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Poland’s largest lender earned record profits in 2011, and could do so again this year

Taxi firms are threatening to fire drivers who use a taxilocation smartphone app

Techeye reviews the iPad that has no name





VOLUME 18, NUMBER 10 • MARCH 12-18, 2012 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

Wrong track


Interview: Janusz Lewandowski

Since 1994 . Poland’s only business weekly in English

The Polish EU commissioner says slashing the bloc’s budget would be “destructive” 8-9

REAL ESTATE Lokale Immobilia • Poland at MIPIM • New Warsaw skyscraper

• Warsaw attracts investment


In this issue Tragedy reveals Poland’s failed railway network policy

News . . . . . . . . . . . . . . . . . . . . . . .2-4 Business . . . . . . . . . . . . . . . . . . . .5-6 Finance & Economics . . . . . . . . . . .7 Interview . . . . . . . . . . . . . . . . . . . .8-9 Opinion & Analysis . . . . . . . . .10-11 Cover Story . . . . . . . . . . . . . . . .12-13 Lokale Immobilia . . . . . . . . . . .14-17 The List . . . . . . . . . . . . . . . . . . . . . .19 Markets . . . . . . . . . . . . . . . . . . . . . .20 Sports . . . . . . . . . . . . . . . . . . . . . . .21 Lifestyle . . . . . . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

3, 12-13


Visas still needed Gender bender “Strong opposition” to Poland joining the US’s Visa Waiver Program means Obama may break an important promise 3

The EU is considering quotas for women on company boards. Poles don’t mind the idea, but Polish firms say “no thanks”



François Hollande, leader of France’s Socialist Party, was in Warsaw on Friday, where he met Polish President Bronis∏aw Komorowski and the leaders of the Democratic Left Alliance. Mr Hollande is current French President Nicolas Sarkozy’s main rival in the upcoming presidential election, scheduled to take place on April 22.

Explosion at Orlen’s Lithuania refinery Two workers died last week due to an explosion at Polish refiner PKN Orlen’s Lietuva AB refinery in Lithuania. According to a statement from PKN Orlen, the explosion has not affected operations. ●

is the number of people who died in the tragic train crash in southern Poland on March 3. Some 57 people were seriously injured.

13.5% was Poland’s unemployment rate in February, according to data from the Labor Ministry. It’s the country’s highest unemployment rate since April 2007.

€972.2 bln is the size of the EU budget proposed by the European Commission (see Interview, pp. 8-9)

4.5% continues to be Poland’s headline interest rate, after the National Bank of Poland’s Monetary Policy Council left rates unchanged for the ninth straight month.

Quote of the Week

Prime Minister Donald Tusk, in reaction to the train crash on March 3, which claimed 16 lives.

Figures in focus Gender gap Employment rates of women and men aged 25-64 and with a high level of education*, selected EU countries, 2010 Women 95 90 85 80 75 70 65

Source: Eurostat

Company index Apple ............................................23

Jeronimo Martins ..........................5

Banco Espírito

JSW ..............................................20

Santo de Investimento ..................5

KBC Securities ..............................5

Banco Santander............................6

Kernel ..........................................20

Bank Handlowy ............................20






Nearly 100 works by young artists will be auctioned. Prices start at z∏.500. DESA Unicum, ul. Marsza∏kowska 34-50, 7 pm





Warsaw Business Journal’s official launch of the 2012 edition of the Book of Lists ranking guide. By invitation only. Muzeum Kolekcji Jana Paw∏a II – Galeria Porczyƒskich, Plac Bankowy 1, Warsaw





Nearly 100 objects created before 1945 to be auctioned, including works by masters of the Munich school and the École de Paris. DESA Unicum, ul. Marsza∏kowska 34-50 at 7 pm


BBI Development ........................15

BNP Paribas Real Estate ............15



Bank Zachodni WBK ..................5, 6

Biedecki ........................................13



Poland’s leading event dedicated to the Nordic and Scandinavian-Polish cooperation, focused on business issues, education and culture. Szczecin




This event honors the Polish enterprises using unique practices and human resource management programs that promote the values of credibility, respect, fairness, pride and camaraderie in the relationship between management and employees. Warsaw Stock Exchange

Location: Web:

Kin gd ed

Un it

*High level of education: First and second stage of tertiary education (ISCED levels 5 and 6)

