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Greece’s ambassador to Poland explains why her country is making the tough choices





The World Bank forecasts Poland’s economy will grow even slower this year than it did last year

VOLUME 19, NUMBER 23 • JUNE 17-23, 2013 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Book of Lists Gala

Since 1994 . Poland’s only business weekly in English

Under pressure Warsaw Mayor Hanna Gronkiewicz-Waltz faces a recall election as residents become fed up with the city’s mismanagement 10-11

Warsaw Business Journal Group launches this year’s edition of the annual Book of Lists publication this week at a gala event 12-13

Wrist-slapper The National Bank of Poland intervened in currency markets to punish those betting on a weak z∏oty 7

LOKALE IMMOBILIA REAL ESTATE • Nova Cracovia • Robyg interview • Ochota Office Park 16-18


In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . .8-9 Cover Story . . . . . . . . . . . . . . .10-11 Book of Lists . . . . . . . . . . . . . .12-13 Opinion & Analysis . . . . . . . . .14-15 Lokale Immobilia . . . . . . . . . .16-18 The List . . . . . . . . . . . . . . . . . . . . . .19 Markets . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

Pension plan

Big bank, bigger

The government is due to reveal its proposals for reforming Poland’s pension system this week 3

Poland’s largest bank PKO BP has acquired Nordea’s Polish assets in the year’s biggest M&A deal so far



Platoon leader Jan Kiepura, a Polish soldier serving in Afghanistan, was killed on June 10 when a land mine exploded beneath the car he was in while on patrol in the Ghazni province. The platoon leader’s team was performing reconnaissance and securing a perimeter for an American minesweeping team. Jan Kiepura was 35 years old and left behind a wife and two sons.

Inflation lowest since 2007 Poland’s consumer price index inflation reading for May dropped to just 0.5% measured year-onyear, the Central Statistical Office (GUS) announced on June 13. In month-on-month terms, inflation dropped to -0.1%. The sectors which pushed down prices in May the most were transport (a drop of 2.3%) communications (2.6%) as well as recreation and culture (0.8%), GUS said.

Apple and Google avoid Polish taxes Google Poland and Apple avoid paying Polish corporate tax by transferring revenue to their offshore subsidiaries, thus saving millions of z∏oty a year, according to data compiled by daily Gazeta Wyborcza. The combined revenue from Apple and Google’s Polish operations amounts to some z∏.2 billion, but the companies only pay a few million z∏oty each year in tax, the newspaper found. ●

Numbers in the News

Jan Rokita


The once-influential, but now somewhat forgotten, politician Jan Rokita has dominated media coverage in recent days and could once again become a force on the Polish political scene. If he does, it would be yet another negative development for Prime Minister Donald Tusk and his ruling Civic Platform party, which has recently been down in the polls. Mr Rokita was once a prominent member of Civic Platform and the head of its parliamentary caucus (20032005) before announcing in 2007 that he was retiring from politics for personal reasons. It was, however, speculated at the time that Mr Rokita felt marginalized in the party by

Donald Tusk, who regarded the popular conservative politician as a threat to his leadership. Mr Tusk has systematically eased out all of the party’s founding fathers, as well as its most popular politicians. But Mr Rokita burst back into the limelight last week, after announcing that a Polish court was demanding he pay z∏.350,000 in damages for defaming former police chief Konrad Kornatowski. “I am seriously wondering whether to return to the country while it is ruled by the current government,” Mr Rokita told journalists from Italy, where he currently resides, implying he felt persecuted by the government.

“Taking into consideration that astronomical sum, I could be paying this debt for the rest of my life,” he said. In 2007, Mr Rokita called Mr Kornatowski, a “particularly vile prosecutor who brings shame to Poland’s police,” referring to the latter’s past as a communist prosecutor. Mr Kornatowski sued Mr Rokita for defamation and won. But Mr Rokita has refused to apologize in public, hence the fine. Jaros∏aw Gowin, a former justice minister and now rival to Mr Tusk for leadership of Civic Platform, said Mr Rokita is being “destroyed by the justice system.” Meanwhile, MEP Marek Migalski announced he would be establishing a special fund to collect contributions in order to help Mr Rokita. Several politicians, including opposition Law and Justice leader Jaros∏aw Kaczyƒski, announced they would be chipping in to the fund. The issue is doing more PR damage to the already battered PM and his ruling party, who have been sinking in the polls in recent weeks. Mr Gowin is now inviting Mr Rokita to return to politics. “Polish politics is losing a lot by the absence of people like Mr Rokita,” the former justice minister said. But for now, Mr Rokita is keeping mum on his plans for the future. Remi Adekoya

On Trouble in Turkey Turkey has been hailed as a huge success story in recent years. So then why are its youth protesting? Log on to to read an analysis by Sebnem Kalemli-Özcan, professor of economics at the University of Maryland

was Poland’s year-on-year consumer price index reading for May, according to Polish statistics office GUS. The reading is far below the central bank’s target.

2.5% is by how much Poland’s GDP will grow in 2014, according to the government’s recently approved budget framework. The World Bank forecasts that Polish GDP will grow 2% next year.

z∏.350-400 million is the amount that the Treasury could lend LOT Polish Airlines in a second tranche of state aid.

49,658 is how many cars were produced in Poland in May, 7.31% less than a year ago, according to Samar.

Quote of the Week “Somebody thought they could make money betting on a weaker z∏oty and got their wrists slapped.” NBP head Marek Belka, on the reasons for its intervention in the currency market in early June.

Figures in focus Wheels keep on turning Change in industrial output from March to April 2013, various European countries 6 5.4 5 4 *Lowest in Europe 3.0 3 **Highest in Europe 2.3 1.9 2 0.8 1.1 1.1 1.2 1 0.1 0.3 0.4 0.5 % -0.3 -1 -0.9 -0.7 -2 -3 -4 -3.6 -3.3 -4.3 -5 -6 -5.1 27 EU 17 Lat Po via la Bu n d lga Slo ria ve Ge nia rm Ro any ma n Fra ia nc Ire e No land rwa y**

Polish soldier killed by mine



In a CBOS opinion poll published last Friday, the biggest opposition party Law and Justice (PiS) was supported by 27% of the respondents, one percentage point more than in the previous poll. Support for senior coalition partner Civic Platform remained unchanged and stood at 23%. Some 9% of the respondents said they would vote for the Democratic Left Alliance and 6% would vote for the Polish People’s Party.

JUNE 17-23, 2013

F Ne inlan the d* rla n Por ds tug Est al on Cz S ia ech pa Re in pu blic Ita ly UK

PiS with 27% support



Source: Eurostat

Company index Accor ..........................................................16 Mantis ..........................................................9 Acron............................................................4 Marathon ....................................................3 Aegean Airlines ..........................................9 Mellon ..........................................................9


Apple ......................................................2, 23 Novotel ......................................................16


BGK..............................................................4 Opoka TFI ....................................................5




The gala celebrates the publication of the 18th edition of bilingual business guide Book of Lists. Warsaw, Dom Dochodowy, Plac Trzech Krzy˝y 3


Location: Web:

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



JULY 14 Event:



This conference will address housing issues

Agdar Group ..............................................16 Nordea ........................................................5


in the largest growing demographic – senior citizens. The conference will address how demographic, economic and social changes are creating the need for alternative senior housing solutions for the entire senior community. Kraków, City Council Chamber, Pl. Wszystkich Âwi´tych 3-4

BMW Inchcape ..........................................16 PGE ..........................................................5, 6 BNP Paribas................................................5 Chipita..........................................................9 City Security ..............................................13 Coca-Cola HBC ..........................................9 DM IDM........................................................5

PGNiG ....................................................4, 11 PHN............................................................11 PKO BP ........................................................5 PKP ..............................................................6 PKP Cargo ..................................................5

Echo Investment........................................16 PKP PLK ......................................................6 Enea ............................................................5 Play ............................................................9 Energa ........................................................5 Erbud ........................................................17


ExxonMobil ..................................................3

The celebration of France’s national holiday in Warsaw will feature “French town” on ul. Francuska with a French song festival and a culinary competition, as well as a “July 14 Ball” on ul. Foksal, which will bring together some 1,500 people involved in Polish-French business, politics and culture. Warsaw

Fiat ..............................................................6 Firmus Group ............................................17 General Motors ..........................................6

Polski Pràd ..................................................5 Robyg ........................................................18 Samar ..........................................................2 Stadler Polska ............................................6 Talisman ......................................................3

Google..........................................................2 Tauron ..........................................................5 Grupa Azoty ................................................4 Terna ............................................................9 Hermanowicz Rewski Architekci ..............16 Totolotek ......................................................9 Jones Lang LaSalle ..................................16 Tremend ....................................................16 Leo Express ................................................6 Volkswagen..................................................6 LOT Polish Airlines..................................2, 6 Warsaw Stock Exchange ..........................20 Mahler Project International ....................16 X-Trade Brokers ........................................20


JUNE 17-23, 2013


Public finances

PM favors giving Poles choice between private and public pension funds The government is due to decide on reforms to Poland’s pension system this month. The prime minister has spoken out for giving people a choice over where to place their money COURTESY OF FLICKR/KPRM

Prime Minister Donald Tusk has said he wants Poles to have “more influence” over where the money they pay into their pensions is held, be it in private pension funds (OFE) or in the state-run Social Insurance Institution (ZUS). Both have been part of Poland’s pension system since 1999. But the money that goes into OFEs isn’t counted on the government’s balance sheet,

However, in 2011, Mr Tusk’s government reduced the proportion of pension contributions paid into the privately run OFEs from 7.3 percent to 2.3 percent of salaries. The remaining five percent was transferred to the government-run ZUS, and is used to pay off current obligations directly to retirees. The prime minister says that the change saved the Polish government some z∏.190 billion it would have otherwise had to borrow in order to prop up ZUS.

Not enough

Prime Minister Donald Tusk wants Poles to have more choice as to where their pension money goes and cannot be calculated against the deficit. That has forced the government to tighten its belt more than it

would like. Between 1999 and March 2012, OFEs received roughly z∏.178 billion of Poles’ pension contributions.

Still though, the government isn’t satisfied, and would like to see more of the money that OFEs receive pumped into ZUS. The Finance Ministry is currently working on a set of proposals for changes to the

system, which it is due to present to the government this week. A decision on which proposals will be implemented is expected in the coming days. Along with the proposals, the ministry is preparing a report on how OFEs have functioned over the years. “Can people really administer the money they have paid [into OFEs] today? They can’t, and it is not their money. As with ZUS, it is simply a way to pay future pensions,” said Mr Tusk at a press conference last week. He added that he had “no doubt” that the report would show the system had generated “large costs.” “The only real – and not virtual – money is the billions that the middlemen have made, because the OFEs are

middlemen. The status quo is unacceptable,” said Mr Tusk. OFEs have collected about z∏.17 billion in management fees and commissions since 1999, according to industry data. Mr Tusk said changes to the system would have to go in the direction of people having more choice over where their own money goes and “this is the way we will go.” And although the prime minister said he is not an opponent of OFEs, he added that the level of pensions they guarantee, in comparison to how much they make, is “delicately speaking, unacceptable.” However, the government will not take over the funds that Poles have already paid into OFEs, Mr Tusk vowed. Remi Adekoya

Natural resources

Poland still has the best prospects in Europe for obtaining energy from shale gas and oil, according to the Energy Information Agency

Despite early disappointment, Poland still has some of Europe’s most favorable infrastructure and geology for exploiting shale resources, according to a new report published by the US Energy Information Administration.

“Poland has some of Europe’s most favorable infrastructure and public support for shale development,” the report reads. It points to the Baltic Basin as the most prospective region and to the Podlasie and Lublin basins as

Shale gas extraction draft law sent to government The final draft of a law on the extraction of hydrocarbons, including shale gas, has been sent to the Chancellery of the Prime Minister, Deputy Environment Minister Piotr Woêniak said last Wednesday. It will now have to be approved by the government and sent to parliament. Changes in the draft include simplifying licensing rules and a guarantee of extending rights from an exploration license to the extraction stage. This means that holders of licenses who have found resources on their concessions will be able to launch extraction

activities on them. However, the exclusive rights for signing an extraction agreement will only be valid for two years. The procedure of environmental approval will also be made simpler. A decision will be issued just before drilling starts. Another important change is the limiting of the National Mining Resources Operator (NOKE), which will be part of consortia on all licenses. Its share in profits will be equal to the share in expenses, no higher than 5 percent. It was also deprived of a right of veto. KW

also having potential. The report estimates Poland’s technically recoverable shale resources at 146 trillion cubic feet of shale gas and 1.8 billion barrels of shale oil. On an energyequivalent basis, the figures are 20 percent lower than estimates published in 2011. The report notes that initial test wells have yielded underwhelming results, and that ExxonMobil, Talisman and Marathon have all decided to leave Poland. It also points to government interference as a possible risk. “The government is discussing modifications to the shale fiscal terms which may increase profit taxes on shale gas production to 40 percent or more, while establishing a government-owned entity to gain a minority


US report: ‘Too soon to dismiss’ Poland’s shale potential

A shale gas rig near Lublin, in eastern Poland equity stake in shale gas development projects,” the report notes. If implemented, these changes could “significantly reduce industry investment in shale exploration at a time of disillusionment with early well results,” the report adds. But the report concludes

optimistically, saying that the Polish shale gas extraction industry is still “at an early exploratory, pre-commercial phase,” and while initial drilling results have not met earlier expectations, “it is too soon to dismiss Poland’s extensive shale potential.” Andrew Kureth


Tusk says he won’t run for European Commission presidency Being PM is “a hundred times more important” than a “European promotion,” he said Prime Minister Donald Tusk will not run for the position of president of the European Commission in 2014 when current EC President Jose

Manuel Barroso’s term is up, Mr Tusk told public television last Monday evening. “My decision is final. I made the decision that I want to continue to be prime minister of Poland. Until 2015, until the [parliamentary] elections, I will be engaged in Polish affairs,” he said. Poland will hold both parliamentary and presidential elections in 2015.

“To be Polish prime minister is for me a hundred times more important than a potential European promotion,” he added. Speculation had grown that Prime Minister Tusk could run for the position since last year, when the rumor began circulating in Brussels. In April this year, Hugo Brady from the Centre for European Reform,

a think tank, reignited the talk. “Germany might back Tusk in order to cement Berlin’s political alliance with Warsaw and because it is time for someone from one of the newer member-states to get a top job,” he wrote. The speculation later increased as Joseph Daul, leader of the European People’s Party, the largest party in

the European Parliament, said, “His name has been coming up since last year, but to be honest I’m not going to ask him that question (about running for the EC presidency) right now.” In late May Mr Tusk admitted that speculation about his candidacy had grown, and said that he would make an announcement on

his final decision soon. In the interview with public television last Monday evening, Mr Tusk said that he wanted to continue to prepare Poland for the end of the economic crisis. “I know it is a matter of several months, maybe two years, so we have to be wellprepared to take on this situaAK tion,” he said.


