WBJ #41 2012

INVESTING IN POLAND: WBJ launches a series of profiles of firms that have made innovative, sustainable investments around the country

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Tech Eye has you covered

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VOLUME 18, NUMBER 41 • OCTOBER 15-21, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

LOKALE IMMOBILIA

Since 1994 . Poland’s only business weekly in English

Is the cloud safe?

COURTESY OF EXPO REAL

REAL ESTATE

Polish firms are using cloud computing in ever greater numbers, but is their most sensitive data secure? 12-13

Extensive coverage of all of the Poland-related news from last week’s Expo Real real estate event in Munich 16-18

Politics: Political PR specialist Piotr Tymochowicz talks about the current state of Polish politics, and calls Jaros∏aw Kaczyƒski the right’s 15 “cleaning lady”

In this issue

¸UKASZ MAZUREK/ SHUTTERSTOCK/WBJ

News . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . . . . . . .8-9 Investing in Poland . . . . . . . . . . . . . . . . .10 Opinion & Analysis . . . . . . . . . . . . . . . . .11 Cover Story . . . . . . . . . . . . . . . . . . . . .12-13 Media Patronage . . . . . . . . . . . . . . . . . . .14 Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Lokale Immobilia . . . . . . . . . . . . . . .16-18 Markets . . . . . . . . . . . . . . . . . . . . . . . . . . .19 The List . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . . . . . . . .23

Tusk center stage

Budget blues

The PM promised billions in new investment in a highly anticipated policy speech last week 3

Talk of two separate EU budgets has Poland worried it could lose out on much-needed funding 4

NEWS

www.wbj.pl

Poland’s abortion debate

Thanks to conservative MPs from the ruling Civic Platform party, parliament last week rejected a bill to liberalize Poland’s laws on abortion while at the same time voting to continue work on a proposed bill that would further tighten the country’s already strict laws on the procedure.

The liberal proposal was initiated by the anti-clerical Palikot’s Movement and aimed to grant women the power to terminate pregnancies in the first trimester, without any restrictions. The proposal was rejected overwhelmingly: some

365 MPs in the 460-member lower house of parliament, the Sejm, voted against it.

Parliament will now instead move ahead with a bill brought forward by the conservative Solidarity Poland party, which would further restrict abortion laws in Poland, already among the most stringent in Europe.

Solidarity Poland’s proposal would ban abortions of damaged fetuses. The bill is supported by the largest opposition party in parliament, the conservative Law and Justice. Forty MPs from Civic Platform, which has touted itself as a

moderate party, also voted in favor of this proposal.

Poland’s current laws allow for abortion in the event of rape, if the mother’s health is at grave risk, or if there is a high probability that the fetus is damaged or deformed.

In response to the vote, President Bronis∏aw Komorowski, who was elected as a candidate from Civic Platform, said the development was “disturbing.”

“I have always believed that one cannot violate a fragile but difficult compromise that nevertheless serves Poland. …

Civic Platform must defend this compromise at all costs,” said Mr Komorowski, referring to the existing laws on the matter.

Mr Komorowski warned that if this compromise were broken, an “ideological war” could emerge. In an effort to emphasize the message, the president went as far as to invoke the late First Lady Maria Kaczyƒska – the wife of the late President Lech Kaczyƒski, a political foe of Mr Komorowski – saying Ms Kaczyƒska had “categorically supported the compromise.”

This was likely a message to the more conservative section of Polish society. But if the president opposes the changes, then he will likely veto them once the bill lands on his desk.

Remi Adekoya

is the number of Polish millionaires expected by 2017, a five-year jump of 105% according to the latest Global Wealth Report by Credit Suisse.

€16 billion

is the value of Polish food exports forecast for 2012, according to the Agriculture Ministry.

52,578 is the number of automobiles that rolled out of Polish factories in September. That’s a drop of 25% on the same period last year.

Quote of the Week “A man is not always in control of his facial expressions” Prime Minister Donald Tusk during last Friday's parliamentary debate, responding to an opposition MP's comment that he was laughing and making jokes while MPs were asking questions about the policy speech he had made earlier that day.

Figures in focus Part-timers Part-time employment as a share of total employment (%), selected EU27 countries in 2011 50 40 30

**Highest in EU27

YOUNG ART AUCTION

Event:

This auction of a diverse set of works includes both well-known young artists and debutantes who have graduated from fine art academies in recent years. Ninety-eight selected works by young painters will be auctioned. The starting price of each is z∏.500. ul. Marsza∏kowska 34-50, Warsaw desa.pl

Web:

18 Event:

Location: Web:

FashionPhilosophy Fashion Week Poland is the biggest fashion event in the region, say organizers. This event will present

nd Gr ee Cz c ec hR e ep ub lic Bu lga ria *

Po la

Web:

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OFFICE BUILDINGS IN POLAND

Bank Gospodarstwa

Location: Web:

This 5th edition of the conference, organized

by Nowy Adres, will feature over 30 expert speakers, as well as a number of lectures and panel discussions. It promises to be a great meeting opportunity for senior management of companies in the Polish office market.

Warsaw Marriott Hotel konferencje.nowyadres.pl/office-buildings-inpoland.php

Asseco Poland ..........12

Krajowego ....................3 Bank Millennium ........6 BBI

IBM ............................12 Randstad ......................2 Ipopema Securities......5 Royal Dutch Shell ........5 Itella ..........................10 IVG Immobilien ..........16

S+B Gruppe................17 Skanska

Jones Lang LaSalle ..18 BP ................................5 Capital Park ..............16 CBRE ..........................16 Centrum Bankowo Finansowe

Event:

Ninety rare items will be auctioned from a wide selection of old jewelry from the art deco and Biedermeier periods, among others. The offer includes diamond-encrusted bracelets and s unique ring called “the poisoner.” ul. Marsza∏kowska 34-50, Warsaw desa.pl

Nowy Âwiat ................18

Web:

Hyla ............................23 PZU ............................13

Development NFI ......17

5TH JEWELRY AUCTION

Location:

Prokom Investments 12

Aon eSolutions ..........12 Globe Trade Centre....16 PRS ..............................6

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24-28 FASHIONPHILOSOPHY Event:

Sp

Cho∏dzyƒski................18 GDDKiA ........................6

Event:

Polnord ......................16

F-Secure ....................14

Spring/Summer 2013 trends. ¸ódê fashionweek.pl

175TH FINE ART AUCTION Over 100 items made before 1945 will be auctioned off, including pictures, sculptures and handicrafts. The offer includes works by Rafa∏ Malczewski, Alfred Wierusz-Kowalski, Jan Che∏moƒski and many other Polish masters. ul. Marsza∏kowska 34-50, Warsaw desa.pl

Estate Germany ........16 Ericsson ....................14 State Enterprise ........17

AMC – Andrzej M.

Location:

Source: Eurostat

Echo Investment ........16 “Polish Airports”

Amazon ......................12 Eurometal ....................5

October 16

*Lowest in EU27

Company index Allianz Real

DATELINE

ain

0 nc e

The EU has been awarded the Nobel Peace Prize for fostering peace on a continent that was once torn apart by war. Was the recognition deserved?

Log on to WBJ.pl to read Polish experts’ opinions on the matter.

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Fra

The EU wins the Nobel Peace Prize

Location:

Nearly one in three Poles expects to lose their job within the next six months, according to a survey carried out by Randstad, reported Rzeczpospolita. What’s more, Poles’ confidence in being able to quickly find another job is also falling. ●

78,000

EU 27

Millionaire population to grow 105%

Workers’ rising anxiety

will be Poland’s place in the EU in terms of the fastestgrowing economies next year, according to the IMF.

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On WBJ.pl

The next five years are expected to see the number of Polish millionaires grow by 105% to 78,000, according to the third edition of the Global Wealth Report, prepared by Credit Suisse. The Poland scenario looks to be part of a broader global trend. Come 2017, the number of millionaires around the world is expected to have jumped 62%.

7th

UK

Some 140 firms listed on the Warsaw Stock Exchange have shared their profits with shareholders so far in 2012, paying out more than z∏.22 billion in dividends, reported Rzeczpospolita.

The majority of that sum went to respective majority stakeholders of large listed companies, but even small market investors saw gains. In fact, the average rate of return across the WSE is 4.6%, the highest in the history of the bourse.

Numbers in the News

nd s Ge * rm an y

WSE giants deliver big payouts

IN THE SPOTLIGHT

the rla

In the most recent CBOS poll, the ruling Civic Platform (PO) party, with 28% support, leads by four percentage points over the opposition Law and Justice (PiS) party. For the past two months polling institute CBOS has noted a decline in support for the ruling party. According to a survey by MillwardBrown SMG/KRC, it is actually PiS, with 30% support, that leads over PO.

OCTOBER 15-21, 2012

Ne

Two polls, two victors

SHUTTERSTOCK

2

Lindner ........................6 Lotos ............................5

Property Poland ........17 SRB Civil Engineering 6

Microsoft ....................14 Standard & Poor ..........6 MTU Polska................10 Tognum Group ..........10 Neste ............................5 Verizon Business ......12

Cisco ..........................12 Netia ..........................14 VIS Citi Handlowy ..............3 Orlen ............................5 Construction Group ....5 Citibank ........................3 Peter Nielsen & Wow Stuff ..................23 Credit Suisse................2 Partners ......................6 CSC ............................12 PKO Bank Polski..........6 WSE ....................2, 6, 18 Dom Maklerski IDM ....6 Polimex-Mostostal ......5 ZE PAK ........................6

NEWS

OCTOBER 15-21, 2012

www.wbj.pl

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Politics

With recent polls showing the ruling Civic Platform behind opposition Law and Justice, Donald Tusk announces a z∏.200 billion investment program, among several other policies Prime Minister Donald Tusk won a vote of confidence in parliament last Friday after announcing a public investment program estimated at roughly z∏.200 billion, as well as policies for combating Poland’s demographic problems.

The speech followed a spate of recent polls showing Mr Tusk’s Civic Platform (PO) party trailing opposition Law and Justice (PiS) by anything from 2 to 6 percentage points. The vote of confidence was initiated by the prime minister himself.

In a much-awaited policy speech, Prime Minister Tusk told parliament that one of the key responsibilities of his government will be to keep Poland’s economy growing and keep Poles in work “at all costs.”

Investments He announced the creation of a special investment vehicle called “Polish Investments,” which will have z∏.40 billion in funds to be managed by the state-owned Bank Gospodarstwa Krajowego (BGK).

Mr Tusk said the program will be financed without “increasing public debt” but by exploiting the “frozen assets of state-owned firms.”

BGK will receive ownership of shares in state-controlled firms and subsequently make loans totaling some z∏.40 billion for investments in Poland, according to Finance Minister Jacek Rostowski. This operation will be carried out between now and 2015.

The PM also said his government would announce

tenders valued at z∏.73 billion during the years 2013 to 2015 in order to continue recent investments in highways and modernize the country’s antiquated railway system.

Meanwhile, by 2020, z∏.60 billion will have been spent on energy-sector investments, such as the building of gas terminals. The government also expects z∏.55 billion to be spent on shale gas investments, although z∏.5 billion will come from Polish firms while the rest will be from foreign firms. Also, z∏.10 billion will be spent on modernizing the Polish army in 2013 and 2014. In addition, z∏.1 billion will be spent on modernizing the Polish police force.

Demographics Poland has a demographic problem, with the average fertility rate at 1.3 children per woman. In addition, Poland’s population is expected to shrink by 1 per-

COURTESY OF KPRM

PM wins confidence vote amidst slump in support

Mr Tusk was under pressure to deliver a strong performance cent in the next decade, and is aging.

If Poles don’t start to have more children, there will be

The prime minister’s speech: an economist’s reaction There were no shortage of opinions about the Prime Minister’s policy speech, and business circles had plenty to chew on. Piotr Kalisz, chief economist for Citi Handlowy, Citibank’s Polish branch, sent his statements to clients and journalists. Here are some of his main takeaways from the speech: •Not many details but trying to bring some optimism. [Friday] morning Prime Minister Tusk delivered a longawaited speech, presenting the government’s actions in response to the economic slowdown. A substantial part of the announced measures/actions is not new as it was already included in previous government plans. Therefore, we treat the speech as an attempt to bring some optimism to the general public, rather than an announcement of new measures.

•Investment matters. In our view the strong message from the speech is that the government will try to keep investment spending at a high level. This appears to be a rational strategy, given that fiscal multipliers of public investment spending are usually high.

•What was proposed? The most interesting proposal is a plan to increase the equity of the state-owned bank BGK [Bank Gospodarstwa Krajowego] by z∏.10 billion in order to boost lending.

The capital injection will come through a transfer of shares of some stateowned companies to BGK and therefore it should be neutral for the budget but is likely to generate around z∏.40 billion in lending for investment projects.

•The PM mentioned large investment projects to be realized in the coming years. This includes investment in the energy sector (z∏.60 billion until 2020), shale gas exploration (z∏.50 billion until 2016), railways and roads (z∏.30 billion and z∏.43 billion respectively).

According to our estimates this would be equivalent to 2.4 percent of GDP annually in the coming years.

Although the size of the investment plans appears large, these are not new measures as they have been in the pipeline for some time and therefore they should not change our growth forecasts. Furthermore, the speech

lacked details regarding the way these projects are to be financed and we believe there is a risk that actual spending will be slower and possibly smaller than the government is planning.

•Maternity leave. The government announced a shift towards pro-family measures. This includes the lengthening of maternity leave to one year (vs.

20 weeks now) as well as the wider availability of kindergartens. The government also wants to increase social contributions paid by high earners on “flexible” job contracts but will not increase contributions by persons with low incomes.

•No reason to change forecasts. The speech didn’t include many new details. It seems the government is sticking to its previous policy with only some tweaks, mostly regarding its pro-family policy and increased lending by the state-owned bank.

More details will be presented ... by the finance minister but for now we see no reason to change our macro or market forecasts. ●

too few people to work for those on pensions.

Mr Tusk said his government will embark on a “revolution” in social policies aimed at solving this problem.

An announcement that will surely get Poles’ attention is that the maximum maternity leave will now be extended from 6 months to 12 months.

There will be two options available to mothers. If a mother chooses the sixmonth option, then she will receive 100 percent of her salary for the whole period.

If she picks the one-year offer, then she will receive 80 percent of her salary for the whole period.

There will also be some z∏.370 million set aside for building preschools and kindergartens.

