish real estate market should come in higher than €2.5 billion, advisory firm Savills said in a recent report.

In 2012, the total value was €2.7 billion, the highest since 2006.

Savills wrote in the report that the value of real estate deals in Poland fell to €600 million in the first quarter of 2013 compared to €728 million in Q1 2012.

Retail

COURTESY OF IMMOFINANZ

Deals value down in 2013?

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The estate will comprise 375 apartments between 28 and 89 sqm

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

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Office

JUNE 3-9, 2013

The first phase is expected to be completed in Q4 2014

COURTESY OF DOM DEVELOPMENT

SwedeCenter building green in Poznaƒ

COURTESY OF SWEDECENTER

Residential

The first stage of the development will comprise four office buildings

A cornerstone-laying ceremony was held at the construction site of Business Garden Poznaƒ Developer SwedeCenter has held a cornerstone-laying ceremony for its Business Garden Poznaƒ office complex in Poznaƒ, western Poland. The project is to be built on a sixhectare plot located at the intersection of ul. Bu∏garska and ul. Marceliƒska, located in the ¸awica district. It will comprise nine buildings offering a total of approximately 80,000 sqm of office and service space.

The project is financed by SwedeCenter, part of the property division of the Inter IKEA Group, which will also manage the complex in the

future. The first phase of the investment is scheduled to open at the beginning of 2015.

A 500 kg concrete foundation stone was transported using a 30-meter crane and placed seven meters below street level, in the corner of the underground parking garage of one of the four office buildings currently being constructed.

At the ceremony the city’s chief architect, Andrzej Nowak, said, “The scheme compliments the city’s 2030 development strategy which aims to boost [Poznaƒ’s] investment attractiveness, support job creation … and strengthen its status as a highlevel services center.”

Business Garden Poznaƒ will be developed in two phases, with the first comprising four office buildings and five

in the second phase. The lower buildings were designed based on modern, energy-saving technical solutions compliant with the LEED (Gold) certification requirements and will be surrounded by greenery.

The scheme’s technological solutions will allow for reduced consumption of utilities, air quality control and optimized access to natural light. The project will feature green roofs, as well as parking spaces for bicycles, and for hybrid and electric cars.

Business Garden Poznaƒ is one of three planned green business parks which SwedeCenter will develop in Poland under the Business Garden brand. Construction on a similar scheme is currently underway in Warsaw.

KEK

‘Artistic’ apartments in ˚oliborz Dom Development’s 1,700-apartment estate references the district’s bohemian days Warsaw Stock Exchange-listed developer Dom Development has launched construction on the first phase of one of its largest schemes – ˚oliborz Artystyczny – in Warsaw’s northern ˚oliborz district. The new multifamily estate, located at ul. Powàzkowska 7/13, is to commemorate the district’s former residents – many of Poland’s best actors, film directors and musicians active during the communist era.

The investment will comprise a total of 13 buildings with 1,700 apartments on a 10ha plot, once completed. The first phase of the development, scheduled for completion in Q4 2014, will deliver a total of

223 apartments in three buildings and 253 parking units.

Eiffage Budownictwo Mitex will act as the general contractor.

Two of the three buildings whose construction has been launched will offer 197 apartments in total, measuring from 30 to 88 sqm and priced from z∏.7,350 to z∏.9,350 per sqm.

The third one, a seven-storey dominant scheme, will offer 26 higher-standard housing units measuring from 51.5 to 173 sqm and priced from z∏.9,500 to z∏.16,500 per sqm.

The investor decided to name the estate after renowned Polish artists who lived and worked in ˚oliborz, such as actress Kalina J´drusik, musician Czes∏aw Niemen, film director Jerzy Kawalerowicz and actor Zbigniew Zapasiewicz. The streets and boulevards within the estate will be named after them.

Logistics

SHUTTERSTOCK

Poland is the 17th lowest-risk location for data centers in the world, according to a report by Cushman & Wakefield. The Data Centre Risk Index 2013 (DCRI) evaluates risks likely to affect the successful operation of data center facilities in the 30 most important global markets.

Poland’s ranking marks a significant rise from its position of 22nd last year. With an increasing number of data centers being developed in Poland, lower costs of electricity and highly-qualified staff, Poland continues to attract companies as an alternative data center location to other, more expensive European countries.

Data centers house business-

critical IT systems – any downtime has the potential to threaten an organization’s viability and seriously affect its customer service and revenues. The report takes into consideration factors such as energy and labor costs, internet connectivity, ease of doing business and the likelihood of natural disasters or political instability.