The supervisory board of state-owned Bank Gospodarstwa Krajowego (BGK) has chosen Dariusz Kacprzycki as the bank’s new CEO, BGK said in a statement. Mr Kacprzycki’s term expires on June 30, 2017. He will have to obtain approval from the Polish Financial Supervisory Authority and until that happens, he will hold the position of acting CEO.

PGNiG gets Norwegian licenses PGNiG Upstream International AS, a subsidiary of Poland’s natural gas giant PGNiG, has obtained shares in four new exploration and extraction licenses from Norway’s Ministry of Petroleum and Energy. Two of them are located in the Norwegian Sea and two other are in the Barents Sea. PGNiG will hold 40% in the Norwegian Sea licenses. It will hold 30% in one of the Barents Sea licenses and 20% in the second one.

Labor market

Unions oppose government proposal on minimum wage The government has set the increase in the minimum wage next year at z∏.80. Unions want z∏.40 more The government has decided to set the minimum wage in 2014 at z∏.1,680, which is z∏.80 higher than in 2013. This is the lowest increase (5 percent) admissible under Polish law. The government had even considered freezing the minimum wage this year by passing a separate bill, due to the difficult conditions on the labor market, Prime Minister Donald Tusk said at a press conference last week.

Compromise unlikely

Too low?

Russian chemical group Acron will not continue to buy shares in Poland’s Grupa Azoty, Vladimir Kantor from the Russian’s management board told Parkiet. “The present situation is not in favor of increasing our stake in Grupa Azoty,” he said. Mr Kantor explained that one of the reasons was the inability to execute rights from shares above 20% by investors other than the State Treasury. Another reason is Grupa Azoty’s stock price, which Acron says is too high.

Multiple terms for RPP members Poland’s Ministry of Finance is working on a new law on the National Bank of Poland. The new regulations would allow Monetary Policy Council (RPP) members to serve two terms. Currently, they are allowed to serve one six-year term. The proposal failed to garner support from the National Bank of Poland. “It may be interpreted as an attempt to limit the autonomy of the council,” read the NBP’s statement. ●

The employers’ association believes that although a higher minimum wage will not have much impact on cities and major corporations, it would result in layoffs in poorer regions. “In many municipalities the current minimum wage already exceeds 60 percent of average pay and generates unemployment among people with the lowest qualifications,”

Minimum pay since 2000 2,000

1,500 *Government proposal 1,000

20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 *


Acron gives up on Azoty

since he’s already once torpedoed a minimum pay negotiated by the tripartite commission.” Employers, on the other hand, consider the wage proposed by the government to be fair and will likely refuse a bigger increase. “The proposed raise means the minimum pay would still grow more quickly than the average pay,” Jeremi Mordasewicz, management board advisor at employers’ group Lewiatan said in a statement.

The government now has to present its decision to the tripartite commission, which comprises representatives of labor unions, employers and the government. Talks will not be easy, as unions are demanding the minimum wage be set at z∏.1,720. “The rate we are demanding is reasonable and may be the starting point for reaching 50 percent of average pay,” Tadeusz Chwa∏ka, president of the Trade Unions Forum (FZZ) told the Polish Press Agency. He admitted, however, that unions had moderate hopes for achieving their goal, “I don’t expect the finance minister to be willing to concede, particularly

Source: Labor Ministry

BGK’s new CEO

JUNE 17-23, 2013


Business leaders and unions are engaged in a verbal tug-of-war over the minimum wage

Mr Mordasewicz added. In order to minimize the negative effect minimum wage has on the labor market, Business Centre Club (BCC), a business advocacy group, has suggested differentiating the minimum pay in poorer and wealthier regions. It would be “proportional to (but no higher than 40 percent of) the average pay in each municipality,” said Witold Micha∏ek, a

BCC expert. Trade unions are standing firm, however. “We need to break away from income inequality, as there is a large group of people who earn millions and still lack z∏.10 to increase an employee’s minimum pay,” Jan Guz, head of National Alliance of Trade Unions (OPZZ) said at a press conference last month. Another trade union, “SolidarnoÊç” is already planning a general strike in September. The tripartite commission has until July 15 to reach a consensus. If it fails to do so, the government will be able to unilaterally decide on the minimum wage for 2014. Beata Socha

Water management

EC wants to withdraw z∏.2 billion of flood aid from Poland With the looming danger of continuing storms, Poles may be in dire need of EU flood funds The European Commission has threatened to withdraw z∏.2 billion of financial aid from Poland for flood prevention. The EC claims Poland has failed to “develop an integrated flood management system,” according to a statement the Environment Ministry and Regional Development Ministry received from Brussels. If the situation does not improve, Poland will not only have to return the flood-prevention aid it received in the EU’s 2007-2013 budget, but also have to do without the funds earmarked for this purpose in the 2014-2020 financial framework. The EC complained mostly about the lack of a comprehensive, nationwide watermanagement plan mandated by the Water Framework Directive, which would help protect Poland from flood risk. Instead of creating a unified

system, each region is attempting to handle the problem on its own. The slow progress on implementing the EC directive was also cited as a reason for the possible withdrawal of aid. The timing of the threat puts the consequences into stark perspective. Last week flooding hit Poland with a vengeance, after persistent, violent storms struck throughout the country. In early June, there were over 6,000 instances of damage caused by floods in Poland.

Work in progress Both government ministries under fire claim to have made every effort to meet the EC requirements. The Regional Development Ministry has organized training for the beneficiaries of the funds, educating them on integrated riverbasin management issues. Meanwhile the Environment Ministry has been working towards unifying the regional water-management systems and has already prepared a recovery plan to keep the EC at bay. “By mid-2014 we will have



Consequences of losing the aid could be dire prepared the master plans, that is two major documents on water management in the river basins of the Vistula and the Oder [two major rivers in Poland],” Deputy Environment Minister Stanis∏aw Gaw∏owski explained. Mr Gaw∏owski added that the ministry was also preparing a new law implementing the EC directive. The Environment Ministry also wants to cut a lot of red tape in the way Poland’s

water-administration system works. Currently water management is under the purview of no fewer than five different ministries (responsible for the environment, agriculture, transport, construction and internal affairs) as well as several dozen public institutions. The present decentralized management system has led to some puzzling situations where, for example, the lev-

ees on opposing riverbanks are supervised by two different institutions. The new system, which is expected to be implemented no sooner than in two years’ time, will aim to centralize the administration over the scattered riverbasin management systems, possibly in the hands of a new government ministry responsible solely for water management. Beata Socha


JUNE 17-23, 2013


PKO BP takes over Nordea’s Polish assets


BNP Paribas Polska SPO BNP Paribas Polska will carry out a secondary public offering in mid2013, the bank said in a statement. The offer will consist of up to 8,575,186 newly issued shares. It will be directed at Polish individual and institutional investors and selected investors outside Poland. The aim of the offer is to increase the bank’s free float to 15% and thus fulfill a requirement from the Polish Financial Supervisory Authority.



Energa IPO likely in Q3

PKO BP headquarters, Warsaw

The deal, Poland’s largest M&A transaction this year, is worth some z∏.2.83 billion Poland’s largest lender PKO BP has signed an agreement to take over the Polish assets of financial group Nordea. The deal includes lender Nordea Bank Polska, life insurer Nordea Polska TUn˚ and leasing firm Nordea Finance Polska. The total value of the deal is about z∏.2.83 billion.

Nordea’s Polish headquarters, Warsaw

PKO BP estimates that the acquisition will help it increase its assets by 16 percent. Its profit per share is expected to rise by 10 percent and the return on investment should be 13 percent. PKO BP’s network in Poland’s largest cities will expand by 25 percent and its portfolio of wealthy customers will expand by 8 percent, the bank said. PKO BP is taking over 99.21 percent of Nordea Bank Polska in the transaction. It said that it would take steps to acquire the remaining shares from minority shareholders

menting the weaker points in PKO BP’s profile,” market analyst Micha∏ Sobolweski from DM IDM told portal

and delist the Nordea unit from the Warsaw Stock Exchange. The acquisition of Nordea is Poland’s biggest M&A transaction this year, according to Bloomberg. It does not come as too much of a surprise, though. PKO BP’s search for acquisitions has been no secret, and earlier this year it announced that it would focus more on wealthier and corporate customers. “The acquisition is part of PKO BP’s current strategy. Business-wise the transaction is good [for PKO], compli-

Revised targets According to PKO, the deal involved Nordea’s continued financing of its mortgage portfolio in Poland and participating in the risk of the loans losing their value. In a statement released after the transaction Nordea said the deal will “lead to a minor capital gain and profit and loss effect.”

Nordea had had ambitious plans for the Polish market just a few years ago. It had a goal of operating 400 branches by 2010 and of doubling its market share to 8 percent. After poor results in 2012, with operating profit falling to €78 million from €95 million in 2011 and with net loan losses up from €14 million to €37 million, the Scandinavian lender had to substantially revise its former targets. The banks now need approval from regulatory bodies to finalize the transaction. KW, BS

Energy sector

Electricity market to see new, private competitor A big pie to slice


Poland’s largest railway cargo firm PKP Cargo had a consolidated net profit of z∏.267 million in 2012, the company said in a press release. The results were calculated in accordance with International Financial Reporting Standards. The PKP Cargo group had revenues of z∏.5.2 billion last year.

Core inflation at 1% in May

Tauron 5.2mln

The four major Treasury-controlled energy giants, PGE, Tauron, Enea and Energa, will soon have a new competitor in Poland’s energy market. Polski Pràd will begin operating this summer and plans to secure some 12,000 customers by the end of 2013. Its stockholder, Opoka TFI, is a fund managing a portfolio worth over z∏.500 million. A new company entering the market will put further pressure on suppliers. Last week Poland’s Energy Regulatory Office (URE) approved new lower tariffs for energy distributors, which are to bring prices down by

PKP Cargo net profit at z∏.267 mln

The number of customers of the four major energy suppliers

PGE Energa


Enea 5.0mln Source: Energy Regulatory Office

3.9-4.6 percent for households.

Promising SMEs Polski Pràd is not planning to focus on individual households, though. Instead, it will primarily target SMEs, which consume some 60 TWh of power per year. This market segment comprises 800,000 companies paying the highest

tariffs. In 2012 it was z∏.328.8 for each MWh of power (the big production plants and mines paid z∏.320 for a MWh of electricity), which makes the value of the entire market segment a whopping z∏.19.7 billion a year. Despite stiff competition, the company’s CEO is optimistic, “In 2012 as many as 45,000 companies changed


A new power supplier will mainly target SMEs and offer energy-saving investments

Deputy Treasury Minister Pawe∏ Tamborski said that the IPO of Poland’s fourth-largest utility Energa is likely to happen in the third quarter of 2013, despite a delay in choosing advisors for the offering. “We are counting on finding a formula for transferring [hydroelectric power firm] ZEW Niedzica to Energa. The third quarter is still a realistic time for the company’s Warsaw Stock Exchange debut,” Mr Tamborski told ISBnews.

A new player on the market will deliver electricity to Polish companies their energy supplier. This year the number could reach 100,000.” Sector analysts say that alternative providers could appropriate up to 20-30 percent of the market segment. The company eventually wants to provide some 3-4 TWh of power per year, reaching a threshold of 0.5 TWh in

2014 and 2 TWh a year later. Its competitive advantage will derive not only from lower prices, but also from advisory services. The firm wants to offer its customers help in financing investments aimed at streamlining their power consumption. Beata Socha

Core inflation, excluding food and energy prices, declined to 1% year-onyear in May, compared to 1.1% in April, the National Bank of Poland said. The month-onmonth figure was -0.1%, compared to 0.6% in April. Inflation excluding statecontrolled prices amounted to 0.4%, compared to 0.7% both in April and in March, and inflation excluding the most volatile prices amounted to 1.5%, compared to 1.6% in April and 1.5% in March, the NBP also said. ●



Energy industry

JUNE 17-23, 2013




PGE to remain involved Car production falls, again in Opole project

PGE’s Opole plant

Despite the company’s opposition, the Treasury wants to see the investment completed Poland’s largest utility, statecontrolled PGE, will be involved in building two new power generation units at the coal-fired Opole plant in southern Poland, Treasury Minister W∏odzimierz Karpiƒski confirmed last week. The statements, made on news station TNV24, came over two months after PGE had announced that it was scrapping the project, claiming it would not be profitable for shareholders. The Opole investment has become a bone of contention

between the Treasury, which is PGE’s largest shareholder, and the company’s management ever since it announced its retreat from building unit numbers five and six at the Opole plant, a project dubbed “Project Opole II.” Despite the company’s reluctance, Prime Minister Donald Tusk announced in early June that the investment would be seen through, saying that it was critical for the country’s security. Minister Karpiƒski echoed those comments, saying that scrapping the investment plan isn’t in the best interests of Poland’s energy sector. He added that PGE’s decisions shouldn’t be made solely on the basis of the investment’s financial profitability.

Mr Karpiƒski denied there was an active dispute over the new Opole units either inside the government or with the PGE’s management. “I am fully convinced that we will find a formula to complete this project, which is important for [Poland’s] energy security,” he said, adding that a decision on the launch of construction in Opole would be made by August 15. PGE suspended the Opole project in early April, saying that falling energy prices had decreased the project’s potential profitability. After the company announced its decision, the government said it would look for ways to carry out the investment. Katarzyna Rybnik


LOT reorganization plan must lead to profitability, says treasury minister The financially troubled airline has already received z∏.400 million in aid and is asking for more Polish national airline LOT’s restructuring plan and the state aid the company has requested will be approved, but only on the condition that the plan makes the company profitable again, Treasury Minister W∏odzimierz Karpiƒski said last week. The airline has asked for further state aid as part of its revised plan in late May. According to business daily Puls Biznesu, the airline is asking for another z∏.350-400 million in addition to the z∏.400 million loan from the Treasury it received last December. The European Commission tem-

porarily approved the z∏.400 million loan in mid-May, saying the measure is in line with European regulations on state aid. Mr Karpiƒski said that the government is currently in a “difficult dialogue” with the European Commission regarding final approval for the aid. The EC said it would make a final decision on the aid after reviewing the restructuring plan, which must be submitted by June 20. The plan includes job cuts and a 25 percent reduction in the number of flights, according to daily Gazeta Wyborcza. The airline’s spokesperson, Marek K∏uciƒski, declined to comment on the plan before submitting it to the EC. Poland hopes to sell the financially troubled airline and has tried to do so several

times over the past few years, but those efforts were scuppered by Polish law, which stipulated that the Treasury must maintain a majority stake. A draft law allowing for the Treasury to sell more than 50 percent in LOT has now passed both the Sejm (the lower house of Polish parliament) and the Senate (the upper house), and was signed by President Bronis∏aw Komorowski last Friday. The Treasury is already looking for a buyer. Though Mr Karpiƒski said it’s “too early” to talk about potential investors, a market probe performed by LOT’s advisor Rothschild shows that several airlines are interested in buying the Polish carrier, including Air Berlin, British Airways and Singapore Airlines. Cathy Liu

Slow European sales and two long weekends in May slowed production, experts say

After a promising rebound in April, fewer cars came out of Polish factories in May Car production in Poland fell 7 percent year-on-year in May, industry research firm Samar announced last week, attributing the drop to weak European demand and a series of public holidays in Poland. A total of 49,658 motor vehicles were produced, an 8.55 percent fall month-onmonth. In April this year, the number of motor vehicles produced in Poland rose 1 percent year-on-year to 54,303 after a 20 percent drop in March and

a 29 percent decline in February, giving industry watchers some hope that a rebound was on the cards.