Polish companies and Greek restructuring Polish companies have been largely protected against taking a direct hit from the euro-zone crisis. But with Greece passing a debt restructuring deal that will impose losses on holders of Greek bonds, there are some firms in Poland that will suffer losses. Log on to WBJ to find out which ones.


en ed

d Sw



Po l


e Gr ee c



Remi Adekoya





Both the Polish and Lithuanian governments are making efforts to reduce their dependence on Russian energy supplies. The potential exploitation of what are expected to be substantial reserves of shale gas in Poland has raised hopes that the country might one day be able to transform from an energy importer into an energy exporter. At a conference in February this year, Lithuanian Energy Minister Arvydas Sekmokas stated that “the Baltic States should become a good market for the supply of Polish shale gas, which could also compete with the gas supplied by the Russian energy giant Gazprom.”

nc e

link is expected to have a capacity of 500 megawatts by 2015, before being increased to 1,000 MW by 2020. LitPol Link is one of Lithuania’s strategic energy projects. The connection will link the electricity transmission infrastructure of the three Baltic countries to that of Western Europe and create the necessary infrastructure for an integration of the countries’ electricity markets. Poland’s PSE-Operator and Litgrid will be the operators of the new power link. Poland has reportedly received €213 million in EU aid for upgrading transmission lines in the northeastern part of the country as part of the LitPol Link project.

Ge r

It was revealed last week that an agreement on the implementation of the LitPol Link, a planned Polish-Lithuanian electricity link estimated to be worth €371 million, was signed in December 2011. The deal was inked by Polish energy firm Polska Grupa Energetyczna (PGE) and Litgrid, a Lithuanian electricity transmission system operator. Virgilijus Poderys, CEO of Litgrid, confirmed the news to the Baltic News Service (BNS), but his firm hasn’t explained why there was no public announcement immediately after the deal was signed. The agreement signals the launch of the project, the completion of which is expected by the end of 2015. The energy

“We all sympathize with the victims, and above all the relatives and families of those who died in the crash.”


French presidential candidate in Poland



Cooperation between Poland and Afghanistan will continue after Poland withdraws its troops, Polish President Bronis∏aw Komorowski said last week in Kabul. Mr Komorowski met with his Afghan counterpart Hamid Karzai in Afghanistan’s capital during an official state visit. Polish soldiers have been stationed in Afghanistan since March 2002 as part of the NATOISAF force.

Poland-Lithuania energy link


Komorowski in Afghanistan

Numbers in the News

hR ep

Industrial salt, such as that which was sold for years by five arrested men to food-processing plants in Poland, is not harmful in human food, Polish health authorities said last week. The amounts of dioxins and heavy metals in the salt, which is normally used to de-ice roads, were found to be minimal and not dangerous to human health. Nevertheless, authorities in neighboring Czech Republic announced a temporary ban on imports of Polish salt, and Polish health authorities ordered over 230,000 kilos of food to be withdrawn from the market last Friday as a precaution.


Cz ec

Food inspector: road salt safe

MARCH 12-18, 2012



KGHM........................................6, 20 Kredyt Bank ....................................6 Litgrid ............................................2 Pekao ............................................20

Capital Park Group ......................17

PGE ..........................................2, 20

CBRE Poland ..........................15, 17

PGNiG ....................................12, 20

Celtic Property Developments ....15

PKN Orlen ....................................20

Colliers International ............15, 17

PKO BP ....................................5, 20

Deutsche Bank ..............................8

PKP ..........................................3, 12

Dom Maklerski IDMSA ..................5

Proama ..........................................8

ECE Projektmanagement Polska ........15 Enea ..............................................12 Gazprom ........................................2 Getin..............................................20 Ghelamco......................................15

PZU ..............................................20 Quadra ............................................6 Skanska Property Poland ............15 Sumitomo Group ............................6 TPSA ............................................13

Groupama ......................................8

TVN ..............................................20

Hochtief ......................................15

UBM Polska..................................16

Icon Real Estate ..........................17

Warsaw Stock Exchange................6

JEMS Architekci ..........................17

X-Trade Brokers ..........................20


MARCH 12-18, 2012


Rail tragedy

Poland suffers deadliest rail disaster in over 20 years The precise cause of the head-on crash remains unknown, although human error seems to be at the heart of it


More investment needed


Poland spent last week trying to come to terms with its worst rail disaster in 22 years, with the nation observing a two-day period of national mourning and some of its politicians calling for a thorough modernization of the country’s rail infrastructure. At 8:57 pm on March 3, two trains collided head-on near the town of Szczekociny, in the south of Poland, as they were traveling on the KrakówWarsaw line. One of the trains was traveling on the wrong track, a fact which had still not been fully explained as WBJ went to press. The death toll stands at 16 while a further 57 were injured, four of whom were still in intensive care as of last Friday.

ly shows that rail controllers should have known that one of the switches did not work.