The US continues to lead the global ranking in data safety, followed by the UK, thanks to its highquality internet connections and ease of doing business. But it is the Nordics, powered by hydroelectricity and with comparatively low energy unit costs, which are becoming an increasingly attractive global data center location.

The region dominates this year’s ranking, with Sweden placed as third-safest location worldwide for data centers, rising from eighth last

Poland is a safe location for data centers, the report found year. Iceland (7th), Norway (8th) and Finland (9th) also feature in the top 10. The only other European

Karolina Kowalska

Piotr i Pawe∏ in Poznaƒ’s MLP

Poland good for storing data Poland has been ranked 17th among the lowest-risk global destinations for a data center

The name of the estate corresponds to the names of other estates in the district, such as ˚oliborz Oficerski (Officers’ ˚oliborz), Dziennikarski (Journalists’), Urz´dniczy (Clerks’) and Spó∏dzielczy (Cooperative’s).

The names won’t be the only element reminiscent of old ˚oliborz’s atmosphere – according to the zoning plan, all trees growing on Dom Development’s plot are to be preserved. They should add an impression of continuity to the new estate, the investor says.

Several other developers are currently active in ˚oliborz, including Robyg, Atlas Estates and Turret Development. Dom Development is also involved in several other schemes in Warsaw, such as Osiedle Wilno in Targówek and Osiedle Saska in Praga Po∏udnie.

country in the DCRI’s global top 10 is Germany, which ranked 4th.

KEK

The Piotr i Pawe∏ upmarket grocery store has leased 8,000 sqm of space in Millennium Logistic Parks’ warehouse and production center in Poznaƒ, western Poland.

The MLP Poznaƒ center is located in Koninko, 15 km from the center of Poznaƒ and 4.5 km from the A2 highway. It is currently being expanded and once completed, it will offer 102,000 sqm of warehouse and production space. Most of building A, which will be delivered at the end of 2013, has already been leased.

“The location of the center allows for efficient distribution of goods all over the country. Close proximity to Poland’s western boarder expands its reach to Western Europe as well,” said Dorota Jagodziƒska-Sasson, a member of MLP’s management board.

The Poznaƒ-based Piotr i Pawe∏ has BS 89 stores in 51 cities.

JUNE 3-9, 2013

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

15

Interview

Changing the use of public space Lokale Immobilia sits down with Elena Madison, an urban planner and vice president at Projects for Public Spaces, a New York-based nonprofit organization, to talk about projects she is involved in to change two public areas in Warsaw

How did you like the interaction with Varsovians?

Wola was great, people at the meeting were excited about the possibilities. It was a very interesting mix of people – there were those born and raised in Wola and now bringing up their children there, multiple generations of residents, as well as newcomers.

Many of them came with their children and though the meeting lasted for three hours, and even though it is really hard for children to spend so much time in one place, they all stayed.

People were excited, very involved in the work, they did not want to leave the meeting. The library workers who were hosting us politely reminded us it was already past 9 pm and they had to go home.

In Wola, developer Skanska Property Poland is engaged in the transformation of the public space. Is it typical for a developer to get involved in such projects?

Here Skanska is not so much a developer as a corporate partner and it is exciting to have them so involved.

Oftentimes you have some-

Elena Madison (top center) working on city plans with Warsaw’s architects and residents one who just looks at the design and says “OK.” What they did was attend the workshops, lectures and public meetings and I think they really wanted to learn from this experience for their own practice.

It has changed since I started working for Project for Public Spaces 12 years ago. Developers used to work in a very different way then, but now the smart ones are actually trying to learn these new methods and processes of planning space.

They realize that people are more than ever focused on the quality of life and that is what is attracting them to

cities. So they need to know how to make cities competitive.

Even people who have been a little bit skeptical about what we were doing just stood up and said that they wanted to see how it works.

One of the reasons we focused on Mariensztat is because it is so central and underutilized at the same time. In the context of Placemaking as a pilot program in Warsaw, we wanted to have successful projects.

I think there is a little bit of a culture clash that we see in places like Mariensztat and other places where street cafes are shut down by the residents, because they are too loud.

It’s simply a different way of life that older generations are used to. They are set in their ways of doing everything within the confines of their private space, because that’s the way the society and culture were functioning for most of their lives.

Now, some of the people who live there are 20 years old and don’t remember communist times. They don’t have such experiences.