Europe dragging us down But commenting the May figures, Samar stated that “Car sales in Europe are still at a low level, which is reflected in the output of factories in Europe, including Poland.” The number of passenger cars and trucks rolling off production lines in Poland in the first five months of 2013 fell 17 percent compared to the corresponding period of last year, Samar added. Regarding Poland’s May results, it added that “It is

important to remember that May was particularly short when it comes to the number of working days because of two long weekends.” Fiat, General Motors and Volkswagen all make cars in Poland, accounting for about 7 percent of Polish industrial output, but the industry has been hit by weak demand in the euro zone in recent months. All of 2012 saw just shy of 636,000 cars and trucks roll out from Polish factories, a 23 percent drop compared to 2011 and the lowest amount since 2005. In Poland, nearly 99 percent of cars assembled are for export, mostly destined for the RA European market.


Czech rail carrier to enter Polish market Leo Express wants to operate trains between major Polish cities, and to Prague Leo Express, a private-owned Czech railroad operator, will enter the Polish market this December, the company announced last week. The company will provide its services through a local partner DolnoÊlàskie Linie Autobusowe. The company’s CEO Leos Novotny confirmed that the Czech operator will provide connections between major Polish cities such as Warsaw, Kraków, Katowice, Poznaƒ and Szczecin. Leo Express has already begun recruiting personnel and plans to employ about 150 people. The investment will mean much-needed job opportunities for former staff of Polskie Koleje Paƒstwowe (PKP), who were laid off after the statecontrolled operator began

implementing its restructuring and workforce-reduction program last year. The new carrier could become a serious competitor for PKP, as it plans on providing high-standard trains and services currently not available on Polish trains at relatively low prices. Leo Express plans on operating four-car low-floor trains called FLIRTs (Fast Light Innovative Regional Trains), produced by a Polish company, Stadler Polska. FLIRTs are equipped with a lift for passengers in wheelchairs and provide step-free passage through the entire train. Other technical features the trains offer include air-conditioned passenger and driver compartments as well as vacuum toilet systems.

No ‘acrimonious competition’ The Czech carrier will need to cooperate with Polish rail-

road companies, due to the fact that its services are to cover a small number of Polish cities. Mr Novotny said at a press conference that his company was “currently holding extensive negotiations” with Polish rail infrastructure manager PKP PLK, as well as other agencies. He also stated that his company’s goal was not “acrimonious competition” and that by offering high-quality rail connections his company was hoping it could convince more drivers to switch to trains. In 2014-15 “we see potential for at least 5 million new passengers,” Mr Novotny added. PKP PLK states that it has been aware of the Czech company’s interest in the Polish market and may cooperate with Leo Express if the carrier meets the conditions for sufficient rolling stock. Katarzyna Rybnik


JUNE 17-23, 2013


Economic growth

Not the only green island anymore The World Bank says Poland’s growth will remain strong compared to region, though some are still outperforming it Poland’s economy will grow at a slower rate this year than it did last year, but will still outperform most of the region, the World Bank said in its Regular

Economic Report on the 10 Central and Eastern European EU countries plus Croatia, which will join the bloc on July 1, 2013. The World Bank puts its forecast for Poland’s GDP growth rate at 1 percent for 2013, a cut of more than one percentage point from its previous forecast six months ago, and significantly less than the 1.9 percent GDP growth Poland

Regional stagnation With the exception of 2009, last year was the region’s weakest since 1996, Ewa Korczyc, country economist for Poland at the World Bank, told WBJ. This year, the 11 countries’ GDP growth together is only expected to come in at around 0.8 percent – the same as last year. In 2014, the World Bank sees growth of 2 percent for the entire region. Last year, four out of the 11 countries saw negative growth. This year, the World Bank expects three countries – Slovenia, the Czech Republic and Croatia – will continue to see their economies shrink (Hungary is expected to swing from -1.7 percent growth last year to 0.3 percent this year). The Baltics will continue to be the top performers in the region. In 2013 Latvia (3.6 percent), Lithuania (3.0) and Estonia (3.0) will show the highest growth by far. In 2014, their economies will grow by between 3.5 percent and 4.1 percent, the World Bank forecasts. ●

recorded in 2012. Nevertheless, Poland’s growth will still be stronger than five of the 11 countries included in the report. The three Baltic states, Latvia, Lithuania and Estonia, expect growth exceeding 3 percent in 2013, while Romania and Bulgaria will see their GDP increase by 1.7 and 1.2 percent respectively, according to the report. “Poland’s growth is still strong, compared to the region, but it is not the only green island anymore,” Ewa Korczyc, country economist for Poland at the World Bank, told WBJ. She was referring to the Polish government’s oft-repeated mantra in 2009 and 2010 that the country was a “green island” of positive economic growth in a red sea of recession across Europe.

global economic crisis and subsequent euro zone sovereign debt crisis, but finally came to a screeching halt last year. A rise in net exports, especially at the end of the year, was what kept the economy growing, said Ms Korczyc. But that situation is due to change this year. “The question is whether this slowdown in consumption is cyclical or structural, and we tend to believe it is cyclical,” she said. As long as the economies of Poland’s trading partners pick up as expected, then Polish consumers will begin to spend again as the benefits filter through to the country’s economy. Still, what happens in the European Union and especially Germany, Poland’s largest trading partner, is the biggest question mark for the Polish economy going forward. Though Ms Korczyc said the hard economic data coming out of the EU15 is “sending out mixed signals,” the World Bank does see the situation in the EU improving. “If the EU bounces back, Poland will follow suit – though it will take time, since both positive and negative develop-

Consumption on the rise The economists who put together the report see Poland’s domestic consumption beginning to grow again, after a significant and unexpected slowdown last year. Domestic consumption had been keeping Poland’s economy growing throughout the duration of the

Poland middle of the pack The World Bank’s GDP growth rate forecasts (percent) for the region Country/region
















Czech Republic





































Source: World Bank EU11 Regular Economic Report 2013

ments in the EU affect Poland with a lag,” she said. Indeed, the institution expects economic growth in Poland to reach only 2 percent in 2014, also because there will be a delay in EU funds flowing back into Poland once the new 2014-2020 budgetary period begins. Nevertheless, the bank sees lower interest rates and the government’s new credit line

for small and medium-sized enterprises as having a positive effect on consumption – which will consequently pick up growth. But the most important factor remains the economic environment outside Poland. “The biggest worry for the Polish economy is uncertainties in its European trade partners,” Ms Korczyc said. Andrew Kureth

Fiscal policy

NBP intervenes on currency market

Finance Ministry proposes new spending rule

Marek Belka, the central bank’s head, was “slapping the wrists” of currency speculators

The ministry says the rule will create more “stability.” Analysts say it’s a smokescreen

NBP president Marek Belka, wrist-slapper z∏oty weakness. Instead, NBP president Marek Belka said that the bank had chosen to make the move because of excessive fluctuations in the exchange rate. “This absolutely isn’t an attempt to fight the trend or anything like that,” he told the Polish Press Agency (PAP). “There was just a little craziness over the past few days and we gave it a kick,” he added, saying that the central

bank doesn’t act “in the interest of currency-market speculators.” “Somebody thought they could make money betting on a weaker z∏oty and got their wrists slapped,” he said. As of press time, the z∏oty was trading at z∏.4.2336 to the euro, bucking a trend that saw most emerging market currencies weakening. Most analysts expect the NBP to cut rates for the sixth time this year, at the AK beginning of July.

The Ministry of Finance is proposing a new spending rule aimed at making Poland’s public finances more stable. Currently, Polish law includes some mandatory limits on spending when the debt-to-GDP ratio reaches certain levels. The ministry wants to change this system to one that would include a broader time scale. The new rules are complicated. In essence, new limits would be created based on an eight-year average of GDP growth: from the past six years, a forecast for the current year and a forecast for the following year. The calculation would also include inflation and some other factors. The ministry wants the rule introduced in 2014. The proposal has been included in a draft amendment to the law on public finances. “The purpose of the proposed fiscal rule is to provide more stability in public finances in Poland,” the ministry said in a statement. “The current system does not ensure sufficient fiscal discipline. The imbalance in public finances in

Poland is of a permanent nature.” At a news conference, the ministry’s chief economist Ludwik Kotecki said that the rule should reduce the structural deficit. “It is particularly aimed at improving the structural result, which is considered the most important measure for assessing the country’s fiscal situation,” he said. According to Krzysztof Kolany, chief analyst at financial website, “the new rule will in fact allow for a significant increase in public

spending both this and next year.” “This isn’t the first time that [Finance Minister Jacek] Rostowski’s team has tampered with regulations on public debt, which has doubled while he’s been in office. The government wants to incur more and more debt on our behalf, relaxing cautionary rules and hiding the extent of the country’s debt. We will all pay for the increased debt with more taxes, which we will have to pay once the debtto-GDP ratio hits the constitutional limit of 60 percent,” he KW, BS added.


On Friday, June 7, the National Bank of Poland announced that it had sold “a certain amount of foreign currencies” on the market. The announcement confirmed what currency traders had seen and told the media. The NBP’s intervention started at a point when the z∏oty-to-euro rate stood at about z∏.4.30. By 5 pm on the same day, the z∏oty had strengthened significantly, bringing the EUR/PLN to z∏.4.2380. The z∏oty has weakened recently and government bonds denominated in z∏oty have been sold off, along with other emerging-market assets, after US Federal Reserve Chairman Ben Bernanke said in late May that policy makers could reduce stimulus if there were sustained improvement in the US economy. Emerging market currencies have also suffered with the outbreak of political instability in Turkey. When the NBP cut interest rates earlier this month, it said that it wasn’t worried about


The z∏oty

Economist Ludwik Kotecki said the new rules should reduce the structural deficit



JUNE 17-23, 2013

Exclusive interview

WBJ sat down with Tasia Athanasiou, Greece’s Ambassador to Poland, to talk about the state of the Greek economy, its difficult path to recovery and threats it is facing, as well as Polish-Greek relations Beata Socha: Greece was one of the first EU countries to be hit particularly hard in the recent crisis. Between 2008 and 2012 the Greek economy contracted by over 20 percent and continues to shrink. Unemployment reached a historic high of 24.5 percent in 2012. What is the state of Greece’s economy right now? Tasia Athanasiou: A year ago many analysts anticipated that Greece leaving the euro zone was all but inevitable. Today however that risk has been significantly reduced and the Greek economy is looking forward to a gradual recovery. On the domestic front, pessimistic expectations have dissipated considerably and confidence is improving, resulting in a reversal of the downward trend of bank deposits. Abroad, the climate is also turning around. The changed climate is reflected in a rapidly falling spread between the yields on Greek and German

10-year government bonds. In the fiscal domain, deficit reduction has been remarkable. Between 2009 and 2012, both the general government deficit and the corresponding primary deficit were reduced by 9 percentage points of GDP, while the fall in the structural deficit was even larger (15 percent). What is more, the general government primary balance is expected to move to a surplus this year. Regarding the external sector, the current account deficit shrank to 2.9 percent in 2012, down from a peak of almost 15 percent of GDP in 2008. More importantly, between 2010 and 2012, Greece managed to improve the cost competitiveness it had lost during the 2001-2009 period, which bodes well for its future recovery. Finally, exports have increased. In fact, 2012 saw Greek exports grow the most among all euro zone countries.

Despite these signs of a rebound, the Greek economy is expected to contract further in 2013. How much longer until Greeks see a real recovery? There is no doubt that 2013 will be a difficult year. But where we stand today makes us hopeful about the future. We expect the Greek economy to return to positive growth rates in the course of 2014, taking into account the aforementioned data and the Greek government’s commitment to

sector’s civil unions succeeded in securing tenure for civil servants, which meant that whenever a new party won elections, they couldn’t lay off the previous government’s civil servants, but instead had to create more jobs to accommodate their own people. Has this problem been resolved in any way in Greece? First of all, let me shortly describe what the situation was. It’s not that there was some kind of a deal between the public sector unions and incoming

“We accept that sacrifices have to be made for our economy to start recovering, which is the only way for us to get out of this downward spiral of recession.” reaching the agreed targets and implementing a series of structural reforms. Speaking of reforms, last year Francis Fukuyama told WBJ that one of the reasons Greece suffered such a blow during the recent crisis was because of its overblown public sector, which had been expanding uncontrollably since the 1970s. Back then the public

governments. To join the public sector you had to pass an open exam. There were also some other ways, like passing an interview. But still, everything was open to the public. What is important is that public servants were protected by the Greek constitution and therefore political parties would bring more people on board rather than let the previous employees go.


