WBJ #31-32 2011

The parliamentary election campaign has officially begun

Norway killer Anders Behring Breivik’s Polish connection

Dalkia has purchased a major Polish heat distributor and it’s not stopping there 5

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WWW.WBJ.PL

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VOLUME 17, NUMBER 31-32 • AUGUST 8-21, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

REAL ESTATE

COURTESY OF MEDIA & DORADZTWO

Lokale Immobilia

• Legal traps in Poland’s property market • New €400 million theme park • Sobieski Hotel sold 11-18

Slow but steady The Irish ambassador tells WBJ about the Celtic Tiger’s efforts to get back on its feet 8-9

Since 1994 . Poland’s only business weekly in English

The wallet in your phone Poles are big cellphone users, and the latest technology will allow them to buy groceries and pay bills with their mobiles in the near future

Przewodnik po polskim biznesie i gospodarce

MBA Programs 20-21

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-3 Domestic . . . . . . . . . . . . . . . . . . . . . .4 International . . . . . . . . . . . . . . . . . .5 Finance & Economics . . . . . . . . . . .6 Industry News . . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . . .14-18 Markets . . . . . . . . . . . . . . . . . . . . . .19 The List . . . . . . . . . . . . . . . . . . .20-21 Last Word . . . . . . . . . . . . . . . . . . . .22 Classifieds . . . . . . . . . . . . . . . . . . .23

Smolensk report fallout Heads have rolled following the government’s Smolensk report, but Poles are still dissatisfied

KASZ K/¸U STOC TTER SHU

A guide to Polish business and industry

J K/WB URE MAZ

12-13

3, 11

Double-dip fears return Stocks are plunging worldwide as uncertainty about the US and EU economies continues

5, 19

A GUIDE TO POLISH EXPORT is AVAILABLE NOW! To order: Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

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NEWS

www.wbj.pl

Andrzej Lepper dead

AUGUST 8-21, 2011

IN THE SPOTLIGHT

Numbers in the News

The Swiss franc

z∏.3.75 was the peak rate of the Polish currency to the Swiss franc in early August

COURTESY OF WIKIMEDIA COMMONS

$2.4 trillion

Quote of the Week

Could be worse GDP per capita in purchasing power standards (PPS) in 2010, selected countries (EU27 = 100) 300 283 250 200 *Provisional value

149 150

124

118

114

108

100

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E. coli compensation at €46 million

Google Street View in Poland After initial privacy concerns halted the project in 2009, Google has now started filming in Poland for its Google Street View service. Image taking in Warsaw, Wroc∏aw, Gdaƒsk, Kraków and Poznaƒ will continue until the end of this year and should be ready in time for the Euro 2012 soccer championships. Log on to WBJ.pl to find out how things are going this time around.

DATELINE

August/September

Company index Acer ............................................12 gowebtrade.com ........................19 Play ............................................12 Aegis Media................................12 Grupa PHN ................................14 Plus ............................................12 AGS Architects ..........................14 GTC ............................................18 Polimex-Mostostal ......................7 Alstom Power Polska ..................7 Hafema ......................................14 Polski Holding NieruchomoÊci 14 Alstom Power Systems ..............7 Hochtief Polska............................4 PwC ..............................................4 Alterco ........................................18 Home Broker..............................17 Rafako ..........................................7 Archon Group ..............................4 HSBC ............................................6 Razer ..........................................22 Argo ............................................14 Immofinanz ................................18 Samsung ....................................12 Bank Pekao..................................3 ING..............................................12 Sk∏adnica Ksi´garska ................14 Bank Zachodni WBK..............5, 12 ING Bank Âlàski ..........................3 SMG/KRC ....................................3 Biedecki........................................6 Inteligo Bank..............................12 So∏tysiƒski Kawecki & Szl´zak 17 Bögl & Krysl ................................2 International Destination SPEC ............................................7 BRE Bank ....................................3 Strategies ..................................14 BUDEXPO ..................................14 Intraco ........................................14 Sprint..........................................13 BZ WBK ........................................6 ISABEAU ....................................18 Square ........................................13 Citibank ......................................13 Jora Vision..................................14 STRATFOR ..................................10

AUGUST 20 GOLF & COUNTRY BUSINESS MIXER Event:

British student murdered Prosecutors have charged a 44-year-old bus driver for the murder of British student Kate Zaks, whose body was found next to a Kraków railway embankment at the end of July. ●

Figures in focus

Source: Eurostat

On WBJ.pl

Poland’s fruit and vegetable producers will receive €46 million in compensation from the EU over loses suffered during this year’s E. coli outbreak. EU countries agreed to back the figure proposed by the European Commission. In total the EU will pay out €227 million to European farmers who suffered losses due to the outbreak.

Prime Minister Donald Tusk channels John McCain as he tries to reassure investors of Poland's economic stability

U Eu K ro rop area ea nU nio n

Adam Zdrodowski

“The Polish economy is built on strong fundamentals.”

US A nm ark Ge rm an y

long overdue, the Swiss currency depreciated by about 10 groszy against the z∏oty. Nevertheless, two days later, on Friday morning, the franc hit a new record high of z∏.3.75.

The growing popularity of the Swiss franc among investors has been looked at with considerable unease in Poland, where approximately 700,000 homeowners hold mortgages denominated in the currency.

Polish politicians have been trying to respond with new legal measures: the Sejm has just passed the so-called antispread law, which will allow mortgage holders to pay off their loans in the same currency in which they took them out, rather than having to convert z∏oty into the appropriate currency at the lending bank.

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of measures aimed at stemming the franc’s rapid growth.

“The Swiss National Bank considers the Swiss franc to be massively overvalued at present. This current strength of the Swiss franc is threatening the development of the economy and increasing the downsize risks to price stability in Switzerland,” the SNB said in a statement.

“The SNB will not tolerate a continual tightening of monetary conditions and is therefore taking measures against the strong Swiss franc,” the bank stressed.

It announced that it was cutting interest rates and increasing the supply of Swiss francs on the market.

Following the publication of the communiqué, which a number of analysts said was

urg

The Swiss franc has seen unprecedented appreciation in recent weeks as international investors, concerned about US and European sovereign debt issues, have been buying up the currency in droves.

Even though the US Congress managed to pass a new law allowing the country’s debt ceiling to be raised, thus helping to avert a potential default, fears about the fragile state of the economy prevailed, leading to losses on stock exchanges across the globe.

This led investors to seek out stable assets and safe-haven currencies such as the Swiss franc.

On the first Wednesday of August, the Swiss currency was trading at a record high of z∏.3.74 until the Swiss National Bank (SNB) intervened later in the day, announcing a number

bo

Poland’s roads directorate announced at the end of July that it had selected contractors for the two sections of the A2 highway, left incomplete following the dismissal of contractor COVEC. Section A will now be taken over by the Eurovia-Warbud consortium, which will complete the 29.2-km stretch for z∏.989 million. A consortium made up of CzechGerman group Bögl & Krysl, along with DolnoÊlàskie Surowce Skalne, will take on section C. Finishing this 20-km portion will cost z∏.756.05 million.

512.76 was how many points the Dow Jones Industrial Average lost on Thursday, August 4, a drop of over 4 percent. Polish stocks were hard-hit as well, with the WIG20 losing 3.84 percent the same day

Lux em

A2 sections contracted

z∏.21.13 billion was Poland’s estimated budget deficit at the end of July, much lower than expected

SHUTTERSTOCK

Andrzej Lepper, leader of Self Defense (Samoobrona), former deputy prime minister, deputy parliamentary speaker and minister of agriculture, was found dead in his Warsaw office on Friday, August 5. It was reported that Mr Lepper committed suicide by hanging. He was 57 years old.

is the maximum amount the US can raise its debt ceiling by, as a result of the recently passed deal

31 Event:

The British Polish Chamber of Commerce is holding a business mixer with a golf tournament, providing an excellent opportunity for participants to promote their business interests in Poland.

Location: Kraków Valley Golf and Country Club, Paczó∏towice

FACILITY MANAGEMENT CONFERENCE The conference will be a great place to exchange experiences related to the functioning of all attributes of the building.

Location: Centrum Bankowo-Finansowe “Nowy Âwiat,” Warsaw. multitrain.pl

SEPTEMBER 7-9 21st ECONOMIC FORUM Event:

The euro-zone crisis, the activities of ratings agencies, and the relative resistance of European banks to potential economic turmoil will be some of the main topics of discussion during this year’s Economic Forum in Krynica-Zdroj. Location: Krynica-Zdrój. forum-ekonomiczne.pl

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SHOPPING CENTER FORUM & TRADE FAIR 2011

Event:

The most important meeting for the shopping center industry in Poland.

Location: Hilton Hotel, Warsaw. shoppingcenter.pl

COBO ..........................................14 Kaskada......................................14 Swiss National Bank..................19 COVEC ..........................................2 Las Palm ....................................14 T-Mobile ....................................12 Cutter Consortium ....................12 LOT ............................................11 Tellabs/Analysys Mason ............13 Dalkia ..........................................7 Magnusson ..........................16, 17 TGC Corporate Lawyers ......16, 17 Danske Bank................................4 Manufacturing............................14 Towarzystwo Obrotu Dell ............................................12 Markit Economics........................6 NieruchomoÊciami “Agro,”........14 DolnoÊlàskie Surowce Skalne ....2 MasterCard ................................13 Twitter ........................................13 EDF ..............................................7 Merrill Lynch................................4 Unibail Rodamco........................18 Emir ......................................19 18 Miniwiz........................................22 Vattenfall ......................................7 Empik Media & Fashion ..............7 Mostostal Warszawa....................7 Vekoma Rides ............................14 Ernst & Young ..............................4 Novitus ......................................12 Veolia ............................................7 Erste Group ..................................7 Oferty.net ....................................17 Vienna Stock Exchange ............18 Europa Capital ..........................18 Open Finance ............................17 W. Babicki, A. Chelchowski First Data ..................................13 Orange........................................12 Frost & Sullivan ........................12 Orco Property Group..............4, 18 & Partners ................................13 Gandalf ........................................7 Pedersen & Partners ..................4 Warimpex Finanz ......................18 GE Real Estate ............................4 peter nielsen & partners ............4 Warsaw Stock Exchange ......5, 14 Gide Loyrette Nouel ..................15 PGE ..............................................7 Wenaasgruppen ........................18 Google ....................................2, 13 PGNiG ......................................3, 7 X-Trade Brokers Dom Maklerski ..19

NEWS

AUGUST 8-21, 2011

www.wbj.pl

Smolensk tragedy

Poland’s official Smolensk report fails to provide closure The report spreads the blame among Polish pilots, their superiors and Russian air-traffic controllers, but it hasn’t drawn a line under the catastrophe

Not qualified The investigative commission, headed by Interior Minister Jerzy Miller, said in the report that the pilot, co-pilot and navigator were not adequately qualified to fly the Tupolev Tu154 plane.

The report excoriated the 36th Regiment, the air-force military squadron responsible for the technical preparations for the flight, saying “improper” pilot training had contributed to the crash.

Moreover, the commission found that only the lead pilot was able to speak passable Russian, meaning he was the

only one in the cockpit able to communicate with the air-traffic controllers in Smolensk.

The thick fog and difficult weather conditions on the morning of the crash also played a major role in the disaster, the report concluded.

“The report hasn’t satisfied the majority of Poles” That there were explosives on board the airplane – as had been speculated by some – was categorically ruled out by Polish investigators.

At a press conference Mr Miller emphasized that no pressure had been put on the pilots by anyone from the Polish delegation on board the plane. This finding runs counter to speculation that suggests the late president ordered the pilot to land in Smolensk despite the difficult weather conditions.

The commission also said some fault lies with the Russian air-traffic controllers at Smolensk airport, who, the report said, told the pilots they were “on course,” when in fact the plane was already flying dangerously low.

Interior Minister Jerzy Miller headed the commission that investigated the tragedy Negative reactions In response to the report, Prime Minister Donald Tusk announced that he was accepting the resignation of Defense Minister Bogdan Klich. The man who took his place, Tomasz Siemoniak, has since announced that the 36th Regiment will be disbanded.

The report hasn’t satisfied the majority of Poles, a survey suggests. An SMG/KRC poll carried out after the report was presented indicated that

56 percent of Poles still believe they don’t have the full picture of what happened. Only 36 percent said they now felt fully informed about the Smolensk catastrophe.

Politicians from the opposition party, Law and Justice (PiS), which was co-founded by the late president, blasted the report, with MP Antoni Macierewicz saying it was a “set of lies … lacking evidence from the actual plane wreckage … and [that it] failed to

point out the guilty individuals.”

All your fault In response to the Polish commission’s findings, Russia’s Interstate Aviation Committee (MAK), which issued its own report into the Smolensk tragedy in January, denied any fault on the Russian side, repeating its earlier position that all of the blame for the crash lay with the Poles.

Remi Adekoya

Parliamentary elections

Election campaign period officially launches The Democratic Left Alliance (SLD) had the support of 12 percent of those polled, while the current junior coalition partner, the Polish People’s Party (PSL), was backed by 4 percent. According to the survey, 55 percent of Poles intend to vote in the October elections.

Although politicians have already been campaigning for the past few weeks, things are set to heat up now, especially since the official campaign will be quite short, lasting for only eight weeks.

Campaign trends So what have been the main themes of the campaign so far and how might they change?

REPORTER

President Komorowski has finally announced a date for the parliamentary elections, starting an election campaign period that will last for roughly eight weeks President Bronis∏aw Komorowski has officially set October 9 as the date of this year’s parliamentary elections, urging all eligible voters to head to the polls when the day arrives.

Asked at a press conference whether he would be campaigning on behalf of his former party, the ruling Civic Platform party (PO), Mr Komorowski said that he would not be actively participating in the campaign.

An August survey by pollster SMG/KRC suggests support for PO is currently at 39 percent, and that their main rivals, the Law and Justice (PiS) party, are backed by 29 percent of the electorate.

More shale gas near Kutno?

Deposits of shale gas recently discovered by Poland’s natural-gas monopolist PGNiG near Kutno, in central Poland, may be just the tip of the iceberg. According to geologists, there are huge deposits located some 90 kilometers away from the area, where major firms have focused their attention.

These deposits are deeper beneath the earth than sources currently being examined.

Polish banks see profits soar

REPORTER

The Polish government’s official report into the April 10, 2010 plane crash in Smolensk, in which President Lech Kaczyƒski and 95 others perished, has failed to satisfy Poles and was strongly criticized by both the country’s main opposition party and Russian investigators.

The report said that poor cooperation between airplane crew members and inadequate pilot training were two key factors behind the crash. It also stated that the crew was given incorrect information by the Russian air-traffic controllers and that there was poor lighting at Smolensk airport when the plane tried to land.

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President Komorowski set October 9 as the date for this year’s parliamentary elections “Up until now, the campaign has not focused on political programs but on current issues and the heated debates surrounding them. It has not focused on the economy but on creating a positive image of

the party leaders,” said Sergiusz Trzeciak, political analyst at Collegium Civitas, a university in Warsaw.

“PiS is focusing on the Smolensk catastrophe, which is understandable in the con-

text of the recent report, and on people who are currently not beneficiaries of the system, people who feel excluded and marginalized,” he added.

Mr Trzeciak said that PO was trying to convince people that Poland is developing and attracting major investments.

But who are Poles likely to feel safer with in these times of global economic uncertainty?

“PO is playing on the fact that they are perceived as being a more predictable party than PiS. They are threatening their non-core electorate with messages of gloom if PiS were to win the elections and this is effective because threats are more efficient than promises, since the fear of losing what they have is stronger in people than the desire to gain something new,” Mr Trzeciak said.

Remi Adekoya

A number of major Polish banks recently released their Q2 results, with all seeing profits rise y/y.

BRE Bank recorded a consolidated net profit of z∏.313.2 million, which represents a 152% increase over the same period last year. Bank Pekao, meanwhile, reported a Q2 net profit of z∏.714.3 million, a 15% year-on-year rise. ING Bank Âlàski recorded a z∏.233.8 million net profit for Q2, up from the z∏.191.5 million it achieved for the same period last year.

Over 8 million in poverty For the last two years 8.7 million people in Poland have been living in poverty, according to Central Statistical Office data. Of this number, 2.2 million have been living in abject poverty.

According to Poland’s Institute of Labor and Social Affairs, if a family of four’s monthly expenditures were lower than z∏.1,257 in 2010, then it was living in abject poverty.

Although Poland’s economy is currently growing, experts say weak wages and slow job creation will mean poverty levels will likely not decrease this year.

Poland higher in UN investment ranking UNCTAD’s “World Investment Report 2011” ranks Poland as the sixth-most attractive country in the world in which to invest during the 2011-2013 period.

Last year Poland was ranked 12th. ●

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DOMESTIC

www.wbj.pl

AUGUST 8-21, 2011

The Blida case

Commission says former PM Kaczyƒski and former justice minister violated constitution The two could be brought before the State Tribunal Former Prime Minister Jaros∏aw Kaczyƒski and former Justice Minister Zbigniew Ziobro should be brought before the State Tribunal for breaching the constitution, a parliamentary commission has found.

The commission had been tasked with looking into the circumstances surrounding the

2007 death of former Democratic Left Alliance (SLD) MP and Construction Minister Barbara Blida. Ms Blida was being investigated for alleged corruption at the time, and the commission found that Mr Kaczyƒski and Mr Ziobro acted unconstitutionally in conducting the investigation.

According to the official report into the incident, Ms Blida shot herself in the chest on April 25, 2007, after Internal

Security Agency officers entered her home with the intention of arresting her on charges of bribery and corruption.