The reception you encountered in Mariensztat was very different from the one in Wola. What happened there?

It seemed like some of the elderly citizens there didn’t want any change. They didn’t even want to talk to us. They simply refused to be a part of the dialogue and they didn’t want anyone else to talk about it.

What was interesting is that there were other residents who really wanted to go through with the project.

COURTESY OF WIKIMEDIA COMMONS/ALINA ZIENOWICZ

Is this a new trend – to reshape existing sites by changing their uses?

A lot of new things are in fact old things that we have forgotten. We call it “Placemaking” and the organization I work for, Project for Public Spaces, has been doing it for 35 years now. It consists of studying the site and understanding how people use existing spaces before any changes are proposed.

We have specialists in all kinds of fields – designers, economic development experts and public-space managers. We start with a lot of site analysis, observations, surveys, activity mapping,

then actually physically mapping the space, counting people etc.

In Warsaw the president of the “Na miejscu” foundation, Marta Trakul-Mas∏owska, and her team did a lot of similar work before we came, so we already knew a lot about how the space is used.

COURTESY OF NA MIEJSCU

Karolina Kowalska: You came to Warsaw to help with the project “Na miejscu – dzia∏anie” (“On the spot – action”) organized by the “Na miejscu” foundation and Skanska Property Poland.

What are you changing in the Polish capital?

Elena Madison: We wanted to revive two public areas with great potential – the Mariensztat neighborhood and a playground in the Wola district, in the vicinity of Al. Jana Paw∏a II. We tried to preserve how these sites are currently used, and make them better and more rational so people could feel more comfortable there.

It is not about physical things as much as about activities, bringing people together and making the public space more welcoming for a variety of people of different ages and genders.

volunteering, participating, or even caring for the public realm are not part of how these people used to live.

In the past, what was communal was in fact nobody’s.

Everyone’s homes were clean and taken care of, but public places were neglected. So this is not an attitude that I haven’t encountered before.

I think the good news is that the former communist countries are a part of Europe now. Young people are traveling and learning. People can travel anywhere now and when they come back they want to do more for the community because they understand the value of it. They can go to Vienna and when they come back to Warsaw they think, “Why can’t we have that here?” And I see this attitude here in Warsaw and other places where I have worked, like Prague or Bratislava.

Mariensztat is one of the most picturesque and underutilized neighborhoods in Warsaw

But when you first came to Mariensztat, elderly residents came to protest the initiative. Was that a shock for you?

I wasn’t surprised. My family was originally from Bulgaria, so I have some experience with post-Soviet people, who are learning new ways of interacting on a broader community level. Things like

Did you manage to work out any solution?

Yes. We met with the representatives of Warsaw Open Library who were interested in creating a sort of a mobile portable library environment there. We are going to try it in Mariensztat. If it is not successful, it is portable, so it could be easily moved to some other places. It’s not designed specifically for Mariensztat. It could move back there when the time and place is right.

Do you think you are able to better understand elderly Polish people because your family is originally from Bulgaria?

It is important to understand how dynamic the transition period in the last 20 years has been and how much cities and places have developed.

So I understand some people’s reluctance to change, especially those from the older generation.

The ever-changing environment is just too much for them to process and sometimes it’s hard for them to see themselves as part of that change. Whereas for younger people it’s easier, everything is much more fluid and obviously when people are younger they are more flexible and they adapt easily.

Our exercises are very well-structured, which helps to get into what we’re doing and get people to focus and engage them in productive work.

Will you come back to Warsaw to see the effects of the projects?

I hope so. I am hoping to come back in the fall to see how they go. ●

16

THE LIST

www.wbj.pl

JUNE 3-9, 2013

Financial Services

Factoring Companies Ranked by revenue from factoring in 2012 A guide to Polish business and industry

www.bookoflists.pl

Przewodnik po polskim biznesie i gospodarce

Rank

Factoring Company name Address Tel./Fax E-mail Website

Revenue from factoring (z∏. mln)

Total revenue (z∏. mln)

Services Debt collection / Number of Ledger Financial factorers maintenance / advisory / Total number of Debt Analysis of employees / administration debtor’s financial Year founded in situation Poland

Ownership: Polish / Foreign

Top local executive / Title

✓

✓ ✓ ✓

WND WND 1995

BRE Holding - 100% None

Pawe∏ Bry∏a; Dariusz Steç

Miros∏aw Jakowiecki

Full / Partial

Export / Import

Maximum risk covered

First payment due (days) First pay-out (%)