Innovation and others A lot has been made of the fact that Poland needs to transform into a knowledgebased economy in order to continue developing. The state currently spends just 0.6 percent of GDP on R&D, much less than most other EU countries. The PM addressed this, saying “we

will invest z∏.10 billion in the next three years on laboratories and building fast information networks in order to make Poland more innovative.”

Responding to the opposition’s oft-repeated criticism that he has failed to provide a “vision” for Poland’s future, Mr Tusk said, “I am not and will not be a specialist on big romantic visions. My vision is made up of small, everyday dreams.” He said he would try to “win back the trust and confidence of Poles,” likely referring to his party’s weakening popularity.

President Bronis∏aw Komorowski, a political ally of the prime minister, said the speech was very “technocratic” but that this was a “good thing.”

President Komorowski spoke with approval about the PM’s announcements regarding policies for young parents.

Meanwhile, Mariusz B∏aszczak, Law and Justice’s parliamentary caucus leader, lambasted Mr Tusk’s speech, saying it lacked specifics.

“Donald Tusk has no credibility,” he said.

Remi Adekoya

4

NEWS

www.wbj.pl

OCTOBER 15-21, 2012

European politics

A proposal for separate budgets for the euro zone and the wider EU is gaining traction Plans are afoot to create a budget for the euro zone that would be distinct from the longterm budget of the wider European Union, raising fears among Polish politicians that Poland could receive less EU funding and become isolated politically.

Draft conclusions of an EU summit due to take place this week say that “for the euro area, the objective is to move towards an integrated budgetary framework.” Mechanisms related to this “would be specific to the euro area,” the draft reads.

The creation of a separate currency-area budget is seen as a way of transferring money to the bloc’s troubled economies, but there are worries that it could reduce funds for the wider budget and therefore for Poland. Over the last few years Poland has been the biggest beneficiary of EU structural funds.

“We hope it doesn’t adversely affect negotiations for the wider 2014-2020 budget – but it could lead to that budget being cut to a smaller size than the one currently in force,” Rafa∏ Trzaskowski, a Polish MEP, told WBJ. There are also worries that a separate budget will see the EU split more clearly into two political entities, potentially leaving in the cold those who are not in the euro zone – including Poland.

the EU. UK Prime Minister David Cameron has also put his country’s weight behind the initiative, saying in an interview with the BBC that “there will come a time I believe where you’re going to need to have two European budgets – one for the single currency, because they’re going to have to support each other much more, and perhaps a wider budget for everybody else.”

Lack of clarity Polish fears “This is an idea which has emerged at an inconvenient time,” EU Budget Commissioner Janusz Lewandowski, himself a Pole, told daily Rzeczpospolita.

“We are afraid the proposed budget could be a sign that the union is dividing,” said Mr Trzaskowski. “We want to safeguard the unity of Europe’s institutions.”

Germany and France are the principle backers of separate budgets, meaning the plan has the support of the two most politically powerful members of

Nevertheless, details of the proposal for a separate euro zone budget are scant.

“There is a big lack of clarity about what the proposed euroarea budget might look like,” said Janis A. Emmanouilidis, a senior policy analyst at the European Policy Centre, a think tank.

“We don’t know what its function will be, how it will be funded and how it would be scrutinized … there are lots of unanswered questions,” he added.

It is also not known whether funds from the budget would be

COURTESY OF THE BRITISH PRIME MINISTER'S OFFICE

Euro zone budget proposal leaves Poland fearful of waning influence

British PM David Cameron has spoken out in favor of two separate European budgets available only to countries that already have the euro, or whether they would also be available to countries like Poland that are obliged by treaty to adopt the single currency.

“If it addresses a euro-zone specific issue it might be a natural extension of euro zone governance,” said Fabian Zuleeg, chief economist at the European Policy Centre. “But if it affects wider policy areas … it could well lead to a fur-

ther cementation of the separation between ins and outs,” And while Poland does plan to join the euro zone at some point, delay could cost it dearly.

“In general terms, the more integration is taking place within the euro zone, the more politically costly it is to stay outside,” said Mr Zuleeg.

MEP Rafa∏ Trzaskowski said that for its part, Poland just wants to stick to the EU’s

timetable.

“Our priority is to have the 2014-2020 budget negotiated.

We need this budget to give us growth and in this we are not acting in a selfish interest, because the budget is indispensable for European growth,” he said.

“We’re trying to stick to the calendar, then we can talk about other means to save Europe from the crisis,” he added.

Gareth Price

BUSINESS

OCTOBER 15-21, 2012

www.wbj.pl

Construction

Lotos and Orlen eye Neste’s Polish gas station network

Polimex-Mostostal thrown lifeline by government

The Polish state has thrown a lifeline to debt-laden Polish construction firm PolimexMostostal by offering to buy a controlling stake in the beleaguered builder.

The state-owned Industrial Development Agency (ARP) has agreed to purchase new shares comprising a stake of up to 33 percent, for a maximum of z∏.250 million. A stake sized around 33 percent would give the ARP control of the company.

The Agency will pay up to z∏.0.50 per share for Polimex.

Moreover, a proposal has also been made that will allow the company’s bondholders to convert the debt they hold into shares in the company.

Polimex shareholders are due to vote on the proposals this week.

“We are thinking about taking a controlling stake in Polimex,” Miko∏aj Budza-

nowski, Poland’s treasury minister, told Rzeczpospolita. “The thing is to be able to oversee the restructuring process and to be able to join in discussions with banks. That is why we are sending our representative to the board. Today, the most important is for the company to straighten out, sell off nonessential holdings and sign new energy contracts.”

The state is keen to keep Polimex afloat because the company has the engineering expertise needed to undertake a z∏.6.3 billion scheme to expand the Kozienice power plant and another z∏.9.3 billion power plant project in Opole.

Russian offer However, the waters have

been muddied somewhat by the Russian VIS Construction Group, which itself has placed an offer to purchase a 33 percent stake in Polimex, Parkiet wrote, citing unnamed sources.

The price per share proposed by the Russian entity is reportedly higher than that due to be offered by the ARP. According to Parkiet’s sources, however, funds with shares in Polimex won’t allow the Russian company to take control of the Polish builder.

Government lends a hand In recent weeks the government has helped negotiate a standstill agreement concerning z∏.2.5 billion owed by

SHUTTERSTOCK

The state is looking to take control of the troubled builder to ensure it stays afloat, and in a position to provide its expertise for energy projects

Polimex overextended itself when taking part in the Euro 2012 infrastructure boom

5

Polimex to banks and other creditors, buying time for the firm to restructure its debt.

Polimex has run up a large pile of debt due to its involvement in the Euro 2012 infrastructure building boom.

Eurometal, a subcontractor of Polimex, looked to have thrown a spanner in the works last week when it demanded the payment of z∏.600,000 in unpaid fees and filed a request for Polimex to be declared bankrupt. Eurometal has been forced to lay off half of its staff and reduce salaries across the board due to financial problems related to the fact that it hasn’t been paid.

Nevertheless, should ARP take control of the company, the difficulties posed by Eurometal are likely to be dealt with.

“Eurometal is only one of many contractors and suppliers to Polimex,” said Tomasz Duda, an analyst at Ipopema Securities. “Given that the government is stepping in, the firm’s liquidity situation has been shored up a bit – it will help them pay off Eurometal,” he added.

Gareth Price

Poland’s second-largest oil refiner Lotos has begun talks concerning the purchase of gas stations in Poland owned by Finnish firm Neste Oil. “The sale process has launched. The subject is being analyzed by us,” Mariusz Machajewski, vice president of the board at Lotos, told Parkiet.

“We are involved in the process,” a Lotos spokesperson confirmed to WBJ. Mr Machajewski did not specify whether the Gdaƒskbased group planned to buy the whole chain or only selected locations. Neste owns 106 gas stations in Poland.

Rival PKN Orlen is also eying Neste’s Polish gas sta-

tions, having announced an interest in those assets back in July. Neste Oil could not be reached for comment.

The acquisition of Neste would bring Lotos closer to a 10 percent share of the domestic retail gas-station market, and would give the company second place in terms of number of gas stations owned in Poland. It currently has the fourth-largest chain, behind Royal Dutch Shell and BP, with Orlen far out ahead in first place, according to Polish Organisation of Oil Industry and Trade data.

Analysts estimate that the acquisition of Neste’s entire gas-station chain would cost up GP to z∏.200 million.

Scrapping for second Largest gas station network operators in Poland, by number of stations owned (data from the end of June 2012) 2,000 1,500 1,000 500 0 PKN Orlen

BP

Shell

Lotos

Statoil

Source: Polish Organisation of Oil Industry and Trade (POPiHN)

BUSINESS

www.wbj.pl

Standard & Poor’s said last week that Western banks are withholding “significant” funds from eastern Europe, Bloomberg reported. The ratings agency added that they are doing so due to worries about the troubled euro zone. As a result, countries such as Hungary and Poland have seen their economic growth prospects reduced, the agency said. “It’s clearly a concern that parent banks are visibly withdrawing their financing,” said Frank Gill, a sovereign rating analyst.

PKO likely to issue euro bonds in 2013 PKO Bank Polski plans to issue euro bonds worth hundreds of millions of euros, Reuters reported.

The issue was more likely to take place in 2013 than this year, its deputy chief executive said. “This year such an issue is not very likely.

More likely we will make use of it next year,” Jakub Papierski told Reuters. He added that the bank would only go to market this year if conditions were very favorable. “We are talking hundreds of millions of euros,” he emphasized. ●

PKO BP eyes takeover of local banks Poland’s largest lender, PKO Bank Polski, wants to grow its business by making acquisitions in Poland, and then potentially in the wider region.

Zbigniew Jagie∏∏o, the bank’s CEO, told reporters that market conditions favor the takeover of local banks.

His statement was a rare one for an official of the state-controlled bank, which is known for its conservative tendencies.

“The next six quarters will be much weaker in terms of GDP growth in Poland. This means smaller banks will have difficulties making adequate returns,” said Mr Jagie∏∏o.

“We want to use the com-

ing time to buy a city bank – that is, one whose domain is large cities – and strengthen [our] position as number one in Poland,” he added.

Micha∏ Sobolewski, an analyst at Dom Maklerski IDM, said PKO BP is considering takeovers because they are the only way for it to scale up.

“Organic growth can only help it expand so far,” he said.

According to Mr Jagie∏∏o, PKO BP would be interested in purchasing Bank Millennium if its Portuguese owner BCP once again decided to put it up for sale. BCP asked for bids for Millennium late last year, but in the end decid-

could come under threat if decides to splurge on a large local lender.

“The state would be more interested in getting dividends

ed not to sell.

PKO BP has been a rich source of dividends for the national budget in recent years, but this supply line

from PKO BP for the budget. … Takeovers could lower dividend payouts,” said Mr Sobolewski.

Gareth Price

PKO BP is mulling a takeover of Bank Millennium, if it goes up for sale again

ZE PAK gets low valuation ahead of public offer Poland’s Treasury Ministry has valued utility ZE PAK at z∏.1.72 billion ahead of its planned debut on the Warsaw Stock Exchange. The price tag is at the low end of what bookmakers had estimated in September.

The state plans to list its 50 percent stake in ZE PAK

on the WSE on or near November 30. The company is the fifth-largest producer of electricity in Poland.

Bookmakers running the IPO had valued ZE PAK at z∏.1.5-3.7 billion, Reuters reported, but concerns about the slowing economy and issues over the age of ZE

PAK’s power plants and the volume of CO2 they emit have forced the state to put the valuation toward the bottom of that range.

The Treasury, which has raised about z∏.8 billion from privatizations this year, hopes to hit a target of z∏.10 billion by year-end. The successful

sale of the 50 percent stake at the valuation price would net the state some z∏.858 million.

ZE PAK’s prospectus says 75-85 percent of all the shares will be offered to financial institutions, with the rest being made available to retail investors. The maximum price for individual

investors has been set at z∏.33 a share.

In the first half of this year, the company made a net profit of z∏.214 million compared to z∏.249 million a year earlier, as the slowing economy weighed on power consumption.

Gareth Price

GDDKiA sued for z∏.1.2 billion by Irish builder Irish construction firm SRB Civil Engineering is suing Poland’s state road operator GDDKiA for some z∏.1.2 billion. SRB claims that it was forced to abandon a contract to build the highway between Toruƒ, in the north of Poland, and Stryków in central Poland,

due to failures by roads operator GDDKiA. But GDDKiA says SRB was at fault and that it was the roads operator who had to withdraw from the contract, not the other way around.

GDDKiA issued a statement saying that because it

Contact: Miros∏aw Stefanik ms@pnplaw.pl

On October 9, the government adopted a draft amendment to the penalty procedure code. The amendments stipulate the acceleration and improvement of penalty procedures by eliminating and shortening some court procedures, limiting the possibility of executive detention and limiting the number of documents sent to courts.

Moreover, it will be possible to discontinue a criminal procedure if the offender reconciles with the injured party and repairs the damage caused. Such a procedure will be possible in the case of offenses punishable by deprivation of liberty of up to five years. The adopted amendments will be forwarded to parliament for discussion.

Reducing administrative burdens in the economy On October 9, the government adopted guidelines to a draft amendment to the act on reduction of certain administra-

tion firms saying they had lost money. Several of Poland’s largest construction firms are struggling as a result of their participation in major infrastructure projects in the run-up to the tournament (see story, p. 5).

Izabela Depczyk

Coffins

Legal News

Acceleration of penalty procedures

structure program, which was supposed to transform Poland’s dilapidated road system ahead of the 2012 European soccer championships.

But the project left behind a trail of contractual disagreements and construc-

feared SRB would fail to pay its subcontractors, GDDKiA halted paying SRB for the work on the A1 highway.

The European Commission is currently looking into the dispute.

The case surfaces on the heels of Poland’s huge infra-

tive burdens in the economy. In accordance with the guidelines, the provisions of the act are to improve conditions for conducting economic activity, remove or limit some of the administrative barriers and simplify legal provisions relating to business activity in Poland.

One of the proposed changes is designed to improve the liquidity of some entrepreneurs by abolishing the obligation for so-called “small taxpayers” (whose sales value including tax was not higher than €1.2 million in the previous tax year) of paying VAT, if such a taxpayer has not received payment for the delivered goods or rendered services and its contracting party is an active VAT payer (at present there is a legal time limit of 90 days, which is to be abolished by the amendment).