National mourning On the day after the tragedy President Bronis∏aw Komorowski announced the start of a two-day period of national mourning. Flags flew at half-mast throughout Poland following

Sixteen people died and 57 were injured as a result of the crash the announcement, with many concerts and other public events canceled. Prime Minister Donald Tusk called the disaster the “most tragic train catastrophe … in many years.”

Possible causes Prosecutor Tomasz Ozimek told reporters that an initial investigation into the tragedy suggests a rail controller made a mistake while setting the

In a further twist, Polish media reported that the controller may have falsified official documents relating to the accident. Infrastructural problems have also come to light, with Polish State Railways (PKP) reportedly admitting that it was aware before the disaster of a fault in the line where the accident occurred. Citing a rail logbook it obtained, TVN24 reported

mechanisms for directing the train that ended up on the wrong track. The controller will face charges of unintentionally causing the accident, although he has not yet been formally questioned or charged, having been taken to a psychiatric hospital to receive treatment for shock. Mr Ozimek declined to reveal precisely what the controller will be charged with.

that a switch that allows trains to pass from one track to another was faulty, meaning the train traveling on the wrong line could not be redirected on to another track. “I know this fault has been registered, and there is only so much I can say,” PKP director for the Kielce rail line, Adam M∏odawski, told the news station. He declined to comment any further. The logbook also reported-

The causes of the catastrophe are now being investigated by a number of bodies and a review into rail safety has been launched by the Supreme Chamber of Control. However, Poland’s politicians have already started drawing their own conclusions about what should be done next. Most have said that investments in rail infrastructure need to be increased in order to improve safety. The need to take action is especially pressing given that Poland is preparing to host Euro 2012 this summer, when thousands of soccer fans will descend on the country. Following an outcry over the government’s plan to ask the European Commission to transfer €1.2 billion in EU funds originally earmarked for rail investment for use in road investment, Transport Minister S∏awomir Nowak announced that the decision had been reversed. Mr Nowak told journalists that the modernization of the railways was his priority as transport minister. Gareth Price

Poland-US relations

Clinton: no visa-free US travel for Poles just yet There is “strong opposition” in the US Congress to opening up the Visa Waiver Program to Poland

Visa Waiver Program [including for Poland],” Ms Clinton said at a joint press conference with Mr Sikorski. “We are working very hard with Congress to try to get that legislation through. I will be very honest with you. We have strong support and we have strong opposition.” “I know the president


After a meeting with Polish Foreign Minister Rados∏aw Sikorski in Washington last week, US Secretary of State

Hillary Clinton admitted that there was “strong opposition” to including Poland in America’s Visa Waiver Program and that it probably wouldn’t happen this year. “President Obama has expressed his support for the pending legislation in Congress that would create broader participation in the

Ms Clinton said the Obama administration was determined to “work very hard” to get Poland into the Visa Waiver Program

pledged that this would be done before the end of his presidency, and probably that will be a little longer than the end of this year. But we are going to continue to work very hard to see that it is accomplished,” she added. Ms Clinton also said that Poland is “a model and a mentor for emerging democracies,” before expressing a “deep appreciation for Poland’s diplomatic role representing the United States in [the Syrian capital of] Damascus.” Ms Clinton added that she and Mr Sikorski had “exchanged ideas on smart defense and on what we can do together to maintain the security of Europe even while the United States cuts its defense budget and cuts its troop commitment to Europe.” “We are happy that the US remains a part of the security system in Europe. We are counting on them confirming that through, among other things, the installation of US

air bases in Poland and participation in NATO military exercises in our country,” said Mr Sikorski. Regarding the proposed NATO missile shield, elements of which are to be located in Poland, Ms Clinton said,