Out of seven commission members, only the two PiS representatives voted against accepting the commission’s final report into Ms Blida’s death. The findings were similar to those contained in an initial draft report prepared by the head of the commission, SLD MP Ryszard Kalisz.

“Ryszard Kalisz’s report is full of confabulations [and] it is clear that the needs of the election campaign have triumphed over concern for the state,” Mr Ziobro was quoted as saying on TVN24.

In the draft report, Mr Kalisz stated that when PiS was in government (between 2005 and 2007) the party “created a system designed to eliminate specific individuals,” one of whom was Ms Blida.

“Barbara Blida would be alive [today] if the PiS state had not existed,” the report states.

Sejm Speaker Grzegorz Schetyna had earlier suggested that the case could come before parliament as early as this month. By law, however, the committee itself cannot initiate a parliamentary procedure to bring Mr Kaczyƒski and Mr Ziobro before the State Tribunal.

To do so, it would need the signatures of at least 115 MPs.

Once those signatures are secured, a three-fifths majority in the Sejm would be needed to accept the motion.

The State Tribunal is Poland’s judicial body which examines cases concerning the infringement of the constitution and laws or crimes committed by the president, members of the government, the president of the National Bank of Poland and other senior state officials.

Tara Taylor

The growth of cities

Poles abandon regional cities for metropolises But many are failing to register in their new residencies, causing a headache for some authorities Many Poles are leaving some of the country’s medium- to largesized cities for major hubs like Warsaw, Gdaƒsk and Kraków, where they hope to find better education and employment opportunities.

However, not everyone who moves to Poland’s major cities registers their new address, leading authorities to argue that the country’s residence registra-

tion card – the “meldunek” – is an archaic tool which fails to record municipal population figures accurately.

According to data from the Central Statistical Office (GUS), approximately 400,000 people have already left cities including ¸ódê, Bydgoszcz, Poznaƒ, Katowice, Cz´stochowa, Lublin and Szczecin in the past 10 years.

Partly as a result, Warsaw’s population is predicted to grow by up to 150,000 people by 2035, while other major cities also expect to see their populations increase.

However, city authorities claim current population figures do not correlate with the actual number of people who live in Poland’s municipalities.

The mayors of Warsaw and Gdaƒsk, Hanna GronkiewiczWaltz and Pawe∏ Adamowicz, wrote a position paper recently outlining their concerns.

“It’s a big problem for large cities. It’s estimated that there are half a million more inhabitants in Warsaw than the number presented by GUS,” they said in the paper.

“The Ministry of Internal Affairs and Administration, as

who’s news?

Tomasz Bejm has become a partner responsible for the technology advisory team in the advisory department of PwC. Mr Bejm has over 17 years’ experience in leading the largest transformation and consulting projects in the area of IT in the Polish market. He has managed projects in the sectors of banking and insurance, telecommunications, energy and fuel and in the public sector. Before joining PwC, Mr Bejm had worked for international consulting companies including in the position of managing partner at the IT advisory team of Ernst & Young.

Tadeusz Blecha has taken up directorship of the Hochtief Polska Branch in Warsaw.

Before joining Hochtief Polska, Mr Blecha worked for 16 years with Bovis Lend Lease, where, from 2008, he was managing director for Poland. He is experienced in investment process management and in construction work execution. Mr Blecha graduated from the department of civil engineering at the Silesian University of Technology, Gliwice.

Cédric Gabilla has been appointed deputy head of asset management at Orco Property Group. Mr Gabilla has over 12 years of experience in the real estate industry in the acquisition, asset management and portfolio

management fields within large international investment companies. Among them are Archon Group (Goldman Sachs), GE Real Estate and Merrill Lynch.

Wan Azhamuddin Jusoh has been appointed trade commissioner of Malaysia in Warsaw. The Malaysian Trade Office (MATRADE Warsaw) is responsible for other Central and Eastern European countries such as Bulgaria, the Czech Republic, Hungary, Romania, Slovakia and Ukraine. Mr Wan Jusoh had been the Trade Commissioner of Malaysia in Budapest from 2007 to May 2011 and also the Trade Commissioner of Malaysia in Brazil from 1997 to 2003. He is a graduate of the University of Iowa and Mara University of Technology.

Mads Pinstrup has been appointed a senior consultant in Pedersen & Partners. He will be responsible for client relationship management and execution of senior level recruitment assignments across the organization. Mr Pinstrup has more than 10 years of experience in the banking sector, where he has held managerial positions at Danske Bank in both Denmark and Poland. Most recently, he was the head of corporate banking and financial institutions in Poland. ●

If your company has recently appointed any new senior managers, we’d like to know about it.

Please send submissions to: appointments@wbj.pl

the administrator of the statutes governing records about population numbers, should begin working very quickly to develop much more precise methods of evaluating the number of citizens,” they added.

The issue is not just one of statistics: important sums of money are also at stake, which is why many local governments are lobbying for legal changes that would allow them to

obtain more accurate population figures.

The Ministry of Finance calculates subsidies and income tax distribution based on the number of citizens in a given city. Every large city wants users of its roads, schools and kindergartens to pay taxes to finance these services. But with many in cities such as Warsaw and Kraków still registered in their home

towns, money that should be spent on the major cities is going instead to municipalities.

As a result, different cities are now finding various solutions to work out how many citizens they really have. In Rzeszów, for instance, authorities are counting the number of electricity meters to get more accurate population estimates.

Ella Pa∏ka, David Ingham

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

Change to signatures on invoices

Poland can now have offshore wind farms

Purchasers of goods and services who signed contracts with sellers may now issue VAT invoices on behalf of and for the benefit of the goods supplier or service provider as long as the supplier/provider approves such invoices. In accordance with the standpoint of the Supreme Administrative Court, taxpayers may approve lists of invoices and their copies without the necessity of obtaining signatures on each single original invoice. Protocols containing invoice numbers, dates of issuance and values of performed services fulfill the requirement of obtaining approval after having been signed by the supplier/provider (court ref. no. I FSK 1053/10).

An amendment to the Act on Maritime Areas of the Republic of Poland and Maritime Administration came into force on July 30, 2011. The act is to facilitate the construction and utilization of artificial islands, structures and equipment necessary for investment connected with the creation of offshore wind farms. The act also liberalizes provisions concerning fees for obtaining permits for construction and utilization of the artificial islands. It is now possible to divide such fees into installments based on the progress of work on the investment.

Business partners not bound by arbitration clause In the opinion of the Supreme Court (court ref. no. III CZP 36/11) a partner in a registered partnership is not bound by the arbitration clause as agreed by the partnership. At the same time the purchaser of an enterprise is bound by such a clause if this clause has been agreed upon between the seller and the creditor of the enterprise prior to its purchase, and the clause covers disputes concerning obligations connected with the conduct of the said enterprise.

Amendments to the Act on Retirement and Disability Pensions According to amendments to the Act on Retirement and Disability Pensions, from October 1, 2011, Poland’s Social Insurance Institution (ZUS) will suspend payments of retirement pensions granted before January 1, 2011. The suspension affects those who did not terminate their employment relations before having obtained the right to the allowance. However, only those who obtained the right to a retirement pension in the period from January 1, 2009 until September 30, 2011 and had not terminated the employment relation, will be able to apply to ZUS for recalculation of their pension. At the same time these people will have to continue working for at least 18 months. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

INTERNATIONAL

AUGUST 8-21, 2011

Global economy

European woes Meanwhile in Europe, concerns about the future of the euro zone refused to abate despite leaders having approved a second bailout for Greece on July 21.

European Commission president José Manuel Barroso’s letter to the heads of governments of euro-zone countries, calling for quick implementation of the latest agreement, failed to reassure markets on August 3.

The decision of the European Central Bank to buy Irish and Portuguese bonds the following day also failed to assuage investors’ worries, as the bank did not buy bonds from Italy or Spain, two countries seen as posing the biggest risk to the whole system due to their size.

Polish angst In Poland, the economy ministry revised its growth expectations for 2011 on August 4, cutting the previously expected 4.2 percent GDP growth forecast to 4 percent.

This was amidst several consecutive days of heavy losses on the Warsaw Stock Exchange, the worst of which was on August 4. At closing on that day, the broad-market WIG was down 3.84 percent. The WSE’s blue-chip index, the WIG20, plummeted 3.55 percent to drop below the 2,500 point mark.

After arranging a meeting of his Economic Council on August 5, Prime Minister Donald Tusk attempted to reassure voters, telling journalists that “the Polish economy is built on strong fundamentals.”

As WBJ went to press, analysts said the market might have further to fall. “A slowdown is inevitable,” said Mr Reluga.

“The question will be the scale of the slowdown, whether we will have another recession or if it will be just a slowdown, as was widely expected for 2011.”

Alice Trudelle

COURTESY OF WIKIMEDIA COMMONS

Concerns about the US economy and the euro zone caused investors worldwide to sell their shares en masse at the beginning of August, leading to several days of heavy losses on stock exchanges.

Although the drops on Wall Street and in London, Warsaw and Tokyo did not approach the levels seen during the peak of the downturn in 2009, on Thursday, August 4, major indices plunged between 3 and 5 percent, to levels unseen in years.

Despite the US reporting better-than-expected job figures on August 5, recent weak economic data was seen as the main reason behind investor nervousness, as many fear the US recovery could falter and turn into a second recession, dragging the rest of the world with it.

The last-minute vote on a deal to raise America’s debt ceiling on August 2 likely further diminished confidence in politicians’ ability to take decisive measures, said Maciej Reluga, chief economist at Bank Zachodni WBK.

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Norway killer confesses, links to Poland investigated

Is the world heading for a double-dip recession?

As optimism regarding the US recovery faltered, the first week of August saw indices across the world plunge to their lowest levels in years

www.wbj.pl

Smoke lingers over Oslo after the deadly bomb attack on July 22 Anders Behring Breivik, the Norwegian man who confessed to killing 77 people in downtown Oslo and on a nearby island, was being kept in solitary confinement at a prison near the Norwegian capital as WBJ went to press.

Police are still investigating whether Mr Breivik acted alone when he detonated a bomb in Oslo and then went on a shooting spree at a youth camp on Utøya Island on July 22.

Although Mr Breivik, who thought he was starting a war that would last 60 years, admitted to the killings, he did not plead guilty to charges of terrorism.

Mr Breivik’s lawyer, Geir

Lippestad, said that Mr Breivik is mentally ill.

A manifesto published online and attributed to him explains his worldview. The document, entitled “2083: A European Declaration of Independence,” is a record of Mr Breivik’s views regarding the threats Europe faces and what needs to be done to oppose these threats.

Poland is mentioned 47 times in the manifesto, mainly in historical contexts, including in relation to the 1683 Battle of Vienna, when Polish king Jan III Sobieski helped defend Europe from the invading Ottoman Turks.

Mr Breivik also mentioned

Poland’s triumph in repelling the Bolshevik advance towards Western Europe during the Polish-Soviet war (1919-1921).

Furthermore, Mr Breivik mentioned Law and Justice (PiS), the biggest opposition party in Poland, in a list he made of Europe’s right-wing parties.

Polish security officials had earlier admitted that Mr Breivik purchased chemicals in Wroc∏aw that could have been used to make explosives. But Poland’s security agency concluded that the materials bought in Poland were legal, “not critical for the construction of the bomb,” and were purchased in “marginal quantiGP, RA ties.”

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6

FINANCE & ECONOMICS

www.wbj.pl

AUGUST 8-21, 2011

Polish manufacturing sector Retail sales growth slows expansion unexpectedly high Defying expectations PMI, May 2010-May 2011 60

55

50

45

Jul

Jun

.2 01 0 .2 01 Au 0 g.

20 Se 10 p.

20 10 Oc t. 2 01 No 0 v. 2 01 De 0 c.

20 1 Jan 0 .2 01 1 Feb .2 01 1 Ma r. 2 01 1 Ap r. 2 01 Ma 1 y2 01 Jun 1 .2 01 1 Jul .2 01 1

40

* A figure above 50 indicates improvement on the previous month Source: Markit

The Purchasing Managers’ Index (PMI) for the Polish manufacturing sector rose for the first time in five months in July, reflecting growth in out-

put and new orders.

The PMI reading reached 52.9 points last month, compared to 51.2 in June, according to figures released by

Markit Economics and HSBC. A PMI reading of 50 or above indicates expansion in the manufacturing sector, while anything below suggests contraction.

July’s reading was above the pre-financial-crisis average of 50.3 (measured between 1998 and 2008) and defied predictions made by a group of economists polled by Reuters, who had expected a month-on-month fall to 50.5.

A breakdown of the PMI reading shows that output and new orders picked up, driven by a resumption in growth of new business following June’s marginal decline.

However, while the latest positive reading signals an overall improvement in business conditions, the volume of new export orders remained below the 50-point mark for the second month in a row, indicating an overall decrease in orders Tara Taylor from abroad.

Annual growth in retail sales decelerated in June to 10.9 percent from 13.8 percent in May, according to data from Poland’s Central Statistical Office (GUS). Market forecasts had predicted growth of around 12 percent.

However, analysts say the slowdown was not caused by underlying economic factors.

BZ WBK wrote that June’s retail sales figures meant that in the second quarter average nominal growth of retail sales was 14.4 percent, while real growth stood at 9.5 percent.

The bank predicts retail sales growth will stabilize at around 10 percent y/y in H2 of this year.

“The slowdown in the annual growth can be attributed to the high base from the previous year. Analyzing changes of particular categories of retail sales, we do not see any signs of a clear weakening in the upward trend of consumption demand,” read a market report from Bank Zachodni WBK.

Gareth Price

Jobless rate falls in June Poland’s unemployment rate fell to 11.8 percent in June from 12.2 percent the month before, data from Poland’s Central Statistical Office shows. The result was in line with expectations.

Unemployment levels usually drop in the summer months, due to a seasonal increase in the number of job

“We expect that in the second half of the year the unemployment decline will continue, which will result not only from the seasonal effect, but also from an improving trend due to continued growth in demand for labor in the economy,” Bank Zachodni WBK analysts wrote in a research Gareth Price note.

opportunities in the construction and farming sectors.

In total, 1.88 million people were unemployed in Poland in June, compared to 1.96 million unemployed in May. Analysts expect the jobless rate to fall further this year with the economy predicted to continue to create new job openings.

Seasonal boost Unemployment rate (in %), June 2010 to June 2011 14.0

Poland to be rid of deficit by 2015?

13.2 12.4

Poland should be deficit-free by 2015, Minister of Finance Jacek Rostowski said at a recent meeting at the Warsaw School of Economics.

Mr Rostowski added that the government wanted to reduce the country’s public debt

to below 40 percent of gross domestic product by 2018.

The finance minister said he felt that in the coming years the most competitive economies in the world would be those with the lowest levels of public debt.

Last year, according to national calculation methods, Poland’s debt-to-GDP ratio was 53 percent, while according to the European Union’s calculations, it was 55 percent.

11.6 10.8 %

010

.2

Jun

010

.2

Jul

010

.2

g Au

010

.2

p Se

t.

Oc

10

20

v.

No

10

20

GP

c.

De

10

20

011

.2

Jan

011

.2

Feb

r.

Ma

11

20

011

r. 2

Ap

y Ma

11 20

011

.2

Jun

Source: Central Statistical Office

Legal Forum

Mortgage (r)evolution Anna Herman Attorney Do you know who gets the mortgage payments you pay every month? Are you absolutely sure? It might be worth checking – not long ago in Poland the possibilities for “trading” mortgage-secured credit or loans significantly increased.

The modern real estate business requires flexible tools and the recent changes to mortgage regulations are intended to furnish these. The changes don’t give the old-fashioned Polish mortgage a face-lift operation so much as subject it to serious evolution in order to suit the needs of today’s lenders and borrowers.

One mortgage principle The most important change is the fact that Polish law no longer divides mortgages into “normal” mortgages and collateral mort-

gages (hipoteka kaucyjna). The decision to discontinue the collateral mortgage classification was made so that a mortgage is able to secure both existing and future claims.

As of February 20, 2011, a “normal” mortgage secures: (i) all existing and future receivables, (ii) receivables of identified or unidentified value, in z∏oty or a foreign currency, and (iii) more than one receivable.

The “one mortgage” rule means a risk of initial over-securing, in particular when a mortgage secures a receivable up to a fixed (identified) amount which is higher than the liability being secured. In such a case, the owner may submit a claim to reduce the mortgage amount.

It is now possible to use one mortgage to secure several receiv-

ables owed to a single creditor.

The assignment of receivables secured by a single mortgage includes the transfer of the appropriate part of the mortgage to the assignee. In addition, parties to the assignment agreement can agree that the mortgage remains with the assignor.

This is of particular interest to the banking sector. Banks will not only be able sell to each other our debts, but also the mortgage securing them or just a part of the mortgage, corresponding to the amount of the debt which is sold.

Several liabilities Moreover, several liabilities owed to several creditors may now be secured by a single mortgage. There is just one condition: such liabilities shall cover one undertaking. In this sce-

nario, members of a financing pool shall appoint a mortgage administrator who, in his own name but on behalf of the creditors, will enter into an agreement establishing the mortgage and will perform the rights and duties of the mortgage creditor.

The creditor shall be entitled to replace one liability secured by a mortgage with another receivable owed to the same creditor. Such substitution is subject to an amendment of the mortgage agreement between the creditor and the real estate owner. There is also no need to obtain consent for this change from creditors with the same or lower rank.

Expired mortgages Last but not least, if a mortgage has expired, the owner has the right to dispose of the empty item

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

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

in the land and mortgage register.