If the small taxpayer’s contracting party is an entity which is not an active VAT taxpayer, the time limit will be extended by up to 180 days. ●

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Lindner uses sex to sell coffins The coffin maker has launched a raunchy calendar for 2013 Lindner, one of Poland’s largest coffin makers, has produced a calendar for 2013 which portrays naked and scantily clad models posing next to and on top of the company’s products.

Lindner’s head salesperson Tomasz Kilarski said the calendar is part of a campaign to promote the company abroad.

“Coffin producers in Poland The Lindner calendar’s artwork for July 2013 normally find it hard to sell making the company stand out beyond their immediate region calendar.

Andrzej Multanowski, to funeral home owners.” [within Poland],” Mr Kilarski Mr Multanowski added that said. “We actually managed to owner of PRS, a PR and marspread out internationally, and keting agency, said that the Polish advertising market our coffins are bought by funer- although this kind of marketing has recently been going back to al homes in France, Germany is “primitive,” it achieves its the past, when nudity was used purpose of making Lindner to promote products. and other places,” he added.

“The current market situaLindner functions as a B2B stand out from the crowd.

“You have to consider who tion is tough, there is a lot of business, selling caskets in bulk mainly to funeral homes, which their target client is, and that is competition, so companies later sell the coffins to clients. certainly not an individual reach for the easiest solution to Mr Kilarski said funeral home client, but a funeral home,” Mr attract attention, and we all owners are usually very happy Multanowski said. “I think the know sex sells,” he said.

Izabela Depczyk when they receive Lindner’s calendar does its job in terms of COURTESY OF LINDNER

Western banks withholding money

OCTOBER 15-21, 2012

COURTESY OF PKO BP

6

FINANCE & ECONOMICS

OCTOBER 15-21, 2012

IMF forecasts 2.4 percent growth for Poland this year In its latest World Economic Outlook report, the International Monetary Fund predicts that Poland’s economy will grow by 2.4 percent in 2012, but will slow down to 2.1 percent in 2013. This would put Poland in seventh place when it comes to the fastest-growing economies in the EU. The IMF’s forecast for Poland is slightly higher than the government’s expectations, which are for 2.2 GDP growth this year.

Estonia and Latvia are expected to grow the fastest next year at 3.5 percent each, while Lithuania is forecast to grow at 3 percent.

Globally, the IMF is pessimistic, saying, “the situation in the world’s economy has worsened since July 2012.”

The IMF predicts the global economy will expand by 3.3 percent this year (as opposed to the 3.5 percent it predicted earlier), while 2013

growth is forecast at 3.6 percent. It also now sees “alarmingly high” risks of a steeper slowdown.

“A key issue is whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current slow-

down has a more lasting component,” the IMF said in the report.

“The answer depends on whether European and U.S. policy makers deal proactively with their major short-term economic challenges,” it added.

Remi Adekoya

Latvia leading The IMF’s projected GDP growth rate for selected countries, 2012 and 2013 2012 2013 5 4 3 2 1 0 -1 Czech Republic Germany

Latvia

Poland

Romania

Turkey Source: IMF

Poland couldn’t join the euro, even if it wanted to In August 2012, Poland did not satisfy any of the criteria required of countries that want to join the euro zone, according to the Ministry of Finance.

In August, Poland did not meet the criterion on price stability, with average annual inflation rate at 4 percent (it would have to keep it below 3 percent). According to the

forecasts of the European Commission, Poland will likely not meet this requirement until the end of 2013.

Poland also fell short when it comes to interest rates. The difference in 12-month average long-term interest rates was 5.5 percent, 1.8 percentage points higher than required.

When Poland joined the

EU in 2004, it agreed to adopt the common currency at some point, but with the euro zone crisis continuing, the government has not yet given a target date. A TNS Polska poll in June said that only 12 percent of Poles believe the country should join the euro zone, while as many as a third think Poland should never join it.

RG

Finance minister disappointed with EU banking proposals told reporters, Dow Jones Newswires wrote. “But the proposals currently on the table aren’t good even for the euro zone, in our view.”

Mr Rostowski added that he is “very disappointed that the current proposals don’t even meet the first condition, which is for that possible union to be something that

really holds the euro zone together.”

“We want the euro zone to hold together, knowing that for Poland it would be a very bad thing if the euro zone fell apart. That’s why we’re concerned that at this stage even this first condition appears to not have been met,” he added.

RG

COURTESY OF KPRM

The proposals brought forward by the EU banking union are not adequate to keep the euro zone from disintegrating, Polish Finance Minister Jacek Rostowski said at a ministers’ meeting in Luxembourg.

“We want a banking union that will be good for the euro zone and the entire EU,” he

Finance Minister Jacek Rostowski

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8

INTERVIEW

www.wbj.pl

UK PM to veto EU budget?

UK Prime Minister David Cameron has said that he would “veto” the 20142020 EU budget if “massive increases” were proposed or if a deal that “does not have proper control” was presented. “[European leaders] know I’m capable of saying no and if I don’t get a good deal I’ll say no again,” he told the BBC. Poland has been the biggest beneficiary of EU funds in recent years.

Another €375 mln for roads The European Investment Bank has agreed to lend money to Poland’s National Road Fund, reported Rzeczpospolita.

The money is set aside for the construction of a major new road and to facilitate investments in local infrastructure. Of the money lent, €300 million will go towards the construction of the S8 highway. The other €75 million will fund small and medium-sized projects dealing with infrastructure and environmental protection. ●

OCTOBER 15-21, 2012

European politics

Facing reality in the European Union Grzegorz Kostrzewa-Zorbas, political scientist and professor of international relations at Vistula University in Warsaw, talks with WBJ about the need for fundamental democratic reforms in the European Union and the need for Poland to have a bigger say Ewa Boniecka: There is a fundamental debate going on about the future of the EU, with EC President José Manuel Barroso having proposed the idea of a European federation. Do you think that this idea will appeal to the 27 members of the EU? Grzegorz Kostrzewa-Zorbas: It might appeal to some governments, maybe to 15-20 members out of 27, but not to public opinion in EU countries. Also not to many opposition forces, who are usually more skeptical or even openly anti-European Union. I don’t say anti-European, because Europe is much bigger than the European Union.

So why did Mr Barroso use the word “federalism” in connection with the EU, when it is anathema to many EU leaders?

The idea of European federalism is much older and originated from the concept of a federal United States of Europe, invented not in continental Europe, but in England and the US. I think that Mr Barroso proposed it in a state of desperation, in an attempt to escape from the economic and political crisis by going forward, by offering a more ambitious and more effective vision of the EU. But the popular mood in Europe runs contrary to that proposal. The so-called

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European idea, which was behind European integration from the early years of the Coal and Steel Community and which was for the last time expressed in the Lisbon Treaty, has now evaporated.

A united Europe, strong and powerful, number one in the world, paving the way for new achievements of humanity – this was the language used in the EU for many years, even quite recently. ...

This is gone and now a new mood prevails among the EU population: national interests, a pragmatic approach to the EU, a focus on short term financial gains or losses, with no trace of bigger ideas and visions. So now calling for a European federation means a dramatic detachment from reality.

But there is also a feeling that to fight the crisis, closer integration is needed. Do you think this could be accepted by members and bring a solution to the present crisis?

Deeper integration could be a solution, however this is a theoretical solution that has no foundation in the minds and hearts of the peoples of Europe. The culture of Europe is a collection of national cultures and has a very weak pan-European identity, and that European identity is not growing, but is becoming weaker with time.

So without the support of EU citizens, without their trust in EU institutions and policies, which is currently lacking, deeper integration will not be a workable solution.

Yet the members of the euro zone are already building structures for deepening integration, while leaving the rest of the EU outside. How will those new developments be accommodated?

Those new developments have weak support even among the population of the most pro-EU countries, and any support comes only from desperation and the fear that there is no other way out.

However, an integration plan, to be effective enough to fight economic crises in the present and future, would require much more. The banking union, for example, may sound ambitious, but in fact it is a small piece of a large mosaic, and even the so-called fiscal pact is far from being enough. In my

Poland needs to raise its voice to be heard in the EU, says Mr Kostrzewa-Zorbas opinion, it still fails to address the roots of the financial and economic crises in the European Union.

What is necessary can be found in the theory of optimum currency areas, for which its principal author, Robert Mundell, received the Nobel Prize in Economics in 1999. This theory is based on comprehensive and global factual research. It points out that a number of conditions must be met before the creation of a common currency and common monetary policy. A common currency helps the economy instead of harming it, but only if the area is homogeneous in terms of the level of development. This is not the case in the euro zone.

Does your conclusion drawn from that theory mean that the euro zone should break up and Greece be kicked out?

Exactly, for the good of Greece and other countries which have to leave. They would then have a better chance to recover, like Iceland has done thanks to the devaluation of its national currency.

So in your view we should stick to national currencies?

A narrower group of countries that meets the criteria of the theory will maintain the common currency, but this is absolutely impossible for the whole territory of the euro zone as of today.

Another condition is a strong central government able to intervene in the economy of the area, with the power to make massive transfers of resources to regions and population groups negatively affected by the functioning of the common currency. And this is what exists in the United States, where the federal government can make massive economic interventions in economic crises, as we saw in the most recent one. This has no equivalent in the European Union. Here there is over 20 times less federalism than in the US, if measured by the share of GDP redistributed through the EU budget as compared to the US federal budget. The EU is too weak to meet this condition of the theory of optimum currency areas.

Let us turn to Poland’s policy within the European Union.

Foreign Minister Rados∏aw Sikorski is very much supportive of a federal structure for the EU, while Finance Minister Jacek Rostowski has reservations towards Poland joining the banking union. Is Poland’s European policy clearly defined during the present crisis?

I do not see a coherent government policy at the time of the current crisis and the international debate about the new political architecture of the European Union.

There are proposals from Foreign Affairs Minister

INTERVIEW

OCTOBER 15-21, 2012

Sikorski to build a federal EU, while the Council of Ministers, the parliament and the president are keeping their distance from it. In my view the Polish government accepts stronger integration of the EU only in very general terms. Slogans like “we want more Europe, not less” are far from specific.

Do you think that verbal support from the Polish government for a policy of deepening integration is a useful strategy for Poland, and that the European Union does not need reforming?

It could be worse if the government engaged Poland in an unrealistic plan for creating a United States of Europe. But to show de facto passiveness in dealing with European Union problems is not useful. It is a time when Poland should undertake efforts and present proposals for reforming the EU, because reforms are needed.

In the political domain, we should push toward more democracy in the EU, including democratic legitimization of EU institutions.

In the economic domain, we should opt for lessening regulations, introducing more economic freedom, and reducing bureaucratic and legal burdens for European entrepreneurs.

Now the European Union is highly secretive and undemocratic in its decision making. All major decisions are made by the European Council and only rubberstamped by the European Parliament. The European Council, whose members represent their nations, is not under the democratic control of the 500 million citizens of the European Union. The European Parliament is not a real parliament because all bills must come from the Council of the EU or the European Commission.

How to change the system? The directly elected members of the European Parliament should be given the right to initiate legislation. Parliament should also create – not only accept – the European Commission, like parliaments create executive cabinets. The head of the European Union, who is now Herman Van Rompuy as a powerless President of the European Council, should receive a real mandate through direct popular elections held across the European Union. I am for EU integration, but a fully democratic integration.

Poland’s foreign policy, including its European policy, is an area of confrontation between the Civic

Platform-led government and the main opposition party Law and Justice (PiS).

How do you see their rivalry?

When one puts aside emotions that appear during discussions between politicians and looks at the facts, one can see that there are no fundamental differences in the field of foreign policy between the government and the Law and Justice party.

Both parties are for Poland’s participation in the EU and NATO, and close relations with the United States. Contrary to some insinuations, PiS is not euro-skeptic in the true meaning of that word, which originated in the UK. PiS is against Poland quitting the European Union. Moreover, PiS supported the Lisbon Treaty and its ratification by Poland. The criticism expressed by PiS is focused mainly toward the way our foreign policy is conducted by the government, which they see as being ineffective.

The problem is, there is not a single foreign policy of the European Union. How can this be changed?

All the mechanisms created for running a common foreign policy of the European Union function poorly.

Speaking in one voice on international problems, being heard in the world, shaping relations on an equal

DAILY EXECUTIVE DIGEST

footing with the US, China, Russia and other powers is a declared priority of the EU. But there is still a lack of a common vision for a foreign policy. In practice, member states put forward their own and different interests.

The European External Action Service, established by the Lisbon Treaty, started its work almost three years ago. It has about 140 permanent delegations around the world, and many other assets. But it is under strong criticism from many member states for being bureaucratic, badly managed, ineffective and invisible. The fact that decisions to appoint diplomats are made exclusively by Catherine Ashton is seen as extremely undemocratic.

There is also a general opinion that the service does not fulfill the criteria of geographic balance and does not guarantee member states proportional representation.

For instance, Poland is grossly underrepresented: We have only four ambassadors, and we should have at least 12.

What instruments should Poland use to strengthen its position in the European Union and also in its external diplomatic service?

We should strengthen the role of the Visegrad Group [of the Czech Republic,

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Hungary, Poland and Slovakia] and use the mechanism of building coalitions with some other new EU members, like Romania, Bulgaria and the Baltic states. We should also create coalitions with political parties across the internal borders of the EU, with business and other interest groups and nongovernmental organ-

9

in the European Union, I will support it. To prepare such a document looks very difficult, but possible. A new treaty should also bring more economic freedom, reduce EU bureaucracy and its outgrown legal apparatus, and contribute to the economic development of Europe. Yet I would be strongly against a single

“Calling for a European federation means a dramatic detachment from reality.” izations. This is the government’s responsibility. Modern diplomacy requires making use of many instruments and the government often neglects them.

Jurgen Habermas, the prominent European philosopher and sociologist, has appealed recently for the European Council to undertake efforts to establish a body to begin working on a new European constitution.

What is your reaction to this?

I am cautious on using the word “constitution,” but if a new treaty introduces more democracy and transparency

comprehensive constitution transforming the EU into a federal state. I rather have in mind the possibility of some specialized treaties, each dealing with thoroughly selected issues. One could be on economic freedom, another on democratic guarantees in the EU, including the legislative process and the role of the European Parliament. But first the European Union needs to conduct a comprehensive review of existing legislation.