0-2 70-100%

Promissory note

0-1 80-95%

In blanco promissory note; authorization to access bank account

✓ ✓

✓ ✓

287 54 1998

Bank Pekao - 100% None

Bank Zachodni WBK Finanse - 100% None

Collateral required

2012 / 2011 / 2010 / 2009

BRE Faktoring SA ul. Królewska 14, 00-065 Warsaw 1 22 829-1460/22 829-1499 kontakt@brefaktoring.pl www.brefaktoring.pl

66.3 55.3 44.6 43.8

66.3 55.3 44.6 43.8

✓ ✓

✓ ✓

100%

Pekao Faktoring Sp. z o.o. ul. Lubartowska 74A, 20-094 Lublin 2 81 445-2000/81 445-2002 biuro@pekaofaktoring.com.pl www.pekaofaktoring.com.pl

53.9 46.4 36.9 41.7

WND WND WND WND

✓ ✓

✓ ✓

80-100%

BZ WBK Faktor Sp. z o.o.

Al. Jana Paw∏a II 23, 00-854 Warsaw 3 22 586-8292/22 586-8034 faktor@bzwbk.pl www.faktor.bzwbk.pl

47.9 36.8 28.8 31.6

47.9 36.8 28.9 31.9

✓ ✓

✓ -

100%

0-5 70-100%

In blanco promissory note; authorization to access bank account

✓

✓ ✓

346 58 2003

Bibby Financial Services Sp. z o.o. ul. Wo∏oska 9A, 02-538 Warsaw 4 22 545-6123/22 545-6124 info@bibbyfinancialservices.pl www.bibbyfinancialservices.pl

34.1 30.6 21.6 19.3

34.9 31.1 21.9 19.6

✓ ✓

✓ -

90%

1 70-90%

In blanco promissory note; authorization to access bank account

✓ ✓

✓ ✓

348 94 2002

UBI Factor S.p.A. SA Oddzia∏ w Polsce Al. Gen. T. Bora-Komorowskiego 25A, 5 31-476 Kraków 12 297-8400/12 297-8410 ubipolska@ubifactor.it www.ubifactorpolska.com

20.0 28.9 10.0 3.4

20.0 28.9 10.1 3.4

✓ ✓

✓ ✓

70-100%

1-2 70-100%

NA

✓

-

WND WND 2008

None UBI Banca - 100 %

Pawe∏ Kawaler

Pragma Faktoring SA ul. Mieczyków 14, 40-748 Katowice 6 32 442-0200/32 442-0240 biuro@pragmafaktoring.pl www.pragmafaktoring.pl

10.2 8.1 5.3 4.9

18.7 15.3 10.9 10.3

✓ ✓

✓ -

100%

0-3 60-90%

In blanco promissory note

✓

✓ ✓

177 35 1996

Pragma Inkaso 79.4% WND

Tomasz Boduszek

arvato services Polska, oddzia∏ Bertelsmann Media Sp. z o.o. - faktoring ul. Kolejowa 150, 7 62-064 Plewiska k/Poznania 61 652-8800/61 652-8755 faktoring@arvato.pl www.faktoring.arvato.pl

6.0 7.0 14.0 13.2

157.4 162.0 161.0 145.0

✓ ✓

✓ -

90%

1 80-90

In blanco promissory note

✓ ✓

✓ ✓ ✓

35 70 1994

None Bertelsmann - 100%

Janusz Jankowiak

INDOS SA ul. KoÊciuszki 63, 41-503 Chorzów 8 32 771-8888/32 249-5434 indos@indos.pl www.indos.pl

4.1 3.2 3.9 4.4

16.0 10.2 10.5 7.7

✓ ✓

-

100%

0-3 80-100%

WND

✓

✓ ✓ ✓

238 34 1991

Ireneusz Glensczyk 33.3%; Andrzej Wernicke - 33.3%; Ireneusz Glensczyk Tadeusz Zientek President 33.3% None

WND WND WND WND

WND WND 1,706.4 1,407.0

✓ ✓

✓ -

100%

1 100%

Authorization to access bank account

✓

✓ ✓

1,290 55 1991

None Raiffeisen Bank International - 100%

Raiffeisen Bank Polska SA ul. Pi´kna 20, 00-549 Warsaw NR 22 585-2001/22 585-2585 faktoring@raiffeisen.pl www.raiffeisen.pl/faktoring

Notes: NA = Not Applicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in March 2013. Number of employees and ownership structure are as of March 2013. All information pertains to the companies’ activities in Poland. Companies that didn’t respond to our survey are not listed.