Taking the necessary steps

Greek Ambassador to Poland Tasia Athanasiou But once the economic downturn hit, Greece had to reform its public sector thoroughly. It signed a memorandum with the Troika which forced it to curtail the public sector. It is expected that until the end of the year, around 4,000 public servants will be laid off, mainly from organizations that will be dismantled. The total number of layoffs will reach 15,000 until the end of 2014 and measures have been taken to repair the system thoroughly. Allow me, however, to point out that one should not only blame the public sector for the current crisis, which is multidimensional in nature. There are many public ser-

vants in Greece who are highly qualified and excel in their duties and who, as any other Greek citizen, have lost numerous privileges and seen their salaries decrease significantly. And how has the population responded to these layoffs? It can’t have been easy to implement them. It’s true that there is huge dissent among the Greeks about this. There are a lot of people very anxious about their future because they don’t feel safe anymore. But despite this feeling of insecurity, I would say that Greek society has proven quite mature. We accept that sacrifices have to be made in order to


JUNE 17-23, 2013

achieve fiscal consolidation and for our economy to start recovering, which is the only way for us to get out of this downward spiral of recession, bringing more taxes and more cuts. We know that only if we try really hard can we overcome this economic crisis and then hopefully recovery will start in 2014. Would you recommend such solutions for Poland? Do you think it is even possible to introduce them in Poland? It is a very hard situation for any society because every citizen has to know where he or she stands. We have to know what lies ahead of us in order to lead a normal life, to be able to fulfill our functions as citizens of our own country. Nevertheless, there are certain moments when we have to make sacrifices. And in order to make them, we have to have faith in our own governments. So I would say it is of utmost importance that each government is very frank with its own citizens. That they explain openly what problems the country is facing and what the solutions are. Only through such frank communication and dialogue can such sacrifices be made. I imagine that such sacrifices can’t have been very popular. Do you know how big a fraction of Greek society supports its ruling party? In Poland it’s rather low, 25-30 percent at the moment. This is also the case in Greece. But we have to make a distinction. Polls are one thing and voting is something completely different. Strangely enough, despite the government’s rather low popularity, when people are asked the question: “What do you think the outcome of the elections will be?” they say that the current government will once again win the elections. They understand that some things are simply necessary for a country to overcome a crisis. Greece has a neo-Nazi party called Golden Dawn, which is increasingly gaining public acceptance. It provides public preschools and food rations for the poor, but its initiatives are aimed exclusively at Greek citizens. Its modus operandi seems to be to pick up the slack left by the shrinking public sector. Does the Greek government see it as a threat? It is true that the Golden Dawn Party is, as the polls show, gaining popularity among a certain segment of Greek society. According to many politicians and analysts, this is due to the discontent caused by the painful but necessary measures implemented by the government in its efforts to cope with the crisis, the sharp inflow of illegal

immigrants in the country, as well as other problems that Greek society is dealing with right now. I would say that as long as the situation in the country continues to improve, the problems are being dealt with, the reforms continue to be implemented and the position of Greece continues to strengthen, then Greek citizens will simply side with forces that want to render Greece once again a strong and competitive partner in Europe. Do you think that Germany’s actions, its demands and conditions for continued support towards crisis-stricken southern European countries, including Greece, are fair? Germany is a very important partner for Greece but also for the EU as a whole. Chancellor Merkel’s shift of attitude in the course of 2012 was instrumental in preventing Greece from leaving the euro zone and in convincing other EU members that the sacrifices made by the Greek people require solidarity among all EU countries. However, there are still occasional insulting comments in the German press about Greece, despite the unprecedented sacrifices the Greeks have made in an effort to overcome the strife. Nevertheless, the German government has openly praised my country’s efforts in coping with the crisis. There are opinions in Poland that, given what has happened and is still happening in several euro zone countries, including Greece, Poland shouldn’t try to join the euro zone. Since you have a unique perspective here, would you advise Poland against adopting the euro? It’s true that when Greece was hit by the crisis, there was a lot of discussion about whether it was worth staying in the euro zone. There were many opinions supporting Greece’s exit from the euro zone. However, there is a widespread feeling among Greeks that there is no real alternative to being in the euro zone. Greek society realizes that the recession was caused mainly by a lack of fiscal consolidation and lower competitiveness. And these are the problems we are striving to correct. The idea is not to demonize the euro but to carefully prepare for introducing it, which is exactly what the Polish government is doing. How do you see Greek-Polish economic relations? Greek-Polish bilateral trade and economic relations have been growing steadily for the past 20 years, especially since Poland’s accession to the EU in 2004. According to the Greek statistics office, in 2012 the volume of bilateral trade was

at €627 million, while Greek exports to Poland stood at €274 million. Poland ranked 13th among our export markets in Europe and 23rd in the world. Also in 2012, the value of Polish exports to Greece amounted to €353 million, which makes Poland Greece’s 13th biggest source of imports in Europe and 25th worldwide. Growing and promising trade relations are complimented by Greek investment in Poland. There are 45 Polish companies with Greek capital in Poland. Greece’s outward FDI stock in Poland is at over €800 million. Greek-owned companies employ some 3,000 people in Poland. Some of the best-known examples are: the Play mobile telephony operator, Coca-Cola HBC in the bottling industry, Chipita in food industry, Totolotek lottery, Mellon and Mantis in the IT sector or Terna wind farms. Unfortunately, the level of Polish investment in Greece is not as high as we would wish. A rough estimate puts Polish outward FDI stock in Greece at a mere €3 million. There is clearly room for improvement here, mostly in the energy, tourism and real estate industries, also bearing in mind that a very ambitious privatization program is currently being implemented in Greece. The third-most important aspect of our relations, tourism, is an area we can be proud of. Some 250,000400,000 tourists from Poland visit Greece every year. Greece steadily ranks among the top four tourist destinations among Polish travelers. We are particularly glad that Aegean Airlines recently decided to include Warsaw in its flight schedule. And how has the crisis affected tourism in Greece, which has always been one of Europe’s favorite holiday destinations? Tourism has been and still is one of the biggest sectors of the Greek economy. For the past three years revenue from tourism amounted to more than 15 percent of the country’s GDP. This is extremely important, given the country’s economic situation. Fortunately, the crisis has not affected the sector seriously. In fact, the crisis has brought prices down, which makes the destination even more attractive. Both in 2011 and in 2012 we had more than 16 million tourists a year coming to Greece. This year we are expecting some 17 million. This indicates that Greece remains one of Europe’s and the world’s favorite holiday destinations, since it offers a wide range of choices besides the traditional forms of tourism, it is a safe country and the prices are now extremely competitive. ●




JUNE 17-23, 2013


Clouds gathering over Warsaw’s mayor Hanna GronkiewiczWaltz will most likely face a recall election this summer. If she loses, what awaits Poland’s capital? In potentially the biggest political upheaval so far this year, Hanna Gronkiewicz-Waltz, mayor of Warsaw and deputy leader of the ruling Civic Platform, will have to face a bruising and potentially disastrous (for her party) recall election this summer that could have far-reaching consequences beyond Poland’s capital. By last week, proponents of Ms Gronkiewicz-Waltz’s removal from office had managed to collect the 134,000 signatures of support (10 percent of eligible Varsovian voters) required to force a referendum on the current mayor. The signatures were being collected by groups of local

government activists, political parties, labor union representatives and others who want to see the back of Ms Gronkiewicz-Waltz. Their leader, Piotr Guzia∏, head of Warsaw’s Ursynów district, told TVN24 that when he and his allies started collecting the signatures supporting the mayor’s recall in late May, they “did not expect such a reaction. People are literally standing in queues to sign up.”

tions to decide who runs Poland’s commercial and political capital. Ms Gronkiewicz-Waltz has argued that the recall will cost z∏.7 million, suggesting the city would be better off spending that money on something else. Mr Guzia∏ responded that if the mayor “wants to save Warsaw some money, then she should quit.” At least 400,000 must take part in the recall vote for its results to be valid.

The timetable

What went wrong?

If the signatures are verified and the petition upheld, a referendum will have to be organized. It could take place as early as August, or by October 6 at the latest. If Ms Gronkiewicz-Waltz is eventually removed from her position in the recall, then Prime Minister Donald Tusk will have to appoint an interim caretaker and call new elec-

Ms Gronkiewicz-Waltz has been mayor of Warsaw since 2006. A former head of the National Bank of Poland and vice president of the European Bank for Reconstruction and Development, she was reelected comfortably in 2010 but has come under fire in recent weeks after a series of PR disasters and political miscalculations.


Remi Adekoya

Warsaw Mayor Hanna Gronkiewicz-Waltz

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JUNE 17-23, 2013

defeating Civic Platform, and that would bode well for them going into next year’s European Parliamentary elections, as well as the Polish parliamentary elections slated for 2015,” he said. So has the ruling party definitively lost its grip on the capital then? “Civic Platform’s candidate could lose a mayoral election, yes, but that is likely only if the opposition presents a united front and coalesces around a very strong candidate. It will be no easy job for them to wrest Warsaw away from the ruling party,” said Mr Trzeciak.


A different face needed

Ms Gronkiewicz-Waltz with Prime Minister Donald Tusk What appeared to ire Varsovians most was confusion over new trash-collection rules set to come into force on July 1. The regulations are complicated, vague and initially left the city’s residents confused as to how much they would have to pay for waste disposal, as well as to whom and under what conditions. The resulting anger among Warsaw’s inhabitants led to the dismissal of Deputy Mayor Jaros∏aw Kochaniak, who was in charge of implementing the new waste disposal system. Warsaw City Hall now says it will pay the refuse-collecting companies directly, while inhabitants will continue to pay the city a service charge until the end of the year, when the new system will come into force. Varsovians are also frustrated with the snail’s pace of construction on the city’s sec-

ond subway line, which has left some major road junctions blocked off for months, causing huge traffic snarls. The line was originally supposed to be ready this autumn, but Warsaw

(captured on camera), because she did not want to pay the required z∏.5 fee to visit the Wilanów Palace in Warsaw. The incident rendered her a laughing stock

“It is usually the case though that those against are much more active than those who are in support.” authorities have pushed back the completion date to September 2014. Meanwhile, city authorities have sharply raised prices for public transportation, prompting disaffection, particularly among students and the youth, a key constituency for Ms Gronkiewicz-Waltz’s party. Add to that a recent PR catastrophe in which Ms Gronkiewicz-Waltz had an argument with a security guard

among Varsovians, inspiring numerous online memes poking fun at her behavior. The recall petition officially accuses Ms Gronkiewicz-Waltz of cutting transportation funding while implementing the highest prices for public transport in Poland, reducing the city’s spending on education, not preparing the capital for the new waste management laws and bringing chaos to city management.

What next? “The collection of signatures has definitely gone much faster than expected, which gives some indication as to what Warsaw’s inhabitants think about their mayor,” said Segiusz Trzeciak, an independent political consultant and lecturer at Collegium Civitas. “It is usually the case though that those against are much more active than those who are in support. It is still not easy to predict the final outcome, but the whole situation could have a very negative impact on Civic Platform as a whole, which is going through a rough patch right now,” he added. Mr Trzeciak said Ms Gronkiewicz-Waltz’s potential dismissal could prove “symbolic” politically. “It would send a signal that the [nationalist] opposition Law and Justice is capable of

Poland’s capital is the heart of its economy. One in four companies in Poland are established in Warsaw and roughly a third of all firms in Poland with foreign capital choose to be based there. Today the city is already a major commercial and cultural hub in the CEE region. What it needs now is someone who can take it to the next level, make it a city that could compete with, say, a Madrid or even a Berlin. Despite the recent bad press for Ms GronkiewiczWaltz, Warsaw has seen a spate of development on her watch, especially when it comes to infrastructure, and unemployment in the capital has remained far lower than in other cities in Poland. But the mayor has lost a significant amount of credibility. The city probably needs someone younger (Ms Gronkiewicz-Waltz is 60) and more dynamic, with a fresh perspective and new ideas – someone more communicative and cosmopolitan. If Ms Gronkiewicz-Waltz indeed loses her job, here’s hoping it will be to someone who fits that bill. ●


PGNiG still without CEO The supervisory board of Poland’s natural gas giant PGNiG has decided to end the competition for the position of CEO without selecting any of the candidates. It did select a new management board member, though. Jerzy Kurella will be PGNiG’s deputy CEO for trade issues starting from June 14 until March 13, 2014.

PHN investor search Poland’s State Treasury will send out an investment teaser to entities potentially interested in buying a stake in real estate group Polski Holding NieruchomoÊci (PHN) around the middle of the summer, said Deputy Treasury Minister Pawe∏ Tamborski. The Treasury sold a 25% stake in PHN in an IPO. It now wants to offer a majority stake in the firm to a sector investor. It does not rule out selling its entire stake in PHN.

Foreign trade deficit Poland’s foreign trade deficit in January-April 2013 amounted to €418.2 million ($596.9 million), statistics office GUS said. Calculated in z∏oty, the deficit was z∏.1.7 billion. Exports amounted to €49.4 billion ($65.3 billion, z∏.204.2 billion), while imports stood at €49.8 billion ($65.9 billion, z∏.205.9 billion). ●


JUNE 17-23, 2013


Publication launch gala

Top-ranking businesses’ get-together Warsaw Business Journal Group’s Book of Lists will celebrate the publication of its 18th edition at Dom Dochodowy On June 18, Warsaw Business Journal Group will celebrate the launch of the 18th edition of the annual Book of Lists publication at a gala to be held at Warsaw’s Dom Dochodowy conference center. The event will bring together the most prominent business people representing key players in the Polish market, as well as the staff of Warsaw Business Journal. During the ceremony three companies with be distinguished with WBJ Spotlight Awards: the Innovator of the Year, the International Success Story and the Real Estate Investor of the Year. Additionally, several top-ranking companies will be awarded certificates in their respective categories. They represent a wide spectrum of business activity, including corporate services, construction and real estate as well as IT and telecommunication services. A special distinction will

also be awarded to security firm City Security for its extraordinary input into the development of the security services sector in Poland. Book of Lists is a bilingual Polish-English publication presenting major players in all sectors of the Polish economy ranked by key business indicators, such as revenue, total GLA or number of employees. The publication consists of 70 ranking lists divided into eight categories, including financial services, the automotive industry, travel and leisure as well as

instead gives a picture of 70 different sectors. That makes it an indispensable resource for anyone doing business in Poland,” said WBJ editor-inchief Andrew Kureth. This year’s Book of Lists includes three new lists, presenting major business process outsourcing companies in Poland, major Polish exporters as well as the most prestigous green buildings. The business guide has been expanded with a list of Business Angels for start-up businesses searching for investors.

“The great thing about Book of Lists is how it offers such a comprehensive view of the Polish economy and business environment.” a business guide providing data on public institutions, local government representatives or special economic zones. “The great thing about Book of Lists is how it offers such a comprehensive view of the Polish economy and business environment. It doesn’t just focus on one branch, but

The event will be held on the patio of Dom Dochodowy, located near the Plac Trzech Krzy˝y square in downtown Warsaw. The festivities will include a performance by Paulina Czapla, an X-factor alumnus and jazz vocals student at the Academy of Music in Gdaƒsk. Beata Socha



JUNE 17-23, 2013

Central banking’s new face Paola Subacchi


changing of the guard is underway at many of the world’s leading central banks. Haruhiko Kuroda is now installed as the governor of the Bank of Japan (BOJ), faced with the daunting task of ending two decades of stagnation. Mark Carney, the Bank of Canada’s current

“Unconventional measures are part of a broader transformation of monetary policymaking.” governor, who is set to take over as the governor of the Bank of England (BoE) in July, is already making his presence felt in British monetary-policy debates. And in the United States, the expected conclusion of Ben Bernanke’s term as Chairman of the Federal Reserve Board in January is already inviting speculation about his successor. The only holdouts among the world’s leading economies are the euro zone and China. But that does not necessarily imply constancy. Mario Draghi has been the president of the European Central Bank for barely a year, and the governor of the People’s Bank of China, Zhou Xiaochuan, was almost replaced

bank to adopt QE. In a push to reduce the cost of borrowing, the Fed purchased long-term assets in the market, injecting liquidity into the financial system. The BoE and the ECB have since adopted similar measures. In early April, the BOJ announced plans to unleash the most aggressive bond-buying program of all, promising to inject $1.4 trillion into the economy over the next two years in order to meet an inflation target of 2 percent. This is monetary policy on steroids, and, to opponents of inflation-inducing money creation, it amounts to playing with fire. But, for Japan, which has been struggling with deflation for a generation, it is a risk worth taking. Whether Mr Kuroda’s assault will bolster domestic consumption and investment remains to be seen. Unconventional measures are part of a broader transformation of monetary policymaking. In addition to becoming bolder and more expansive, it has become increasingly intertwined with fiscal policy. This is most explicit in Japan, where monetary policy is a central component of Prime Minister Shinzo Abe’s economic strategy, dubbed “Abenomics,” implying collaboration between the government and the central bank. Does this undermine central-bank independence by amounting to a de facto subordination of unelected technocrats to elected politicians?

when he reached retirement age in February.