Many excessive regulations in the form of decisions, directives and lower-level acts should be simplified or entirely abolished. ●

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INVESTING IN POLAND

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A

s part of its mission to support foreign investment in Poland, Warsaw Business Journal aims to recognize companies that have made a large, positive contribution with their investments in Poland. To accomplish this goal, WBJ is organizing a competition for “Investment of the Year,” to be presented at the Investing in Poland Gala ceremony on November 20, 2012.

OCTOBER 15-21, 2012

Nominees for the awards will be chosen by selected chambers of commerce partners.

Below we present the profiles of two companies and their investment nominated for Investment of the Year: Finnish Itella’s SSC center in Toruƒ, nominated by the Polish-Scandinavian Chamber of Commerce, and German MTU’s diesel engine plant, nominated by the Polish-German Chamber of Commerce and Industry●

SSC investment

Engine manufacturing

Itella touts Toruƒ center’s sustainability, innovativeness

More innovation in Zachodniopomorskie

Finnish BPO company Itella has chosen the path less trodden by locating an SSC facility in Toruƒ

Sustainable investment The investment is also a sustainable one in many ways. Itella says the new center has provided many new jobs in a city where there is no similar business. The center, it says, pro-

MTU Polska, a diesel-engine manufacturer and the Polish subsidiary of the Tognum Group, will build a factory in Stargard Szczeciƒski that will manufacture components for Tognum’s MTU brand diesel and gas engines from the second half of 2013.

The investment is valued at z∏.350 million and will involve the establishment of a new production plant for engine components (mainly diesel engines) for application in various sectors, including for marine and rail vehicles, as well as for power supply. This will enable the Tognum Group, one of the largest producers of diesel engines in the world, to significantly increase its production capacity. In addition, the investment will include an R&D department for electronic components of engine control systems.

COURTESY OF ITELLA

Finnish BPO company Itella’s Financial Shared Service Centre & IT Competence Centre in Toruƒ has given a major boost to the local area by providing challenging employment opportunities for the local workforce. It has also shown that advanced service facilities can be successfully located outside of Poland’s major cities.

The Toruƒ center incorporates a Tier 3 data center that connects four functions: a shared services center for the Itella Group, nearshoring for customer operations in the Scandinavian countries and Germany, BPO capabilities for Polish customers, especially in finance and accounting, and IT competence center operations.

The Toruƒ center became operational in 2011 and currently employs 85 people, with the plan being to increase headcount to 450-600. Up until this point, z∏.5.2 million has been invested in the scheme, with the company planning to invest a total of €6.5 million (z∏.27 million) over a period of five years.

Itella says the investment can be characterized as innovative partly because of its location, since the northern city of Toruƒ is not normally associated with large outsourcing investments. Most companies choose to locate in or near major cities such as Warsaw, Kraków and Wroc∏aw.

Itella also cites the center’s numerous highly developed IT platforms and systems as being among the scheme’s innovative features.

MTU plans to build a z∏.350 million production plant in the voivodship

Itella’s IT Competence Centre in Toruƒ vides opportunities for young and educated people to stay in their place of origin and gain experience and grow their careers.

Moreover, the facility’s IT Competence Centre is located in a refurbished 19th century historical building.

The firm also emphasizes that the investment was carried out according to Itella Group Company Responsibility Standards, which indicate ways of operating responsibly towards customers, employees, partners and the environment.

Long-term impact One of the major long-term impacts the investment is expected to have on the local area is that, being the first BPO center in Toruƒ, it has the potential to be a big employer in the city and surrounding area. The company also says it wants to involve itself in supporting the local university with its practical knowledge,

and create opportunities for students to gain experience by taking part in internship programs.

In terms of its impact on Poland, the company says its decision to locate in one of the country’s smaller cities has shown that BPO companies do not necessarily need to locate in or near big and well-known metropolises.

“Our success in this location shows that it is a good idea and creates a perspective for other middle and small cities to get investors from this sector,” Joanna Galuba, marketing manager at Itella Information, wrote in an e-mailed comment.

“It is an interesting project because Itella is a Finnish state-owned company. This means that the Finnish government gave its trust to Polish employees and accepted a reduction of employees in Finland to gain financial and operational benefits,” she added. ●

Welcome jobs Polish employees will be involved in both preparing the site and erecting the plant itself. The factory is expected to become fully operational in

2015, by which time it will be employing some 200 Poles.

That would be welcome news in a region that has an unemployment rate well above 16 percent and rising. The company says there will be attractive job offers for both blue- and white-collar employees. The firm also plans to work with universities on research and development.

The company says it will also work with small and mediumsized enterprises in the region.

“We don’t only want to be known, we want to add to the development of this region,” said Karl Kollmuss, president of MTU Polska at the launch of construction of the factory in July this year.

“This is a great day for our voivodship, for Stargard. The bar has been set really high.

But the voivodship and Stargard are good partners to realize such a complicated and innovative project,” said

MTU implements highly innovative technologies based on developments within Tognum, which has significant experience with diesel engines including state-of-the-art machines and cost-effective solutions.

From mid-2013, production output from the planned Stargard Szczeciƒski plant will include cylinder heads and large-volume parts for Tognum’s MTU brand Series 2000 and 400 engines. They will be delivered to the assembly lines of a plant in Friedrichshafen, Germany and to plants in Aiken, in the United States and Suzhou, China, where MTU engines are manufactured for the Tognum Group. ●

MTU Polska is the Polish subsidiary of the Tognum Group, one of the world’s leading specialists in engines, propulsion systems and distributed energy systems. MTU itself has existed as a firm for a century. The Stargard Szczeciƒski factory will be Tognum Group’s first foray into Poland. ●

SHUTTERSTOCK

services industries.

Itella Group comprises three business groups: Itella Mail Communications, Itella Information and Itella Logistics. The group is wholly owned by the Finnish state.

Net sales amounted to €1.9 billion in 2011. ●

Innovative

About MTU Polska

About the Itella Group Itella operates in several European Union countries, as well as in Norway and Russia.

The company says that its international operations account for about one-third of its business.

The company’s key customer industries include the media, as well as the trade and

Andrzej Jakubowski, Deputy Voivode of Zachodniopomorskie voivodship, at the ceremony.

The new factory will build diesel engine components

OPINION & ANALYSIS

OCTOBER 15-21, 2012

www.wbj.pl

Nord Stream pipeline feeds Europe’s natural-gas dependence V

ladimir Putin inaugurated the second line of the Nord Stream natural gas pipeline last Monday, nearly doubling the direct natural gas transit capacity between Russia and Germany to 55 billion cubic meters per year. The Nord Stream pipeline allows Moscow to bypass continental transit states through an underwater route.

Running under the Baltic Sea, the pipeline specifically circumvents

“The Nord Stream pipeline allows Moscow to bypass continental transit states through an underwater route” Ukraine, an important transit state for Europe-bound natural gas, that frequently is problematic for Russia when it tries to leave Moscow’s sphere of influence and run closer to the West.

The geopolitical impact of the Nord Stream project has prompted Russia to accelerate its strategy of sidelining what it sees as problematic transit states through expensive direct pipelines to its consumer markets.

However, challenges are growing in Russia’s Western destination markets.

Indeed, Europe is continuing its

allows Russia to funnel higher volumes of natural gas into non-Ukrainian pipelines. As a result, Kiev loses one of its major leverages against Russia, particularly in the face of the Kremlin’s push to grab ownership of Ukraine’s valuable natural gas storage network.

Russia’s efforts to ensure consistently high volumes of natural gas to key European markets goes beyond its attempts to bring back some of its former Soviet states within its influence.

Natural gas revenues are one of the key pillars of the Russian economy, and those revenues have begun to be threatened by changes in the market dynamics in the European continent.

efforts in becoming an integrated liberalized market by expanding alternative sources, challenging Russia’s decade-long dominance of the continent’s energy sector.

Geopolitical advantages The first branch of the Nord Stream pipeline became operational in May 2011. To a large degree, the pipeline was constructed in response to the European energy crises of 2006, 2008 and 2009, when Russia cut off supplies to Ukraine to counter rising opposition to Moscow’s influence. The supply cuts affected downstream European customers who relied on Ukraine to transit Russian natural gas.

To ensure stable supplies amid potential future disputes with Ukraine or Belarus, Russia financed and constructed Nord Stream, creating a direct export avenue into Germany.

Russia is slated to begin construction next month on the South Stream pipeline project, a tactic meant to further circumvent transit countries. The South Stream pipeline will run under the Black Sea and through the Balkans to deliver natural gas to southwestern Europe.

While constructing underwater pipelines is incredibly expensive, such pipelines give Moscow significant geopolitical advantages. Not only does it allow Russia to engage more freely in energy wars with Ukraine, it also

Three strategies The natural gas crises of 2006, 2008 and 2009 compelled Europe – particularly the European Union – to form a framework that would insulate the continent from similar shocks in the future. To lessen their dependence on Russian natural gas, European nations are pursuing three strategies on national and transnational levels.

First, the European Union enacted a set of policies to address the monopoly of large companies, particularly Gazprom, in the continent’s natural gas market. The bloc’s Third Energy Package mandates the unbundling of production, transport and distribution operations for natural gas. This legal

framework increasingly is being used

by Central European nations, especially the Baltics, seeking to ease Gazprom’s dominance over all branches of their energy supplies. The European Commission’s upcoming probe into Gazprom’s monopolistic practices is a clear example of the growing pressures on Russia from the regulatory side of Europe.

Second, European nations have made technological and political investments in developing alternative sources of natural gas. The accelerated construction of liquefied natural gas import terminals theoretically is allowing countries with sea access to become more energy independent, giving them greater pricing and unbundling negotiation leverage over Russia.

Third, Europe’s natural gas market is becoming increasingly integrated through physical interconnectors among countries. This aspect of Europe’s liberalization decreases Moscow’s ability to create tailored energy strategies for different countries. For example, it is offering gas discounts to Bulgaria to accelerate the construction of the South Stream pipeline but keeping prices high in the Baltics as a way of maintaining political pressure. A unified regional market in Central Europe already is helping nations insulate themselves from minor pricing and supply differentials.

11

Stratfor

New environment These changes in the European natural gas market pose several challenges for Russia. Moscow is attempting to maintain vital revenue streams from natural gas exports while preserving the political advantage of being the major supplier of a strategic commodity to the continent.

In this new environment, Moscow must ensure that it continues to cultivate good relations with its major customers. For example, it may have to become relatively accommodating to smaller EU members. However, as long as the main heavyweights of the European Union – such as Germany – continue to receive direct, uninterrupted and cheap supplies from Russia, the incentive to throw their support behind expensive integration and diversification efforts in Central Europe will remain limited.

Rather than only serving additional natural gas demand in Europe, the expansion of Nord Stream and the construction of South Stream are key tactics in Gazprom’s response to increasing diversification and liberalization efforts on the continent.

“Nord Stream pipeline feeds Europe’s natural-gas dependence” is republished with permission of Stratfor.

Stratfor.com

Lithuanian elections – an (un)real chance for change?

Kinga Dudziƒska

O

n October 14, Lithuania was due to hold the first round of parliamentary elections. The second round will be held on October 28. Although the current government of Prime Minister Andrius Kubilius is the first since 1991 that has survived a full term, the chance that the ruling party (The Homeland Union – Lithuanian Christian Democrats) will form the government after these elections is close to zero.

This year’s elections are being held under the shadow of the country’s economic collapse. As a result of the global economic crisis, the Baltic States – largely dependent on foreign investment and foreign markets – saw their economies tank. Lithuania was forced to take action to save government finances by increasing taxes and reducing pensions. In addition, food, electricity and heating prices continue to rise. The government has come under harsh criticism for this state of affairs, and many blame Mr Kubilius for the country’s predicament.

Despite this, in recent weeks the prime minister’s party has gained a few extra points of support (as many as 10 percent) in the polls.

Nevertheless, the opposition parties still enjoy the greatest popularity.

These include the Social Democratic Party, the populist Labour Party, led

by Viktor Uspaskich (who is suspected of tax fraud), and the Order and Justice party, headed by impeached former President Rolandas Paksas.

Even so, the final results of the election, and especially the composition of the new coalition government, are difficult to predict. This year’s election campaign has revealed the growing fragmentation of Lithuania’s political scene.

Possible outcomes Lithuania uses a mixed electoral system, with half of MPs elected from a national list and half elected in single-mandate constituencies.

It’s impossible to rule out a situation in which the ruling party, which

is losing support, would not join any new government, and would instead be replaced by the Social Democrats.

That scenario would guarantee the continuation of a relatively restrictive financial policy.

“This year’s elections are being held under the shadow of the country’s economic collapse” Meanwhile, if the populists seize power, it could cause a significant change not only in domestic politics – understood as a withdrawal from a restrictive finance policy – but also in the area of foreign policy.

The opposition parties, especially the Social Democrats and the Labour Party, favor improving relations with neighboring countries.

The Labour Party advocates “econonomizing” Lithuania’s foreign

policy, which in practice would mean closer relations with Russia and Belarus. Projects that enhance trade and transportation ties between these countries and Lithuania would be prioritized.

In addition, while the Kubilius government had hoped to reduce the country’s energy dependence on Russia, if the opposition gains power, it will likely water down that policy.

Relations with Poland The Social Democrats also point out the need for changes in Lithuanian foreign policy, including the improvement of relations with neighboring countries, such as Poland. However, a change of power does not directly guarantee a breakthrough in relations between Poland and Lithuania.

That’s because Polish authorities have made the improvement of bilateral relations dependent upon the extent to which Lithuania protects its Polish minority. The new

government will have a limited impact on this issue. It requires a change of existing legislation, which will be up to a more or less cooperative parliament to make.

In this regard, a lot depends on the political position that the Electoral Action of Poles in Lithuania (EAPL) takes. The party, which represents the interests of the Polish minority, hopes to cross the threshold needed to get into parliament – 5 percent of the vote. But that still remains a big question – especially considering demographic changes and increasing emigration.

For the EAPL to gain more than 5 percent of the vote, it would require not only the support of the Polish and Russian minorities, but also at least a small percentage of the votes of Lithuanians.