Board Members

President

Maurice Tracey President

None Krzysztof Kuniewicz Bibby Group of Factors General Director - 99.9%

Unit Director

President

President

Piotr Czarnecki President

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to +48 22 257-7500, or via e-mail to wbjbol@wbj.pl. Copyright 2013, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

MARKETS

JUNE 3-9, 2013

www.wbj.pl

Stocks report

world stock indices DJIA

NASDAQ

15,324.53 (May 30 close)

S&P500

3,491.30 (May 30 close)

0.20% (for the week)

FTSE100

1,654.41 (May 30 close)

0.92% (for the week)

DAX

6,657.00 (May 30 close)

0.24% (for the week)

-0.59% (for the week)

A good week, a great month

NIKKEI 8,400.20 (May 30 close)

13,589.03 (May 30 close)

0.58% (for the week)

-6.18% (for the week)

CHANGE: 14.26% (year to May 30)

CHANGE: 12.18% (year to May 30)

CHANGE: 13.13% (year to May 30)

CHANGE: 10.45% (year to May 30)

CHANGE: 7.99% (year to May 30)

CHANGE: 27.14% (year to May 30)

52-week high: 15,542.40

52-week high: 3,532.04

52-week high: 1,687.18

52-week high: 6,875.60

52-week high: 8,557.74

52-week high: 15,942.60

52-week low: 12,035.09

52-week low: 2,726.68

52-week low: 1,266.74

52-week low: 5,229.76

52-week low: 5,914.43

52-week low: 8,238.96

May was the best month so far this year for the Warsaw Stock Exchange. Its bluechip WIG20 index finished the month with a 7.17 percent gain, the highest gain for any month yet this year.

The four-day week (the WSE didn’t trade last Thursday, a national holiday) was shaped by the shares of Mostostal Warszawa, which, along with Rafako, signed a deal with North China Power Engineering Co to build a power block in the Jaworzno power plant. After the announcement, its stock rocketed by 40.45 percent.

Many other construction companies and developers followed its path.

The only day that the main indices didn’t show any gains was Wednesday, when Q1 GDP data for Poland was revealed (growth of 0.5 percent), probably reminding investors that Poland is still

Major indices WIG

47,476.64 (May 29 close)

WIG20

2,463.37 (May 29 close)

29.05

28.05

27.05

24.05

23.05

22.05

21.05

20.05

17.05

16.05

15.05

14.05

13.05

29.05

28.05

27.05

24.05

23.05

22.05

21.05

20.05

17.05

2,200 16.05

43,000 15.05

2,260

14.05

44,200

13.05

2,320

10.05

45,400

09.05

2,380

08.05

46,600

07.05

2,440

06.05

47,800

02.05

2,500

30.04

49,000

10.05

52-week low: 2,039.72

09.05

Change year to May 29: -6.20%

08.05

52-week low: 36,653.28

07.05

52-week high: 2,628.36

Change year to May 29: -1.31%

06.05

Change for the week: 3.85%

02.05

52-week high: 48,222.72

30.04

Change for the week: 3.36%

Top 5 MOSTALWAR EFH MOSTALEXP CALATRAVA MEDIATEL

Closing 7.30 0.76 0.25 0.03 1.31

% change (week) 52-week high 124.62 16.85 68.89 4.10 56.25 0.86 50.00 0.53 45.56 2.00

52-week low 2.60 0.34 0.12 0.02 0.80

Top 5 GTC SYNTHOS TPSA EUROCASH LOTOS

Closing 8.54 5.35 8.15 63.50 42.43

% change (week) 16.99 10.31 7.95 7.32 6.88

52-week high 10.25 6.00 17.34 64.50 45.45

52-week low 5.13 4.29 6.23 36.59 22.66

Bottom 5 COALENERG PRIMAMODA GLOBALNRG ELZAB ORZBIALY

Closing 3.44 1.77 0.59 3.26 10.71

% change (week) -29.07 -21.68 -21.33 -18.50 -13.63

52-week low 2.66 1.74 0.55 0.94 10.60

Bottom 5 TAURONPE HANDLOWY PZU BORYSZEW KERNEL

Closing 4.22 99.70 447.00 0.41 59.80

% change (week) -0.71 0.70 2.05 2.50 2.91

52-week high 4.87 103.85 455.00 0.67 76.00

52-week low 3.67 66.57 273.95 0.38 47.25

52-week high 19.90 5.45 2.16 4.15 26.39

sWIG80

NewConnect

30.34 (May 29 close)