Outspoken and aggressive Twenty years ago, such developments would have interested mostly bankers and businesspeople. But, since the global financial crisis, the need to revive and sustain economic growth in the US, the United Kingdom, and Japan – and to avoid financial collapse in the euro zone – has prompted major central banks to be more outspoken and pursue more aggressive monetary policies, including unconventional measures like quantitative easing (QE). As a result, many central bankers have become household names; some even have tabloid nicknames, like “super Mario” Draghi. This new prominence has also forced some central bankers to reassess their decision-making processes. In Japan, outsiders recently got a rare glimpse into the BOJ’s activities when minutes of a policy meeting were leaked. Likewise, the accidental release a day early of the minutes from the Fed’s March ratesetting meeting to more than 100 people, including banking executives, congressional aides, and bank lobbyists, raised questions about how the bank controls the disclosure of privileged information. In fact, the Fed has been under increasing scrutiny since 2008, when near-zero nominal interest rates drove it to become the first central

Arguably, Japan is an exceptional case, with the constraint of the zero bound on nominal interest rates demanding, at long last, a deviation from conventional measures. In Europe, however, Bundesbank President Jens Weidmann has criticized the ECB for overstepping its mandate with its “outright monetary transactions” program, through which Mr Draghi aims to fulfill his pledge to guarantee the euro’s survival.

Individualized approaches As a result, questions about the role of monetary policy and the independence and accountability of central banks, once confined to rarefied academic discussions, are fixtures of broad policy debate. But, rather than try to define a single approach, central bankers should aim to develop individualized approaches within the orthodox monetary-policy framework, which revolves around price stability and independence. For example, the Fed’s mandate dictates that price stability can be explicitly linked to active support for GDP growth and employment; for the BoE and the ECB, it can be a condition for achieving the broader goal of sustainable growth and employment. As long as politicians observe the rule of non-interference – at least publicly – central banks will be perceived as unconstrained by political interests. The BOJ, by demonstrating that

aggressive money creation is a legitimate approach to fighting deflation, has broken previously sacrosanct conventions. At the same time, it has taken the unprecedented step of incorporating monetary policy into a comprehensive economic strategy based on coordination among different policy areas and their associated institutions. This integrated approach could prove effective in countries where the real economy and the financial sector are closely linked, ensuring the timely, orderly implementation of policies, while preventing adverse spillovers. Such coordination would infringe on central-bank independence no more than multilateral cooperation undermines the sovereignty of the countries involved. While the impact of Abenomics on Japan’s economy remains to be seen, its impact on debates about monetary policy and the relationship between central banks and governments is already becoming apparent. One hopes that Mr Carney will follow this trend of challenging conventional wisdom at the BoE. A new era of active and varied monetary policy may have begun, with potential benefits for all. Paola Subacchi is research director of international economics at Chatham House. Copyright: Project Syndicate, 2013.

Quantitative quicksand


lmost all recoveries from recession have included rapid employment growth – until now. Though advanced-country central banks have pursued expansionary monetary policy in the wake of the global economic crisis in an effort to boost demand, job creation has lagged. As a result, workers, increasingly convinced that they will be unable to find employment for a sustained period, are leaving the labor force in droves. Nowhere is this phenomenon more pronounced than in the United States, where the Federal Reserve has reduced interest rates to unprecedented levels and, through quantitative easing (QE), augmented bank reserves by purchasing financial assets. But inflation – which rapid money-supply expansion inevitably fuels – has so far remained subdued, at roughly 2 percent, because banks are not using their swelling reserves to expand credit and

increase liquidity. While this is keeping price volatility in check, it is also hindering employment growth. Rather than changing its approach, however, the Fed has responded to slow employment growth by launching additional rounds of QE. Apparently, its rationale is that if expanding reserves by more than $2 trillion has not produced the desired results, adding $85 billion more monthly – another $1 trillion this year – might do the trick.

Easy to see America’s central bankers need not search far to find out why QE is not working; evidence is published regularly for anyone to see. During QE2 (from November 2010 to July 2011), the Fed added a total of $557.9 billion to reserves, and excess reserves grew by $546.5 billion. That means that banks circulated only 2 percent of

QE2’s contribution, leaving the rest idle. Similarly, since QE3 was launched last September, total bank reserves have grown by $244.1 billion, and excess reserves by $239.4 billion – meaning that 99 percent of the funds remain idle. Given that banks earn 0.25 percent in interest on their reserve accounts, but pay very low – indeed, near-zero – interest to their depositors, they might choose to leave the money idle, drawing risk-free interest, rather than circulate it through the economy. At current interest rates, banks lend to the government, large stable corporations, and commercial real-estate dealers; they do not extend credit to riskier borrowers, like start-up companies or first-time home buyers. While speculators and bankers profit from the decline in interest rates that accompanies the Fed’s asset purchases, the intended monetary and credit

Allan H. Meltzer

stimulus is absent. At some point, the Fed must realize that its current policy is not working. But developing a more effective alternative requires an understanding of the US economy’s actual problems – something that the Fed also seems to lack. Indeed, Fed Chairman Ben Bernanke often says that his goal is to prevent another Great Depression, even though the Fed addressed that risk effectively in 2008.

Policy changes needed The US economy has not responded to the Fed’s monetary expansion, because America’s biggest problems are not liquidity problems. As every economics student learns early on, monetary policy cannot fix problems in the real economy; only policy changes affecting the real economy can. The Fed should relearn that lesson.

One major problem, insufficient investment, is rooted in President Barack Obama’s effort to increase the tax paid by those whose annual incomes exceed $250,000 and, more recently, in his proposal to cap retirement entitlements. While such proposals have been met with opposition, Mr Obama cannot be expected to sign a deficit-reduction bill that does not include more revenue. As long as that revenue’s sources, and the future effects of new regulations, remain uncertain, those whom the policies would most harm – the country’s largest savers – are unlikely to invest. Allan H. Meltzer, professor of political economy at Carnegie Mellon University and distinguished visiting fellow at the Hoover Institution, is the author of “A History of the Federal Reserve.” Copyright: Project Syndicate, 2013

Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to Please include a name and contact information and clearly indicate if they are to be considered for publication.
































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JUNE 17-23, 2013


Donald Tusk, social democrat?


Where are the voters? With his numbers tanking in the polls and his party not doing much better, the PM now seems to be stretching out an olive branch to leftist voters who have previously backed him in many an election, if only to keep the right-wing, nationalist Law and Justice out of power. Although elections are two years away, Law and Justice is now ahead of Civic Platform in the polls, and could once again serve as a boogeyman with which to scare leftists voters. At times Mr Tusk can indeed seem to be playing both sides. Conservatives have long accused him of veering the ruling party to the left while many progressives believe the party is far too traditional and wary of change.

Mr Gowin is right to say that Civic Platform used to be far more economically liberal than it is today, while Mr Tusk is right to point out that running a country is not the same thing as writing a party manifesto. The PM’s swing to the left makes sense. Both leftist parties in parliament, Democratic Left Alliance and Palikot’s Movement, are weak and unlikely to get more than 25 percent of the vote in the next parliamentary elections combined. Classic leftist voters in Poland are estimated to make up 30 percent of the electorate, so if the PM is looking for the votes that could make the small but all-important difference at the next elections, then he is looking in the right place. It will be easier for him to convince Poland’s less ideologically aggressive leftist voters that there is a “social democrat” in him than to convince its more ideologically rigid conservatives that he is still one of them.


Remi Adekoya Apparently, Mr Tusk does not share that view. Or at least that is the impression he wanted to give readers of the left-leaning Polityka magazine.

urrently on a charm offensive after weeks of bad press, Prime Minister Donald Tusk told weekly Polityka that “the longer one is prime minister, the more one becomes, in a sense, a social democrat.” “In Poland, there are millions of people who need to be given directions, or care or help, social democratic sensitivity must be present in the practices of the government,” he added. Poland’s prime minister has indeed come a long way from when he was a decided economic liberal who spoke warmly of Augusto Pinochet and General Franco. This seems to be Mr Tusk’s response to the open challenge of former justice minister and now party rival, Jaros∏aw Gowin, who wrote an open letter to Civic Platform members in which he said his party needs to “go back to its socially conservative and economically liberal roots.”

Donald Tusk Warts, faults and all, Donald Tusk is still the best man available to run Poland today. He brings a calmness, seriousness and experience to the table that is much-needed in the rarely amusing circus of Polish politics.

If he has to become a social democrat to remain in power, then so be it. Remi Adekoya is Warsaw Business Journal’s politics editor. Read his blog, “The business of politics” on

Bismarck versus Bismarck Yannos Papantoniou


serious challenges to democracy, including the rise of neo-fascist parties.

Found wanting And yet, despite the risks, European leaders remain remarkably inactive, apparently reassured by European Central Bank President Mario Draghi’s promise to do “whatever it

“virtuous” countries, or Germany itself will choose to pursue a policy of narrow fiscal advantage by seceding from the euro zone. The political and economic weakness of France and Italy, together with Britain’s gradual withdrawal from EU affairs, highlight Germany’s key role in rescuing the euro zone from the current crisis. But true leadership

mobilize the resources and competences required to restore Europe. Instead, Ms Merkel’s Germany has been doing as little as possible, as late as possible, to prevent the euro’s collapse. This policy cannot endure for long. Either stagnation will lead to the euro zone’s breakup, or circumstances will force a policy change.

A statue of Otto von Bismarck in Hamburg, Germany


he centrality of Germany to Europe and, more widely, to world affairs has been amply, and often bloodily, demonstrated over many centuries. Indeed, Germany’s strategic position at the heart of Europe, as well as its huge economic and military potential, made it first a prize to be sought, and then, following Otto von Bismarck’s completion of German unification in 1871, a nation-state to be feared. Bismarck’s legacy was a Germany that dominated European politics until the end of World War II. That legacy is now reasserting itself. After the interlude of the Cold War, during which Germany served as the center of discord between East and West, reunification permitted the reassertion of German power within the context of the European Union and, most notably, the euro zone. Today, however, the question is whether Germany is ready and willing to provide leadership in the conduct of the EU’s affairs – and, if so, to what end. Europe is currently facing its most challenging crisis of the postwar period. After six quarters of recession, the slump is spreading to the euro zone’s core countries. Unemployment, above 12 percent on average, is at a record high. In Spain and Greece, more than one-quarter of the labor force is jobless, while the unemployment rate hovers around 60 percent among young people. Despite harsh austerity, large fiscal deficits persist, and banks remain undercapitalized and unable to support a sustained economic recovery. Social malaise is deepening as expectations – and actual prospects – for economic improvement are likely to remain poor for the foreseeable future. Faith in the European project is declining, and, given the euro zone’s lack of cohesion, stagnation and recession may lead to popular rejection of the EU, accompanied by

takes” to protect the monetary union from collapse. But prolonged inaction, induced by relative calm in financial markets, will perpetuate stagnation and eventually lead to a breakup of one sort or another. Either gradual attrition, with weaker countries defaulting, will lead to a more restricted German-led club of

requires a sense of direction and a willingness to pay up, and, here, Germany has lately been found wanting. Despite German Chancellor Angela Merkel’s evident political skills and high domestic standing, her government lacks a concrete design for “ever closer Union” in Europe. As a result, it, too, is in a weak position to

lution authorities, as well as a depositinsurance scheme, forming the core of a European banking union. Strong central institutions, responsible to a directly elected parliament, are needed to coordinate fiscal and economic policies. In the shorter term, the single market should be extended to services, and free-trade arrangements should be promoted either multilaterally or bilaterally with major trading partners such as the United States. Austerity should be eased, particularly in the fiscally stronger core economies, and substantial resources should be devoted to boosting youth employment and investment in small and medium-size firms in the over-indebted countries. Germany’s reluctance to lead on these issues partly reflects historical inhibitions, which are always difficult to overcome. The persistence of preKeynesian orthodoxy in German economic thought, with its moral abhorrence of the “sin of borrowing” (and thus its neglect of aggregate demand), does not help, either. The federalist structure of Germany’s political system, moreover, favors parochial approaches over grander designs. Nonetheless, Germany must accept that the alternative to a democratically unified currency union is German economic hegemony. In the longer run, that outcome would destroy the common European project, in turn undermining Germany’s own economic prosperity and strategic security – a Bismarckian scenario from which Bismarck would have recoiled in horror.

How to lead? So, in which areas must Germany lead? First, European public debt should be partly and gradually mutualized. National banking systems should be unified, in order to separate private losses from sovereign debt, with centralized supervision and reso-

Yannos Papantoniou was Greece’s economy and finance minister from 1994 to 2001. He is currently president of the Center for Progressive Policy Research, an independent think-tank. Copyright: Project Syndicate, 2013.