Kinga Dudziƒska is an analyst at the Polish Institute of International Affairs PISM.pl

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 editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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PR & MARKETING SPECIALIST

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COVER STORY

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Asseco Poland management reduced IT company Asseco Poland has decided that there is no need for separate vice presidents to manage its infrastructure department, building automation department and its data center, Parkiet reported. Owing to the changes Wojciech Woêniak, head of the division created after the merger of subsidiaries Asseco Systems and Alatus, has stepped down. Another change in Asseco came after Wies∏aw Walendziak, vice president of Prokom Investments, resigned from his position on Asseco Poland’s board, after holding it for a little over two months.

ZUS to announce IT tenders At the beginning of next year, Poland’s state-run Social Insurance Institution (ZUS) will take concrete steps towards tackling its dependence on its sole IT services supplier – Asseco Poland – and will announce two tenders. Apart from weakening Asseco Poland’s position with relation to ZUS, the move is also intended to cut costs for network maintenance.

Smartphones fuel online gaming market Central and Eastern Europe’s market for video games accessed online is projected to increase to z∏.6.02 billion from a present value of z∏.3.8 billion by 2016, according to Roland Berger Strategy Consultants. During the same period, the global casual game market is expected to grow to $46 billion.

Officials target counterfeits The Polish Security Printing Works (PWPW) and the Ministry of Finance have presented a new system of verification of product excise bands, which is expected to make it easier for consumers to verify the legality of products they buy. The move is aimed at curbing illegal cigarette and alcohol sales. ●

OCTOBER 15-21, 2012

Mark Ordon

The Cloud

Cloud computing presents opportunities, poses threats Polish businesses are using the cloud in ever greater numbers. But is it secure enough?

Cloud computing is a growing worldwide trend, due to its flexibility, easier cost control and user-friendly access. The new technology is also gaining ground in Poland: A study by Cisco earlier this year showed that 42 percent of Polish businesses now use the cloud in some shape or form.

Yet even owners of these same businesses view data security in the cloud as their biggest concern and are equally skeptical that the resources available in Poland – financial and technical – can encourage further development.

Are these justified concerns or symptoms of hi-tech anxiety?

At least one authority in Poland shares the skepticism.

Wojciech Rafa∏ Wiewiórkowski, inspector general for personal data protection in Poland, stated outright late last year that in his opinion, the level of security in the cloud is not sufficient to allow the safe processing of person-

SHUTTERSTOCK

12

The cloud can sometimes be safer than more traditional alternative technologies al data. One of the conclusions at a cloud computing conference held at the end of May in Warsaw was that processing data in a cloud is cheap and convenient, but not always

safe.

Cloud security a priority It seems though that cloud vendors are putting a lot of emphasis on the security

Cloud computing definitions The European Union uses a definition which declares that cloud computing consists of a set of technologies and service models that focus on the internet-based use and delivery of IT applications and services.

Cloud computing can generate significant economic benefits, because on-demand resources can be configured, expanded and accessed on the internet quite easily.

However, the most common definition referred to as of late is the one presented by the National Institute of Standards and Technology (NIST) of the US Department of Commerce in September 2011:

“Cloud computing is a model for enabling ubiquitous, convenient, ondemand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

This cloud model is composed of five essential characteristics, three service models, and four deployment models.” ● Source: NIST Special Publication 800-145, September 2011

Cloud computing deployment models include: Private Cloud - The cloud infrastructure is provisioned for exclusive use by a single organization comprising multiple consumers (e.g., business units). It may be owned, managed, and operated by the organization, a third party, or some combination thereof, and it may exist on or off premises. Source: NIST Special Publication 800-145, September 2011 Public Cloud - The cloud infrastructure is provisioned for open use by the general public.

It may be owned, managed, and operated by a business, academic, or government organization, or some combination thereof. It exists on

the premises of the cloud provider. Source: NIST Special Publication 800-145, September 2011 Hybrid Cloud - The cloud infrastructure is a composition of two or more distinct cloud infrastructures (private, community, or public) that remain unique entities, but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load balancing between clouds) ● Source: NIST Special Publication 800-145, September 2011

aspect. Grzegorz Dobrowolski, sales manager for data center and virtualization at Cisco Systems Poland, said that security is a key part of the Cisco cloud strategy, which provides cloud solutions for private, public, and hybrid clouds.

Mr Dobrowolski said this is assured by the Cisco SecureX technology, an integral part of all Cisco architectures. It is a context-aware security framework that allows customers to easily define and manage business-relevant security policies.

It provides further security enforcement elements in the form of appliances, modules, and cloud services. Most importantly, he added, these mechanisms have been proven effective.

Large cloud service providers such as Amazon, CSC, IBM, Salesforce.com and Verizon Business have built robust security mechanisms – offering both application-level security as well as firewalls and encryption at the infrastructure level. These service providers store millions of gigabytes of sensitive data in the cloud and have so far suffered no serious security breaches.

Hard to believe? A recent article on cloud computing on businessinsurance.com, a USbased portal for risk and benefit management experts, seems to confirm the claim. With large companies entrusting more and more of their data to

external sources, the stakes are high and security has the highest priority. In fact, the conclusion is drawn that “data breaches seem to be everywhere these days except the one place everybody fears – the cloud.”

The author quotes Jay Heiser, vice president of research at technology consultant Gartner Inc. “Cloud providers put more emphasis on security than other entities.

If they didn’t, they’d fall over.”

Other experts agree.

“Potential data breaches in the cloud are talked about a lot, but there hasn’t been much to point to,” said David Black, chief information security officer at Aon eSolutions, the technology solutions business of Chicago-based Aon Corp.

“The reality is that cloud vendors know that security is the big risk to their entire business model. If they were to experience a major breach, they’re sure to go out of business,” he added.

Mr Wiewiórkowski, Poland’s inspector general, also admits that in terms of classic protection from unwanted access to data, cloud solutions can be safer than traditional technologies. Most data centers are well protected against external attacks, while centralized data storage means limited sources of a potential data leak. The real concern in his view is the matter of who has legal access to data stored in a

COVER STORY

OCTOBER 15-21, 2012

Who can access data?

Today it is difficult to contractually limit the number of entities that can legally access data stored in a cloud, the chief inspector said.

Of course, a cloud vendor will always assure that we have full and exclusive control over our data, but we cannot be completely sure that the data aren’t processed by third parties. In many cases, we may not be aware of the obligations a cloud provider may have to provide data to public authorities (especially police or special services). For example, in the United States, special services have broad uncontrolled access to such data. This creates major issues for the data owner, who is legally required to have full control of how it is processed, especially when sensitive personal data is concerned.

Is there a way around this issue? Thomas Trappler, a USbased cloud computing risk mitigation expert agrees that data access and protection are key issues to address when investigating or adopting a cloud computing service.

How do you ensure that you have continued access to your data, and that others who shouldn’t be able to access your data don’t? He suggests that to help mitigate risk in this area, it’s important to take a deeper

dive on the infrastructure and security issues when a firm comes to do its research.

Cloud providers are, of course, quite aware of these growing concerns and are addressing them. So for example, in addition to technology solutions for cloud security, Cisco also provides advisory services to help customers with cloud deployments.

Mr Dobrowolski explained that cloud computing represents a shift to new technologies, but even more importantly, it means a shift to new business computing models. So when we talk about security of the cloud, it is important to bear in mind that cloud security actually begins with governance considerations. Providers of cloud services as well as subscribers to those services need to ensure that their organizational governance is up to date to support these changes. All related policies and procedures need to be updated. Subscribers need also to review information offered by their cloud provider to understand how providers manage application development, infrastructure design, security architecture and implementation, as well as monitoring, auditing, and security incident response processes.

But, he stressed, security is not the responsibility of cloud providers alone. If a subscriber does not have sound governance and a strong security pos-

13

Shale gas exploration struggles Companies looking for shale gas in Poland are progressing much slower than expected, blaming bureaucracy and uncertainty regarding future tax burdens. They have made only 30 vertical drillings, seven fracturing operations, and just two horizontal drillings, according to data from the Ministry of Environment, as reported

by Rzeczpospolita.

PZU to spend z∏.7.5 bln on acquisitions

SHUTTERSTOCK

cloud and how that data can be processed.

www.wbj.pl

Use of the cloud is becoming increasingly popular among Polish firms ture to start with, moving to the cloud will not solve their security problems.

What’s next?

There still remains a lot to be done in creating perfectly secure cloud environments, especially in the more abstract area of cloud security governance, but the obvious financial and flexibility benefits are an encouragement. Mr Wiewiórkowski definitely sees a future for the cloud, although he

remains cautions. He would definitely use the technology for non-sensitive data, but would rather keep personal data in-house.

Nevertheless many companies have made the leap.

Mr Dobrowolski gives the example of Salesforce.com, which offers very successful business cloud applications dealing with highly sensitive corporate data. Also, he added, people use the technology every single day, even without consciously thinking

that they’re in the cloud – Facebook is a good example here.

He acknowledged that companies which are considering a migration to either a private, public or hybrid cloud should take security very seriously. But if properly implemented, use of a cloud can bring many benefits.

Above all, cloud governance implicates an increased need in visibility and auditing capabilities between data owner and cloud provider. ●

Poland’s largest insurer PZU has a fair amount of cash that it’s willing to spend on acquisitions outside of its home market. “We have some z∏.5 billion of free cash, which could be raised to approximately z∏.7.5 billion with a loan,” Andrzej Klesyk, CEO of PZU, told Reuters in an interview. He also said that the insurer could team up with certain private equity funds to finance some bigger transactions. ●

14

MEDIA PATRONAGE

www.wbj.pl

OCTOBER 15-21, 2012

Business innovation

Miros∏aw Godlewski, president and chief executive officer at Netia sentations and speeches were also recorded and will soon be made available at biznestorozmowy.pl.

In addition, the congress’ participants who use iOS or

Android mobile devices were able to download the agenda, create their own schedule and read speaker bios. The app was used by nearly half of the participants, Netia says. ●

COURTESY OF NETIA

Stewart Butterfield, cofounder of photosharing website Flickr

and online security. He spoke about the ways in which companies can deal with global network threats, as well as the most modern ways companies can protect themselves.

Finally Tomas Qvist, vice president of business unit networks HR and organization at Ericsson, spoke about the innovation and world trends in technology.

Renata Filipek-Bary∏owska, director of commercial business, customers division at Netia, said that her company aims to deliver the values that the congress was promoting – integration, innovation and inspiration – to its clients.

“Netia and our comprehensive solutions provide our customers with inspiration every day,” Ms Filipek Bary∏owska said. “Among the innovations that we have introduced to our clients, one can find video conferences Netia Video Anywhere, which is accessible on all mobile devices and computers.”

For those who were unable to attend the congress in person, Netia prepared an live online feed in HD. All the pre-

On October 4, Netia’s “Business is Talking” congress brought together 1,200 participants, special guests and several hundred more who followed the presentations and debates online.

This edition’s theme was “Integration – Innovation – Inspiration.” In line with this, participants had the opportunity to listen to presentations by some special guests, among them the cofounder of photosharing website Flickr, Stewart Butterfield. Mr Butterfield talked about his experience of working with Flickr, and shared his observations on the impact of innovation on creating startups.

Ludo Wijckmans, who leads the sector of communication and media in the EMEA region at Microsoft, was also a special guest speaker at the congress.

Mr Wijckmans talked about innovation and the newest trends in business, as well as the future of technology.

Another guests speaker was Mikko Hypponen, the chief research officer in F-Secure and an expert on cyber-crime

The congress brought together 1,200 people

COURTESY OF NETIA

COURTESY OF NETIA

The congress, organized by Netia, aimed to promote “integration, innovation and inspiration” in business

COURTESY OF NETIA

‘Business is Talking’ conference offers discussion on technology, innovation

Netia aims to deliver the values the congress was promoting – integration, innovation and inspiration

POLITICS

OCTOBER 15-21, 2012

www.wbj.pl

15

Political PR

Creating charisma Remi Adekoya: How do you assess the recent moves by opposition Law and Justice (PiS), which has organized debates, a street protest and announced its candidate for prime minister all in the space of a few weeks?

Piotr Tymochowicz: First, PiS organized an economic debate. Then it organized a protest march and finally it announced a professor as its PM candidate. The chronological sequence was meant to create the impression that PiS has a perfectly-prepared plan for everyone. For the religious, the nationalistic and, in general, the whole country.

During the protest, several aspects were employed: the religious, with a priest leading mass before the march; the material, with the involvement of the Solidarity labor union; the political, with PiS’s involvement; and there was also a nationalistic element.

But is organizing a protest march one day and presenting a professor as a candidate for prime minister the next a cohesive PR campaign?

In the first Italian restaurants opened in Warsaw, you could order pizza and spaghetti as well as Polish pork chops and cabbage. The fact the menu was not cohesive didn’t bother the clients.

You notice such inconsistencies if you are a journalist or a PR specialist. The consumer doesn’t see it, just like he doesn’t wonder why he can order pork chops in an Italian restaurant. What he sees is that there is something he likes in PiS’s program.

Nationalists see PiS has an offer for them; that’s all that interests them. Those who want economic change see PiS has a relatively cohesive economic plan and that’s enough for them, too.

In that sense, PiS’s moves are good PR-wise. Nobody likes everything in New York but everyone can find something they do like. It’s the same with political parties.

PiS is obviously waiting for a serious crisis in order to win back power. But do you think that in a crisis, Poles would go for a radical party?

Not every country that experienced a crisis in the 1930s went

fascist. But that’s not because those countries had different mentalities. Please remember that nations as different as Italy and Japan embraced fascism.

It’s simply a question of whether such a radical political offer appears during a crisis – an offer which provides escapism.

During a crisis, people feel they have nothing to lose and that only a so-called strong man can lead them out of the wilderness. Weak people in particular want to hide under the wings of someone who appears omnipotent.

Do you think Poles view PiS leader Jaros∏aw Kaczyƒski as a strong man?

Unfortunately, yes, thanks to PR. Do you think Adolf Hitler was a strong man? He was a scrawny little wimp you could knock down with one finger.

But his image was created by PR. Stalin, on the other hand, was a strong man – as well as a psychopath.

How can the Democratic Left Alliance (SLD), the party you currently advise, operate in a political scene dominated by two conservative parties, PO and PiS with 70 percent support between them? Maybe Poles are natural conservatives?

Poles are not natural conservatives. Poland is divided along two fault lines. The first is geographical with vast differences visible depending on which foreign power ruled a particular region 150 years ago: Prussia, Russia or Austria.

Then there is the generational divide. Older people don’t want anything new but the young ones have the internet, they travel and they are getting increasingly angry at what is happening in Poland.