52-week high: 11,439.53

WIG-Banki

Adam Narczewski X-Trade Brokers DM SA

29.05

28.05

27.05

24.05

23.05

22.05

21.05

20.05

17.05

16.05

15.05

14.05

52-week low: 8,984.43

10.05

09.05

08.05

29.05

28.05

27.05

24.05

23.05

22.05

21.05

20.05

17.05

10,200

16.05

2,400

15.05

10,560

14.05

2,520

13.05

10,920

10.05

2,640

09.05

11,280

08.05

2,760

07.05

11,640

06.05

2,880

02.05

12,000

30.04

3,000

07.05

Change year to May 29: 8.57%

06.05

52-week low: 2,147.52

02.05

Change year to May 29: 9.39%

30.04

Change for the week: 3.18%

6,671.76 (May 29 close)

Change for the week: 0.63%

52-week high: 37.78

Change for the week: 3.14%

52-week high: 6,723.16

Change year to May 29: -8.67%

52-week low: 29.82

Change year to May 29: -0.76%

52-week low: 5,163.30

SOURCE: WSE

29.05

28.05

27.05

24.05

23.05

22.05

21.05

20.05

17.05

16.05

15.05

14.05

13.05

10.05

09.05

08.05

07.05

06.05

02.05

29.05

28.05

27.05

24.05

23.05

22.05

21.05

20.05

17.05

16.05

15.05

14.05

6,100

13.05

30.0

10.05

6,240

09.05

30.4

08.05

6,380

07.05

30.8

06.05

6,520

02.05

31.2

30.04

6,660

30.04

6,800 31.6

Jacek Ciesnowski

Weak z∏oty

11,434.08 (May 29 close)

52-week high: 2,829.62

13.05

2,809.70 (May 29 close)

Change for the week: 1.38%

on the brink of recession.

The one-day holiday break on Thursday put investors in spending mood again on Friday, when the broad-market WIG index and the WIG20 gained 0.69 and 0.9 respectively. JSW and BRE Bank led gains that day, rising by 4.7 percent and 4 percent. The WSE’s gains on Friday were all the more impressive, since most European indices were in the red that day.

This week should be interesting for the WSE, as a bevy of macroeconomic data will be released. The week will start with PMI data for Poland, as well as for the UK and the entire euro zone, and finally for the US. The Monetary Policy Council’s decision on whether to further cut interest rates, due on Wednesday, will certainly shape the markets as well.

Currency report

Other indices mWIG40

17

Despite a shorter work week due to the long weekend in Poland (last Thursday was a national holiday), we witnessed a lot of action on the currency market. After a series of weak macroeconomic data from the US the dollar depreciated.

The EUR/USD, after reaching a weekly low of $1.2850, shot up to reach its two-week high of $1.3050 and to finish the week in the $1.30 area. This week’s FOMC and ECB press conferences will certainly be decisive for the short-term direction of the EUR/USD. On the local market, we have observed a large depreciation of the Polish z∏oty. The final, official GDP growth figure for the first quarter of 2013 showed the economy expanded by only 0.5 per-

cent. The economy is hurt by declining investments, weak internal consumption and the contracting housing market.

Moreover, foreign investors have begun realizing gains on Polish treasuries, whose yields were at their lowest levels since April.

The EUR/PLN, which traded at z∏.4.19 at the beginning of the week, advanced sharply to z∏.4.29 (its highest since June of 2012) in the course of the week.

The USD/PLN followed that trend, climbing from z∏.3.24 to z∏.3.30.

This week we could see traders taking some profit, which could cause shortterm corrective movements on the PLN pairs, but for the weeks to come we have to prepare for further z∏oty depreciation. ●