Work will soon commence on the Pogodne Centrum mall near Wroc∏aw with Erbud as general contractor

Firmus Group wants to turn the Mielno seaside resort into a new Miami-esque beach 17



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

Novotel Poznaƒ Centrum refurbished Accor has recently completed the refurbishing of the interiors of its Novotel Poznaƒ Centrum hotel at ul. Andersa 1 in the heart of Poznaƒ. The designs of the new interiors of the bar, the restaurant and the lobby were provided by the Tremend architectural studio in accordance with Accor style. The second phase of the redevelopment will be the construction of a new access road along the scheme that will join ul. KoÊciuszki and ul. Królowej Jadwigi. ●

In this issue Nova Cracovia . . . . . . . . . . . . . . .16 Ochota Office Park . . . . . . . . . .16 New Miami in Mielno . . . . . . . .17 Pogodne Centrum . . . . . . . . . . .17 Robyg interview . . . . . . . . . . . . .18

Cracovia: new mall or old hotel? A modern shopping mall could replace the communist-era Cracovia Hotel in Kraków WSE-listed developer Echo Investment wants to build the Nova Cracovia shopping mall on the site of the former Cracovia Hotel on ul. Focha. The launch of the construction has been on hold since 2011, when the company bought the premises. The delay was caused by the city authorities’ decision to enter the hotel in the register of historic monuments as an example of Modernism-era architecture. Now, with the new zoning plan in the works for the nearby B∏onia, a 48-ha historic meadow in the center of Kraków, the developer hopes to finally get green light for the construction. The one thing it still needs is a demolition permit. The company might be

able to finally get it if, as per historians’ recommendation, the hotel building is removed from the registry of historic monuments. Its current status only allows for the building to be refurbished, which would incur enormous costs, and its condition is deteriorating fast. According to the investor, an important reason the existing hotel should be removed from the registry is that it contains 18 tons of asbestos.

city architect in the early 1960s. Opened on June 22, 1965, the hotel was the tallest (150 m), the largest and the most modern hotel in Poland at the time. Comprising 309 rooms measuring from 9 to 12 sqm

and nine suites, it could host up to 510 guests. Since all the walls in the building are load-bearing, it is impossible to demolish them to make the units more spacious. Also, the height of the rooms – 2.5 m – is too low for today’s standards.

In meetings with city officials, Kraków residents have said they would like the hotel removed from the list of historic monuments to allow for the construction of the retail center. Karolina Kowalska

Not up to today’s standards The new retail scheme the developer has planned is a department store comprising 28,000 sqm. Glass-layered and designed in accordance with the latest trends, it could fill the void on the retail market in this part of Kraków. The new scheme was designed under the supervision of 89-year-old Witold C´ckiewicz, who designed Cracovia Hotel as


Developer Echo Investment has launched construction on its Galeria Sudecka shopping mall in Jelenia Góra, in Lower Silesia voivodship, which involves the redevelopment and extension of the Echo shopping center on Al. Jana Paw∏a II. Upon its delivery, the mall will comprise 45,000 sqm of retail area and 1,800 parking spaces. The demolition work on the mall’s section where Nomi market used to be situated is currently in progress.


Echo Investment plans to build a modern department store in place of the hotel


Adgar buys Ochota Office Park The new addition to the group’s Warsaw portfolio is a 40,000sqm seven-storey complex Agdar Group has purchased 40,000-sqm office complex Ochota Office Park from Mahler Project International. The scheme is located at Al. Jerozolimskie 181 in the capital’s Ochota district. The value of the transaction was not revealed. Adgar Group wants to refurbish and redevelop the building, providing it with modern solutions and making it more tenant-friendly. “We are currently working on exciting plans regarding the future of the Ochota

Office Park,” Eyal Litwin said in a statement, adding that the company hired Hermanowicz Rewski Architekci design studio and Jones Lang LaSalle specialists to help change the existing structure. The acquisition involves a 36,350-sqm plot with three seven-storey office buildings offering a total of 40,000 sqm of space and 1,000 parking spaces. The complex, completed in 1999, is just the latest Adgar Group investment in the Warsaw office market. The firm already holds several office schemes in the Polish capital, including Adgar Business Centre and Adgar Business Centre II, comprising a total of 19,200 sqm on ul. Post´pu 15 in the


Galeria Sudecka construction

JUNE 17-23, 2013, LI 18/23

Ochota Office Park S∏u˝ewiec Przemys∏owy district and a nearby Adgar Plaza Conference Centre on ul. Post´pu 17a comprising

56,000 sqm of space. The group’s portfolio also includes a BMW Inchcape service point on Al. Prymasa

Tysiàclecia in Wola, comprising 4,000 sqm on a 8,000-sqm plot. Karolina Kowalska

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

JUNE 17-23, 2013





New Miami to be built in Mielno Erbud to build Pogodne Centrum

Erbud has been appointed as general contractor for the Pogodne Centrum shopping mall in OleÊnica in the Lower Silesia voivodship, southern Poland. The investor behind the scheme, Rank Progress, wants to commence work at the construction site later this month.

Pogodne Centrum, located between ul. Wojska Polskiego and ul. Oliwkowa in OleÊnica near Wroc∏aw, will offer 7,657 sqm of space and a parking lot for 277 cars. The retail center has already been fully leased with a supermarket and an electronics and home appliances retailer as major tenants. Clients will also be able to shop in a cosmetics store and fashion boutiques. A number of service points will also be available. The Pogodne Centrum shopping mall is part of Rank Progress’s strategy, which con-

Dune will offer picturesque views through its floorto-ceiling windows investment is estimated at some €700 million. “It’s a huge investment, but if you build it in stages, according to a detailed plan, there is no risk,” Mr Knutsen said. If the developer obtains the zoning plan for the site in spring 2014, it could launch construction on the first phase of Beach City a year later. The plans were revealed during the opening ceremony of another project by Firmus Group in Mielno, the Dune apartment building. Located by the beach, the seven-storey

scheme comprises some 10,500 sqm. It has 109 apartments and six penthouses designed so that each contains at least one floorto-ceiling window with a view of the Baltic Sea. The residents will be able to use private deckchairs and beach lounges, as well as two swimming pools. Nordic developer and investor Firmus Group has been active in the Polish market for 13 years, investing in Mielno and Koszalin on the Baltic coast. Karolina Kowalska, Marta Mardosz


Located on a 2.5-kilometer long, post-military plot of land between the Baltic Sea and the Jamno lake, the plot could become a new residential district within the resort town of Mielno in the Zachodniopomorskie voivodship in northwest Poland. “When I first came to Mielno in May 2000, I came across this property, which was to be sold by the army the following month,” said Firmus Group’s president Stein Christian Knutsen. “I didn’t hestitate even for a moment, and along with my partners we took part in the tender, winning it,” he added. The plot comprises 36 ha of space and is considered one of the most scenic sites on the Baltic coast. Mr Knutsen believes that a completely new district of highquality apartment and office buildings, retail centers and leisure facilities, a marina, an airport for private jets and a helicopter landing pad could be developed on the plot. The total amount of the

Rank Progress will soon launch construction on its Pogodne Centrum shopping mall in OleÊnica near Wroc∏aw


Norwegian developer Firmus Group plans to construct a beach city on a 36-ha plot it owns on the Baltic coast

The new mall will comprise 7,657 sqm of retail space

sists of building small retail centers in Polish towns with populations under 50,000. According to the strategy, the centers should comprise from 6,000 to 15,000 sqm each, depending on their location. Between 2001 and 2012, Warsaw Stock Exchange-listed real estate developer and investor Rank Progress completed 25 investments, including seven of its own shopping centers – in Jelenia Góra, Legnica, Âwidnica, Kalisz, K∏odzko, ZamoÊç and Zgorzelec. Karolina Kowalska



JUNE 17-23, 2013


Robyg says it is unaffected by slowdown in Poland’s residential sector

Karolina Kowalska: The current environment in Poland’s residential market is less than favorable. How has Robyg fared during this difficult period? Oscar Kazanelson: Our financial results for 2012 strengthened our position as one of Poland’s top developers. We achieved revenues of z∏.402.89 million, an increase of 151 percent compared to 2011. The first quarter of this year proves that 2013 may also be successful for us. Revenues after Q1 2013 were almost 186 percent higher than for the corresponding period of 2012. Moreover, our strong position on the market and stable financial situation are confirmed by our contracting results. In 2011, we managed to contract 1,019 apartments, while in 2012 this number increased to 1,113. This year we would like to maintain this

upward trend and reach the contracting target of 1,1001,200 units. The 303 apartments we sold in the first quarter of 2013 show that it is possible to meet these expectations. In order to maintain our strong position in the market, we pay a lot of attention to maintaining the company’s financial liquidity. Since June 2012, Robyg issued bonds worth a total of z∏.120 million. Recently, a private issue was held on June 10 and raised z∏.40 million. The money you raised in that private issue is due to be used to buy two or three new plots in Warsaw. Where would you like to build your new investments and when? Currently we are interested in plots located in Warsaw’s districts of ˚oliborz, Bielany and Wola. Nonetheless, we do not exclude the possibility of buying another plot of land in Gdaƒsk for a minor investment. The schedule for new projects will be subject to our apartment portfolio. As per our strategy, we maintain a level of about 1,000 units on

sale, which should allow us to achieve the contracting target of 1,100-1,200 apartments in 2013. Therefore, we continue to proceed with new investments and continue to add more units to our portfolio. Do you feel that there is still demand for apartments in Warsaw, despite the slowdown in the residential market? Temporary difficulties on the market are visible mostly in the activity of minor developers. Robyg, however, has a strong financial position and high financial liquidity. Which of your investments has garnered the most interest? For years, the most attractive investment was the one we started our business with – Nowa Rezydencja Królowej Marysieƒki, located in the Warsaw district of Wilanów. The only apartments left for sale are the ones located in the last stage of the investment. Due to the strong interest in the location, we decided to expand our presence in that part of the city. This decision resulted in our new investment, Osiedle Królewskie, which is currently attracting a

lot of interest. What size of apartments are most sought after in Warsaw? Which floors do the buyers choose the most frequently? We’ve noted a trend towards smaller units – up to 50 sqm. This is due to the fact that young people and couples without children are buying apartments to suit their current needs, and not as an investment for the future. Since the price of an apartment depends on the floor, selection of the storey is strongly connected with the budget the client operates within. Obviously, we try to meet the expectations of the market and provide housing for good prices, with diverse sizes. Do you see a tendency among buyers to choose more energyefficient solutions when buying a home? So far, we have not seen such a trend. The Polish market is more focused on the price and quality, rather than on the ecological aspects of the buildings. What are your plans for the future?


Lokale Immobilia sits down with Oscar Kazanelson, CEO of Robyg, to talk about the developer’s recent activity in the Polish residential market

Oskar Kazanelson, CEO of Robyg We intend to contract around 1,100-1,200 apartments within this year. Moreover, we would like to continue the steady growth, which is possible thanks to our strategy of cyclic

expansion of our land bank, building new units and handing them over to the clients, which increases our capacity and secures a steady source of income. ●

DAILY EXECUTIVE DIGEST Poland A.M. gives you the biggest Polish stories of the day. Have the most valuable news delivered to your inbox each weekday morning.

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JUNE 17-23, 2013


Business Guide

Government Agencies Listed alphabetically A guide to Polish business and industry


Agency for Restructuring and Modernization of Agriculture Agricultural and Food Quality Inspection Agricultural Market Agency Agricultural Property Agency Agricultural Social Insurance Fund Central Office of Measures Central Statistical Office Chancellery of the Prime Minister Chief Inspectorate of Environmental Protection Police Headquarters Chief Sanitary Inspectorate Civil Aviation Authority Customs Service Energy Regulatory Office Foreign Intelligence Agency General Directorate for National Roads and Motorways General Inspector of Building Audit Government Legislation Center Government Protection Bureau Head Office of Geodesy and Cartography Head Office of the State Archives Human Rights Defender Inspector General for the Protection of Personal Data Main Inspectorate of Plant Health And Seed Inspection Main Pharmaceutical Inspectorate Mazovia Development Agency Military Housing Agency Ministry of Administration and Digitization Ministry of Agriculture and Rural Development Ministry of Culture and National Heritage Ministry of Economy Ministry of Finance Ministry of Foreign Affairs Ministry of Health Ministry of Justice Ministry of Labor and Social Policy Ministry of National Defense Ministry of National Education Ministry of Regional Development Ministry of Science and Higher Education Ministry of Sport and Tourism Ministry of the Environment Ministry of the Interior Ministry of Transport, Construction and Maritime Economy Ministry of Treasury

Przewodnik po polskim biznesie i gospodarce

Address, Tel./Fax E-mail / Web page

Top Executive

ul. Po∏eczki 33, 02-822 Warsaw, 800-380-084/22 318-5330 Andrzej Gross / ul. Wspólna 30, 00-930 Warsaw, 22 623-2900/22 623-2998 Stanis∏aw Kowalczyk / ul. Nowy Âwiat 6/12, 00-400 Warsaw, 22 661-7272/22 628-9353 Lucjan Zwolak (1) / ul. Dolaƒskiego 2, 00-215 Warsaw, 22 452-5400/22 452-5591 Leszek Âwi´tochowski / Al. Niepdleg∏oÊci 190, 00-608 Warsaw, 22 592-6400/22 592-6650 Artur Brzóska / ul. Elektoralna 2, 00-139 Warsaw, 22 581-9399/22 620-8378 Janina Maria Popowska / Al. Niepodleg∏oÊci 208, 00-925 Warsaw, 22 608-3112/22 608-3860 Janusz Witkowski / Al. Ujazdowskie 1/3, 00-583 Warsaw, 22 694-7542/22 694-7156 Jacek Cichocki / ul. Wawelska 52/54, 00-922 Warsaw, 22 825-3325/22 825-0465 Andrzej Jagusiewicz / ul. Pu∏awska 148/150, 02-624 Warsaw, 22 621-0251/22 601-2670 Marek Dzia∏oszyƒski / ul. Targowa 65, 03-729 Warsaw, 22 536-1300/22 635-6194 Marek Posobkiewicz (1) / ul. M. Flisa 2, 02-247 Warsaw, 22 520-7200/22 520-7438 Piotr O∏owski / ul. Âwi´tokrzyska 12, 00-916 Warsaw, 801-470-477/33 857-6383 Jacek Kapica / ul. Ch∏odna 64, 00-872 Warsaw, 22 661-6107 Marek Woszczyk / ul. Mi∏ob´dzka 55, 02-634 Warsaw, 22 640-5019/22 640-5070 Maciej Hunia / ul. ˚elazna 59, 00-848 Warsaw, 22 375-8888 Lech Witecki (1) / ul. Krucza 38/42, 00-926 Warsaw, 22 661-8142/22 661-8142 Robert Dziwiƒski / Al. Jana Chrystiana Szucha 2/4, 00-582 Warsaw Maciej Berek 22 694-6067/22 694-7015, / ul. Podchorà˝ych 38, 00-463 Warsaw, 22 606-5000/22 606-5140 Krzysztof Klimek / ul. Wspólna 2, 00-926 Warsaw, 22 661-8017/22 629-1867 Kazimierz Bujakowski / ul. Rakowiecka 2D, 02-517 Warsaw, 22 565-4600/22 565-4614 W∏adys∏aw St´pniak / Al. SolidarnoÊci 77, 00-090 Warsaw, 22 551-7700/22 827-6453 Irena Lipowicz / ul. Stawki 2, 00-193 Warsaw, 22 860-7086/22 860-7086 Wojciech Rafa∏ Wiewiórowski / Al. Jana Paw∏a II 11, 00-828 Warsaw, 22 652-9290/22 654-5221 Tadeusz K∏os / ul. D∏uga 38/40, 00-238 Warsaw, 22 831-4281/22 831-0244 Zofia Ulz / ul. Nowy Zjazd 1, 00-301 Warsaw, 22 566-4760/22 843-8331 Krzysztof Filiƒski / ul. Cha∏ubiƒskiego 3A, 02-004 Warsaw, 22 501-9252/22 501-9367 Micha∏ Âwitalski / ul. Królewska 27, 00-060 Warsaw, 22 245-5931 Micha∏ Boni / ul. Wspólna 30, 00-930 Warsaw, 22 623-1000/22 623-2750 Stanis∏aw Kalemba / ul. Krakowskie PrzedmieÊcie 15/17, 00-071 Warsaw Bogdan Zdrojewski 22 421-0100/22 421-0131, / Pl. Trzech Krzy˝y 3/5, 00-507 Warsaw, 22 693-5000/22 693-4048 Janusz Piechociƒski / ul. Âwi´tokrzyska 12, 00-916 Warsaw, 22 694-5555 Jacek Rostowski / ul. J.Ch. Szucha 23, 00-580 Warsaw, 22 523-9000 Rados∏aw Sikorski / ul. Miodowa 15, 00-952 Warsaw, 22 634-9600 Bartosz Ar∏ukowicz / Al. Ujazdowskie 11, 00-950 Warsaw, 22 521-2888 Marek Biernacki / ul. Nowogrodzka 1/3/5, 00-513 Warsaw, 22 661-1000/22 661-1336 W∏adys∏aw Kosiniak-Kamysz / ul. Klonowa 1, 00-909 Warsaw, 22 684-0212/22 684-0213 Tomasz Siemoniak / Al. J.Ch. Szucha 25, 00-918 Warsaw, 22 347-4100 Krystyna Szumilas / ul. Wspólna 2/4, 00-926 Warsaw, 22 273-7000 El˝bieta Bieƒkowska / ul. Wspólna 1/3, 00-529 Warsaw, 22 529-2718/22 628-0922 Barbara Kudrycka / ul. Senatorska 14, 00-082 Warsaw, 22 244-3142/22 244-3255 Joanna Mucha / ul. Wawelska 52/54, 00-922 Warsaw, 22 579-2900/22 579-2900 Marcin Korolec / ul. Stefana Batorego 5, 02-591 Warsaw, 22 621-2020/22 601-3988 Bart∏omiej Sienkiewicz / ul. Cha∏ubiƒskiego 4/6, 00-928 Warsaw, 22 630-1000 S∏awomir Nowak / ul. Krucza 36/Wspólna 6, 00-522 Warsaw, 22 695-8000/22 628-0872 W∏odzimierz Karpiƒski /