To simplify this somewhat, suffice it to say that within the framework of an expired mortgage, an owner may establish a new mortgage on an empty item in the land and mortgage register. This will allow a new creditor to step into an expired mortgage.

The same applies to the ability to transfer an existing property mortgage to an empty item in the land and mortgage register. This change should lead to creditors of lower rank “competing” to agree with the property owner to such a step.

That’s the theory, anyway. In practice the changes are so important that the courts registering mortgages will have to test and digest them. Only afterward will mortgage operations become smooth. ●

INDUSTRY NEWS

AUGUST 8-21, 2011

www.wbj.pl

7

Energy

Dalkia buying up Polish heat and power assets The energy firm has purchased a major heat distributor and is likely in the market to buy Vattenfall’s Warsaw plant Energy supplier Dalkia looks to be making a major play to solidify its position in the Polish market. Last month it

bought an 85 percent stake in Warsaw’s heat distributor for z∏.1.44 billion, and is reportedly in the running to buy Swedish utility Vattenfall’s heat and power plant in Warsaw. The company has filed a binding offer for the Vattenfall plant, Reuters reported, citing unnamed sources.

Dalkia is reportedly competing with Polish gas giant

heating business when it was announced last month that a preliminary contract had been signed with Warsaw City Hall awarding Dalkia an 85 percent stake in heat distributor SPEC, the largest municipal heating supplier in the EU. The privatization will be the biggest recorded by a local government in Poland and will pump some z∏.1.44 billion into

PGNiG for the Vattenfall plant. Neither Dalkia nor PGNiG has commented publicly on the reports.

Controlled by French utilities Veolia and EDF, Dalkia is the largest private heating network operator in Poland, where it has been operating for 15 years. It provides heating services in 40 cities across Poland.

The company added to its

Warsaw’s budget.

Piotr ¸opaciuk, an analyst at Erste Group, said Dalkia’s purchase of SPEC put it in pole position to win Vatenfall’s Warsaw-based asset.

“In view of Dalkia’s recent investment in SPEC, it seems likely that suggestions they are bidding for Vattenfall’s [Warsaw asset] are true. In this case, I would think it highly probable

that Dalkia would win the bid over PGNiG because it is well established in the market, while PGNiG is new to the field,” Mr ¸opaciuk said.

He added that if Dalkia’s bid was successful, the company would have to invest a significant amount of time and money to modernize the power plant.

Tara Taylor, David Ingham

Energy

Opole power investment to cost z∏.11 billion Binding offers for the construction of two new power blocks for Polish utility PGE have pushed up the price from an estimated z∏.9 billion to z∏.11 billion.

The lowest bidder, at z∏.11 billion, was a consortium of subsidiaries, comprising Alstom Power Polska and Alstom Power Systems. The

second consortium, comprising builders Rafako, PolimexMostostal and Mostostal Warszawa, submitted a bid of z∏.11.5 billion.

Tomasz Zadroga, president of PGE, was quoted by Parkiet as saying that considering current market conditions, both offers were “satisfactory.”

According to Piotr ¸opaciuk, utility analyst at Erste Group, the offers are close to the market standard.

Price, he said, will be the deciding factor, making Alstom the

favorite for what will be Poland’s biggest-ever energy tender.

PGE will now assess and analyze the two bids, a process that the firm said could take between several weeks to several months.

The two coal-burning electricity blocks will be built at PGE’s Elektrownia Opole power plant in southern Poland. They will generate a combined 1,800 MW when they come online between 2015 and 2016.

COURTESY OF WIKIMEDIA COMMONS

The price for two new power blocks tops the original estimate by some z∏.2 billion

The two power blocks will be built at PGE’s Elektrownia Opole power plant Although it is a massive investment, the likes of which will only be seen when Poland’s nuclear energy program gets going, it represents only a fraction of the work

needed to modernize the country’s aging power infrastructure.

Indeed, the average age of Polish utilities infrastructure is close to 40 years and must be

Empik buys controlling stake in internet bookstore Gandalf

replaced, otherwise Poles will suffer blackouts starting from 2015, said Mr Zadroga. “[And] we haven’t even started yet,” he said.

Alice Trudelle

2012

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Investing in Poland 2012 • the latest edition of Warsaw Business Journal Group's popular series of busines guides • a handbook to all of the essential information investors need to make a decision about why, where and how to invest in Poland • a perfect vehicle for businesses, regions, and cities to promote themselves to foreign investors

Empik spent z∏.12 million on its purchase of 70 percent of Gandalf Empik Media & Fashion (EM&F) has bought a 70 percent controlling stake in internet bookstore Gandalf for z∏.12 million. The two companies have also signed an agreement guaranteeing EM&F the option to buy the remaining 30 percent at a later stage.

Gandalf is one of the bestknown internet bookstores in Poland and the leader in the market for school textbooks, with an annual turnover of z∏.21 million. EM&F’s revenue last year exceeded z∏.2.7 billion, and its chief impetus behind the buy is to increase its presence in Poland’s textbook mar-

ket, which is worth approximately z∏.1 billion annually.

“Up till now, Empik’s textbook section was minimal. The textbook market has grown steadily in recent years … which is why we want to participate in it,” president of the EM&F Group, Maciej Szymaƒski, said in a press release.

Meanwhile, the president of Gandalf, Anetta Wilczyƒska, said that “gaining EM&F as a strategic investor marks another key stage in the development of internet bookstore Gandalf.”

The merger is also part of EM&F’s larger strategy to

develop its online store business. “Internet sales comprise a small share of our group’s total sales but thanks to recently planned acquisitions, we are counting on rapid sales growth in this area,” said Mr Szymaƒski.

The move follows Empik’s failed attempt to buy internet shop Merlin last year. Regulators decided that the merger would limit competition.

EM&F has appealed that decision to the Court of Competition and Consumer Protection, where it is still awaiting a decision.

Tara Taylor

The publication will include a special supplement: Trendbook Poland • a comprehensive view of the business trends shaping Poland's market • looks forward, predicting how the market will change • crucial insight and analysis for investors and businesspeople Distribution (24, 500 copies) • in bookstores and kiosks around Poland • to Warsaw Business Journal subsribers • through embassies and chambers of commerce • at Polish commercial end economic centers abroad • at conferences and trade fairs (e.g. The Econimic Forum in Krynica, Expo Real, Real Vienna, Imex) The launch of the publication will be accompanied by conferences and seminars on investment in Poland and the Polish economy.

For advertising and promotion opportunities contact: Ms Agnieszka Brejwo abrejwo@wbj.pl (+48) 504 201 007

8

INTERVIEW

www.wbj.pl

AUGUST 8-21, 2011

Polish - Irish relations

The power of history Ewa Boniecka: Before the financial crisis Ireland had one of the highest rates of economic growth in the European Union and was an example of how to handle fast modernization.

How do you assess your country’s current economic situation and its prospects for emerging from the economic crisis?

Ambassador Eugene Hutchinson: The impact of the global economic and financial crisis on Ireland has been severe, with a decline in real GDP of over 11 percent between 2008 and 2010. Ireland is now showing that it will meet its fiscal targets required to effectively deal with these challenges. The EU/IMF program which is being implemented provides a clear path to sustainability.

The Irish economy is one of the most open in the world.

Exports were over 100 percent of GDP last year, and our economy is adjusting quickly. Irish unit labor costs and price competitiveness have improved significantly, while productivity, a key determinant of long-term growth, grew strongly in 2010.

The World Bank also ranked Ireland ninth out of 183 countries in terms of the ease of doing business in its 2011 report.

Our economy is expected to grow modestly this year and the European Commission expects growth of 1.9 percent in 2012.

Over the medium-term, 3 percent growth is anticipated.

So, we are on track with our

adjustment program as confirmed by the recent EU/IMF review. Tough decisions are being taken to bridge the gap between revenue and expenditure. Public finances have been stabilized, and with our banking system restructured and downsized, a line has finally been drawn under our banking problems. Essentially, the fundamentals of the Irish economy are strong: last year we had the second-highest trade surplus in the EU after Germany. We expect that Ireland will emerge from this crisis leaner, more competitive and more productive. A strong export-led recovery is already under way.

Polish-Irish relations are particularly good right now. What do you think are the main factors behind this development?

Our relations are warm and friendly, not only at a governmental level, but also at a personal level with our people.

These links have been reinforced by many Poles coming to live and work in Ireland.

They have integrated easily into Irish society where their work ethic has been much appreciated.

Ireland and Poland have a strong sense of nationhood, forged by our turbulent histories and long struggles for selfdetermination. The Irish and Polish people have a deep commitment to family values. We also share a common historical experience of emigration and a desire to strengthen the links

with our respective diaspora.

In some ways, we have a shared recent history. When Ireland joined the EU, our economy was primarily agrarian, but EU membership has enabled us to modernize our economy.

Poland is making similar rapid economic and infrastructural progress, evidence of which is all around us.

To what extent have Ireland’s financial difficulties impacted the economic cooperation with Poland and in which fields is this cooperation strongest?

I do not see a significant falling-off in our commercial relations as a result of our economic difficulties. The cooperative relationship between Poland and Ireland is a relatively new phenomenon, accelerated by Poland’s membership of the European Union.

At that time, there were a number of bilateral initiatives through which we shared our experiences of EU membership and how to equip public services for handling EU affairs.

Our economic and commercial links remain strong.

Last year Irish merchandise exports to Poland were valued at some €600 million and Poland exported goods worth over €300 million to Ireland.

Our exports of services are valued at some €700 million annually and Polish services to Ireland at some €260 million each year. Irish investment in Poland is currently estimated at around €1.5 billion, and employs some 5,000 staff. This is a significant level of economic cooperation.

Remember that Ireland has

EAST NEWS

Eugene Hutchinson, Ireland’s ambassador to Poland, talks to WBJ about the financial crisis, relations between the two nations and the issue of Irish unification

Ambassador Hutchinson says that commercial relations between Poland and Ireland have not been significantly hindered by the economic crisis a population of only about 4.7 million people and Poland is now Ireland’s 17th-largest merchandise-export market. Our commercial activities are diverse, with over 40 Irish companies having an active presence in Poland. They cover a wide spectrum of activities, including ICT, pharmaceuti-

cals, engineering and design.

The Embassy and our Warsawbased Trade and Technology Board, Enterprise Ireland, want to enhance these commercial links and increase cooperative activities.

As you previously mentioned there are now many Poles work-

ing and living in Ireland. How do you see their position in your country?

Over 350,000 Poles came to Ireland at one time or another since 2004. The highest number of Poles living in Ireland at any time was some 250,000.

Currently, there are between 150,000 and 170,000 Poles in

INTERVIEW

AUGUST 8-21, 2011

Ireland and for the most part they are young, well-educated and hard-working. The high level of remittances to Poland suggests that the Polish community in Ireland is prospering.

The predicted outflow of Poles from Ireland following the downturn has not materialized. All reports point to a high level of satisfaction within the Polish community in Ireland.

Poles are Ireland’s largest nonIrish ethnic group, accounting for about one out of every 25 or 30 people in Ireland. They are well-integrated into the Irish lifestyle and they make a significant, positive contribution to our economy and society.

How would you describe Ireland’s priorities on the international stage, bearing in mind Ireland’s neutrality and the fact that it has not joined NATO? Ireland is not politically neutral but it is a militarily neutral state, which means that we are not a member of any military alliance. The Irish people have a strong attachment to our traditional policy of military neutrality. But this has not resulted in Ireland shying away from international engagement.

Indeed, our neutrality has enabled us to engage more effectively in promoting peace, development and human rights internationally.

We do not believe that there can be a purely military solution to conflict. While the role of the military is fundamental to peace-keeping, we see it only as one element of what must be a more comprehensive peacebuilding package involving diplomacy, mediation, civilian crisis management and development.

Small states that do not have significant military capabilities can make a difference particularly when they work together in pursuit of common objectives and shared principles. Non-proliferation and the elimination of nuclear weapons is also a priority – the “Irish Resolution” in the UN General Assembly in 1961, for example, was a precursor to the Nuclear Non-Proliferation Treaty.

Ireland maintains a highprofile in multilateral forums.

We are seeking membership of the UN Human Rights Council

“Irish investment in Poland is currently estimated at around €1.5 billion, and employs some 5,000 staff” for the first time next year. We will also assume the Chair of the Organization for Security and Cooperation (OSCE) in 2012 and the presidency of the EU in 2013.

Following the end of the “Troubles” in Northern Ireland, relations between the Protestant and Catholic communities and between the Republic of Ireland, Northern Ireland and Britain have been normalized to a large extent. As a result the issue of unification is no longer at the top of the agenda. How do you assess the current situation in Northern Ireland?

I doubt if my view is much different from the views of most others in Ireland. This is because, in 1998, the people of the whole island of Ireland voted overwhelmingly in favor of the Good Friday Agreement. Northern Ireland is now a peaceful, prosperous and stable society. Major advances have been made in areas such as equality, human rights and policing. Cooperation between both parts of our island have intensified.

The Good Friday Agreement’s institutions are functioning smoothly, and this is creating effective government for Northern Ireland.

A range of international partners, including the EU, have made important contributions to this process.

The EU’s example, in bringing once irreconcilable enemies together, has served to inspire many who worked to establish peace in Northern Ireland.

There are similarities in Ireland’s and Poland’s history as both nations have had to fight hard for independence from more powerful neighbors. How important is this history in shaping the present Irish society and your relations with the United Kingdom?

I think that you already sense my personal view of the power and influence of histo-

Path to recovery Quarterly GDP Growth, Ireland and Poland

Poland

Ireland

6 4 2 0 -2 -4 -6 -8 -10

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2009 2009 2009 2010 2010 2010 2010 2011 Sources: GUS, Central Statistics Office of Ireland

ry. This helps explain who we are, what we do and provides us with the foundations on which decisions can be made.

Clearly, history has shaped modern Irish society.

Relations with the UK have never been better. This was most vividly highlighted during the recent visit to Ireland by Queen Elizabeth II, last May, marking the first visit by a British Head of State to Ireland since our independence in 1922. This visit was not only hugely symbolic but substantive. Indeed, Queen Elizabeth put into context the complicated and interlinked relations between the two countries when she said that “so much of this visit reminds us of the complexity of our history, its many layers and traditions but also the importance of forbearance and conciliation, of being able to bow to the past but not be bound by it.”

And I couldn’t agree more.

Poland has taken over the presidency of the EU Council at a difficult time in the ongoing financial crisis and during a period when negotiations are beginning for the next multi-annual budget. What are your expectations for the Polish presidency and do you see Poland pushing further with EU integration?

Expectations for the Polish presidency are high. Poland’s first presidency provides a great opportunity to demonstrate Polish organizational and political skills, as well as leadership capabilities in dealing with a complex range of problems confronting the EU. Poland will, for example, take forward the consideration of the EU’s Multi-annual Financial Framework and the EU’s budget for the period between 2014-2020. There are many other important subjects in economic governance that Poland will advance. The arrangements for the accession of Croatia into the EU should be finalised during Poland’s presidency.

Poland’s leadership will also make a positive contribution in the international arena, for example by strengthening relations between the EU and its Eastern neighbors. In the wake of the “Arab Spring” Poland is well-placed to support democracy and the reform process. I have the sense that Poland is picking up the reins of leadership of the European Union with skill and confidence. ●

www.wbj.pl

9

10

OPINION & ANALYSIS

www.wbj.pl

AUGUST 8-21, 2011

Opinion

The wobbly West E

arly in the financial crisis, a major emerging-market investor told me, “This is not a global, but a semi-global financial crisis.”

He was right: it really was a crisis of the United States, Europe, and Japan. Among emerging markets, only Eastern Europe was badly hit.

Indeed, the crisis marks the emerging economies’ overtaking of the major Western countries, with huge consequences for global power, finance, politics, and economics.

The euro zone sovereign-debt crisis appears to have been the worstmanaged financial crisis since Argentina’s default in 2001. The European Union and euro zone leaders have seriously discredited themselves. Europe requires institutional changes that are much more fundamental than anything discussed so far.

The International Monetary Fund has never bet such huge sums on a single country as it has on Greece. As a result, the IMF, a custodian of some of the international reserves held by the world’s central banks, risks losing tens of billions of dollars.

Is this a responsible use of international taxpayers’ money? Would the IMF not have insisted on a much tougher program, with less financing, for any country outside the euro zone?

The apparent explanation for the IMF’s extraordinary gamble is that the managing director who made the decision to support Greece so heavily hailed from the euro zone and, at the time, was barely disguising his ambitions to run for the French presidency – that is, before his arrest in New

York on charges of rape. Europeans, moreover, dominate the Fund’s leadership. It is a discomforting conflict of interest that debtors dominate an international institution that lends them vast sums.

This mismanagement should disqualify any euro-zone policymaker from the IMF’s managing directorship, and yet Christine Lagarde, French finance minister, was named to succeed her compatriot Dominique Strauss-Kahn after his resignation.

Who would seriously have suggested a Russian to lead the IMF after its financial crash in 1998, or an Argentine after its default in 2001? Today, the euro zone is equally toxic.

Loose fiscal policy = poor economic policy The EU, the United States, and Japan are in fiscal jeopardy, and several countries – Japan, Greece, Italy, and Belgium – have public debts exceeding their GDP. Increasingly, people recognize that loose fiscal policy was poor economic policy, with serious implications for macroeconomic thinking, politics, and constitutions.

In macroeconomic theory, Keynesianism is due for its second demise.