They won’t be locked up in conservative cages. The party that presents them the best offer will win the next elections.

SLD has three opponents: [the ruling] Civic Platform (PO), PiS and the relations between those two parties.

The bigger the battle between those two parties, the worse for SLD because then all the attention is on PiS and PO. SLD must show that, ultimately, both parties are simi-

lar, the only difference being that one is more conciliatory and the other is more radical.

When Prime Minister Donald Tusk was an opposition politician, he was often described as weak, dull and uninspiring.

Today he is considered a strong leader, some even say a statesman. Why did perceptions of him change so drastically?

There are two ways to create the image of a politician. Who is charismatic? The person who has an aura of charisma about him and/or the person who is a very skilled politician.

Those two characteristics can go together or a politician might have one but not the other.

When Donald Tusk was leader of the opposition, he had the aura of position but he didn’t have the skills needed to be convincing. People saw that contradiction and thus didn’t have a high opinion of him.

Today, he has learned the skills needed to be a convincing leader.

Who in your opinion is the most charismatic public figure in Poland?

Father Tadeusz Rydzyk [the controversial ultra-conservative Catholic priest]. He is an absolute genius. And there are some who have the aura but no skills whatsoever. Jaros∏aw Kaczyƒski, for example, is intellectually weak and has poor skills.

Then why is he the leader of the right?

There are several conservative politicians who are stronger and wiser than Mr Kaczyƒski.

But none will allow the other to be leader. They would slit each other’s throats if they had to compete for power.

So the best option is to pick a cleaning lady who will not be a threat to any of them. Only on that condition can they cooperate. And it will be in their common interest to convince people that the cleaning lady is the most charismatic person in Poland. That’s how Jaros∏aw Kaczyƒski was created. After all, he used to clean Lech Wa∏´sa’s shoes in the past – and I mean that literally.

Who do you think is also leadership material apart from Father Rydzyk?

Foreign Minister Rados∏aw Sikorski, who is underrated in Poland. He should have become president, not Bronis∏aw Komorowski. He would be a strong president.

But Poles seem satisfied with President Komorowski. His

TOMASZ RADZIK SE / EAST NEWS

WBJ sits down with well-known political PR strategist Piotr Tymochowicz, who has advised politicians such as former Prime Minister Leszek Miller, farmer turned deputy PM Andrzej Lepper and political maverick Janusz Palikot. Here, he discusses PR in politics today, perceptions of charisma and how political images are created

Piotr Tymochowicz says you have to be a “psychopath” to want to be president or prime minister approval ratings are sky-high.

He is successful because he is from a popular party, PO. He would never have become president if he was not a member of PO. In terms of his image, he is winning because he is wishywashy. A strong president from a strong party would arouse huge aggression.

But Mr Komorowski did arouse aggression from PiS supporters at the beginning of his presidency.

For some time, but he did the right thing by not responding and avoiding confrontation.

And so the shots in his direction never hit the bull’s eye.

Does it take a specific type of personality to be successful in politics?

You have to be a psychopath to want to become prime minister or president. You must be autistic to condemn your family to what is, in effect, a kind of suffering for the rest of their lives just because you want to rule other people.

A normal person wouldn’t do that to his family. Politicians also often have huge inferiority complexes. They feel better in a herd. Political parties are herds.

And they win elections not for the country but so the herd can have the benefits, material and otherwise, of power.

Meanwhile, the man who wants to be at the top wants to control the distribution of those benefits and in that

way control the herd.

What has changed in political PR over the last two decades?

It used to be parties who decided everything. Today, it’s the masses who decide.

Before, we used to do surveys to find out what level of

ed him to act, according to our survey.

But people as a group also learn and you can’t repeat the same cases all the time. Unless you have a primitive electorate like PiS does. Then you can repeat the same cases and they’ll keep buying it.

“There are several conservative politicians who are stronger and wiser than Mr Kaczyƒski. But none will allow the other to be leader” taxes people wanted and that sort of thing.

Today, we do surveys to decide what demeanor a politician should adopt.

Should he be aggressive or conciliatory towards a journalist? Should he smile during a TV interview? If, yes, how often during 15 minutes? How should he smile, ironically or contemptuously? Everything is preplanned.

Donald Tusk uses such surveys. I recently asked my trainees to conduct a survey asking how people want the PM to behave regarding particular issues.

And then I observed Mr Tusk. I saw that he acted exactly the way people want-

Finally, what do you think happened to Janusz Palikot?

He showed a lot of promise but seems to be fading away now.

Janusz Palikot is very intelligent but he also has a huge ego. I warned him that if he thinks he does not need to stimulate his supporters everyday he is mistaken. He felt he knew better. It’s a pity, but that often happens to people who have achieved a lot in life. At a certain point, they feel they know best and don’t need advisors.

However, a wise leader is one who surrounds himself with people wiser than himself when it comes to particular issues. ●

Skanska Property Poland is about to launch its first office project in Kraków

Construction on Nowy Âwiat BIS offices is set to commence in Q2 2013 17

18

LOKALE IMMOBILIA

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

WSE-listed developer Globe Trade Centre (GTC) has acquired from Polnord the remaining 50% stake in the planned Galeria Wilanów shopping center project in Warsaw. It has thus become the sole owner of the 80,000-sqm scheme. The first to be developed will be a 60,000-sqm phase whose value is estimated at €160 million. GTC plans to go ahead with construction on Galeria Wilanów as soon as it has obtained all the administrative permits for the mall.

Echo to open outlet center Warsaw Stock Exchangelisted developer Echo Investment is set to open the first phase of its Outlet Park Szczecin retail project in Szczecin in northwestern Poland on November 7. The scheme, which is already almost fully leased out, will house 70 retail units. ●

In this issue Poland at Expo Real . . . . . . . . .16 Skanska in Kraków . . . . . . . . . .17 S+B plans . . . . . . . . . . . . . . . . . . .17 Chopin Airport City . . . . . . . . . .17 New BBI projects . . . . . . . . . . . .17 Kraków revitalization . . . . . . . .18 Nowy Świat offices . . . . . . . . . .18 Property-related stocks . . . . . .18

Expo Real 2012

Poland shines at Munich property fair Investors commended the stability of the country’s market and expressed optimism about its potential for growth Poland provided a strong presence and enjoyed significant investor attention at this year’s Expo Real commercial property fair in Munich, Germany, with the stability of the country’s real estate market proving to be a recurrent theme at the event.

Sustained interest Asked about investor inquiries concerning Poland at this year’s Expo Real, Przemys∏aw Felicki, director in the capital markets department of CBRE, stressed that the country continues to see considerable demand for prime commercial space.

“Both the funds which are already present in our market and those, including entities from the US and Scandinavia, which are still preparing for an entry, are interested in new acquisitions in Poland, Mr Felicki said.

He added that investors were looking for products in the office, retail and logistics sectors alike. When it comes to office space, investors were mostly interested in Warsaw locations, whereas in the retail

IVG Immobilien, said that his company is focusing on the office sector in Poland, which it sees as very liquid and offering stable income and good returns. IVG has already raised €100 million in equity for its IVG Warsaw fund.

segment of the market there was also demand for prime regional malls.

According to Mr Felicki, the commercial property investment volume in Poland amounted to €1.1 billion in the first three quarters of 2012.

“By the end of the year, the figure will likely go up to around €2 billion so the prospects are promising,” he said.

Growth potential The Polish capital remained in the spotlight as the Polish city which has been getting by far the most investor attention of late. Discussions focused on issues including

Market stability During a special panel discussion devoted to Poland, representatives of two of the largest investment funds active in the country commended the Polish market for its stability and liquidity, saying that these factors allow for a relatively safe allocation of assets.

Stefan Brendgen, CEO at Allianz Real Estate Germany, noted that investment in real estate remains an attractive option, compared to other alternatives, including bonds.

He added that many Western European cities, including London, Paris and some German cities, are now overpriced. Warsaw offers yields of from 6.5 percent to 7 percent, which are unheard of in many other European markets, Mr Brendgen said.

Bernhard Berg, member of the executive committee of

the amount of new office supply that Warsaw could see developed in upcoming years.

Warsaw City Hall representatives stressed that there are still gaps to fill in a number of central locations in the city and that investors are welcome to propose high-rise projects in places including the capital’s Wola district.

Micha∏ Olszewski, deputy mayor of Warsaw, said that according to some estimates the existing office supply in the capital could double to around six million sqm by

2016. Marcin Juszczyk, board member at Capital Park, added that up to five million sqm could now be in the pipeline in the city.

He stressed, however, that the pace of development could be slower due to factors including difficulties in obtaining bank financing.

IVG’s Berg and Allianz’s Brendgen agreed that the Warsaw market is in for growth since it is still relatively small, compared to some of its West European peers.

Adam Zdrodowski

AGNIESZKA KUCZY¡SKA/WBJ

GTC sole owner of Wilanów mall

OCTOBER 15-21, 2012, LI 17/41

There was a lot of interest in the Warsaw stand at this year’s Expo Real

OCTOBER 15-21, 2012

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

17

Seen and heard at Expo Real 2012 Lokale Immobilia reports on some of the major planned real estate projects in Poland that were being presented or discussed at the Munich property fair this year.

Skanska launches Kraków project Chopin Airport City attracts investors be able to present a preliminary architectural vision for the development in the latter location before the end of this AZ year.

Kapelanka 42

S+B plans new Warsaw scheme Real estate company S+B Gruppe is planning a new office investment in Warsaw that will be located on ul.

Królewska in the capital’s central business district, said

“Polish Airports” State Enterprise (PPL), the operator of the Warsaw Chopin Airport in the Polish capital, was presenting its planned Chopin Airport City office project at Warsaw’s Expo Real stand this year.

The company is looking for a partner with whom it could develop the scheme, which will be located on 22.5 hectares of land lying adjacent to the airport and will comprise 17 office buildings with additional functions offering a total of over 170,000 sqm of usable floor space.

Micha∏ Marzec, general director of PPL, said that there

Johannes Bauer from the firm’s CEE asset management team.

The development will comprise over 6,000 sqm of space.

S+B Gruppe is now in the

process of obtaining administrative permits for the scheme and expects to launch construction on the project next year, Mr Bauer added.

AZ

was substantial investor interest in the scheme during the fair and that by this time next year the company would like to have a shortlist of potential partners with whom it will enter detailed negotiations.

He added that PPL hopes to

COURTESY OF CHOPIN AIRPORT CITY

Daszyƒskiego roundabouts.

Waldemar Olbryk, president of Skanska Property Poland’s management board, said that his company should

COURTESY OF QUESTIA

Developer Skanska Property Poland announced it had received a building permit for, and would soon launch construction on, its Kapelanka 42 office project in Kraków, the company’s first scheme in the city.

The investment will comprise two nine-storey buildings offering a total of approximately 30,000 sqm of leasable class-A space. The first phase of the development will deliver over 12,000 sqm of GLA scheduled to be completed at the turn of Q2 and Q3 2014.

Meanwhile, the company continues preparatory work on new Warsaw investments that will involve the construction of several office buildings in the area of the capital’s Rondo ONZ and Rondo

break ground on the Chopin Airport City development in 2014. According to Mr Marzec, who stressed that his company is not in a hurry as it focuses on its core business, the whole project could take up to 10 AZ years to construct.

Chopin Airport City

BBI plans to build in northern Warsaw Warsaw Stock Exchange-listed developer BBI Development NFI is planning a new project in Warsaw that will be located in the northern part of the capital, said Micha∏ Skotnicki, president of the company’s management board.

For the time being, BBI is not revealing any details pertaining to the scheme. Mean-

while, the company is continuing preparatory work on a number of other, previously announced, investments in the Polish capital.

The company is awaiting a building permit for its Nowy Sezam office development in Warsaw’s downtown. It also hopes to develop a high-rise building standing approximate-

ly 180 meters tall, which will deliver around 55,000 sqm of space.

BBI is now also going ahead with construction on the first phase of the residential part of its Koneser mixed-use real estate project in Warsaw’s Praga Pó∏noc district, which will deliver around 90 homes, Mr AZ Skotnicki said.

18

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Construction on Nowy Âwiat BIS offices to launch next year Jones Lang LaSalle to obtain a LEED “Core & Shell” certificate of energy efficiency and

Property-related stocks

environmental performance for the planned scheme.

Closing price on Oct 11

BUDIMEX CELTIC DOMDEV ECHO

The scheme will deliver almost 11,000 sqm of space

Kraków touts huge Nowa Huta revitalization scheme At this year’s Expo Real the city of Kraków was touting “Kraków – Nowa Huta of the Future” – a major post-industrial area revitalization project that, the municipal authorities claim, is the largest scheme of its kind in Europe.

In March this year, an international competition was announced for the redevelopment and revitalization proj-

Security

ect that is expected to transform over 5,000 hectares of land in Kraków’s Nowa Huta district.

Rafa∏ Kulczycki, acting director of the city strategy and development department at Kraków City Hall, said that elements of the best designs will be used while developing the project, which will include extensive commercial spaces,

% change (week)

52-week low

52-week high

55.85

-3.04

45.85

88.35

8.10

-4.14

7.02

20.30

28.10

-2.09

23.51

42.80

% change (year)

Total shares

Market value (z∏. mln)

71.55

25,530,098

1,425.86

19.01

34,231,466

277.27

25.04

24,715,272

694.50

Adam Zdrodowski

COURTESY OF JONES LANG LASALLE

Centrum Bankowo Finansowe Nowy Âwiat plans to launch construction on its Nowy Âwiat BIS office building in downtown Warsaw in April next year. The almost 11,000-sqm facility is scheduled to be turned over for use in June 2015.

The development, which is being designed by the AMC – Andrzej M. Cho∏dzyƒski studio, will be located on Warsaw’s ul. Nowy Âwiat, next to the Warsaw Stock Exchange building, and will include retail spaces and an underground parking lot.

The investor has contracted a team of office building accreditation experts from

OCTOBER 15-21, 2012

eco-housing and green areas.

Mr Kulczycki said that there are investors interested in the scheme, and that City Hall also hopes to obtain EU funds for the project. He said construction on the massive investment will likely commence after 2014 and take as long as two or three decades to complete.