currency rates 3.2816 31.05

SOURCE: NBP

3.2320 29.05

3.2132

3.1811 28.05

27.05

24.05

3.2233 23.05

0.1040

0.1035 31.05

3.13

3.1828

PLN-100JPY

3.33

29.05

0.1034

0.1034 28.05

27.05

24.05

0.1036 23.05

3.3832

3.4569 31.05

0.101

0.1035

PLN-RUB

0.105

29.05

3.3501 28.05

3.3579

3.3723 27.05

3.0

23.05

3.3732

5.0181 31.05

4.9465 29.05

4.8977 28.05

4.9093 27.05

4.8968 24.05

23.05

4.9109

3.2953 31.05

3.2831 29.05

3.2465 28.05

3.2416 27.05

3.2400 24.05

3.2587 23.05

31.05

4.7

PLN-CHF

3.5

24.05

PLN-GBP

5.1

4.2902 4.2315 29.05

28.05

27.05

24.05

3.0

23.05

4.1

PLN-USD

3.5

4.1912

4.1950

4.2020

4.2049

PLN-EUR

4.3

18

SPORTS & LIFESTYLE

www.wbj.pl

JUNE 3-9, 2013

Soccer

Soccer

Lewandowski held scoreless as Borussia falls to Bayern

Legia wins top Polish league title

The Polish goalscoring machine was stifled as the Munich side won the Champions League final

Arjen Robben (foreground) celebrates his team’s Champions League win Arjen Robben passed the ball along the goal line, getting it past Borussia’s goalkeeper and defenders. Munich striker Mario Mandzukiç had little trouble putting the ball into the empty net.

Borussia managed to equalize fairly quickly, when German midfielder Ilkay Gundogan converted a penalty in the

68th minute. But with a minute to go before the end of regular time, Mr Robben scored the decisive goal.

The game was Mr Robben’s third Champions League final, but the first in which he was on the winning side. For his performance he was named UEFA Man of the Match.

Jacek Ciesnowski

Despite coming away with just a draw on May 24, the next day Legia Warszawa clinched the championship of the top Polish soccer league, the T-Mobile Ekstraklasa, when secondplace team Lech Poznaƒ lost its game.

After their team drew with Widzew ¸ódê, many Legia fans were convinced they would have to wait at least until the next round of games before they could claim the championship. But with Lech losing to the last-place team in the league table, Podbeskidzie Bielsko Bia∏a, by a score of 2-0, Legia supporters were able to begin their celebrations.

Those fans should be especially grateful to Podbeskidzie midfielder Fabian Pawela, who scored both goals against the Poznaƒ team, giving Legia reason to celebrate and his team a glimpse of hope. As of press time, Podbeskidzie was sitting in last place in the league table, but were just one point away

COURTESY OF T-MOBILE EKSTRAKLASA/X-NEWS.PL

SHUTTERSTOCK

“Twenty-two men chase a ball for 90 minutes and at the end, the Germans win.” Gary Lineker’s quote describing soccer never seemed so accurate as during this year’s UEFA Champions League Final, with two German teams squaring off at Wembley Stadium in London.

Borussia Dortmund, with Robert Lewandowski, Jakub B∏aszczykowski and ¸ukasz Piszczek in its starting eleven, had a strong following in Poland this year. The team had hoped to surprise its archrivals Bayern Munich with an offensive approach. That tactic was successful for the first 30 minutes, with the Dortmund side dominating the action. Thereafter the game became more even-sided – both teams had legitimate goal-scoring chances.

The goalless draw held up until the 60th minute, when Bayern’s Dutch midfielder

The Warsaw side earned its first Polish championship since 2006

Legia striker Marek Saganowski from moving up a spot, which would allow them to avoid relegation to a lower league.

With one round of games to go as of press time, the only season result for the league that wasn’t known was what team besides Polonia Warszawa (which wasn’t granted a license by the Polish FA to play in the T-Mobile Ekstraklasa next year), would be relegated.

The two possible victims were GKS Be∏chatów and Podbeskidzie Bielsko-Bia∏a.

Concert

50 years of excellence Eric Clapton June 7 Atlas Arena ¸ódê

SHUTTERSTOCK

After a five-year break, Eric Clapton is back in Poland, this time with a show in ¸ódê. Mr Clapton’s current tour is special, as it celebrates his 50 years as a musician.

And what a career it has been: he is the only musician to have been inducted into the Rock & Roll Hall of Fame three times – once for his solo work and once each with his bands the Yardbirds and Cream. The legendary blues and rock musician – one of the most influential guitarists of all time – has won a staggering 17 Grammy awards.

His latest album, his 21st as a solo artist, is called “Old Sock” and was released back in March this year. It features a myriad of and blues standards, as well as jazz and reggae sounds and two new original songs penned by Mr Clapton himself.

With his catalog spanning five decades, Mr Clapton is sure to perform his solo hits,

Eric Clapton

as well as tracks made famous by the various bands he played with during his career. It will also be a good occasion to reprise some

songs not played live in years.