Milton Friedman’s monetarism delivered the first death blow in the 1980’s, but it did not generate useful policy rules or predictions. During the crisis, prevailing macroeconomic theory counseled massive fiscal stimulus, thereby aggravating the publicdebt crisis. The question today is whether macroeconomic theory will render itself as irrelevant as the polit-

ical economy of socialism, or make useful contributions to economic policy. For the time being, elementary fiscal and monetary rules appear more appropriate.

How could people and governments accept these enormous debts and even recommend further fiscal stimulus? Many public expenditures and budget deficits have no justification other than populism, and the big political loser of the crisis has been European social democracy, Keynesian economics’ political counterpart.

“The predicament of the West remains lamentable” All too often, social democracy has amounted to populism, opposing any cuts in public expenditures and even deregulation, which would have enhanced productivity. European voters are now punishing social-democratic parties, which have become weaker than at any time since World War I. Instead, a fiscally responsible center-right alignment of political forces has taken power in all but three of the 27 EU countries.

Democracy’s failure Western democracies have prided themselves on institutional checks and balances, but obviously these mechanisms did not work during the crisis or the preceding boom. And they have been a recipe for policy paralysis in

America’s long debate about raising the ceiling on its national debt. So, when Chinese and Russians officials attack democracy as such, old questions about democracy’s efficacy and stability are raised anew.

There is no denying that advanced democracies largely failed to preempt the financial and sovereign-debt crises, while most emerging economies pursued better economic policies. How can modern Western democracies impose strict fiscal discipline? Has the independence of central banks given unelected officials a license to print money? How can accountability be imposed? How can unrepresentative vested interests be contained?

Such questions have triggered a wide-ranging constitutional debate.

After the Second World War, many European countries enshrined extensive social guarantees in their constitutions. Now many of these guarantees will need to be thrown out.

Instead, a number of European countries are discussing the introduction of stringent fiscal rules into their constitutions, and are contemplating even more far-reaching changes.

Excessive fiscal deficits in many Western countries must be reduced.

The average public debt in the euro zone has soared to 85 percent of GDP. Some European countries can reduce their debt through continuous budget surpluses, as Bulgaria, Finland, Russia, and Sweden have done in the last decade. Privatization of public corporations and property is another possibility.

Anders Åslund Fallout My Petersen Institute colleague Carmen Reinhardt suspects that financial repression will be the main debtreduction method: governments will rely on regulation and manipulation to force savers to pay down public debt through negative real returns on their bond investments.

Meanwhile, central bankers everywhere ask themselves: why keep everlarger international reserves in two of the world’s most mismanaged currencies, the US dollar and the euro?

However rare changes in reserve currencies have been historically, the current situation is no longer tenable; but a switch could further destabilize the world economy.

The West’s economic mismanagement will also reduce its military power. At present, the US accounts for half of all global military expenditures, but cuts are due. Relative US military power is not likely to be this great ever again, and China’s military rise looks as inevitable as its economic success.

The predicament of the West remains lamentable. Even so, some economists still advocate more fiscal stimulus. Instead, Western leaders need to focus on fixing their state budgets in order to salvage what they can. ● Anders Åslund, a senior fellow at the Peterson Institute, is the author of The Last Shall Be the First: The East European Financial Crisis, 2008-10.

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

Analysis

Germany’s opportunity takes shape with euro zone crisis

O

n August 4, global markets suffered their worst single-day losses in months. The causes were many and the losses spanned the major economic zones. The sigh of relief that first heralded the end of the US debt crisis quickly gave way to a traditional American panic attack.

Japan intervened – massively – in the currency market for the first time in months to stem the yen’s rise.

Switzerland, which also suffers from an abnormally strong currency, implemented a somewhat unorthodox strategy of cutting interest rates to zero in an effort to scare investors out of the country. European Commission president Jose Manuel Barroso openly maligned the euro zone’s newly improved bailout fund, calling for a “rapid reassessment.”

Each of these factors warrants a discussion of its own, but only the last – Barroso’s statement – is geopolitically critical.

The EU bailout mechanism is called the European Financial Stability Facility (EFSF). It was formed in 2010 in the aftermath of the first Greek bailout in order to assure markets that the Europeans had the institutions and the resources in place to

deal with any future debt crisis. Since its inception, the EFSF has been used for three bailouts: Ireland, Portugal, and a second bailout of Greece in June. During Greece’s second bailout negotiations, the function of the EFSF was adjusted considerably. The fund was given more autonomy and wider discretion over the kinds of crises to which it can apply its funds.

Most importantly, though, the Germans now have far more control over how the fund functions.

Leadership stake In STRATFOR’s opinion, these shifts effectively end the threat of outright national defaults in Europe. Germany definitively decided that it will allow its wealth to underwrite the union, but only in exchange for political control over how its wealth is used. With these changes, the Germans have staked their claim to European leadership.

However, preventing defaults is not the same thing as avoiding bailouts, and here is where Mr Barroso’s statements come into play. The EC president asserted that the EFSF suffers from two serious flaws, and STRATFOR agrees wholeheartedly.

The first problem is that the changes to the fund agreed to at the last summit must be ratified by eurozone governments (in most cases through parliamentary approval).

However, enshrined in the laws of most EU states is a robust vacation benefit for workers – six weeks a year is common. In Europe, August is vacation time. The plan for the new EFSF may be fully agreed to, but the fund cannot act in its new capacities until the various parliaments reconvene after their summer recesses. At present no European parliament has been called back for an emergency session to ratify the EFSF changes.

(Incidentally, Mr Barroso made his comments while on vacation back home in Portugal.)

The second problem is the latest summit’s failure to formally increase the EFSF’s maximum funding above its current level of €440 billion. Many observers – particularly bond traders – are concerned that the rolling euro zone crisis will not end until it becomes crystal clear that the European have allotted sufficient financial resources to stamp out any reasonable crisis. The colloquial term in the financial world is on the crass side, so we’ll paraphrase it

as “shove it” money – the idea being that the Europeans would be able to point to the stack of reserve cash as proof that no European state will be allowed to fail.

Reasons for limiting funding The Germans, as the ultimate guarantors of the European system, would prefer not to increase the EFSF’s funding level for three reasons.

First, the required volume would be astounding. Right now the bond markets are treating Spain and Italy particularly badly. Bailing out the two of them would require at least an additional €2 trillion. Germany knows it will have to increase the EFSF’s war chest in time, but that much that fast is simply beyond the capacity of the German voter to support.

Second, in the German mind, any expansion of the EFSF should only be done in league with additional restrictions on borrowers’ actions.

With the current revisions, Germany has seized de facto control of negotiations for bailouts, but those strictures were designed for smaller states and have yet to be tested.

The Italian economy is roughly seven times the size of Greece’s. Furthermore, the methods used to bring Greece to heel cannot be applied to a founding state of the European Union. If Germany is going to commit the massive resources required to bail out a major state, it will first want its political dominance codified, and it will want to test out the current system, which is still new and unused.

Finally and somewhat paradoxically, Germany reaps some benefit from the continuation of the crisis. So long as bond markets are pressuring EU states, those states are forced to come to Germany to humbly ask for assistance. This assistance comes with a price that the Germans are now able to name. So long as the crisis does not spiral out of control, Germany actually needs the market pressure to steadily rewire the European architecture more to its liking. Berlin actually has a vested interest in keeping the crisis – and several EU states – on an aggressive simmer. ● This edited version of “Germany’s opportunity takes shape with euro zone crisis” is reprinted with permission of STRATFOR

OPINION & ANALYSIS

AUGUST 8-21, 2011

www.wbj.pl

11

Editorial

Let something positive come from Smolensk

I

n reaction to the Polish government’s official report into the tragic Smolensk plane crash of April 10, 2010 in which president Lech Kaczyƒski and 95 others were killed, Prime Minister Donald Tusk has accepted the resignation of former Defense Minister Bogdan Klich.

For some time now it has been obvious to political observers that Mr

report which did not shy away from pointing out several embarrassing facts, including the revelation that the pilot, co-pilot and navigator did not have sufficient qualifications to fly the Tupolev Tu-154 plane. The 36th Regiment was slammed for its failure to properly train pilots and for allowing the falsification of pilots’ qualifications so that they could fly planes they were not properly trained for.

unique to that particular formation, but rather are a reflection of attitudes prevalent in many other Polish military units. This is a view shared by many Polish journalists, especially those who report on military issues.

It appears that the mentality of the Polish army has not changed much since the communist era, when the ability to get away with circumventing protocols and procedures was a trait admired by many. The former defense minister did nothing to change this mindset.

He’s a wonderful minister …

“The Polish army has not changed much since the communist era” Klich would lose his job. Even in the first few days following the catastrophe, it was clear that many mistakes had been made concerning preparations for the trip. Most of these were made by the Polish air force squadron, known as the 36th Regiment, that had been in charge of the flight. As the person at the head of the entire Polish army, the buck for those failings ultimately stops with the defense minister.

The commission, headed by Interior Minister Jerzy Miller, produced a well-documented and substantive

Mr Tusk looked somewhat foolish at the press conference where he announced that Mr Klich would be stepping down. The prime minister spent much of the time emphasizing how great a minister Mr Klich had been and that he was in no way to blame for the Smolensk catastrophe.

That, of course, begs the question as to why he accepted Mr Klich’s resignation in the first place.

It is now clear that there was blatant disregard for rules and procedures in the 36th Regiment, which has now been disbanded by the new Defense Minister Tomasz Siemoniak.

But looking at the bigger picture, and what the report reveals about the state of the Polish army and the mindset of those who run it, it is equally clear that the problems which plagued the 36th Regiment are not

Have they learned anything?

In 2008, when a CASA military plane crashed, killing 20 military personnel, including 16 high-ranking officers, a commission was also set up to investigate the accident. After the findings were published, Mr Klich, who was defense minister at the time, stated that the army had displayed “a nonchalant approach to rules and procedures.” The CASA plane belonged to the 36th Regiment.

Three years later, the Smolensk crash investigation revealed almost identical causes. The question now is whether those in power will do everything they can to implement the commission’s 45 suggestions for improving the safety of military flights, or whether it will only be a matter of

time before another similar catastrophe occurs.

The new minister has gotten off to a strong start by disbanding the 36th Regiment and dismissing 13 senior officers, including three generals.

Time will tell if he is able to make systemic changes to the Polish army’s modus operandi or if these headlinegrabbing dismissals will be the end of the story.

Cheap and ambitious don’t mix There is also another question worth discussing: How will highranking Polish officials such as the president and prime minister be transported abroad, now that the 36th Regiment has been disbanded?

The PM announced that VIPs will be transported in civilian aircraft in cooperation with the national airline, LOT. This, however, is highly impractical.

Take, for example, President Bronis∏aw Komorowski, who was recently invited to dinner with US President Barrack Obama in September. The schedules of normal civilian airliners would make it nearly impossible for Mr Komorowski to make it for the Obama dinner, unless he arrived in Washington two days earlier – a bit unbecoming for the head of the EU’s

sixth-largest member state. Is a country that aspires not only to being a regional leader but also a key player in Europe incapable of purchasing a decent plane to fly its leaders?

We are not speaking of exhorbitant sums here. Four years ago, the Czech government, which represents four times fewer people than the Polish government, retired its Tupolev fleet and bought two Airbus 319CJs, which can carry around 40 people and fly distances of up to 12,000 km. One such plane costs roughly z∏.200 million.

For years now, Polish officials have privately admitted to journalists that successive governments have simply been too afraid to buy new planes. Officials are fearful that the tabloids will have a field day, bashing them for acquiring luxury air-carriers while the average citizen struggles to make ends meet.

It is true that Poles are particularly susceptible to such “anti-elitist” propaganda, but enough is enough.

At some point, someone will have to make the decision to purchase new planes, instead of having government officials continuing to rely on shabby, half-century-old, unreliable and unsafe Russian carriers. If ever there was a moment in time the government could “get away” with buying new planes, that time is now. ●

Opinion

The Pole: a happy predator

T

he Swiss franc is climbing ever higher, Greece is on the brink of going bust, the euro zone is unstable, gales and storms are raging, and the southern part of the country is threatened by floods – but Poles are still happy. It is beyond belief. A nation which was once considered pessimistic, gloomy and unhappy – and was famously labeled by The Economist as “prickly” – is now filled with optimism.

A happy paradox The Social Diagnosis 2011, which was prepared by a team led by the renowned psychologist Janusz Czapiƒski, suggests that the number of Poles who consider themselves to be happy has risen from 60 percent in 2000, to 80 percent in 2011.

This implies that the majority of Poles are happy with their lives and feel fulfilled. But this is difficult to square with other findings in the same report and with recent macroeconomic figures. The study found that at least 26 percent of households earn incomes

which fail to cover their family’s basic needs. The country’s unemployment rate has also risen over recent years, from 9.4 percent in June 2008 to 11.8 percent in June of this year.

In seeking an explanation to this paradox, one could speculate that, being one of the most Catholic nations in Europe, Poland draws hope and faith from biblical teachings. But that doesn’t seem plausible, considering that year after year, the number of Poles who are practicing Catholics declines.

Some 42 percent of Poles surveyed said in a recent poll that they had attended church four or more times a month so far in 2011; a year earlier that figure stood at around 43.4 percent and in 1992, at 55.7 percent.

Let’s shop So, what exactly is keeping Poland smiling? Could the answer lie in a nationwide obsession with shopping?

Poland’s Central Statistical Office recently announced that the country’s consumer confidence index had

improved by 0.9 percentage points on a month-to-month basis in July 2011.

Recent statistics also show that unemployment dropped m/m in July, while Poles’ perception of the country’s general economic condition had also improved.

Poles are starting to spend more money on food, holidays and electronic goods. In other words, we are spending on things that bring us instant gratification. We go to the cinema, to concerts, we organize lavish weddings and baptisms and, importantly, we don’t plan our expenditures with a calculator in hand.

Animal instincts Poles should be bursting with pride before the world, before foreign investors, and be an example to a frustrated Europe. But shameful as it is to admit it, our happiness, consumption and optimism are really just the primitive traits of the common predator.

Polish psychology guru Jacek Santorski has remarked that our purchas-

es are largely dominated by basic instincts and are often not well thought out. We buy something because we desire it at a particular moment and not because we have planned the expenditure.

Moreover, the average Pole sometimes behaves like a bird during mating season – puffing his feathers to show the world what he can afford.

He takes out big loans, for example, to keep up with the Kowalskis next door.

All this points to the conclusion that it is something primeval in our brains that is driving our need to purchase more and more.

“In light of psychology and evolutionary economics it turns out that most financial, budgetary and economic decisions derive from the level of the so-called reptilian brain,” Mr Santorski has said.

“Sensations, attitudes, rapacity and greed influence our purchasing and investment decisions to a much larger degree than rational calculation,” Mr Santorski added.

Joanna Wóycicka

Rapacious consumption is thus, in reality, a Polish vice and not an advantage, and is perhaps therefore more of a sign of social backwardness than civilizational progress.

“The average Pole sometimes behaves like a bird during mating season” Nevertheless, one lives and works better among people who are happy, even when their reasons for being so are somewhat questionable. ● Joanna Wóycicka is the former head of the foreign sections of the ˚ycie Warszawy and ˚ycie newspapers and the former head of the foreign department at the Polish Press Agency (PAP). j.woycicka@hotmail.com

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12

COVER STORY

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AUGUST 8-21, 2011

Mobile technology

Cash, charge or cell?

Piotr Âlusarski

You call your friends with it, you take pictures with it, you write e-mails on it, you schedule events and play games on it – and soon you may be buying your groceries or even paying your bills with it. Your smartphone could soon become your new wallet.

New advances in telecommunications and banking are making the prospect more likely. The key technology is near-field communication (NFC), which enables people to place their phone next to a reading device that connects to a modified SIM card housing your account data. Faster and more reliable than the now-commonplace Bluetooth technology, it could be set to revolutionize shopping.

NFC has become a hot topic recently as banks and mobile operators battle to find ways to stay competitive. Pilot tests of the new service involving the four major mobile network brands in Poland (Orange, Plus, Play, T-Mobile) and several major banks, are now under way or are scheduled to take place soon.

T-Mobile, for one, plans to launch a mobile wallet option in the fourth quarter of this year and is currently completing testing with Inteligo Bank.

Orange, which is working on similar plans with Bank Zachodni WBK, had planned to finish its testing and assessment in July, but has now decided to extend the finish date until October.

been on the Polish market since April, while Acer plans to launch a new product in the third or fourth quarter of this year. These introductions are finding an eager customer base: according to an Aegis Media study, Poles will buy more than 11.6 million phones this year, nearly 5.4 million of which will be smartphones.

Indeed, mobile communication has taken a strong foothold in Poland. Not only does the country have over 48 million active SIM cards, with a penetration rate of around 125 percent according to Poland’s statistics office, but data from the UK’s broadcasting and telecommunications regulatory authority, Ofcom, shows that in 2009 more than

“Only giants will make waves” 82 percent of all voice connections in Poland were made using mobile networks. That amounts to the second-highest percentage in the world, surpassed only by India.

It also turns out that one in three Poles use only their cellphone to make calls, compared to one in eight British people and one in 20 Germans.

Another alternative Smartphone stronghold Smartphones equipped with proximity technology – which includes special microprocessors that communicate with instore terminals – are still rare in Poland, with the Samsung Avila, until recently, the only one currently available.

Another similar smartphone from Samsung, named Wave 578, has just hit Orange stores in France, and will soon be available in Germany, Spain and Poland.

This year in Poland some of the country’s largest telecommunication firms have already increased their smartphone sales by 20-50 percent, according to figures cited by Dziennik Gazeta Prawna.