AZ

4.62

8.71

3.05

4.67

3.44

420,000,000

1,940.40

ELBUDOWA

111.90

3.61

87.00

120.00

100.00

4,747,608

531.26

ENERGOPLD

0.39

85.71

0.17

2.71

2.45

70,972,001

27.68

ERBUD

14.69

7.54

11.33

23.20

19.60

12,677,956

186.24

GANT

3.81

-9.50

3.37

9.85

7.35

20,120,000

76.66

GTC

7.80

2.63

5.20

12.49

10.98

319,372,990

2,491.11

HBPOLSKA

0.04

100.00

0.01

1.43

0.75

210,558,445

8.42

JWCONSTR

3.66

-12.65

3.66

8.42

6.10

54,073,280

197.91

LCCORP

1.15

-0.86

0.85

1.48

0.98

447,558,311

514.69

MARVIPOL

9.71

-2.80

6.20

11.00

7.25

36,923,400

358.53

MIRBUD

1.16

0.87

0.98

2.68

2.41

75,000,000

87.00

MOSTALWAR

14.00

-2.10

11.30

25.88

21.00

20,000,000

280.00

MOSTALZAB

1.19

-2.46

0.81

1.80

1.14

149,130,538

177.47

ORCOGROUP

9.78

27.01

6.36

19.55

17.90

107,840,962

1,054.68

PBG

6.31

3.27

3.36

92.00

62.00

14,295,000

90.20

PLAZACNTR

2.20

-7.95

1.93

2.94

1.88

297,181,703

653.80

POLAQUA

3.60

2.56

3.30

8.18

7.50

27,500,100

99.00

POLIMEXMS

0.66

-16.46

0.48

2.04

1.60

521,154,076

343.96

POLNORD

13.52

-7.21

10.49

19.85

11.03

23,798,439

321.75

RANKPROGR

10.10

16.09

7.10

16.97

9.60

37,145,050

375.17

ROBYG

1.35

3.85

1.08

1.75

1.10

257,935,500

348.21

RONSON

0.78

-2.50

0.61

1.15

1.00

272,360,000

212.44

TRAKCJA

0.86

-2.27

0.65

1.87

1.39

232,105,480

199.61

ULMA

41.80

6.63

37.20

74.80

62.90

5,255,632

219.69

UNIBEP

4.98

3.97

3.60

6.28

6.08

34,021,684

169.43

WARIMPEX

3.19

0.00

2.64

5.70

5.43

54,000,000

172.26

ZUE

7.37

1.66

5.07

8.50

8.98

22,000,000

162.14

THE LIST

OCTOBER 15-21, 2012

www.wbj.pl

19

Corporate Services

HR Companies – Temporary Work Agencies Ranked by number of temporary employees converted to FTE in 2010

Type of contracts: Employment contract / Mandate contract / Specific task contract

Number of offices: Worldwide / In Poland

Number of temporary work consultants / Number of temporary work field representatives

Total number of own employees in Poland / Year founded in Poland

1

Grupa Randstad Al. Jerozolimskie 56C, 00-803 Warsaw 22 462-2500/22 462-2600 firma@pl.randstad.com www.randstad.pl

WND 9,694 7,587

WND 5,452 4,922

WND 4,242 2,665

WND 439.1 330.3

WND WND WND WND

WND WND WND

3,085 52

123 WND

391 1994

WND

2

Work Service SA ul. Ruska 51, 50-079 Wroc∏aw 71 371-0900/71 371-0938 work@workservice.pl www.workservice.pl

WND 8,600 WND

WND 3,354 WND

WND 5,246 WND

WND 305.5 WND

WND WND WND WND

54% 45% 1%

23 15

113 WND

399 1999

Supernova IDM Fund - 16.1%; HMS Best Management Idea LTI 10.3% Prologics UK - 36%

3

Adecco Poland Sp. z o.o.

Al. Jana Paw∏a II 19, 00-854 Warsaw 22 376-0900/22 376-0901 biuro.hq@adecco.com www.adecco.pl

WND 7,234 5,613

WND 4,702 3,929

WND 2,532 1,684

WND 282.0 214.0

WND WND WND WND

97% 3% -

5,500 51

44 WND

238 1994

None Adecco - 100%

Anna Wicha

WND 7,160 WND

WND 6,073 WND

WND 1,087 WND

WND 287.0 WND

2.5% 97.5% -

90% 10% -

3,900 50

87 WND

212 2001

None Manpower France Holding - 100%

Iwona Janas

7,000 4,500 3,700

5,900 3,600 2,900

1,100 900 800

WND WND WND

4% 1% 95% -

70% 30% -

12 12

15 10

150 2003

WND

Grzegorz Tyszka

5,268 4,236 3,032

WND WND WND

WND WND WND

180.0 147.5 99.7

0.1% 99.8% 0.1%

90% 10% -

350 34

WND WND

WND 2000

None Trenkwalder International - 90%; Jeroen van der Weijde - 10%

Jeroen van der Weijde

3,640 3,762 WND

3,323 3,472 WND

317 290 WND

143.9 135.0 WND

1.3% 0.7% 98% -

92.6% 6.4% 1%

WND 27

44 6

169 1997

WND USG People

Marek Jurkiewicz

8

Wadwicz Sp. z o.o. ul. Karczewska 18, 04-112 Warsaw 22 345-6601/22 345-6630 biuro@wadwicz.pl www.wadwicz.pl

2,100 2,350 2,000

280 750 600

1,820 1,600 1,400

33.0 40.0 32.5

15% 85% -

95% 5% -

8 8

50 6

WND 1992

Jaros∏aw Adamkiewicz - 90%; S∏awomir Adamkiewicz - 10% None

Jaros∏aw Adamkiewicz

9

Grupa Job - Job Impulse Polska Sp. z o.o. ul. Sielska 8, 60-129 Poznaƒ 61 662-3479/61 662-3479 atokarewicz@grupajob.pl www.grupajob.pl

3,000 2,300 1,800

2,000 2,000 1,500

1,000 300 300

WND WND WND

WND WND WND WND

WND WND WND

30 15

120 WND

60 2003

WND

10

InterKadra Sp. z o.o. ul. Wielicka 50, 30-552 Kraków 12 290-2244/12 290-2245 info@interkadra.pl www.interkadra.pl

1,932 1,345 761

1,900 1,300 750

32 45 11

60.0 37.0 18.0

8% 92% -

55% 43% 2%

11 11

62 62

78 2005

Krzysztof Jakubowski - 33%; Marcin Smoroƒ - 33% None

Marcin Smoroƒ Krzysztof Jakubowski;

11

GP People Sp. z o.o., Sp.k. ul. Mickiewicza 83A, 87-100 Toruƒ 56 651-0468/56 621-0211 kontakt@gppeople.pl www.gppeople.pl

1,370 1,055 525

1,100 938 509

270 117 16

12.9 9.5 2.4

0.8% 99.2% -

71.1% 28.9% -

3 3

5 -

13 2002

WND None

Rafa∏ Dyla

12

Grafton Recruitment Polska Sp. z o.o. ul. Sienna 39, 00-121 Warsaw 22 654-4646/22 654-4333 grafton@grafton.pl www.grafton.pl

778 694 2,000

117 210 600

661 484 1,400

13.5 11.2 9.6

34% 66% -

90% 10% -

70 7

6 -

61 1997

WND

13

Hays Poland Sp. z o.o. ul. Z∏ota 59, 00-120 Warsaw 22 584-5650/22 584-5651 info@hays.pl www.hays.pl

170 140 30

-

170 140 30

WND WND WND

WND WND WND WND

100% -

255 7

WND WND

150 2002

None Hays Specialist Recruitment 100%

14

Stegmann Polska Sp. z o.o. ul. Opolska 1, 40-084 Katowice 32 609-0550/32 609-0559 stegmann@stegmann-personal.pl www.stegmann-personal.pl

111 110 104

23 23 21

88 87 83

5.0 4.9 4.5

5% 1% 94% -

100% -

Over 200 4

4 4

15 2004

WND

15

Devonshire Sp. z o.o.

Al. Jerozolimskie 56C, 00-803 Warsaw 22 820-9360/22 820-9328 biuro@devonshire.pl www.devonshire.pl

130 100 65

-

130 100 65

WND WND WND

20% 57% 20% 3%

92% 8% -

5 2

3 -

20 2006

None Devonshire Recruitment Holdings - 100%

Daniel ¸upiƒski

16

CPL Jobs Sp. z o.o.

Al. Jerozolimskie 81, 02-001 Warsaw 22 488-6500/22 488-6530 warsaw@cpljobs.pl www.cpljobs.pl

WND 6 WND

WND WND

WND 6 WND

WND WND WND

80% 15% 5% -

WND WND WND

20 2

1 WND

27 2006

None CPL Resources - 100%

Gracjan Góêdê

Rank

Income breakdown: S&R / Executive Search / Temporary work agencies / Other

Converted to FTE

www.bookoflists.pl

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

Revenue from Total number of Number of Number of temporary temporary manual workers office workers work services workers (z∏. mln) 2011 (forecast) / 2010 / 2009

4

5

6

7

Manpower Polska Sp. z o.o. ul. Nowogrodzka 68, 02-014 Warsaw 22 504-0715/22 504-0717 manpower@manpower.pl www.manpower.pl Sanpro Job Service Sp. z o.o. ul. Ruska 3/4, 50-079 Wroc∏aw 800-190-911/71 711-0001 cc.info@impel.pl www.stacjarekrutacja.pl Trenkwalder (1) ul. Czerwona 22, 96-100 Skierniewice 46 811-3091/46 811-3097 infopoland@trenkwalder.com.pl www.trenkwalder.pl

Start People Sp. z o.o. ul. Piotrkowska 111, 90-425 ¸ódê 22 661-5902/22 661-5902 mwieczorkowska@startpeople.pl www.startpeople.pl

Notes: NR = Not Ranked, WND = Would Not Disclose. Research for the list was conducted in October 2011.

Number of employees and ownership structure are as of September 2011. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Footnotes: (1) Consolidated data of Trenkwalder & Partner Sp. z o.o., Trenkwalder Patron Sp. z o.o., and Trenkwalder Benefit Sp. z o.o.

Ownership: Polish / Foreign

Top local executive / Title

Kajetan S∏onina General Director

Tomasz Hanczarek President

General Director

President

Managing Director

Managing Director

President

Maciej Kozicki President

President; Vice President

Proxy

Aleksandra Iwicka Country Manager

Micha∏ M∏ynarczyk Managing Director CEE

Aleksandra Knapczyk Country Manager; Proxy

General Director

Country Manager

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) 22 639-8569, or via e-mail to wbjbol@valkea.com. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

20

MARKETS

www.wbj.pl

OCTOBER 15-21, 2012

Stocks report

world stock indices DJIA

NASDAQ

13,326.39 (Oct 11 close)

S&P500

3,049.41 (Oct 11 close)

-1.83% (for the week)

FTSE100

1,432.84 (Oct 11 close)

-3.18% (for the week)

DAX

5,829.80 (Oct 11 close)

-1.95% (for the week)

0.03% (for the week)

Weak start, weak finish

NIKKEI225 7,281.70 (Oct 11 close)

8,546.78 (Oct 11 close)

-0.32% (for the week)

-3.15% (for the week)

CHANGE: 7.49%

CHANGE: 15.13%

CHANGE: 12.20%

CHANGE: 2.28%

CHANGE: 19.85%

CHANGE: -0.16%

(year to October 11)

(year to October 11)

(year to October 11)

(year to October 11)

(year to October 11)

(year to October 11)

52-week high: 13,661.90

52-week high: 3,196.93

52-week high: 1,474.51

52-week high: 5,989.10

52-week high: 7,478.53

52-week high: 10,255.20

52-week low: 11,231.40

52-week low: 2,441.48

52-week low: 1,158.66

52-week low: 5,075.20

52-week low: 5,366.50

52-week low: 8,135.79

Andrew Nawrocki WBJ market analyst Stocks last week started off where they finished the week before, with losses. The Warsaw Stock Exchange’s bluechip WIG20 index performed last week almost exactly opposite to the week prior, shedding value on Monday and Tuesday, while performing better on Wednesday and Thursday, though it dipped again on Friday. Dim growth prospects for the global economy, as well as poor industrial production data from Germany on Monday, October 8, sent shares down.

Losses continued on Tuesday, October 9, as a slew of brokerage downgrades cast doubt over equities. Shares throughout Europe were hit hard, with the WIG20 losing 1 percent, while the overall WIG index shed 0.79 percent.

Wednesday, October 10 started off poorly as well,

Major indices WIG

44,224.67 (October 11 close)

WIG20

2,394.21 (October 11 close)

11.10

10.10

09.10

08.10

05.10

04.10

03.10

02.10

01.10

28.09

27.09

26.09

25.09

11.10

10.10

09.10

08.10

05.10

04.10

03.10

02.10

01.10

2,200

28.09

40,000

27.09

2,260 26.09

41,000

25.09

2,320

24.09

42,000

21.09

2,380

20.09

43,000

19.09

2,440

18.09

44,000

17.09

2,500

14.09

45,000

24.09

52-week low: 2,035.80

21.09

Change year to October 11: 9.12%

20.09

52-week low: 36,653.28

19.09

52-week high: 2,417.32

Change year to October 11: 15.41%

18.09

Change for the week: 1.01%

17.09

52-week high: 44,524.65

14.09

Change for the week: 0.88%

Top 5 HBPOLSKA ALTERCO ENERGOPLD BYTOM ATLANTIS

Closing 0.04 1.38 0.39 0.40 0.42

% change (week) 52-week high 100.00 1.47 91.67 47.98 85.71 0.40 42.86 0.87 35.48 1.21

52-week low 0.01 0.66 0.33 0.25 0.18

Top 5 PZU PKOBP KGHM PBG GTC

Closing 382.00 37.10 158.30 6.31 7.80

% change (week) 5.38 4.21 3.46 3.27 2.63

52-week high 382.80 38.50 174.20 94.65 12.75

52-week low 290.10 30.10 102.40 3.25 5.13

Bottom 5 JAGO REGNON SOLAR POLIMEXMS INVESTCON

Closing 0.04 0.04 9.00 0.66 0.85

% change (week) -55.56 -20.00 -17.73 -16.46 -15.00

52-week low 0.03 0.04 8.99 0.46 0.81

Bottom 5 POLIMEXMS ASSECOPOL TAURONPE PGNIG BRE

Closing 0.66 40.17 4.70 3.91 316.40

% change (week) -16.46 -9.18 -2.69 -2.25 -1.56

52-week high 2.09 55.45 5.77 4.39 329.20

52-week low 0.48 40.12 4.10 3.61 233.00

52-week high 0.37 0.38 9.14 2.09 2.25

Currency report

PM’s speech changes little

Other indices sWIG80

9,994.63 (October 11 close)

NewConnect

34.82 (October 11 close)

WIG-Banki

SOURCE: WSE

11.10

10.10

09.10

08.10

05.10

04.10

03.10

02.10

01.10

28.09

27.09

26.09

25.09

24.09

11.10

10.10

09.10

08.10

05.10

04.10

03.10

02.10

01.10

28.09

27.09

5,900

26.09

33.0

25.09

6,020

24.09

33.6

21.09

6,140

20.09

34.2

19.09

6,260

18.09

34.8

17.09

6,380

14.09

35.4

21.09

52-week low: 5,163.30

20.09

Change year to October 11: 15.44%

19.09

52-week low: 33.85

18.09

52-week high: 6,495.06

Change year to October 11: -16.08%

17.09

Change for the week: 1.34%

14.09

52-week high: 43.83

6,500

Despite a bare macroeconomic calendar this past week, it was an interesting time on the currency markets.