National Atomic Energy Agency National Bank of Poland National Centre for Nuclear Research National Disabled Persons Rehabilitation Fund National Election Commission National Fund for Environmental Protection and Water Management National Headquarters of the State Fire Service National Health Fund National Labor Inspectorate National Security Bureau Office for Foreigners Office of Competition and Consumer Protection Office of Electronic Communications Office of Technical Inspection Ombudsman of Children Rights Polish Academy of Sciences Polish Agency for Enterprise Development Polish Border Guard Polish Centre for Accreditation Polish Centre for Testing and Certification Polish Committee for Standardization Polish Information and Foreign Investment Agency Polish Institute of International Affairs Polish Tourism Organization Public Procurement Office Refugee Council Social Insurance Institution State Mining Authority Supreme Administrative Court Supreme Audit Office Supreme Court of the Republic of Poland The Institute of National Remembrance The Internal Security Agency The Main Inspectorate of Road Transportation The Material Reserves Agency The National Broadcasting Council The National Centre for Research and Development The National School of Public Administration The Office for War Veterans and Victims of Oppression The Office of Rail Transportation The Patent Office of the Republic of Poland The Polish Constitutional Tribunal The President of the Republic of Poland The Senate of the Republic of Poland The State Forests National Forest Holding

Address, Tel./Fax E-mail / Web page

ul. Krucza 36, 00-522 Warsaw, 22 695-9800/22 629-0164 / ul. Âwi´tokrzyska 11/21, 00-919 Warsaw, 22 653-1000/22 620-8518, / ul. Andrzeja So∏tana 7, 05-400 Otwock-Âwierk 22 718-0001/22 779-3481, / Al. Jana Paw∏a II 13, 00-828 Warsaw, 22 505-5500 / ul. Wiejska 10, 00-902 Warsaw, 22 625-0617/22 629-3959 / ul. Konstruktorska 3A, 02-673 Warsaw, 22 459-0000/22 459-0101 / ul. Podchorà˝ych 38, 00-463 Warsaw, 22 523-3510/22 523-3016 / ul. Grójecka 186, 02-390 Warsaw, 22 572-6000/22 572-6333 / ul. Krucza 38/42, 00-926 Warsaw, 22 420-3731/22 420-3725 / ul. Karowa 10, 00-315 Warsaw, 22 695-1800/22 695-1858 / ul. Koszykowa 16, 00-564 Warsaw, 22 601-7401/22 601-7413 / Pl. Powstaƒców Warszawy 1, 00-950 Warsaw 22 556-0800/22 556-0800, / ul. Kasprzaka 18/20, 01-211 Warsaw, 22 534-9190/22 534-9162 / ul. Szcz´Êliwicka 34, 02-353 Warsaw, 22 572-2100/22 822-7209 / ul. Przemys∏owa 30/32, 00-450 Warsaw, 22 583-6600/22 583-6696 / Pl. Defilad 1, 00-901 Warsaw, 22 620-4970/22 620-4910 / ul. Paƒska 81/83, 00-834 Warsaw, 22 432-8080/22 432-8620 / Al. Niepodleg∏oÊci 100, 02-514 Warsaw, 22 500-4000/22 500-4768 / ul. Szczotkarska 42, 01-382 Warsaw, 22 355-7000/22 355-7018 / ul. K∏obucka 23A, 02-699 Warsaw, 22 464-5200 / ul. Âwi´tokrzyska 14, 00-050 Warsaw, 22 556-7755 / ul. Bagatela 12, 00-585 Warsaw, 22 334-9875/22 334-9999 / ul. Warecka 1A, 00-950 Warsaw, 22 556-8000/22 556-8099 / ul. Cha∏ubiƒskiego 8, 00-613 Warsaw, 22 536-7070/22 536-7004 / ul. Post´pu 17A, 02-676 Warsaw, 22 458-7701/22 458-7700 / Al. Ujazdowskie 1/3, 00-583 Warsaw, 22 694-7582/22 694-7476 / ul. Szamocka 3/5, 01-748 Warsaw, 22 667-1000/22 667-1418 / ul. Poniatowskiego 31, 40-055 Katowice, 32 736-1700/32 251-4884 / ul. Gabriela Piotra Boduena 3/5, 00-011 Warsaw 22 551-6500/22 551-6506, / ul. Filtrowa 57, 00-950 Warsaw, 22 444-5000/22 444-5793 / Pl. Krasiƒskich 2/4/6, 00-951 Warsaw, 22 530-8000/22 530-9100 / ul.Towarowa 28, 00-839 Warsaw, 22 581-8778 / ul. Rakowiecka 2A, 00-993 Warsaw, 22 585-7910 / ul. Post´pu 21, 02-676 Warsaw, 22 220-4000/22 220-4899 / ul. Grzybowska 45, 00-844 Warsaw, 22 360-9100/22 360-9101 / Skwer Ksi´dza Kardyna∏a Stefana Wyszyƒskiego 9, 01-015 Warsaw 22 597-3042/22 597-3180, / ul. Nowogrodzka 47A, 00-695 Warsaw, 22 390-7401/22 201-3408, ul. Wawelska 56, 00-922 Warsaw, 22 608-0100/22 608-0273 / ul. Wspólna 2/4, 00-926 Warsaw, 22 661-8129/22 661-9073 / ul. Cha∏ubiƒskiego 4, 00-928 Warsaw, 22 630-1867/22 630-1890 / Al. Niepodleg∏oÊci 188/192, 00-950 Warsaw, 22 579-0000/ 22 579-0001, / Al. J.Ch. Szucha 12A, 00-918 Warsaw, 22 622-1830/22 622-1830 / ul. Wiejska 10, 00-902 Warsaw, 22 695-2900/22 695-2238 / ul. Wiejska 6, 00-902 Warsaw, 22 694-9512/22 694-9118 / ul. Bitwy Warszawskiej 1920 r. 3, 02-362 Warsaw 22 589-8100/22 589-8171, /

Top Executive Janusz W∏odarski Marek Belka Grzegorz Wrochna Wojciech Skiba Kazimierz Wojciech Czaplicki Ma∏gorzata Skrucha Wies∏aw LeÊniakiewicz Agnieszka Pachciarz Iwona Hickiewicz Stanis∏aw Koziej Rafa∏ Rogala Ma∏gorzata Krasnod´bska-Tomkiel Magdalena Gaj Marek Walczak Marek Michalak Micha∏ Kleiber Bo˝ena LubliƒskaKasprzak Dominik Tracz Eugeniusz W. Roguski Wojciech Henrykowski Tomasz Henryk Schweitzer S∏awomir Majman Marcin Zaborowski Rafa∏ Szmytke Jacek Sadowy Anna LuboiƒskaRutkiewicz Zbigniew Derdziuk Piotr Litwa Roman Hauser Jacek Jezierski Stanis∏aw Dàbrowski ¸ukasz Kamiƒski Dariusz ¸uczak Tomasz Po∏eç Jacek Bàkowski Jan Dworak Krzysztof Jan Kurzyd∏owski Jan Pastwa Jan Stanis∏aw Ciechanowski Krzysztof Dyl Alicja Adamczak Andrzej Rzepliƒski Bronis∏aw Komorowski Bogdan Borusewicz Adam Wasiak

Footnotes: (1) Acting President; (2) Acting Chief Sanitary Inspector. To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Monika Brysiak, ul. Elblàska 15/17, 01-747 Warsaw, via fax to +48 22 257-7500, or via e-mail to Copyright 2013, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.



JUNE 17-23, 2013

Stocks report

world stock indices DJIA





Volatile week


15,176.08 (June 13 close)

3,445.36 (June 13 close)

1,636.36 (June 13 close)

6,308.26 (June 14 close)

8,127.96 (June 14 close)

12,686.52 (June 14 close)

0.90% (for the week)

0.62% (for the week)

0.85% (for the week)

-1.62% (for the week)

-1.54% (for the week)

-1.48% (for the week)

CHANGE: 13.15% (year to June 13)

CHANGE: 10.70% (year to June 13)

CHANGE: 11.89% (year to June 13)

CHANGE: 4.66% (year to June 14)

CHANGE: 4.49% (year to June 14)

CHANGE: 18.70% (year to June 14)

52-week high: 15,542.40

52-week high: 3,532.04

52-week high: 1,687.18

52-week high: 6,875.60

52-week high: 8,557.86

52-week high: 15,942.60

52-week low: 12,450.20

52-week low: 2,810.80

52-week low: 1,309.27

52-week low: 5,435.50

52-week low: 6,096.94

52-week low: 8,328.02

Andrew Nawrocki WBJ market analyst The past few weeks have given testament to the saying “It’s all fun and games when money is cheap.” With investors becoming increasingly worried about the global economy’s ability to function without any governmental support (in the form of low interest rates and the massive bond-buyback program in the US), last week tested investors’ composure. Monday started off moderately well, despite worsethan-expected non-farm payroll figures released the week before in the US. The Warsaw Stock Exchange’s main WIG index and the blue-chip WIG20 both gained slightly more than half a percent. Investors were unnerved on Tuesday by fears that central banks are cooling in their commitment to pump money into their economies.

Major indices WIG

48,273.42 (June 14 close)


2,478.43 (June 14 close)




























2,360 28.05


















52-week low: 2,101.10


Change year to June 14: -5.63%


52-week low: 38,982.82


52-week high: 2,628.36

Change year to June 14: 0.27%


Change for the week: -0.42%


52-week high: 48,495.01


Change for the week: 0.06%


Closing 0.05 28.45 0.24 11.17 0.56

% change (week) 52-week high 66.67 0.20 58.94 28.50 41.18 0.47 38.07 19.20 27.27 0.56

52-week low 0.03 8.10 0.08 7.89 0.31


Closing 0.44 36.85 154.70 8.15 168.80

% change (week) 7.32 2.65 1.78 1.37 0.78

52-week high 0.67 38.50 194.80 17.34 173.10

52-week low 0.38 30.50 109.60 6.23 133.20


Closing 2.30 0.20 0.25 0.93 0.76

% change (week) -30.09 -23.08 -13.79 -12.26 -11.63

52-week low 2.07 0.09 0.14 0.58 0.34


Closing 58.30 52.00 94.00 6.20 41.00

% change (week) -7.61 -5.28 -5.05 -4.02 -3.76

52-week high 66.56 76.00 103.85 6.50 45.45

52-week low 36.08 47.25 69.08 3.78 24.02

52-week high 10.75 0.40 0.68 1.37 4.10

Currency report

Other indices mWIG40

2,942.25 (June 14 close)


Z∏oty regains lost ground

11,980.74 (June 14 close)

Change for the week: 1.94%

52-week high: 2,943.65

Change for the week: 2.21%

Change year to June 14: 14.55%

52-week low: 2,211.09

Change year to June 14: 13.76%

A sharp sell-off in Tokyo set the tone for the day, with indices around the globe following suit. European shares fell to sixweek lows, with the WIG20 dropping 0.77 percent. Wednesday saw a slightly calmer session in Poland, despite another sell-off in Tokyo. Blue chips again got hit, shedding 0.1 percent. On Thursday, despite better-than-expected retail sales figures from the US, indices across Europe continued their slide. Hit particularly hard were shares of Eurocash, down nearly 6 percent. Ultimately the WIG closed half a percent lower. On Friday both the WIG and WIG20 started the day strong, but lost steam at the end of the session after disappointing data on economic sentiment was released in the US. ●

52-week high: 12,044.12 52-week low: 9,242.22


























30.57 (June 14 close)

6,940.89 (June 14 close)















