New players, including Dell and Acer, are also joining the game. Dell’s Venue Pro has

es of public transport tickets, games and ring tones, as well as wallpapers and prepaid topups, he added.

But SkyCash founders are preparing another offensive by teaming up with Novitus, a Nowy Sàcz-based manufacturer of cash registers. The purpose is to install GPRS modules in cash registers to allow SkyCash payments to be made at supermarkets or bookstores.

The technology works like this: after goods are scanned by a cashier, the client types the store number and total cost of the purchase into their cell phone. The client confirms his or her PIN and waits for the cash register to receive confirmation and print the receipt.

F o r m e r -

SHUTTERSTOCK

Poles are global leaders when it comes to mobile-phone use. With new mobile payment methods emerging, they may begin to do much more

NFC is not the only option allowing for payments with a cell phone. For example, Poland-based SkyCash, which was established last summer, allows any cell-phone user to connect to the internet and download an app which then serves as a payment instrument.

With a client base of several thousand users (the exact numbers are not available), SkyCash is independent from mobile operators as well as banks, acting more as a clearing house that monitors transactions and does the accounting. An average SkyCash transaction involves around z∏.70, said Dariusz Mazurkiewicz, the company’s managing director. The most popular services include payments between users, purchas-

chants, the system is seen as a simpler and cheaper alternative to traditional credit-card payments and it could be a gamechanger if it catches on. There are as many as 300,000 Novitus cash registers in Poland, compared to only 250,000 card terminals. The first cities due to try out the new service within the next couple of months include Warsaw, Wroc∏aw and Bydgoszcz.

Cost and security worries There are, however, still several concerns. According to a Frost & Sullivan study on the subject, these include security issues, a lack of regulation on mobile transactions, quality of service, limited collaboration between different participants and the high cost of solutions.

Indeed, although interest is high, progress has stalled. As far back as 2007, the four major mobile operators in Poland formed a consortium aimed at creating a standard for mobile-payment services.

The plan was to implement solutions for contactless payments by means of NFC-

Will smartphones one day render our wallets obsolete?

enabled handsets. The standard, including readers, software, a billing system and security mechanisms was to be ready by 2009, but little has resulted from the initiative.

Also in 2009, several partnerships between banks, mobile operators, financial institutions and clearing houses were formed to test NFC and non-NFC payments. But tangible results have yet to be seen.

“Each year forecasters say it has been miserable thus far, but next year will be the year for mobile payments, no doubt,” said Sebastian Konkol, a senior consultant and telecommunications market expert from Cutter Consortium, an IT advisory firm.

“Alas, there is still no business justification, no significant edge in terms of functionality, utility or finance that would influence a payer’s habits and make them abandon cash and credit or debit cards to the benefit of mobiles,” he added.

“Universality is the key.

Either you reach all merchants with one smart move, or noth-

ing comes of it.”

Enter the giant Nevertheless, Marcin Gi˝ycki, director of ING’s retail prod-

uct management department recently told Puls Biznesu, “I believe that in the near future cell phones will be a subscriber’s financial center.”

Poland's mobile payment market in 2014 – a forecast Number of users

7.82 million

Gross transaction value

$9.7 billion

Annual growth (transaction value) from 2010-2014 (CAGR) Largest category

94.9% Prepaid top-ups, 25.2%

Average transaction size

$10.53

Dominant technology

SMS, 60%

NFC share

29.3% Source: IEMR Research

Mobile payment around the world and in Poland • Some 2.5 billion users globally will be able to pay via their mobilesby 2015. That will be around 40% of all mobile subscribers around the world.

• The first Polish enterprise that offered mobile payments in shops and vending machines was mPay, operating since 2007. Today mPay has about 220,000 registered users, 15% of whom use the service regularly.

• Since June this year, subscribers in seven European countries including Poland may try out the new mobile financial service launched by Ericsson (ericssonmoney.com). It allows for sending and receiving money between users as well as withdrawing cash from ATMs (prepaid card). In the future, it will be possible for users to pay bills and do online and offline shopping via the system.

Source: Juniper Research

AUGUST 8-21, 2011

COVER STORY

www.wbj.pl

13

Legal Eye

Banking with the dinosaurs

Security of mobile payments remains a concern

Google promises layers of security with its ‘Wallet’

COURTESY OF GOOGLE

What does this mean for credit card companies?.

Google says that its new “Google Wallet” app is one of the safest and most secure methods for using and storing your plastic cards’ financial information to enable mobile payments.

Use of the app will require PIN authorization prior to purchase, much like today’s credit and debit cards, and Android-enabled smartphones will also feature a separate lock screen, the company said in a statement.

The technology envisioned by Google involves several layers of security. First, Google states that the Google Wallet will store encrypted data on a computer chip, which will work like a separate computer outside of the phone’s main memory, allowing only trusted programs to have access to the phone’s data.

Second, the MasterCard PayPass will also protect data as it is transferred during payment. According to reports from Gigaom, Google also stated that the chip will selfdestruct if tampered with, thereby ensuring an even greater element of security.

According to Google, eventually your loyalty cards, gift cards, receipts, boarding passes, tickets – even your keys – will be seamlessly synced into the app. Every offer and loyalty point will also be redeemed automatically.

Currently, MasterCard is the only payment network officially working as a launch partner with Google. But according to The New York Times, “Google emphasized that the wallet would be open to all businesses and invited other banks, credit card issuers, payment networks, mobile carriers and merchants to work with it.”

However, judging by the fact that Visa has recently teamed up with Square, a company founded by Jack Dorsey (one of the cofounders of Twitter) it looks as though competition in mobile payments is set to increase.

COURTESY OF SQUARE

“My belief is in one platform that will unite all parties interested in this market,” he added.

But Mr Konkol sees things differently. “In my view, banks pose competition to mobile payments and will defend this market. So, the only way is to compete with them, as well as credit card organizations, but this is not a game for single telecoms, even if they’re huge and global,” he said.

Telecoms are the players who probably care the most about this new form of technology as profits from basic voice or text services are decreasing each year and many will need to seek other sources of revenue. Finding other avenues may be a matter of life and death for firms: recent data from Tellabs/Analysys Mason suggests that mobile operators in developed countries could run out of profit in the next two to four years if they do not change their business models.

So, is Mr Gi˝ycki’s forecast of smartphones as a subscriber’s “financial center” realistic?

“Very realistic,” said Mr Konkol. “But not because of the banking system, or the global telecoms or the collaboration of these two worlds.

Only giants will make waves – like Google, who won’t ask if anyone will let them create a revolution. They’ll just do it.”

The internet giant definitely wants a big piece of the pie. In May of this year, a new NFCenabled application, Google Wallet, came into the picture.

The technology is currently in the beta phase, with tests being performed in New York and San Francisco in collaboration with Sprint, Citibank, First Data and MasterCard.

Google’s partnership with MasterCard will make it possible for users to “take” money out of their e-wallets from any PayPass-enabled store around the world, of which there are currently over 300,000.

“You will be able to store your credit cards, offers, loyalty cards and gift cards, but without the bulk. When you tap to pay, your phone will also automatically redeem offers and earn loyalty points for you,” reads a statement from Google’s official blog.

So, despite the lack of progress in Poland recently, with Google on board we all may be saying goodbye to traditional wallets and plastic sooner rather than later. ●

SHUTTERSTOCK

Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com

Square allows you to sign up for a free card reader that plugs into your phone, iPod or iPad. The only cost of using it is a 2.75 percent charge for the initial swiping of your credit card information, the company said.

Currently, free readers are already available both from Square’s website as well as the Apple store. NFC technology is also being tested out

by Visa, but it is still in its initial stages.

Considering the mix of companies collaborating in this sector, one cannot help but wonder if more will be in the works, thereby extending further ease of coverage for mobile payments. ●

Up until two years ago, I refused to bank online. I simply did not trust the internet. Or more precisely, I did not trust myself on the internet. To pay a bill I either paid the amount via the post office or instructed a bank clerk to wire the payment on my behalf. If a problem occurred, the blame would rest with someone else. Not with me.

I would have my piece of paper stamped, confirming that I had made a payment.

The only problem with this approach was the time it took me to visit the nearest post office or bank, not to mention the additional fee I had to pay to execute each payment order. But I digress. Fast forward to the present and I now bank online. I pay all bills over the internet, including mortgage payments, the condo fee and utility payments.

However, just when I thought I had mastered the cutting edge of technology and converted to banking online, I now learn that I am again walking with the dinosaurs.

Today I am bombarded with advertisements to pay all my bills using my mobile phone. No way. I am always dialing wrong numbers.

Payment by mobile and me would be a disaster in the making. With my luck I would send my mortgage payment to some bicycle shop in Tarnów. On second thought, however, I used these same excuses for years when confronted with the idea of internet banking. Maybe this time I shouldn’t be so quick to reject the latest technology.

Who can operate mobile banking?

Strictly speaking only a bank can operate mobile banking. Payments by mobile phone, however, can be operated by a “settlement agent.” Despite the name, a settlement agent is not an individual person. In this case a settlement agent must be a joint stock company with a minimum share capital of not less than z∏.1 million. Moreover, a settlement agent must first obtain a license to operate from the president of the National Bank of Poland.

Two types of mobile payments Payments by mobile phone may be made by one of two methods: (i) proximity payment; or (ii) mobile application.

In the case of proximity payments, it is necessary to enter into a contractual relationship with a bank and to use a mobile phone with Near Field Communication technology. The mobile operator itself is not party to the contract, and as such has no liability.

The entire structure is similar to a regular bank account, only transactions are made via your mobile phone.

The second form, that being by mobile application, does not require signing a contract with a bank, nor with a credit card company or with one’s mobile phone service provider.

Instead, all that is required is to create an account via the internet or your mobile phone and to deposit funds into the account. Several settlement agents have created different web platforms to establish such accounts. The time it takes to create an account is only a few minutes.

Someone stole my mobile!

In theory, at least, a thief should not be able to access your account to make payments using your funds because each account holder should have a unique personal identification number. As added protection, it is possible to place limits on the value of payments made per transaction. If a thief were to somehow gain access to an account owner’s identification number and begin to make payments, the owner would be responsible for such payments up until the moment he or she notifies the service provider of the theft.

Dinosaurs rule …

All this sounds great, but for the time being I think I will continue to walk with the dinosaurs. I’ve already lost one mobile phone. So far I haven’t lost my desktop. And I don’t want to worry about another PIN number. ●

Foreign investors in Polish residential real estate have to navigate a legal minefield

Warsaw’s signature Jan III Sobieski hotel has been sold for €50 million

16-17

18

LOKALE IMMOBILIA

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

•

AUGUST 8-21, 2011, LI 16/31-32

Theme park investment

Consortium to build €400 amusement park near Warsaw Adventure World Warsaw will be the largest theme park in Central Europe A Luxembourg-based international consortium of private investors will spend €400 million on a project to build a theme park in Poland.

The complex, called Adven-

ture World Warsaw, will be sited in Grodzisk Mazowiecki, about 40 kilometers from the capital, and will be the largest theme park in Central Europe.

The amusement park, which will cover an area of 240 hectares, will include roller coasters, water slides and wave machines. The park will be divided into five different the-

matic zones, each of which will evoke different fairy tales and legends.

In addition, the project will house an entertainment area complete with movie theaters, bars, restaurants and two hotels.

The investor has appointed a special purpose vehicle, Las Palm, to construct and manage the site. The group of compa-

nies involved in the project also includes architectural studio AGS Architects, as well as Jora Vision, Vekoma Rides Manufacturing, Hafema and International Destination Strategies.

Work on the project is set to begin in spring 2012, with the opening scheduled for spring 2014, said Peter Jan Mulder, chairman of the board at Las

Palm.

“We forecast that about two million people will visit the theme park every year,” he added.

Adventure World Warsaw will be completed within the framework of a broader investment plan. The second phase of the plan calls for the construction of a second

theme park, a large entertainment center, a business-conference center, and a luxury spa facility. This part of the investment is estimated to cost some €350 million and construction should start two to three years after the opening of the first phase of the amusement park.

Katarzyna Piasecka

Real estate firms

The newly established Grupa PHN is to debut on the Warsaw Stock Exchange within the next few months

The Ministry of the Treasury has announced its plans to privatize Grupa PHN, a recently established holding comprised of state-owned real estate companies, through an IPO on the War-

saw Stock Exchange that is due to take place within the next few months.

The group came into existence in March this year and could, the treasury hopes, become the largest property management firm in the CEE region.

“Grupa PHN is a unique entity on the Polish market – the idea behind founding the group was real estate sector consolidation, just as it was the case in the power sector,” Krzysztof Walenczak, undersecretary of state in the Ministry of Treasury, said in a statement.

Grupa PHN CEO Wojciech Papierak, meanwhile, stressed the value of bringing together a number of experienced firms.

“The ambition of Grupa PHN is to create the largest real estate management company in the entire Central and Eastern Europe region. The combination of several experi-

enced companies will enable us to achieve synergy and thereby increase the development potential of the group,” Mr Papierak said.

The newly founded Grupa PHN comprises Intraco, Polski Holding NieruchomoÊci (which, for its part, is composed of Dipservice w Warszawie, Towarzystwo Obrotu NieruchomoÊciami “Agro,” Argo, Sk∏adnica Ksi´garska, Kaskada and COBO) and BUDEXPO. Grupa PHN is expected to initially deal with property management, as well as project development in cooperation with external business partners. Ultimately, the company is to solely manage its own real estate in the office, retail and logistics sectors.

The group currently owns approximately 180 properties, including more than 1,300 hectares of undeveloped land, whose total mar-

COURTESY OF ON BOARD PUBLIC RELATIONS

Treasury aims to create largest property management firm in CEE

The planned PHN Tower in Warsaw is one of Grupa PHN’s most advanced development projects ket value is estimated at almost z∏.2.6 billion.

Advanced development projects on which Grupa PHN is working at the moment

include PHN Tower, an office high-rise building that will be built on ul. Âwi´tokrzyska in Warsaw’s central district.

Adam Zdrodowski

In this issue New theme park . . . . . . . . . . . . . . . .14 PHN WSE debut . . . . . . . . . . . . . . . . .14 Property-related stocks . . . . . . . . . .16 Legal hurdles . . . . . . . . . . . . . . . . .16-17 Orco’s new tower . . . . . . . . . . . . . . .18 Sobieski hotel sold . . . . . . . . . . . . . .18 Immofinanz buys land . . . . . . . . . . .18

Coming up: AUGUST 22 Design & innovation – trends in building, architecture and interior design

AUGUST 8-21, 2011

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

15

Expert Opinion

Legal basics for buying property in Poland perpetual usufruct is concluded, and an annual fee (from 0.3 percent to 3 percent of the value of the land, depending on the purpose for which the right was granted) thereafter. The annual perpetual usufruct fee may be reviewed yearly, where the value of the land has changed.

It is important to note that real estate transactions in Poland are not based on the transfer of the right to the real estate, but rather on a structure comprising the transfer of shares in the companies holding such real estate.

Form of real estate agreements Any transaction concerning the sale or transfer of real estate (both concerning transfer of the ownership right and the perpetual usufruct right) in Poland requires a form of a notarial deed. Furthermore, when it comes to the perpetual usufruct right, a transfer is only effective once it is registered in the land and mortgage register.

The transfer of the ownership right is effective as soon as the agreement is concluded.

B∏a˝ej Czwarnok Lawyer Gide Loyrette Nouel Legal background for foreigners buying real properties in Poland: the object of the transaction, preliminary and final contracts, administrative permits, taxation and additional costs Foreigners investing in real properties in Poland should be aware of some specific aspects of Polish law. This article will take a look at some of the most important issues for foreign investors who want to invest in real estate in Poland.

The object of the transaction It should first of all be noted that apart from the full ownership right, which is generally wellknown and understood by foreign investors, there is also another kind of property right – that of perpetual usufruct – which is also widely used in Poland. Foreign investors looking for investment opportunities will almost certainly stumble upon offers concerning perpetual usufruct rights. This is because a substantial amount of land in Poland is still owned by the state treasury or by local authorities who can grant the “use” – or

Transaction structure perpetual usufruct right – to such land to third parties on the basis of a perpetual usufruct agreement.

Once the right is established, the perpetual usufructary (the person or entity that owns the perpetual usufruct right) is free to transfer it to third parties.

As for the main characteristics of this right, it should be noted that it is limited in time (in principle it is granted for 99 years). However the perpetual usufructary can request that this period be extended (within the last five years of the initial period).

On the other hand, the owner of the land remains entitled to terminate a perpetual usufruct agreement prematurely if the land is not used for the purposes specified in the agreement. Buildings and other facilities purchased or erected on the land by the perpetual usufructary constitute the latter’s property.

A major difference between the ownership right and the perpetual usufruct right lies in the fact that the perpetual usufructary must pay the relevant public authority – the owner of the land – an initial fee (from 15 percent to 25 percent of the value of the land) when the agreement establishing

Even though real estate transactions in Poland can consist of one agreement, business transactions usually consist of two steps. The

court, in case one of the parties tries to evade concluding the final agreement.

Administrative permits for foreigners The acquisition of real estate by a foreigner requires a permit. A permit is issued by the Minister for Internal Affairs and Administration in the form of an administrative decision. The term “foreigner” includes both individuals without Polish citizenship and business entities having their registered offices abroad and established under foreign legislation, as well as Polish entities controlled by foreign entities.

A permit is required for direct acquisitions of real estate (for both full ownership and perpetual usufruct), as well as for acquisitions or subscriptions by foreigners of shares in a company registered in Poland that holds real estate, where that transaction results in the foreigners obtaining control of the company.