“NATO has made a decision. We believe that it is in all of our interests to carry forward and implement that decision.” Russia stands opposed to the plan, viewing it as a threat to its security. Remi Adekoya

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MARCH 12-18, 2012

EU climate policy

Poland single-handedly blocks EU climate plan, again

Supreme Court to decide on re-opening of Nangar Khel trial

Seven Polish soldiers may face a retrial COURTESY OF THE EU COUNCIL

Poland vetoed the EU’s “Energy Road Map 2050” at a meeting of environment ministers in Brussels last Friday. This is the second time in eight months that the country has blocked an otherwise unanimously supported commitment to raise carbon emissions cuts in the EU after 2020. “It has been a tough day, and tough negotiations. Once again, one delegation has blocked the conclusions,” said Martin Lidegaard, Danish minister for climate, energy and building, following the meeting. The energy road map in question envisions reducing total EU emissions by 80 to 95 percent from 1990 levels by 2050. That’s a minimum of four times the current 20 percent reduction target for 2020. The EU Council’s approval of the road map is needed to set legally binding emissions targets after 2020. Since its entry in the EU in 2004, Poland has frequently clashed with the EU on envi-


The country was the only one to object to the EU’s “Energy Road Map 2050”

Poland’s Environment Minister Marcin Korolec defends Poland’s lonely stance ronmental legislation. But under the current Danish presidency of the EU Council, which has put environmental issues at the center of its sixmonth term, Poland is especially isolated. Connie Hedegaard, EC member in charge of Climate Action, said she was confident a consensus would be reached eventually. “The EC will continue to do its job. In Europe,

one country cannot block things when 26 say they want to move forward,” she said. “In the next few months we will discuss energy efficiency. With all due respect, anyone who has visited Poland knows there is a lot to do when it comes to energy efficiency. I think we will find a way to move forward.” Polish businesses are actively lobbying the Polish govern-

ment to oppose the road map, arguing it would cause a drastic deterioration of the competitiveness of many Polish companies and steep financial losses. In the run-up to Friday’s meeting, the Polish Chamber of Commerce published a report which found that implementing the EU road map would cost Polish industry z∏.22 billion a year from 2030. Alice Trudelle

Poland’s Supreme Court will decide this week whether to reopen the trial of the seven Polish soldiers who were charged with and then acquitted of carrying out a massacre of six civilians in the Afghan village of Nangar Khel. The soldiers had been charged with war crimes for launching a mortar and machine-gun attack on Nangar Khel in 2007. In their defense, the soldiers said that they had been targeting Taliban fighters after being attacked, and that the civilians were killed by mistake. They were acquitted last June on the grounds that there was a lack of evidence they

had intended to harm civilians, and that the law therefore required them to be presumed innocent. However, the appeals prosecutor said the original acquittal was made without a complete assessment of the evidence. He has therefore requested a full retrial. “The court incorrectly established the facts and didn’t assess all the evidence, or assessed it illogically,” prosecutor Jakub Mytych wrote in his appeal to the Supreme Court, Gazeta Wyborcza reported. The Supreme Court is expected to rule on the prosecutor’s motion on March 14. Remi Adekoya

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MARCH 12-18, 2012


Women and business

EU to introduce gender quotas for big companies? In Poland, views are mixed on the issue The European Commission is currently discussing the possibility of introducing quotas to boost the number of women on the boards of top European firms. Surveys indicate Poles are generally in favor of the idea, but businesses aren’t so keen. Both in Poland and in the EU, women are still scarcely represented on the boards of large companies. According to EU data, as of January women occupied 13.7 percent of the seats on company boards in the bloc. In Poland, that number shrinks to 12 percent. Poland fares better when it comes to the proportion of women as presidents of large listed companies, at 11 percent, compared to the EU average of just 3 percent. Poland has also fared better than the EU in stepping up the proportion of women as presidents of large companies, more than doubling their numbers over the past year (from 5 to 11 percent), where

the EU didn’t record any change.