52-week low: 5,479.94


Change year to June 14: 3.24%


52-week low: 29.82


52-week high: 6,987.45

Change year to June 14: -7.98%


Change for the week: 1.37%


52-week high: 37.05


Change for the week: -0.59%











11,060 29.05



















Adam Narczewski X-Trade Brokers DM SA The currency market displayed some surprising behavior last week. Better-than-expected macroeconomic data from the US, instead of strengthening the dollar, caused it to weaken against the euro. The EUR/USD continued to advance, reaching $1.3380, its highest level since February of 2013. After a corrective movement, the world’s main currency pair may continue to rise in the upcoming week. It also seems the USD/JPY rally has stopped. The Japanese yen continued to strengthen (from levels above 100.00) all the way to 94.00, which is causing great damage to Japanese exporters. This in turn has put the Nikkei index under pressure and continued declines. On the local market, the z∏oty took advantage of the

upward EUR/USD trend and regained the ground it had lost in previous weeks. The local currency continued to gain despite a very low inflation figure in May – only 0.5 percent on a yearly basis – while core CPI dropped to 1 percent. Such low inflation should make another interest rate cut by the Monetary Policy Council in July a sure thing. Together, all of that created a volatile market for the z∏oty. After the central bank intervention in early June, the EUR/PLN tumbled to z∏.4.23, only to rebound to z∏.4.28. By the end of the week though, it was being quoted at just above z∏.4.22. Surprisingly, the USD/PLN was more stable and consistently declined throughout the week from z∏.3.23 all the way to z∏.3.17. ●

currency rates 3.3327 14.06



3.3100 12.06


3.2977 11.06





0.0994 14.06






0.0991 12.06

0.0995 11.06


0.1006 0.095


3.4244 14.06







3.4548 12.06

3.4591 11.06


3.4993 07.06


4.9472 14.06









5.0678 4.9992 10.06



3.1654 14.06







3.2002 12.06

3.2201 11.06


3.2545 07.06


4.2180 14.06






4.2555 12.06

4.2756 11.06


4.3061 07.06






JUNE 17-23, 2013


American football

Eagles beat defending champs in stunner A touchdown with no time left on the clock gave Warsaw the win over the Seahawks, 21-20


The race for first in the Topliga North Division has tightened in dramatic fashion, after the visiting Warsaw Eagles stole a victory from the Gdynia Seahawks on the final play of the game to put the two teams to within a halfgame of each other in the standings. Shane Gimzo’s 3yard touchdown run with no time remaining on the clock capped a comeback that began with Warsaw trailing by 13 points late in the third quarter. The 6-2 Eagles officially clinched a playoff spot with the victory, eliminating Koz∏y Poznaƒ from the playoff hunt with their third-straight win. They were also able to break a three-game losing streak against the Seahawks, who nonetheless maintain the lead in the division with a record of 7-2. Gdynia still holds the tiebreaker advantage over Warsaw as well, meaning that the Seahawks control their own destiny in the race

strong in the second quarter, however, as Mr Garza rebounded to throw two touchdown passes to put Gdynia on top at halftime. Wide receiver Jeremy Dixon capped off a 94-yard drive with his league-leading twelfth touchdown reception, tying the game in the process, and Marcin Bluma caught a 29-yard touchdown pass to give the Seahawks the lead.

Risk and reward

Eagles QB Shane Gimzo dives for the last-second touchdown that gave Warsaw the win between the two teams. The fact that the Eagles will now need the Seahawks to lose to Koz∏y in Gdynia’s final game of the season to give them a chance of capturing the division title will be of little worry at this point to Warsaw fans, who have seen their heroes struggle against the Topliga’s better teams this season. Even if Poznaƒ manages to upset the defending

champions next weekend, the Eagles will still need to win their final two games, including one against the 7-1 Wroc∏aw Devils, to leapfrog the Seahawks in the standings. Things seemed to have started well for the hosts at the National Rugby Stadium, as the Seahawks blocked an Eagles field goal attempt in the first quarter on the only


Gortat on the move The Phoenix Suns are considering transferring Polish center Marcin Gortat to the Portland Tail Blazers or to the Philadelphia 76ers, according to reports from Fox Sports. As Mr Gortat’s three-year contract is coming to an end, a significant amount of speculation has arisen regarding possible new destination for the Phoenix Suns’ center, often referred to as “the Polish Hammer.” The Blazers are in need of strengthening their team at the center position and are ready to fork out a sizable amount for a player that could fit the bill. Cody Zeller of Indiana University is reportedly the Blazer’s favorite choice, while Mr Gortat is next in line. The Philadelphia 76ers are also showing interest in the Polish player, and could initiate a sign-and-trade agreement with the Phoenix Suns that could potentially involve 76ers center Andrew Bynum. This type of agreement could be a good deal for Mr Gortat, because such contracts normally involve a pay bump for


The Polish NBA player might soon be changing colors

Marcin Gortat the player. Marcin Gortat, currently the only Polish player in the National Basketball Association, is the son of Polish boxer Janusz Gortat, who was a twotime Olympic bronze medalist in the lightweight division. Before being drafted in 2005

by the Phoenix Suns, Mr Gortat began his professional career in Europe, playing in Poland and Germany. After being drafted by the Suns he was traded to the Orlando Magic, but then was traded back to Phoenix in 2010. Katarzyna Rybnik

drive by either team that threatened to put points on the board. However, the advantage gained from that play was quickly undone when Eagles cornerback ¸ukasz Koniusz picked off a pass from Seahawks quarterback Ferni Garza and took it 57 yards for a touchdown that gave Warsaw a 7-0 lead at the end of the first quarter. The Seahawks came on

Gdynia extended the lead in the third quarter, after a 70yard reception by Mr Bluma left them in a goal-to-go situation. Seahawks running back Sebastian Krzysztofek, now back after being out several weeks with an injury, cashed in with a 6-yard touchdown run, and the Seahawks led 207. That lasted for all of about two minutes, however, as Eagles’ star returner Clarence Anderson took the kickoff back 88 yards for a touchdown to get the Eagles to within 7 points. Coach Phillip Dillon decided to take a risk, and Warsaw went for a fake on the conversion attempt. The gamble paid off when Filip MoÊcicki found Caleb

Singleton in the end zone to convert the two-point try, and suddenly it was 20-15. The teams traded long drives in the fourth quarter, with each being stopped on downs once inside the other’s red zone. The Eagles took possession for their final drive with just 90 seconds remaining, and needing to go almost the entire length of the field to win. They drove quickly and effectively down the field, reaching the 3-yard line on fourth down with just two seconds left on the clock. Mr Gimzo called his own number on an option, reaching the goal line easily after turning the corner, and the Eagles sideline erupted in euphoria. In other scores around the league, both the Wroc∏aw derby and the Silesia derby also proved exciting affairs, with the Wroc∏aw Devils avenging their loss earlier this season to the Wroc∏aw Giants by a score of 32-25. The Devils now lead the Topliga South Division. The AZS Silesia Rebels also avenged an earlier loss to their regional rivals the Zag∏´bie Steelers, winning 22-15 in overtime. Alex Zarganis



Art festival

JUNE 17-23, 2013

Music festival

Accessible art Old Town, new jazz

“Cycle” by Poznaƒ-based theater group Usta Usta cal/Visual Theatre at a FRINGE Festival in Edinburgh, Scotland. The Blind has been described as “powerful and beautifully acted visual drama about a society’s instinctive response to a crisis that kills no-one, but changes everything, and reveals many disturbing truths,” in a review by Joyce McMillan for the Edinburgh-based daily newspaper The Scotsman. Another intriguing performance, entitled “Cycle,” will focus on the “repetitiveness in everyday life and how things that appear unusual can be ultimately

traced back to run-of-themill behavioral patterns,” said Dariusz Jarosiƒski, the festival’s art director. The festival dates back to 1993 when three Polish theatrical troops performed on the streets of Warsaw. Over the years the repertoire of the event has expanded considerably, with theater groups from Argentina, Belgium, France, Italy, Norway, Russia, Spain, Sweden and Ukraine taking part in the event. This year’s festival will feature performers from Austria, the Czech Republic, Russia and Ukraine. Beata Socha


This year the international Street Art Festival will be held on June 29-30 and July 5-7. Interactive live installations, mime shows and other theatrical performances will take place in some of Warsaw’s landmark locations, such as the New Town square or the Agricola Park, as well as outside the Metro S∏odowiec subway station. The goal of the event is to make art and theater accessible to all. One of the most picturesque performances, entitled “The Blind” was inspired by the Nobel-prize winning Portuguese novelist Jose Saramago’s bestseller “Blindness.” The show, which will take place on June 30 in the Agricola Park, is a moving metaphor for social decomposition in a world without empathy or tolerance. The piece has been performed in many European countries, as well as in South Korea and Colombia. It was nominated for the Total Theatre Award 2012 in the category Physi-


Street Art Festival June 29-30, July 5-7 New Town, Agricola Park Warsaw

Enrico Pieranunzi will play the festival on August 3

International Open Air Jazz Festival “Jazz at the Old Town” Every Saturday, June 22-August 17 Old Town Warsaw Warsaw will welcome international jazz stars again, as the annual International Open Air Jazz Festival “Jazz at the Old Town” kicks off its 19th annual edition this summer. The festival will be held each Saturday of the summer to August 17. Opening up the festival on June 22 will be Squeezeband, a grouping of international musicians from the US, the Netherlands, Martinique, Italy and Switzerland. The group combines rock, jazz, world and

African music to create its own unique sound. New York-based jazz pianist Jacky Terrasson will bring his trio to Warsaw on July 13. Mr Terrasson is one of the most celebrated jazz pianists working today. On July 20, the young but already acclaimed Japanese singer and composer Hiromi will perform. Her work combines progressive jazz with rock and classical music. Enrico Pieranunzi, one of the best-known figures on the international jazz scene, brings his trio to Warsaw on August 3. Mr Pieranunzi is one of Italy’s most respected pianists, and is also a composer and arranger. He has recorded more than 70 CDs under his own name and has

played in concert or in the studio with famous musicians such as Chet Baker, Lee Konitz, Marc Johnson and Charlie Haden. Luxembourg-born musician Pascal Schumacher (June 29), European band Kahiba (July 6), the Adam Baldych Project (July 27), and the Jorge Pardo Trio (August 10) will also share their talents during the event. The festival will conclude with a performance from the Bester Quartet, based in Kraków, Poland. The band gives a new interpretation to traditional Yiddish folk music and has a repertoire that combines classical, jazz, avant-garde and chamber music. Cathy Liu

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 Czarna Gallery ul. Marsza∏kowska 4 Galeria 022, DAP, Lufcik ul. Mazowiecka 11a Galeria 65 ul. Bema 65 Galeria Appendix 2 ul. Bia∏ostocka 9 Galeria Asymetria ul. Nowogrodzka 18a Galeria Foksal ul. Foksal 1-4 Galeria Milano Rondo Waszyngtona 2A Galeria Schody ul. Nowy Âwiat 39

Green Gallery ul. Krzywe Ko∏o 2/4

Simonis Gallery ul. Burakowska 9

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

State Archaeological Museum in Warsaw ul. D∏uga 52

Królikarnia National Gallery ul. Pu∏awska 113a Le Guern Gallery ul. Widok 8, Museum of Independence Aleja SolidarnoÊci 62 National Museum in Warsaw Al. Jerozolimskie 3 Polish National Opera at Teatr Wielki Pl. Teatralny 1 Pracownia Galeria ul. Emilii Plater 14

State Ethnographic Museum ul. Kredytowa 1 Historical Museum of Warsaw Old Town Square 28-42 History Meeting House of Warsaw ul. Karowa 20 Warsaw Philharmonic ul. Jasna 5 Warsaw Rising Museum ul. Grzybowska 79

Galeria XX1 Al. Jana Paw∏a II 36

Rempex Art and Auction House ul. Karowa 31

Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16

Galeria Zoya ul. Kopernika 32 m.8

Royal Castle Pl. Zamkowy 4

Zachęta National Art Gallery Pl. Ma∏achowskiego 3


JUNE 17-23, 2013


Tech Eye

The Mac Pro

The MacBook Air

and up to 12 hours for its 13-inch sibling. Other improvements include fourth-generation Intel Core processors, 802.11ac Wi-Fi and 128GB of flash storage that is “up to 45 percent faster” than the last-gen MacBook Air. The smaller version starts at $999, the larger at $1,099. Add $200 to either to double the flash storage to 256GB. The biggest “liek omg” moment of WWDC 2013 came when Apple offered a “sneak peek” of its redesigned desktop, the Mac Pro. Apple exec Phil Schiller introduced

the product with a roguish “Can’t innovate anymore, my ass,” which was either a dig at critics who think Apple is old hat or an honest lamentation of buttockal-innovation fatigue. We couldn’t tell which. The Mac Pro makes a good first impression, though. It sports a 12core, 256-bit Intel Xeon E5 processor, dual AMD FirePro GPUs (with support for 4K displays) and 1,866MHz DDR3 RAM capable of 60GB/s data transmission. Not too shabby. Most intriguingly, the computer is tiny – just 9.9-inches (25 cm) tall. That’s a tad taller than two cans of Coke stacked atop each other, a little shorter than a bottle of Johnnie Walker, and much less delicious than the two mixed together. Anyway, the new Mac Pro will

launch “this year” and will probably cost its weight in gold. Among Apple’s other announcements were iTunes Radio, a rather late-to-the-market music streaming service, and iOS 7, “the most significant iOS update since the original iPhone.” The latter will please owners of more recent iPhones (4 and up), iPod Touches (fifth-gen) and iPads (2 and up) who are ready for something different from Apple’s notoriously uniform mobile OS. There’s a new color palette, sleeker typography, and translucency has been added. Also: a new lock screen! And: toggles! In other words, iOS 7 is significant because it includes things Android, Windows 8 and others have offered for years? Nice try, Apple. ●

iOS 7


frankly, it’s a pretty bland choice. The new OS X boasts “more than 200 new features,” such as: e-book app iBooks; iCloud Keychain, “which safely stores your website login information, credit card numbers and WiFi passwords, and pushes them to all of your devices so you don’t need to remember them”; App Nap, which reduces the power consumed by unused apps; a new version of Safari; and Maps (now with Earth-based cartography!). In other words, there are more than 200 new features, of which four or five will be useful to the average person. You have to be a Mactard to get excited about OS X, but the updated MacBook Air is something even Techeye could warm to. The big selling point this time is “all day battery life,” which means up to nine hours for the 11-inch model


Has it really been a year since the last Apple Worldwide Developers Conference (WWDC)? It seems just yesterday that a newly introduced iOS 6 Maps was making headlines by undiscovering landmasses, smooshing landmarks and advising drivers to “turn left into ocean.” How time flies. Particularly, we’ve heard, when your car is plummeting into a large body of water. But let’s move on to WWDC 2013. Held last week, the event was typical Apple – lots of pomp and tons of smirkumstance. Like its predecessor, WWDC 2013 was software-heavy and hardware-light. The first thing Apple showed off was OS X Mavericks, its new operating system for Macs. Mavericks marks an end to the mostly feline nomenclature (Leopard, Mountain Lion, etc) that Apple has used since 2000 and,


Apple showcases software updates, dwarf desktop

Ever measured a bottle of Johnnie Walker? Let us know:

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WBJ #23 2013  

Warsaw Business Journal, vol. 19, #23, June 17-23