Following Poland’s accession to the European Union, the acquisition of real estate in Poland by citizens and companies from the European Economic Area (the European Union plus Norway, Iceland, and Liechtenstein) and Switzerland no longer requires any permits, except in the case of agri-

“Foreign investors looking for investment opportunities will almost certainly stumble upon offers concerning perpetual usufruct rights”

parties first conclude a preliminary sale agreement whereby they specify the conditions for the conclusion of the final agreement (that is, obtaining administrative permits, conducting legal and technical due diligence of the object of the transaction, obtaining financing, and the waiver of any pre-emption right, if applicable). Only then can they conclude the final agreement.

The preliminary agreements are most commonly concluded in the same form as those required for the final agreement – that is, in the form of a notarial deed, which ensures the possibility that the transaction can be enforced in

cultural or forest land (this requirement will expire on May 1, 2016).

For entities from the EEA or Switzerland a permit would not be necessary when it is the shares in a company holding agricultural or forest lands that are the object of the transaction.

Taxation of real estate acquisitions The sale (the “supply” under tax laws) of real property is, in principle, subject to VAT calculated on the value of the land and buildings alike. The standard rate of VAT for such transactions is 23 percent, though a preferential rate of 8 percent or a complete exemption of

BROUGHT TO YOU BY GIDE LOYRETTE NOUEL

VAT applies to some transactions.

The conditions for VAT exceptions stipulated in the regulations are always analyzed in detail prior to a given transaction.

Interestingly, the parties to the transaction can waive a VAT exception. This option can be exercised if both parties are registered VAT payers and announce their intention to the appropriate tax authority. In this case, the acquirer will first have to pay a higher price including the VAT, but will recover the VAT later on.

On the other hand, if a transaction is exempt from VAT, it will be subject to the Civil Transaction Tax (CTT) at 2 percent of the transaction value. This cannot be recovered. Transactions between individuals, acting in their non-commercial capacity, will also be subject to 2 percent CTT.

Other costs Since any acquisition of real properties in Poland requires the form of a notarial deed in order to be valid, the acquirers must be aware of additional costs related to notarial fees in connection with the acquisition. Such fees generally depend on the value of the given transaction, but are limited to z∏.10,000 (approx. €2,500).

Additional notary fees for establishing a mortgage or issuing excerpts of the notarized agreement are also to be expected. It is worth noting that if the parties first conclude a preliminary agreement and then the final sale agreement, the notarial fees would be due at each stage of the transaction, but in both cases the fees would be no more than 50 percent of the amount applicable to a single-contract transaction.

Even though the parties to the transaction are jointly and severally liable to the notary for the payment of the relevant fees, they are free to agree amongst themselves if the costs are to be shared or paid entirely by one of the parties.

In addition to the notarial fees, the parties to a real estate transaction must also be prepared to incur the court fees that come with application for entry of the transfer of rights into the land and mortgage register. For example, a court fee for establishing a new land and mortgage register amounts to z∏.60 (approx. €15) and the fee for entering a new owner of the real estate into the land and mortgage register amounts to z∏.200 (approx. €50). ●

16

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

AUGUST 8-21, 2011

Legal and insurance matters

Negotiating a legal minefield Gareth Price Regulation has been streamlined since Poland’s accession to the EU, but foreigners looking to purchase property in Poland still face a mountain of bureaucracy, and no little risk The process of purchasing a house or apartment in Poland can be riddled with legal traps for the unwary foreigner.

Due diligence documents drawn-up by law firms for individual property transactions are often lengthy and normally bursting with potential problems an investor could face.

Nevertheless, the process is not as fraught as it once was, due in large part to Poland’s 2004 accession to the European Union.

Permits Since Poland joined the European Union, EU regulations have played an important role in streamlining the process of obtaining a permit to purchase real estate.

From May 1, 2004, inhabitants of the European Economic Area (which comprises the EU plus Iceland, Norway

and Lichtenstein) and Switzerland have been able to purchase a residential property in Poland without needing to apply for a permit from Poland’s Ministry of Internal Affairs and Administration.

Legislation introduced later on absolved those from the EEA and Switzerland from needing to obtain a permit to buy more than one property in Poland.

Nationals of countries outside the EEA and Switzerland, however, must still obtain a permit from the ministry before they can purchase property other than a primary residence. As part of the application process they need to demonstrate ties with Poland, although experts contacted by Lokale Immobilia say the number of refusals is low.

EEA and Swiss nationals can buy real estate more or less anywhere in Poland,

while others are not able to buy property in border areas unless they obtain an additional permit.

There are, however, ways around such restrictions. If a non-EEA national owns a property in another EEA country, for example, they can set-up a special-purpose vehicle to enable them to buy property in Poland under the same conditions as those who live in the EEA.

Worry-free?

Ownership law in Poland is based in large part on principles used by other major continental European countries.

Real estate in Poland is, generally, freely alienable, meaning it may be bought, sold and inherited. For the most part ownership is freehold rather than leasehold, so the buyer has ownership of the land on which the building is sited.

Aside from the issue of permits, most potential pitfalls are largely the same for the average Polish buyer as

they are for foreigners.

“Foreign investors from the European Economic Area and Switzerland buying real estate in Poland, other than farmland, face more or less the same problems as Polish investors,” said Bartosz D´bski, an associate at Magnusson, a law firm.

Good faith A number of lawyers Lokale Immobilia spoke to said that Polish courts provide protection to those who buy proper-

If a client has purchased or part-purchased an apartment in a development that has not yet been completed, he faces the potentially costly risk that the developer could go bankrupt before the building has been completed.

Under general rules of Polish civil law, a developer is financially liable towards a customer who has paid to the

The investor of Konstancja estate is Globe Trade Centre S.A. (GTC S.A.) – one of the leading developers in the New Europe with over 15 years of experience, operating in 10 countries.

GTC develops projects and manages completed properties in three key sectors of real estate: office buildings and parks, retail and entertainment centers and residential sector, realized more than 130 projects in Europe.

You can find more information on the project at: www.konstancja.pl Sales office: tel: +48 22 716 01 77 +48 22 716 01 74 email: konstancja@gtc.com.pl

Red tape Lawyers that spoke with Lokale say the number of cases in which documents and clauses, and the web of legislation which governs them, return to haunt a foreign buyer is significant.

Buyers from overseas, and especially those from outside the EEA and Switzerland,

developer an advance for the price of an apartment.

Nevertheless, developers in Poland are often declared bankrupt mid-project, meaning they don’t have sufficient funds to repay all their customers.

“In most other European countries it is a requirement that the company puts a bond up to cover the risk,” said Jim

Yrkoski, a legal expert at TGC Corporate Lawyers.

“In Poland the client is simply taking a risk,” he said.

Clients can take out insurance against the risk, thereby protecting themselves in the event that a development remains incomplete. However, legal experts suggest that this is not a standard practice in the Polish market. ●

Property-related stocks Security

All new residents of Konstancja can also purchase a limited edition MINI Cooper car, at a price of 19 900 PLN.

ers to take out title insurance to give themselves more certain protection against later claims.

Developer bankruptcy: taking a risk

Advertorial Houses and residences in Konstancja estate blend perfectly into the green landscape of Konstancin. The project is located in close proximity to Warsaw, near the entry road to Konstancin-Jeziorna – a charming enclave, traditionally inhabited by the representatives of the media, business, arts and the diplomatic world. Konstancja is also located in an immediate vicinity to the American School of Warsaw. Stylish architectural details, unique design and best materials – this is what characterized the local buildings over 100 years ago and still remains as an inherent feature of Konstancja.

ty in good faith, meaning those who take possession of a property unaware that there are defects in the title will generally be protected by courts against later claims.

However, Mr D´bski cautioned against relying too much on this principle, saying that although regulations can be extremely complicated for an average buyer, reliance on the “good faith” principle may not substitute knowledge of legal regulations.

Legal experts advise buy-

Closing price on Aug 4

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏.mln)

BUDIMEX

79.50

-3.17

76.40

109.20

-18.88

25,530,098

2,021.98

CELTIC

18.92

-7.71

17.00

60.55

N/A

34,068,252

644.57

DOMDEV

42.90

-4.69

38.52

50.80

-9.84

24,560,222

1,042.58

ECHO

4.00

-12.28

4.00

5.55

-16.32

420,000,000

1,671.60

ELBUDOWA

125.00

-15.94

125.00

188.40

-26.94

4,747,608

583.96

ENERGOPLD

3.70

-2.12

3.57

4.10

-7.50

70,972,001

249.11

ERBUD

21.49

-8.67

21.49

61.00

-57.02

12,602,711

247.01

GANT

9.59

-7.79

9.59

22.01

-56.61

20,499,953

200.28

GTC

13.90

-16.27

13.90

24.98

-42.08

219,372,990

3,064.64

HBPOLSKA

1.26

-25.44

1.26

3.90

-63.27

210,558,445

267.41

JWCONSTR

12.00

-11.11

12.00

18.35

-30.99

54,073,280

602.92

LCCORP

0.95

-19.49

0.95

1.72

-37.09

447,558,311

425.18

MARVIPOL

8.46

-5.47

7.40

12.81

-32.27

36,923,400

308.31

MIRBUD

3.00

-7.41

3.00

4.75

-13.04

75,000,000

222.00

MOSTALWAR

28.00

-6.20

25.95

69.00

-59.65

20,000,000

545.00

MOSTALZAB

1.87

-15.77

1.87

3.74

-50.00

149,130,538

278.87

ORCOGROUP

29.50

-7.09

20.19

40.00

40.48

14,053,866

408.26

PBG

119.50

-15.61

119.50

252.00

-48.02

14,295,000

1,708.25

PLAZACNTR

3.15

-10.00

3.15

5.59

-40.68

296,738,962

934.73

POLAQUA

17.70

-1.23

16.10

20.60

4.12

27,500,100

486.75

POLIMEXMS

2.30

-20.69

2.30

4.73

-51.48

521,154,076

1,198.65

POLNORD

19.78

-6.52

19.78

39.41

-44.72

23,798,439

470.97

RANKPROGR

11.54

-2.04

9.59

13.60

17.76

37,145,050

400.05

ROBYG

1.47

-18.33

1.47

2.13

N/A

257,390,000

352.62

RONSON

1.13

-0.88

1.12

1.78

-31.10

272,360,000

299.60

TRAKCJA

2.19

-17.67

2.19

4.97

-49.66

232,105,480

503.67

ULMA

69.00

-8.00

68.60

88.00

-2.89

5,255,632

362.64

UNIBEP

5.10

-12.07

5.10

10.30

-37.04

33,927,184

173.03

WARIMPEX

7.80

-6.14

7.80

10.89

-3.70

54,000,000

421.20

ZUE

9.90

-8.33

9.90

15.14

N/A

22,000,000

217.80

AUGUST 8-21, 2011

age investor,” Mr D´bski said.

Some entries in the land and mortgage register may not be final even if they are disclosed, and may be subject to change. Moreover, brief remarks on pending proceedings concerning a real estate can have the same force against the purchaser as full descriptions of such proceedings.

In addition to the register, there are many other documents which should be studied carefully, especially when a buyer is looking to purchase larger buildings or land for development.

The excerpt from the land registry, the decision on conditions of development, the zoning plan, environmental decisions, the building permit, the use permit, and certificates confirming that a seller is not in arrears are just a selection of those documents.

Legal experts advise that each of these documents should be read carefully, together with the legislation concerning the area in question, to check how they affect the real estate to be purchased, the possibilities of developing the real estate, and its value.

when a buyer has to pay for parking and storage as part of the transaction, four contracts are normally required for the real estate. Still, it’s better not to take Polish bureaucracy too lightly.

“Even the excerpt from the land and mortgage register, which is a basic document describing a real estate, may be full of unpleasant surprises which are h i d d e n from the eyes of the aver-

SHUTTERSTOCK

must therefore wade carefully through a flood of bureaucracy when they buy in Poland.

“Americans cry red tape every five minutes, whereas for Europeans the extent of the regulations is quite normal,” said one legal expert who preferred to remain unnamed.

To give an example of the convoluted nature of Polish regulation,

LOKALE IMMOBILIA – REAL ESTATE

Foreigners can sometimes feel like they are drowning in Polish legal bureaucracy

Legal advice Finding a lawyer to identify potential trouble spots in transactional documents is obviously vital for non-Polish speakers. This is particularly

the case when one considers that estate agents are often given incentives to close transactions speedily.

“Foreign investors should bear in mind that real estate agents in Poland tend not to focus too much on the legal issues and in many cases they push hard to close the transaction, irrespective of the purchaser’s doubts, as they often obtain a commission from both the seller and the purchaser,” Mr D´bski said.

Moreover, public notaries who prepare the transfer documents are only obliged to make sure that a seller is authorized to sell real estate, that there are no major legal defects and that the transfer of the real estate is valid.

Experts say notaries rarely alert home buyers about any other legal defects of the real estate that may have an influence on its value.

Non-Polish speakers are however well-served in

Poland when it comes to getting legal advice to counter these problems; law firms often offer services in a range of languages, with most offering their services in English.

As far as legal costs go, there are transactional costs to think about, as well as law firms’ conveyancing fees.

Most costs are set by statute, with the exception of the notary’s fee, which can be lower than the maximum set by law.

Even though the costs can add up, good legal counsel can mean avoiding much higher costs later on.

“Foreign investors should always ask a Polish lawyer to conduct at least basic legal due diligence of a real estate to be purchased.

The larger and more expensive the real estate is, the more thorough the legal due diligence should be,” said Mr D´bski. ●

Company profiles TGC Corporate Lawyers A law firm offering residential real estate services, including due diligence and transactional services. Branches in Warsaw, ¸ódê, Wroc∏aw and Kraków.

Phone (Warsaw): +48 22 295 3300 E-mail: cfielding@tgc.eu So∏tysiƒski Kawecki & Szl´zak (SK&S) A Warsaw-based law firm that offers residential real estate services including due diligence, and purchase and lease

agreements.

Phone: +48 22 608 7000 E-mail: office@skslegal.pl Magnusson A Baltic Sea region law firm with offices in Warsaw, the company has handled a number of large-scale residential transactions. Offers services related to acquisition, leasing and financing.

Phone (Warsaw): +48 22 552 7555 E-mail: warsaw@magnussonlaw.com

www.wbj.pl

17

Summer savings The summer period is the best time to buy an apartment in Poland, according to a report prepared by consultancy Oferty.net and financial advisory Open Finance.

The residential real estate market usually slows down significantly during the summer months, leading home sellers to reduce prices to try and attract buyers.

‘Family on its Own’ limits The number of homes that qualify for “Family on its Own,” the government’s mortgageassistance program for first-time home-buyers, will be reduced later this month as a new bill comes into force. The modifications will reduce the price threshold set for homes that qualify for the assistance package by 42.9% in the secondary housing market and by 28.6% in the primary market. This will reduce the percentage of all homes available for the program from 65% to 10% in Poland’s 13 major cities, according to Home Broker. ●

www.wbj.pl

GTC sells Galeria Mokotów stake Having received approval from the Office of Competition and Consumer Protection (Poland’s anti-monopoly authority) and a group of banks financing the Galeria Mokotów retail project in Warsaw, developer Globe Trade Centre has finalized the sale of its remaining 50% stake in the development to a subsidiary of Unibail Rodamco, the current co-owner and manager of the mall. Completed in 2000, Galeria Mokotów comprises 62,000 sqm of net rentable space.

Alterco acquires Kraków hotel Real-estate investor Alterco has purchased a 50% stake in Emir 19, a special purpose vehicle, which will buy Kraków’s historic Hotel Francuski.

The hotel will be managed by the Gessler family, founders of the well-known Polish restaurant empire. ●

LOKALE IMMOBILIA – REAL ESTATE

Europa Capital and Warimpex Finanz have sold their 100 percent stake in the capital’s fourstar Hotel Jan III Sobieski to Norwegian investment company Wenaasgruppen. The transaction price was around €.50 million.

“The sale of the Sobieski Hotel concludes our second successful project in joint venture with Europa Capital,” Franz Jurkowitsch, president of Warimpex, said in a press release.

“This first substantial market transaction in the hotel sector in CEE after the global financial crisis is a sign of the re-emerging strength of the investment market in the region,” he added.

The Hotel Jan III Sobieski project was one of first luxury hotels to be built in Poland after 1989. The 435-room facility opened in 1992 and was acquired by Europa Capital and Warimpex Finanz in 2006.

Katarzyna Piasecka

The cost of the transaction was around €.50 million

Immofinanz to build Lublin shopping center Austrian real estate company Immofinanz Group has acquired more than 29,000 sqm of land in central Lublin on which it plans to build a shopping center. The value of the transaction, which the developer concluded with ISABEAU, a Polish-Luxembourgish firm that originally intended to develop its own mall called Galeria Zamek at the same location, has not been disclosed.

Immofinanz sees Poland as a robust CEE and EU

economy which is reflected by growth in the retail market.

“Seen against this background, the positively realized sales transaction and the planned shopping center project are an important milestone for us,” Eduard Zehetner, president of Immofinanz Group’s management board, said in a statement.

So far, Immofinanz has declined to reveal any further details as far as the planned scheme is con-

AUGUST 8-21, 2011

Orco plans office tower in Warsaw

Warsaw’s Hotel Sobieski sold

COURTESY OF MEDIA & DORADZTWO

18

cerned. The company is now in talks with Lublin authorities concerning administrative permits for the project and hopes construction will launch in the spring of 2012.

The mall could then open in 2013.