Quotas? But one year after Poland and several other EU countries signed a pledge to step up efforts to increase women’s representation on the boards of large firms, only France, which adopted a legally binding quota in January 2011, saw a notable improvement. The country boosted the proportion of women on the boards of companies from 12 to 22 percent, approaching proportions seen in Nordic countries, which tend to fare better on such measures. This has led EU Justice Commissioner Viviane Reding to consider implementing EUwide quotas. “Personally, I am not a great fan of quotas. However, I like the results they bring,” said Ms Reding in a statement. While Poles seem to favor the idea, businesses are more reluctant. According to a recent Eurobarometer survey, Poles are the least likely in Europe, along with Swedes, to

say that there is no need to achieve more gender balance on company boards (3 percent), and the least likely in Europe to say that companies should not be obliged to comply with quota legislation regarding their board members (also 3 percent). Meanwhile three-quarters of Poles surveyed said they would be in favor of legal measures to ensure a more balanced representation of men and women on company boards, putting them on par with the EU average.

women on the boards of companies listed on the bourse was in the financial and services sectors, and the lowest in the construction and IT sectors. A month later, the bourse amended its code of best practices to add the participation of women in the management and supervisory boards to the list of information that should be published on listed firms’ websites every fourth quarter. “In our opinion, activities aimed at raising awareness can have a positive impact on reducing the scale of underrepresentation of women on boards of companies,” said Ms Jarosz. Mieczys∏aw Bàk, deputy secretary-general of the Polish Chamber of Commerce (PCC), which does not have a policy to integrate women in decision-making, also said soft regulations which create positive attitudes are the best method for gradually increasing the role of women in business. “Introducing quotas can have the reverse effect,” he told WBJ. “A more effective

No thanks But Polish companies still prefer non-binding measures. The Warsaw Stock Exchange, while recognizing the need to address the issue, is sticking with voluntary measures for the time being, said Beata Jarosz, member of the management board. A first step was a survey conducted in September 2011 to examine the participation and role of women in the Polish capital market. The survey found that the largest share of

The (few) ladies at the top Percentage of women as presidents and members of the boards of large European companies, selected countries


Female presidents

Female board members















Czech Republic








































Source: European Commission

means of increasing the number of female managers is to promote their positive role on the functioning of the governing bodies of companies. Firms should also be encouraged to actively seek women for membership in supervisory boards and encourage them to apply for these positions.” But the European Commission says that voluntary measures have proven inefficient, and that the lack of women in

top jobs in the business world is harming European competitiveness and economic growth. Public consultations with business organizations, companies, NGOs and trade unions are already underway to discuss the proportion, scope and sanctions that potential quota legislation would cover. The EC has said it is planning to make a decision on further action this year. Alice Trudelle


Biedronka expansion PKO BP reports record profits for 2011 hits JM’s profits

Poland’s largest bank, PKO BP, recorded an above-forecast net profit of z∏.3.8 billion for fullyear 2011, showing an annualized increase of 18.4 percent. The result was the highest in the history of the Polish banking sector, PKO said in a statement.

The lender also beat analysts’ expectations with its fourth-quarter earnings, recording a net profit of z∏.952 million for the last three months of 2011 – an increase of 9.7 percent from the same period of 2010. According to analysts polled by WBJ, the bank’s net profit for 2012 could be even higher, possibly reaching the z∏.4 billion mark. “Net interest income is

nomic slowdown and interest rates, according to Micha∏ Sobolewski, an analyst at Dom Maklerski IDMSA. “If the interest rate decreases, it’s negative for all banks, but particularly for the largest bank [PKO BP] because it has big retail deposits,” he said. For now it may be too early to tell what direction the economy will take. Nonetheless, analysts are overwhelmingly positive on PKO BP.

expected to remain the key driver of revenue growth at PKO BP. Although loan volumes are going to slow in 2012, we expect margins to pick up. Thus, despite an increase in funding costs, net interest margins should stabilize,” said Marta Czajkowska-Ba∏dyga, an analyst at KBC Securities. Still, PKO’s prospects for continued record profits will be largely dependent on the eco-


The Santander effect

PKO BP posted the highest net profit in Polish banking history

While PKO BP remains Poland’s largest lender, Santander’s recent move to merge its Polish unit Bank Zachodni WBK with Kredyt Bank has raised questions about the potential for increased competition. The proposed merger, currently awaiting regulatory approval, would create the third-largest financial institution in Poland. But according to Szymon O˝óg, head of equity research at Banco Espírito Santo de Investimento, “the threat will be greater to smaller banks than for PKO or Pekao.” Still, it will be some time before the merger has time to settle and take effect. “In the short-term the impact will be limited. For the next two years the focus will be on integration than on expanding market share,” he added. Ella Pa∏ka