Ratings agency Standard & Poor’s lowered Spain’s rating to BBB- causing more concerns and increasing Spanish bond yields.

Moreover, the Greek problem remains – European countries are willing to send the next transfer of financial aid in order to calm market participants, but the IMF maintains that Greece should come back to the fiscal path that was agreed on back in the spring. That would mean another debt restructuring, which many European countries do not want to agree to.

The EUR/USD collapsed all the way to just above $1.28 despite being quoted above $1.30 at the beginning of the week. Better-than-expected

6,399.21 (October 11 close)

Change for the week: 1.69%

36.0

Adam Narczewski X-Trade Brokers DM SA

11.10

10.10

09.10

08.10

05.10

04.10

03.10

02.10

01.10

52-week low: 8,218.71

28.09

25.09

52-week high: 10,536.29

24.09

21.09

11.10

10.10

09.10

08.10

05.10

04.10

03.10

02.10

01.10

9,200

28.09

2,200

27.09

9,400

26.09

2,250

25.09

9,600

24.09

2,300

21.09

9,800

20.09

2,350

19.09

10,000

18.09

2,400

17.09

10,200

14.09

2,450

20.09

Change year to October 11: 16.16%

19.09

52-week low: 2,076.52

18.09

Change year to October 11: 9.33%

17.09

Change for the week: 0.22%

14.09

52-week high: 2,561.94

27.09

2,394.59 (October 11 close)

Change for the week: 0.87%

26.09

mWIG40

with all three major indices in Poland shedding nearly half a percent by noon.

Stocks traded sideways up until the last hour of trading, with all indices, aside from the small-cap sWIG80 index, finishing higher for the day. Thursday, October 11 saw little action, with stocks seeing mild fluctuations. Despite poor economic data from Japan, as well as a credit downgrade for Spain by ratings agency S&P, indices throughout Europe seemed to brush off the news. Both the WIG and WIG20 finished flat.

On Friday, October 12, Prime Minister Donald Tusk’s policy speech failed to impress markets, with the WIG and WIG20 both losing – they fell by 0.53 percent and 0.76 percent respectively. ●

news from the US labor market helped market sentiment and the most liquid currency pair rebounded and again traded just below the $1.30 before the end of the week.

In Poland, investors were waiting for Prime Minister Donald Tusk’s policy speech, but no critical information was revealed. There was no reaction on the z∏oty market, which was rather stable this past week but gave up a small amount of the previous week’s gains. The EUR/PLN climbed to z∏.4.09 (from z∏.4.06) while the USD/PLN finished the week at z∏.3.15 (reaching as high as z∏.3.19 during the week).

This week investors will focus more on macroeconomic news from the US and euro zone. Also, the quarterly earnings reporting season has begun in the US. ●

currency rates 4.0204

4.0478

4.0763

09.10

10.10

11.10

12.10

4.0179 08.10

SOURCE: NBP

3.9971 05.10

0.1022

0.1019 12.10

3.8

4.0251

PLN-100JPY

4.5

11.10

0.1018 10.10

0.1011 09.10

08.10

0.1012 05.10

3.3942

3.3866 12.10

0.1

0.1010

PLN-RUB

0.11

11.10

3.3683 10.10

3.3613 09.10

08.10

3.3649 05.10

5.0976

5.0714 12.10

3.0

3.3679

PLN-CHF

3.5

11.10

5.074 4 10.10

5.0410 09.10

08.10

5.0726 05.10

3.1819

3.1577 12.10

5.0

5.0549

PLN-GBP

5.5

11.10

3.1695 10.10

3.1501 09.10

08.10

3.1353 05.10

4.0933

4.0766 12.10

3.0

3.1430

PLN-USD

3.5

11.10

4.1202 10.10

4.1115 09.10

08.10

4.1138 05.10

4.0

4.1020

PLN-EUR

4.5

SPORTS

OCTOBER 15-21, 2012

Soccer

www.wbj.pl

21

Snooker

B∏aszczykowski out of World Neil Robertson wins Cup qualifier against England Gdynia Open The Australian beat Scotland’s Jamie Burnett in the final

one red remaining, allowing Mr Robertson his chance to return to the table and gain an unassailable lead.

It proved a costly mistake for the Glasgow-born 37year-old as he missed out on the €12,000 top prize.

Next up for the world’s best players is the Antwerp Open, which begins on October 18.

David Ingham

SHUTTERSTOCK

Neil Robertson claimed his first title of the season following a 4-3 win over Jamie Burnett in the final of the Gdynia Open.

For Mr Robertson it was a second successive championship victory in Poland following his win at last season’s

Warsaw Classic.

The world no. 8 looked to be in cruise control after he racked up a 3-0 lead over Mr Burnett, who was looking to gain his first-ever professional title. But then the Scot fought back to level at 3-3, with a top break of 64.

The final frame, which lasted 52 minutes, was decided when Mr Burnett missed a black off the spot with just

The Poland captain injured his ankle in Dortmund’s draw with Hannover Jakub B∏aszczykowski has been ruled out of Poland’s World Cup qualifier with England after picking up an injury during Borussia Dortmund’s 1-1 draw with Hannover 96.

Poland’s inspirational onfield general fell awkwardly in the 39th minute and despite receiving treatment, was unable

to continue.

After the match, Mr B∏aszczykowski told reporters, “I shifted my weight on my left foot and felt a pain in the ankle joint. I knew immediately that it is not good. There was no way I continue to play.”

The injury to Poland’s best player at Euro 2012 is bad news for new national team coach Waldemar Fornalik, as the midfielder has been in inspired form this season with three league goals in just seven

matches. Fornalik will also be without injured Legia Warszawa striker Marek Saganowski when his side takes on England at the National Stadium in Warsaw, on October 16.

However, there was some good news for Polish fans, as striker Robert Lewandowski was once again on target for the German champions, scoring his team’s only goal to keep Borussia fourth in the Bundesliga table.

David Ingham

COURTESY OF WIKIMEDIA COMMONS

Jakub B∏aszczykowski

Neil Robertson

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22

LIFESTYLE

www.wbj.pl

OCTOBER 15-21, 2012

Concert

Exhibition

Guitar hero

Bringing music to life

Steve Vai October 28 Stodo∏a ul. Batorego 10 Warsaw American guitar maestro Steve Vai is in the capital this month for a show set to contain some extravagant solos and plenty of shredding.

The 52-year-old, who learned his craft under legendary guitar player Joe Satriani, has played with Frank Zappa, David Lee

Roth, Ozzy Osbourne and Whitesnake, among many other members of rock music’s elite, in a 33-year recording career.

Apart from his successful musical career, Mr Vai is also known for his role as the devil in the 1985 movie “Crossroads” which sees him defeated in a guitar battle by Ralph Macchio of “Kirate Kid” fame.

Speaking about his own personal musical style on his

Good Vibrations October 23-28 Copernicus Science Centre ul. Wybrze˝e KoÊciuszkowskie 20, Warsaw

website, the guitarist said, “I make music to push my own buttons … I’ve always been driven by an addiction to create sounds that are unique – not better than what other people do, just different.”

The three-time Grammy award winner is currently promoting his eighth studio album, “The Story of Light,” which was released in August. Tickets for the event are priced from z∏.150.

The first-ever temporary interactive exhibition to open at the Copernicus Science Centre provides an invitation to travel into the land of sounds.

The exhibits on display have been selected by German music professor Michael Bradke, who

David Ingham

some sophisticated musical technology.

Entrance to the exhibition is included with the price of a ticket to the museum’s permanent exhibitions. These include the light zone, roots of civilization and the planetarium, among many other interesting attractions.

seeks to enable those attending to understand the mysteries and the physics behind sound and human hearing.

With the aid of both unusual and simplistic musical instruments, visitors will be able to hear sounds from objects that normally remain silent, such as ice cream sticks or egg slicers, while also being able to find out what their “robotic” voice sounds like using the aid of

David Ingham

For more information log on to narodowy.pl

Opera

Steve Vai

SHUTTERSTOCK

“Manon Lescaut” October 23 Teatr Wielki Pl. Teatralny Warsaw “Manon Lescaut,” an opera by Giacomo Puccini, first premiered back in 1893 and was the famous Italian composers’ first show to become a major hit of the day.

Based on the 1731 novel “L’histoire du chevalier des Grieux et de Manon Lescaut,”

by French author Abbé Prévost, it is set in the 18th century in both Paris and New Orleans,

and tells the story of Manon Lescaut, her brother, simply known as Lescaut, and her lover Chevalier des Grieux.

This adaptation is produced in conjunction with the Théatre Royal de La Monnaie in Brussels and the Welsh National Opera in Cardiff.

It is directed by Mariusz Treliƒski and stars Amanda Echalaz as Manon Lescaut, and Miko∏aj Zalasiƒski as Lescaut.

Music is provided by the orchestra of the Polish National Opera.

David Ingham

COURTESY OF TEATR WIELKI

French love affair

For more information log on to narodowy.pl

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LAST WORD

OCTOBER 15-21, 2012

www.wbj.pl

23

Tech Eye

The Attacknid

ment while reading a “lactivist manifesto,” it’s probably time to have the estrogen levels checked.

A doctor’s appointment has been made, but in the meantime Techeye is trying to butch up with some manly – or at least man-childy – technology,

such as the Attacknids from Wow Stuff (Combatcreatures.com).

Attacknids are six-legged, 10-inch tall battling robots with destructible armor and a choice of three weapons that fire up to 30 feet. If you’ve ever dreamed of commanding a fearsome army of unstoppable, vaguely insectoid robots, well, you’ll be disappointed. Still, these are about as close as you’re going to get to that dream today.

Here’s how they work: you send your Attacknids up against enemy units and if one gets hit three times, it automatically shuts down. According to Wow Stuff, the remote control system’s 2.4 GHz processor will let you battle with up to 40 robots. On the other hand, each robot costs £70, so you (or your friends) need a hefty £2,800 if you want to see a battle that large.

Speaking of expensive fun, let’s look at the HotTug (Hottug.nl), the “world’s first wood-fired hot tub boat.” That’s right – a hot tub and a boat. That’s probably the best product-combination since Mmmvelopes

The HotTug brought bacon flavor to the envelope.

The HotTug holds around 2,000 liters of water and up to eight people.

Or 1,000 liters and four Tongans. Six variants are available, ranging from €8,950 for a just-the-hull model to €16,450 for the E-power+ version, which boasts an integrated electric motor with four batteries and a stainless steel wood-burning heater that warms the water to 38°C. All it really lacks are a beer cooler and harem.

Last up this week is something a little less masculine. Ok … it’s a lot less masculine.

Behold, the Swarovski HYLA GST (Hyla-us.com), an irresistibly bejeweled icon of domestic divinity.

Or, to put it more plainly, it’s a hybrid vacuum cleaner / air purifier that uses water as a filter (GST stands for geyser separator technology). The system forces dirty air through a water bath, trapping the naff stuff and returning clean air to the environ-

ment.

Most importantly, this ultra highend version of the HYLA has been encrusted with 32,000 Swarovski crystals by fabulously named German firm “Bling-my-Thing.” Of course all that shiny comes at a cost: $21,900, to be precise.

Let’s be honest – a man owning a bejeweled vacuum cleaner is probably a man suffering a bad case of testiculus disappearus. On the other hand, the Swarovski HYLA GST is sure to impress the ladies, at least a few of them, somewhere. And that’s kind of manly … right? ●

COURTESY OF HYLA

favorite blog, The Feminist Breeder (“where edgy feminism finds modern motherhood”).

From man’s man to modern mom, all in a single decade.

We’re being melodramatic, yes. But when a man finds himself nodding in agree-

COURTESY OF WOW STUFF

Getting older sucks. This is an empirical fact – it has been demonstrated by diaper-clad scientists who sketched out the necessary mathematical proofs between spoonfuls of tapioca.

True story.

But anyway, the worst thing about getting older is the alarming speed at which youth vanishes.

Ours disappeared faster than a cupcake tossed, grenadelike, into an Overeaters Anonymous meeting.

It seems like it was just yesterday that Techeye was a strapping paragon of virility, wrestling bloodthirsty vicunas in the wilds of South America. In startling contrast, here’s what we actually did last Wednesday: babysat a sick child, wore a bathrobe for 18 hours and, come evening, sipped red wine and stuffed cheese-flavored crackers into our face while reading our new

COURTESY OF HOTTUG.NL

Old-age, manhood and bejeweled vacuum cleaners

The Swarovski HYLA GST

Ever suffered a crisis of manhood? Let us know: techeye.wbj@gmail.com

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

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

Galeria 022, DAP, Lufcik Królikarnia National ul. Mazowiecka 11a Gallery www.owzpap.pl ul. Pu∏awska 113a www.krolikarnia.mnw.art. pl Galeria 65 ul. Bema 65 www.galeria65.com Le Guern Gallery ul. Widok 8, www.leguern.pl Galeria Appendix 2 ul. Bia∏ostocka 9 Museum of www.appendix2.com Independence Aleja SolidarnoÊci 62 Galeria Asymetria www.muzeumniepodleglo ul. Nowogrodzka 18a www.asymetria.eu sci.art.pl Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

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

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

Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl

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

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

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

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

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