Included in the ATX index of the Vienna Stock Exchange, Immofinanz Group is one of the largest listed real estate companies in Europe. The firm is focused on the retail, office, logistics and residential markets in Austria, Germany,

the Czech Republic, Slovakia, Hungary, Romania, Poland and Russia.

At the end of January 2011, Polish assets constituted 7.7 percent of the group’s portfolio, making the country the company’s fourth biggest market. In June this year, Immofinanz announced it would spend more than €900 million on new assets in Europe over the next two to three years, with Poland being the company’s most significant target.

Adam Zdrodowski

Orco Property Group, which is currently building the Daniel Libeskind-designed Z∏ota 44 residential tower in central Warsaw, is working on another high-rise project in the Polish capital, Jean-Francois Ott, the company’s president and CEO, said in a statement.

The planned tower, which will host office space, is to be located in downtown Warsaw.

Orco has refrained, for the time being, from divulging any further details concerning the investment.

“We want to bring into play our experience with Z∏ota 44 and make a project of a similar scale – a luxurious skyscraper [located] in the center of Warsaw. It will be a top-drawer office building. Unfortunately, I cannot talk about the details, like the location, now,” Mr Ott said in the statement.

He added that Orco is now also preparing a new multiphased residential scheme called LeÊny Trakt which will be located in Józefos∏aw, near Warsaw. “We are planning to start sales in the first half of AZ 2012,” Mr Ott said.

MARKETS

AUGUST 8-21, 2011

www.wbj.pl

Stocks report

world stock indices DJIA

NASDAQ

11,383.68 (Aug 4 close)

S&P500

2,556.39 (Aug 4 close)

-7% (for the week)

FTSE100

1,200.07 (Aug 4 close)

-7.59% (for the week)

DAX

5,393.1 (Aug 4 close)

-7.73% (for the week)

-8.17% (for the week)

Markets tumble

NIKKEI225 6,414.76 (Aug 4 close)

9,659.18 (Aug 4 close)

-10.78% (for the week)

-2.45% (for the week)

CHANGE: 5.72%

CHANGE: -4.49%

CHANGE: 3.42%

CHANGE: -8.59%

CHANGE: -8.01%

CHANGE: -6.69%

(year to August 4)

(year to August 4)

(year to August 4)

(year to August 4)

(year to August 4)

(year to August 4)

52-week high: 12,928.50

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 9,915.73

52-week low: 2,099.29

52-week low: 1,039.70

52-week low: 5,070.90

52-week low: 5,833.51

52-week low: 8,227.63

Andrew Nawrocki, market analyst & trader, gowebtrade.com It was a dismal two weeks for stock markets, with only one day of gains for the WIG between July 25 and August 5. Indices across the board tumbled, with the market’s malaise stemming from a number of factors. US economic data has worsened and Europe’s sovereign debt crisis doesn’t seem to be getting any better, and is now threatening to engulf Spain and Italy. Investors are beginning to believe in the real possibility of a doubledip recession, and Friday’s non-farm payroll data – though better than expected – did very little to alleviate concerns.

Losses particularly worsened throughout the week of August 1-5, with the WIG hit hard. Monday began with poor ISM data from the US and a jittery passing of the

Major indices WIG

42,828.22 (August 4 close)

WIG20

2,487.66 (August 4 close)

04.08

03.08

02.08

01.08

29.08

28.07

27.07

26.07

25.07

22.07

21.07

20.07

19.07

04.08

03.08

02.08

01.08

29.08

28.07

27.07

26.07

25.07

2,400 22.07

42,000

21.07

2,480

20.07

43,400

19.07

2,560

18.07

44,800

15.07

2,640

14.07

46,200

13.07

2,720

12.07

47,600

11.07

2,800

08.07

49,000

18.07

52-week low: 2,393.28

15.07

Change year to August 4: -1.23%

14.07

52-week low: 41,572.80

13.07

52-week high: 2,932.62

Change year to August 4: -1.21%

12.07

Change for the week: -8.57%

11.07

52-week high: 50,371.74

08.07

Change for the week: -9.01%

Top 5 PRAGMAFA 08OCTAVA OLYMPIC PTI BNPPL

Closing 20.89 2.99 6.00 8.97 120.60

% change (week) 52-week high 18.36 20.93 16.34 3.09 9.09 7.22 5.04 12.00 4.78 157.00

52-week low 15.00 1.81 3.95 6.51 105.00

Top 5 CEZ BZWBK PGE TAURONPE TPSA

Closing 138.20 224.90 22.19 6.14 16.20

% change (week) -2.61 -3.35 -4.72 -5.1 -5.26

52-week high 154.10 239.00 24.90 6.89 19.01

52-week low 118.70 179.00 21.31 5.10 15.71

Bottom 5 BBICAPNFI CPENERGIA CENTROZAP LUBAWA 06MAGNA

Closing 0.80 1.05 0.20 1.00 0.28

% change (week) -30.43 -28.57 -28.57 -27.01 -26.32

52-week low 0.80 1.05 0.20 1.00 0.28

Bottom 5 POLIMEXMS GETIN GTC PBG PKNORLEN

Closing 2.30 9.55 13.90 119.50 40.85

% change (week) -20.69 -16.59 -16.27 -15.61 12.77

52-week high 4.71 15.29 24.98 252.00 57.90

52-week low 2.30 9.55 13.90 119.50 37.50

52-week high 2.04 2.47 0.60 1.73 1.03

Swiss franc and global economy in the spotlight

sWIG80

10,129.39 (August 4 close)

NewConnect

48.47 (August 4 close)

WIG-Banki

04.08

03.08

02.08

01.08

29.08

28.07

27.07

26.07

25.07

22.07

21.07

20.07

19.07

18.07

04.08

03.08

02.08

01.08

29.08

28.07

27.07

26.07

25.07

22.07

21.07

6,000

20.07

48.0

19.07

6,180

18.07

49.4

15.07

6,360

14.07

50.8

13.07

6,540

12.07

52.2

11.07

6,720

08.07

53.6

15.07

52-week low: 5,830.96

14.07

Change year to August 4: -5.77%

13.07

52-week low: 49.84

12.07

52-week high: 7,387.49

Change year to August 4: -18.59%

11.07

Change for the week: -8.35%

08.07

52-week high: 64.39

6,900

The last two weeks brought a fall in the prices of risky assets. Because of the fears connected with the debt of the PIIGS countries (not only Greece but also Spain and Italy), the slowdown in the US economy and the debt ceiling deal in the US, most investors preferred to buy Swiss francs, Japanese yen and precious metals (gold and silver).

The disappointing data concerning GDP growth in the US, the worse-thanexpected PMI indices for the European economy and the tightening of monetary policy in China, have discouraged investors from buying such currencies as the z∏oty.

Despite those fears and in comparison to other currencies of the emerging markets, the z∏oty seems to

6,012.57 (August 4 close)

Change for the week: -6.10%

55.0

Pawe∏ Kordala, X-Trade Brokers Dom Maklerski SA

04.08

03.08

02.08

01.08

29.08

28.07

27.07

26.07

25.07

22.07

21.07

20.07

19.07

18.07

04.08

03.08

02.08

01.08

29.08

28.07

27.07

26.07

25.07

10,100 22.07

2,400

21.07

10,480

20.07

2,500

19.07

10,860

18.07

2,600

15.07

11,240

14.07

2,700

13.07

11,620

12.07

2,800

11.07

12,000

08.07

2,900

15.07

52-week low: 10,129.39

14.07

Change year to August 4: -9.14%

13.07

52-week low: 2,450.73

12.07

52-week high: 12,932.00

Change year to August 4: -2.37%

11.07

Change for the week: -8.98%

08.07

52-week high: 2,987.72

SOURCE: WSE

2,450.73 (August 4 close)

Change for the week: -10.59%

bill that probably prevented the US government from default. The WIG closed 0.70 percent down. On Tuesday, aside from rating agencies announcing a negative outlook for the US, data showed US consumer spending falling to its lowest level in over two years.

Indices tumbled, the WIG shed 1.25 percent. On Wednesday, the Swiss National Bank intervened in response to a soaring franc by slashing interest rates. The WIG lost even more, closing 3.67 percent down. And on Thursday, markets tumbled to their lowest levels this year, with fear gripping all market participants. The WIG closed 3.84 percent down.

Despite encouraging job data from the US, the WIG closed 1.63 percent down on Friday. ●

Currency report

Other indices mWIG40

19

be very strong against the euro and dollar. The EUR/PLN currency pair still remains near the level of z∏.4.

However, due to the fact that many Polish families have mortgages denominated in Swiss francs, now its price (which has been rising since the beginning of March) is much more important for them (as WBJ went to press it cost around z∏.3.70) than the euro and dollar.

The near-term future is still uncertain. The probability of a sharp slowdown in Europe and the US will not support the strengthening of the Polish currency.

The plunge on the stock markets and the sell-off of risky assets could even lead to short-term weakness of the z∏oty. ●

currency rates 3.6393 05.08

04.08

SOURCE: NBP

3.6604 03.08

3.5537

3.6621

3.5759 01.08

02.08

3.6220

05.08

04.08

03.08

02.08

01.08

3.5

29.07

05.08

04.08

03.08

02.08

29.07

0.1011

0.1012

0.1015

0.1018

0.1006

0.1014

3.7147

3.6355

3.6383

3.6342

3.4973 01.08

PLN-100JPY

4.0

0.09

29.07

05.08

04.08

03.08

02.08

01.08

PLN-RUB

0.12

3.0

29.07

05.08

04.08

3.5

3.5080

4.6549

4.6291

4.6242

4.6130

4.5431

4.5768

2.8572

2.8237

2.8252 03.08

02.08

01.08

PLN-CHF

4.0

4

29.07

05.08

04.08

03.08

02.08

01.08

PLN-GBP

5

2.5

29.07

3

2.7683

2.8109

4.0423

4

2.8331

PLN-USD

3.0

4.0278

4.0321

4.0225

4.0125

3.9859

PLN-EUR

5

20

THE LIST

www.wbj.pl

AUGUST 8-21, 2011

Education

MBA Programs

Rank

Ranked by number of graduates in 2009/2010 (1)

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

Program name

Accreditation received / Foreign partner

duration of Number of Number Course Number of Number (number of Polish foreign of graduates students semesters) / students teachers Language program

www.bookoflists.pl

Course fee

2009/2010 / 2008/2009

Wy˝sza Szko∏a Zarzàdzania / Polish Open University ul. Domaniewska 37A, 02-672 Warsaw 1 22 843-7692/22 847-2282 info@pou.pl www.pou.pl

Executive Master of Business Administration

The Association of MBA’s; Oxford Brookes University; London Chamber of Commerce and Industry English for Business Oxford Brookes University (UK)

205 135

239 311

WND 4

67 WND

4 semesters Polish; English

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 2 22 519-2192/22 519-2308 anetam@kozminski.edu.pl www.kozminski.edu.pl

Koêmiƒski Master of Business Administration with specialistic semester

EQUIS; FORUM; AMBA -

120 117

271 268

-

29 27

4 semesters Polish

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 3 22 519-2248/22 519-2308 malgosiao@kozminski.edu.pl www.kozminski.edu.pl

Executive Master of Business Administration

EQUIS; FORUM; AMBA -

73 44

133 112

1 -

30 28

Wielkopolska Szko∏a Biznesu przy Uniwersytecie Ekonomicznym w Poznaniu ul. Powstaƒców Wielkopolskich 16, 4 61-895 Poznaƒ 61 853-0694; 61 854-3226/61 853-0695 wsb@ue.poznan.pl www.wsb.ue.poznan.pl

Executive Master of Business Administration

FORUM Association of Management Education; ESPAS - accreditation EFMD (Brussels) The Nottingham Trent University , Nottingham Business School (UK)

65 70

96 136

0 1

Szko∏a Biznesu Politechniki Warszawskiej; Biuro Programu International MBA 5 ul. Koszykowa 79, 02-008 Warsaw 22 234-7089/22 234-7016 mba@biznes.edu.pl www.biznes.edu.pl

EQUIS; AACSB; AMBA, EPAS Executive Master of HEC School of Management (France); London Business Administration Business School (UK); NHH Norwegian School of Economics and Business Administration (Norway)

64 62

125 133

Uniwersytet Miko∏aja Kopernika w Toruniu ul. Gagarina 13A, 87-100 Toruƒ 6 56 611-4892/56 611-4892 mba.efs@umk.pl www.mba.umk.pl

Executive Master of Business Administration

North Central Association of Colleges (NCA); The Association of Collegiate Business Schools and Programs (ACBSP) Brennan School of Business Dominican University (River Forest, IL)

60 29

Executive Master of Management

SEM Forum; PKA; FPAKE; FORUM Association of Management Education University of Limerick (Ireland); Hasselt University (Belgium); Euromed Marseille Ecole de Management (France)

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 8 22 519-2199/22 519-2308 sylwiah@kozminski.edu.pl www.kozminski.edu.pl Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 9 22 519-2132/22 519-2308 sylwiah@kozminski.edu.pl www.kozminski.edu.pl

Uniwersytet Ekonomiczny we Wroc∏awiu ul. Komandorska 118/120, 53-345 Wroc∏aw 7 71 368-0636/71 368-0636 mba@ue.wroc.pl www.mba.ue.wroc.pl

Szko∏a G∏ówna Handlowa ul. Rakowiecka 24, 02-521 Warsaw 10 22 564-9770/022 849-5374 biuro@wemba.edu.pl http://wemba.edu.pl

Number of Polish International programs the school teachers / Number of takes part in / foreign Foreign academy issuing MBA teachers / Year program launched

Program director

65 2 1997

Dr Bogdan Gorczyca

Erasmus; Jean Monnet Project; Eurasia z∏.26,100 + z∏.360 recruitment Foundation; Leonardo da Vinci; Safe; Tempus fee -

29 1997

Prof. dr hab. Witold Bielecki

4 semesters Polish; English

Erasmus; Jean Monnet Project; Eurasia z∏.39,300 + z∏.360 registration Foundation; Leonardo da Vinci; Safe; Tempus fee -

23 7 1989

Prof. dr hab. Witold Bielecki

68 66

4 semesters Polish

International Science Projects (concerning z∏.31,000 + GBP current economic issues such as privatization, 450 + €400-700 foreign investments, marketing orientation, internationalization); Socrates/Erasmus (International lecturers exchange program Study Tour costs) The Nottingham Trent University

60 8 1991

Dr Robert Szczepaƒski

5 7

42 40

4 semesters English

90 29

-

30 30

52 34

174 180

4 2

Executive Master of EQUIS; FORUM; AMBA Business Administration Institute of Privatization and Management in Minsk in Minsk

48 44

-

EQUIS; AACSB; AMBA Maastricht University School of Business and EURO*Master of Economics (Netherlands); IAE Aix-en-Provence Business Administration (France); AUDENCIA Nantes Ecole de Management (France); EADA Barcelona (Spain); HHL-Leipzig Graduate School of Management

44 32

1

z∏.31,000

Erasmus/Sokrates Oxford Brookes University (UK)

€13,900

– –

23 19 1996

Prof. Witold Or∏owski

4 semesters English; Polish

WND

Socrates: Erasmus; Comenius; Lingua; Grundtvig; Minerva; Erasmus Mundus; Leaonardo da Vinci; CEEPUS; TEMPUS Brennan School of Business Dominican University (River Forest, IL)

10 20 2000

Dr hab. Robert Karaszewski

71 73

4 semesters Polish; English

z∏.22,000

WND

WND WND 1993

Dr hab. In˝. Ewa KonarzewskaGuba∏a

78 64

22 21

4 semesters Russian

$10,000

Erasmus; Jean Monnet Project; Eurasia Foundation; Leonardo da Vinci; Safe; Tempus Management Institute for Privatization and Management (IPM)

5 17 2001

Dr Pawel Golanchenko; Prof. dr hab. Witold Bielecki

66 62

80 79

4 semesters English

WND

Erasmus; Jean Monnet; Eurasia Foundation; Leonardo da Vinci; Safe; Tempus One diploma signed by all the parter academies

7 72 1996

Dr Stuart Dixon

$14,200 + z∏.41,800

Leonardo da Vinci; CEMS Master in International Management; student exchange program within bilateral agreements (including PIM); CIEE program (Council on International Education Exchange); Canadian Executive Master of Business Administration (CEMBA); BMEU (Business Management Education in Ukraine); Jean Monnet; TEMPUS; Master’s Programme in International Relations University of Minnesota (US)

18 17 1995

Prof. dr hab. Marian Geldner

Warsaw Executive Master of Business Administration

AACSB International; NCA University of Minnesota (US)

37 48

64 79

2 9

35 33

4 semesters English

Wy˝sza Szko∏a Bankowa w Poznaniu Al. Niepodleg∏oÊci 2, 61-874 Poznaƒ 11 61 655-3357/61 355-3353 emba@wsb.poznan.pl www.emba.wsb.pl

Executive Master of Business Administration

AACSB; AMBA;SEM FORUM Helsinki School of Economics (Finland)

36 27

64 74

WND WND

25 24

4 semesters English; Polish

Socrates; Erazmus; Leonardo da Vinci; z∏.28,900 + Grundtvig z∏.500 registration Aalto University School of Economics fee + €750 (Finland) in cooperation with Wy˝sza Szko∏a graduation fee Bankowa in Poznaƒ

13 19 2000

Barbara Walkowska

Krakowska Szko∏a Biznesu Uniwersytetu Ekonomicznego w Krakowie / Cracow School of Business 12 ul. Rakowicka 27, 31-510 Kraków 12 293-5525/12 293-5868 mba@uek.krakow.pl www.ksb.uek.krakow.pl