Eric Clapton and his band will be supported by Andy Fairweather Low, a veteran

Welsh musician. As WBJ went to press, there were still a few tickets available, starting from z∏.235.

Jacek Ciesnowski

With one point separating them, the fight to remain in the top league was due to go down to the wire.

Legia will be aiming to qualify for the Champions League group stages next season, while Lech Poznaƒ, Âlàsk Wroc∏aw and Piast Gliwice will be playing in Europa League qualifiers.

The league championship is Legia’s 9th, and its first since 2006.

Jacek Ciesnowski

JUNE 3-9, 2013

LAST WORD

www.wbj.pl

19

Tech Eye

Gift ideas for dads who like Thrones. And beer. brewed by US-based Brewery Ommegang (Ommegang.com). This is a blond ale – they’re generally worse at math than brunette ales – and its head is predictably “full and fluffy.”

It’s 6.5 percent alcohol by volume, with a grassy, lemony aroma and a lightly malty flavor. Price: $8.50 per 750ml bottle.

Note: you can get approximately 2,684ml of Bud Light for the same price. Something to keep in mind if your dad prefers quantity to quality.

And has no self respect.

Our final gift idea this week is something un-throne-related: The Night’s Watch from Swiss watchmaker Ulysse Nardin (Ulyssenardin.ch). This “Game of Thrones”-inspired timepiece – named after an order of duty-sworn men – is a marine diver resistant to the practically unfathomable depth of 200 meters.

The watch case is 45.8mm, made of stainless steel and coated with vulcanized black rubber, with sapphire crystal case on the back bearing the “Game of Thrones” logo. Only 25 will be produced, each costing $10,500, which is fair enough in our opinion.

There’s just one problem. A mem-

ber of the Night’s Watch, as depicted in the books, must vow to “take no wife, hold no lands, father no children.” In other words, Ulysse Nardin is asking five figures for a timepiece that effectively symbolizes a life of chastity for the heterosexual male.

So if you’re looking for a father’s day gift for a guy who likes “Game of Thrones,” maybe you should stick with the beer. For dad’s sake. ●

COURTESY OF ULYSSE NARDIN

COURTESY OF BREWERY OMMEGANG

COURTESY OF THINKGEEK

importantly, scientific requires a rather sturdy resting place, research indicates that like a steel desk. Or a giant rock. four out of five dads If you think dad would like an approve.

Iron Throne to call his very own, but As one might expect wouldn’t settle for a scale replica, The Iron of a flourishing media you can always get him a life-sized Throne franchise, a multitude of model from HBO (Store.hbo.com). opportunities to license We haven’t included a picture of it – the brand have ap- just imagine a bigger version of the peared. And since licen- smaller version pictured at left. sor HBO is not one to Be aware that owning this version ignore the scent of of the Iron Throne involves a money, lots of tremendous commitment splendid meron the financial, spatial chandise has and personal levels. You appeared in need $30,000 (plus $1,800 consequence, for shipping), a wide swath including a verof floor space, a high ceilitable plethora ing and people dumb Father’s day is on the horizon, and of Iron Thrones (a key seat enough willing to help you now is a good time to consider gift of power in the “Game of move the 350lb (158kg) ideas. This week Techeye has some Thrones” series). chair. Also key: a mom One is the cute but who will tolerate a giant, suggestions for people whose dads hefty Iron Throne, a handuncomfortable, rather like “Game of Thrones.” pointy piece of furniture.

Wait ... you’ve heard of “Game of finished resin sculpture If you think mom would Thrones,” right? Of course you have. available from ThinkGeek get upset about holes Everybody knows “Game of (Thinkgeek.com). For just poked in her ceiling or the Thrones.” It’s everywhere, a true $269, you get a 1/6-scale disruption of her carefully social phenomenon, holding the replica of the infamous coordinated IKEA decor, uncoveted title of “most pirated TV throne. It’s just about the there’s another Iron show.” It’s also a wonderfully bloody most epic paperweight you Throne that might work: drama, full of wit and artful gore, can imagine, though its with just a smidge of incest. Most compact 23lb (10kg) mass Iron Throne beer the Iron Throne beer

The Night’s Watch

Ever consumed 2,684ml of Bud Light? Let us know: techeye.wbj@gmail.com

To advertise in WBJ’s classifieds section, contact Agnieszka Brejwo, at (+48) 222-577-526 or abrejwo@wbj.pl