Stowarzyszenie Edukacji Menad˝erskiej FORUM Stockholm University School of Business (Sweden); cooperating academies: Grand Valley State University (US); Groupe ESC Clermont-Ferrand; Executive Master of Graduate School of Managment (France); St. Gallen Business Administration Business School (Switzerland); Sawyer Business School, Suffolk University (US); University of Johannesburg (South Africa); Continuing Education and UCLA Extention, University of California (US)

35 32

89 99

1

41 48

5 semesters English; Polish

International MBA Alumni Congress; Socrates; Erasmus; Leonardo da Vinci; Ceepus; Jean Monnet; Tempus; European €7,500 + €150 Management of Business Sciences (EMBS); registration fee Network of International Business & Economic School (Nibes); ESSAM Stockholm University School of Business

32 9 1994

Dr Piotr Bu∏a

Gdaƒska Fundacja Kszta∏cenia Mened˝erów / Business Centre Club ul. Pomorska 68, 80-343 Gdaƒsk 13 58 558-5858/58 557-2733 mba@gfkm.gda.pl www.gfkm.pl

International Quality Accreditation - Central and International Master of European Management Development Association Business Administration CEEMAN (Slovenia); Association of Management Education FORUM accreditation Program RSM Erasmus University (The Netherlands)

34 47

72 79

1 -

29 29

4 semesters English; Polish

z∏.35,800

OneMBA; RSM Erasmus University RSM Erasmus University

22 7 1991

Dr Adam Ubertowski

33 46

50 70

8 5

32 32

3 semesters English

z∏.27,000 + $9,000

CEMS (Consortium of European Managment School) University of Quebec at Montreal (Canada)

8 24 1995

Prof. dr hab. Marek Gruszczyƒski; Prof. Michel Librowicz

Szko∏a G∏ówna Handlowa ul. Rakowiecka 24, 02-527 Warsaw 14 22 849-2629; 22 646-6124 cemba@sgh.waw.pl www.cemba.pl

Canadian Executive Master of Business Administration CEMBA

UQAM - EQUIS; SGH - CEMS; PIM; EUA; CEMBA-EPAS University of Quebec at Montreal (UQAM) (Canada)

THE LIST

Rank

AUGUST 8-21, 2011

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

Program name

Accreditation received / Foreign partner

www.wbj.pl

Course duration of Number of Number (number of Number of Number Polish foreign of semesters) / graduates students students teachers Language program

Course fee

2009/2010 / 2008/2009

Number of Polish teachers / International programs the school Number of takes part in / foreign Foreign academy issuing MBA teachers / Year program launched

21

Program director

Zachodniopomorska Szko∏a Biznesu ul. ˚o∏nierska 53, 71-210 Szczecin 15 91 814-9481/91 814-9493 mba@zpsb.szczecin.pl www.zpsb.szczecin.pl/mba

Executive Master of Business Administration

FORUM; KSU accreditation Leeds University Business School (UK); Abertay University Dundee (UK)

30 61

28 59

2 28

30 39

4 semesters Polish

z∏.16,500

BSVC; Leonardo da Vinci; Erasmus; Asia Link; POKL; POEWT Leeds University Business School (UK) and Abertay University Dundee (UK)

32 7 1998

Dr Justyna Osuch

Uniwersytet Ekonomiczny w Poznaniu Al. Niepodleg∏oÊci 10, 61-875 Poznaƒ 15 61 854-3868/61 856-9415 mba@ue.poznan.pl www.uemba.ue.poznan.pl

Master of Business Administration PoznaƒAtlanta

Association of MBA, London (AMBA) Georgia State University (Atlanta); TiasNIMBAS Business Scholl (Utrecht)

30 32

58 59

1

33 31

4 semesters English; Polish

z∏.32,000

N/A Georgia State University; Poznaƒ University of Economics

25 8 1995

Dr Anna Matysek-J´drych

Gdaƒska Fundacja Kszta∏cenia Mened˝erów ul. Pomorska 68, 80-343 Gdaƒsk 15 58 558-5858/58 557-2733 mba@gfkm.pl www.gfkm.pl

Master of Business Administration with support from Business Centre Club

International Quality Accreditation - Central and European Management Development Association CEEMAN (Slovenia); Association of Management Education FORUM accreditation RSM Erasmus University (The Netherlands)

30 28

93 73

1

25 24

4 semesters Polish; English

z∏.43,600

OneMBA; RSM Erasmus University RSM Erasmus University

20 5 1991

Dr Adam Ubertowski

Master of Business Administration – Management

WND

27 28

27 28

WND 1

20 20

3 semesters Polish

z∏.15,000

Prestigious American MBA University of Wisconsin

WND WND 2006

Dr Mieczys∏aw B∏oƒski

6 8 2006

Dr Piotr Bu∏a

Uczelnia ¸azarskiego w Warszawie ul. Âwieradowska 43, 02-662 Warsaw 18 22 543-5350/22 543-5350

o.ciesielska@lazarski.edu.pl www.lazarski.pl/ckp Krakowska Szko∏a Biznesu Uniwersytetu Ekonomicznego w Krakowie / Cracow School of Business 18 ul. Rakowicka 27, 31-510 Kraków 12 293-5568/12 293-5868 imba@uek.krakow.pl www.ksb.uek.krakow.pl; www.ksb.biz.pl

Master Class in FORUM MBA rank St. Gallen Business School (Swetzerland); cooperating academies: Grand Valley State University (US); Groupe ESC Clermont-Ferrand; International Master of Business Administration Graduate School of Managment (France); Sawyer Business School, Suffolk University (US); University of Johannesburg (South Africa); Continuing Education and UCLA Extention, University of California (US)

27 26

42 53

5 6

14 16

4 semesters English

Szko∏a Biznesu Politechniki Warszawskiej ul. Koszykowa 79, 02-008 Warsaw 20 22 234-7089; 22 234-7085/22 234-7016 mba@biznes.edu.pl www.biznes.edu.pl

EQUIS; AACSB; AMBA; EPAS International Master of HEC School of Management (France); London Business Administration Business School (UK); NHH Norwegian School of Economics and Business Administration (Norway)

23 17

12 18

13 6

43 39

2 semesters English

€8,200

–

20 23 1992

Prof. Witold Or∏owski

Politechnika Gdaƒska, Wydzia∏ Zarzàdzania i Ekonomii ul. Narutowicza 11/12, 80-233 Gdaƒsk 21 58 348-6175/58 347-2494 mba@zie.pg.gda.pl www.zie.pg.gda.pl

MBA Sports Management, MBA in Strategy, Program and Project Management

WND Liverpool University; CRM Warsaw; Harvard Business Review Polska; Ernst & Young Polska

21 -

81 21

-

30 26

4 semesters English; Polish

WND

European Consultancy Project Rouen (France); Essam (Denmark) Liverpool University

11 19 2008

Barbara Stepnowska

Warsaw University of Life Sciences – SGGW ul. Nowoursynowska 166, 02-787 Warsaw 22 22 593-4216; 22 593-4218 edward_majewski@sggw.pl www.sggw-mba.pl

International Master of Business Administration in Agribusiness Management

ICA ICA

17 11

18 16

2 2

22 22

4 semesters Polish; English

z∏.18,500

International Network of MBA Programs in Agribusiness and Commerce (Warsaw; Prague; Debrecen; Belgrade; Nitra; Zagreb; Kiev; Dnepropetrovsk; Kazan) International Board of the Network of MBA Programs in Agribusiness and Commerce

16 6 1996

Prof. dr hab. Edward Majewski

Akademia Leona Koêmiƒskiego ul. Jagielloƒska 57/59, 03-301 Warsaw 23 22 519-2248/22 519-2308 malgosiao@kozminski.edu.pl www.kozminski.edu.pl

European Master of Business Administration

AMBA; EQUIS; FORUM Bradford University School of Management (UK)

15 18

WND 27

WND 8

WND 21

4 semesters WND

WND

Erasmus; Jean Monnet; Eurasia Foundation; Leonardo da Vinci; Safe; Tempus Bradford University School of Management (UK)

WND WND 2002

Dr Dominika Latusek-Jurczak

Wy˝sza Szko∏a Handlu i Finansów Mi´dzynarodowych im. Fryderyka Skarbka 24 Al. Jerozolimskie 65/79, 00-697 Warsaw 22 487-5875/22 487-5875 mba@wshifm.edu.pl www.wshifm.edu.pl

SEM; CAPITA; Edu-Swiss; IBM Partners; NATO Executive Master of Business Administration Commercial and Government Entity Code (NCAGE) International Marketing Tiffin University (US)

8 23

5 12

2 -

14 21

2 semesters Polish; English

z∏.9,000

Erasmus; first level studies in University of Wolverhampton –

12 2 1996

Prof. dr hab. in˝ Micha∏ KellesKrauz

Wy˝sza Szko∏a Handlu i Finansów Mi´dzynarodowych im. Fryderyka Skarbka 25 Al. Jerozolimskie 65/79, 00-697 Warsaw 22 487-5875/22 487-5875 mba@wshifm.edu.pl www.wshifm.edu.pl

SEM; CAPITA; Edu-Swiss; IBM Partners; NATO Executive Master of Business Administration Commercial and Government Entity Code (NCAGE) International Finance Tiffin University (US)

7 27

10 15

1

13 23

2 semesters English; Polish

z∏.9,000

Erasmus; first level studies in University of Wolverhampton –

11 2 1996

Prof. dr hab. in˝. Micha∏ KellesKrauz

Wy˝sza Szko∏a Handlu i Finansów Mi´dzynarodowych im. Fryderyka Skarbka 26 Al. Jerozolimskie 65/79, 00-697 Warsaw 22 487-5875/22 487-5875 mba@wshifm.edu.pl www.wshifm.edu.pl

SEM; CAPITA; Edu-Swiss; IBM Partners; NATO Executive Master of Business Administration Commercial and Government Entity Code (NCAGE) Information Technology Tiffin University (US)

3 8

7 10

-

15 17

2 semesters Polish; English

z∏.12,000

Erasmus; first level studies in University of Wolverhampton –

13 2 2007

Prof. dr hab. in˝ Micha∏ KellesKrauz

Master of Business Administration

EFMD (The European Foundation for Management Development); ABS (The Association of Business Schools) University of Bedfordshire (UK)

30

54 30

-

24 20

4 semesters English

GBP 3,800

LLP-Erasmus University of Bedfordshire (UK)

14 10 2006

WND

Executive Master of Business Administration General Management

SEM; CAPITA; Edu-Swiss; IBM Partners; NATO Commercial and Government Entity Code; European Council for Business Education; North Central Association – Commission on Accreditation and School Improvement Tiffin University (US)

WND WND

WND WND

WND WND

WND WND

2 semesters English

z∏.9,000

Erasmus; first level studies with University of Wolverhampton Tiffin University (US)

WND WND 2009

Prof. dr hab. in˝ Micha∏ KellesKrauz

Krakowska Akademia im. Andrzeja Frycza Modrzewskiego ul. Gustawa Herlinga-Grudzieƒskiego 1, 30NR 705 Kraków 12 252-4650/12 252-4651 rektorat@afm.edu.pl www.afm.edu.pl Wy˝sza Szko∏a Handlu i Finansów Mi´dzynarodowych im. Fryderyka Skarbka NR Al. Jerozolimskie 65/79, 00-697 Warsaw 22 487-5875/22 487-5875 mba@wshifm.edu.pl www.wshifm.edu.pl

Notes: Notes: NR = Not Ranked, WND = Would Not Disclose. Research for The List was done in July/August 2010. Number of employees and ownership structure are as of July/August 2010. All information pertains to the companies’ activities in Poland. Companies which did not respond to our survey are not listed.

Footntes: (1) Number of graduates as of August 2010.

International MBA Alumni Congress; Sokrates; Erasmus; Leonardo da Vinci; Ceepus; Jean Monnet; Tempus; European €10,000 + €150 Management of Business Sciences (EMBS); registration fee Network of International Business & Economic School (Nibes); ESSAM St. Gallen Business School

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

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LAST WORD

www.wbj.pl

AUGUST 8-21, 2011

Concert

Festival

A little help from his fans

Kraków rocks Alter Art, the organizer of the Heineken Open’er Festival, has once again turned its sights on Kraków for this year’s Coke Live Music Festival.

The top-draw lineup includes US rappers Kanye

Joe Cocker

Festival

Festival

Jamaican roots

International classics

11th Ostróda Reggae Festival August 11-14

COURTESY OF WIKIMEDIA COMMONS

Stephen Marley, the son of legendary reggae superstar Bob Marley, is the star act at this year’s Ostróda Reggae Festival.

Marley will arrive in Poland to promote his new album “Revelation Part 1: Roots Of Life.”

Other performers set to take the stage in Ostróda include Mr Vegas with Thugz Band, Sly & Robbie with Junior Reid, and Polish acts

7th International Music Festival Chopin and His Europe Warsaw Philharmonic and various other locations August 16 – September 1

Stephen Marley such as Izrael and Vava Muffin.

For more information log onto www.ostrodareggae.com

Now in its seventh year, the Chopin and His Europe festival, which is organized by the Fryderyk Chopin Institute, aims to bring together some of the most talented pianists from around the world.

Performers this year will

include Elisabeth Leonskaja from Georgia, Bulgaria’s Plamena Mangova and Latvia’s Dina Yoffe, a former runnerup in the Fryderyk Chopin Piano Competition.

The winner of last year’s competition, Yulianna Avdeeva, will perform a recital on a contemporary piano, while the Orchestra of the Age of Enlightenment will perform a symphonic concert.

West and Q-Tip, New York indie rockers Interpol and British groups The Kooks and White Lies.

Clinics at the festival will also offer massages to weary party-goers taking a break between concerts.

Tickets for the event are priced from z∏.125 For more information log onto www.livefestival.pl

COURTESY OF WIKIMEDIA COMMONS

Sheffield-born rocker and original Woodstock survivor Joe Cocker returns to Warsaw this month to belt out classic hits including “You are so Beautiful,” “Up Where We Belong,” and Beatles cover “With a Little Help From My

Friends.”

Mr Cocker, who released his debut record way back in 1964, has been entertaining music lovers across the globe for over 40 years with his trademark vocals and heartfelt performances.

Tickets for the event are priced at z∏.130.

For more information log onto www.kongresowa.pl

Coke Live Music Festival 2011 Airfield – Aviation Museum, Kraków August 19-20 COURTESY OF WIKIMEDIA COMMONS

Joe Cocker in concert Sala Kongresowa, Pl. Defilad 1 Warsaw, August 10, 7 pm

Kanye West Content provided by the Warsaw Insider. For more information on culture and entertainment in Warsaw this month, pick up the August issue.

For more information log onto www.pl.chopin.nifc.pl

Tech Eye

stood numbly as their brains tried to process the horror. Both parties passed through the five stages of grief before stumbling out at the next stop.

Yes, that’s the kind of story that Techeye will be telling our descendents. And when the little monsters push for one story too many, we’ll go all-out senile on them and start rambling about technology that hasn’t been new for decades. Like the Razer Electra headphones from gaminggear maker Razer (www.razer-

zone.com).

Our grandkids probably won’t care much about the Razer Electra (€59.99), but in terms of present-day tech it’s pretty sweet, boasting enhanced bass response, snug-fit ear cups and a rubber-sheathed audio cable. The headphones are thickly cushioned to block out ambient noise, but this makes them chunky as a result. In other words, don’t expect to see people rocking these on the subway.

Unless they’re a little different, of course.

Another gadget which Old Man Techeye will blather on about

someday is the HYmini from Miniwiz (www.hymini.com). While it will probably be obsolete within a few years, the HYmini is currently quite a relevant little gizmo – a “handheld, universal charger/adapter device that harnesses renewable wind power, solar power and conventional wall-plug power to recharge almost all your 5V digital gadgets.”

In other words, it’s a battery that draws its energy from a variety of sources, some of which are renewable; you then use it to recharge your phone, mp3 player, camera or other small device.

But if you live in a dark, windless environment don’t waste your $50; just charge your gadgets the usual way. Unless you live in the subway tunnels, of course, and the only alternative is to charge

your phone using the third rail. In that case, we’d heartily recommend the HYmini.

“Graaaaandpaaaaa! No more stories about dumb old gadgets,” the young’uns will complain some day. “Tell us about the guy on the subway that accidentally drooled on the crazy lady carrying the Taser!” And maybe we will. But, as with the Legend of the Snot-Gunner, we’ll leave out the fact that we played the central role in the story.●

COURTESY OF MINIWIZ

Techeye loves taking the subway during rush hour, just to watch all the people jammed together like sallow, sweaty marshmallows.

The more passengers, the greater the psychological tension. It’s great, like “Alfred Hitchcock Presents,” but in a subway car.

The best times are when somebody goes a bit crazy. Just a little bit though; full-on nutters are no fun. But when some freak starts biting at her own ear, or a drunkard breaks into a slurred soliloquy from “Richard III” – that’s great entertainment.

And occasionally there’s a lifechanging experience, the kind you tell stories about at every family gathering. Like the time some guy sneezed a huge, body-shuddering sneeze and it happened so suddenly that he didn’t get a hand up to cover his nose and mouth, resulting in the biological equivalent of buckshot. A snotgun blast, if you will.

“In that particular situation,” we’ll tell our grandchildren some day, “the crowd parted faster than the Red Sea when Moses was in town.” Except for the sneezer and his primary victim, of course. They

COURTESY OF RAZER ELECTRA

Legends from the underground

Ever been connected to another human by a trembling rope of mucus? Let us know: techeye.wbj@gmail.com

AUGUST 8-21, 2011

CLASSIFIEDS

www.wbj.pl

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