The 2011 net profit of Portuguese retail group Jeronimo Martins (JM) was lower than forecast, due in large part to the expansion of its Polish discount food chain holding, Biedronka. Jeronimo Martins’ full-year 2011 profit came in at €340 million, representing a year-onyear increase of 21 percent. The average estimate of a Bloomberg poll of analysts taken prior to the results’ release saw the retailer earning €363.5 million. Sales increased 13 percent to €9.8 billion in 2011. Jeronimo Martins, which has witnessed a slowdown in its home market, re-focused its attention on Poland, opening 239 new Biedronka stores there last year. The full impact of this investment was not factored in by most analysts, hence Jeronimo Martins’ results coming in below their forecasts. Polish investments in 2011

corresponded to 70 percent of the group’s total investment program. Jeronimo Martins’ earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 15.6 percent on the year. According to the company, EBITDA would have been higher but for the opening of a large number of new stores in Poland and the weakening of the z∏oty against the euro. Analysts say this latter factor led to an increase in rent prices in Poland. “We expect 2012 to be another good year, driven by the strong growth of Biedronka in Poland,” the company said in a statement. Of the €650 million it plans to invest in 2012, 80 percent will be pumped into Biedronka. This will include the opening of around 250 new stores this year. Gareth Price


Poland’s largest lender could see even higher earnings in 2012

The firm opened 239 Biedronka stores in 2011


KNF wants Santander on the WSE


Taxi firms resist new smartphone app Companies are threatening to fire drivers if they use the new technology The new iTaxi smartphone application, set to enter the Polish market this week, is already attracting resistance from taxi companies, which are threatening drivers that if they implement the new technology they risk losing their jobs. “Most of the corporations’ owners are against our system,” said ¸ukasz Felsztukier, one of the founders of iTaxi. One exception, he said, is MERC Taxi, which has pledged its support for the application. The iTaxi app, which is free to download, allows smartphone users to locate and order a taxi closest to their location, without the need to call a taxi company directly. According to iTaxi, the service will save drivers considerable

time. But despite the purported benefits, the start-up has not been without controversy. Many market players view iTaxi as a threat to their business. “For us it’s another corporation that wants to enter the taxi market,” said Arkadiusz Wieczorek, founder of Wawa Taxi. He added that if there is interest in such a service, his company would introduce its own application. While some companies have decided not to cooperate with iTaxi, others are actively working against it. One driver from Grosik Taxi, who did not give his name, said his company would fire anyone who implements the iTaxi technology in their vehicles. While he said he expected such technology to increase in use in the future, for now, he said, there are not enough people with a smartphone to take advantage

Legal News Contact: Miros∏aw Stefanik

Simplification of procedure for legalizing a foreigner’s stay in Poland On February 21, 2012 the Polish government adopted draft legislation for changing the Act on Foreigners. The new legislation is aimed at making it simpler to legalize the stay of citizens who come from countries outside the EU, so they can take up employment in professions which require higher education (i.e. qualifications acquired in the process of academic education or during at least five years of vocational training that is comparable to academic qualifications). The draft has been forwarded to parliament. The changes provide that permits for residing in Poland for a defined period of time in order to take up employment in a profession that requires higher education will be issued by a voivode (a regional government executive) in a single administrative procedure. Foreigners who hold such a permit will be able to stay in Poland in cases where they are temporarily unemployed. A voivode will be obliged to ascertain whether foreigners hold the appropriate qualifications and meet the remuneration threshold criterion.

Insolvency of dishonest travel agents In the case C-134/11, Jürgen Blödel-Pawlik vs. HanseMerkur Reiseversicherung AG, the Court of Justice of the European Union (CJEU) passed a judgment on February 16, 2012 in which it interpreted Article 7 of the Council Directive 90/314/EWG. The Directive deals with package travel, package holidays and package tours. Article 7 of the Directive stipulates that

as a safeguard against potential insolvency, the organizer and/or retailer party to the contract shall provide sufficient evidence that it can refund and repatriate customers in the event a trip is canceled. In the case in question, Mr Blödel-Pawlik paid a German travel agent for a trip that it had no intention of organizing. The travel agent then announced that it had become insolvent. That being the case, the travel agent’s insurance company refused to refund Mr Blödel-Pawlik the money for the canceled travel, since it decided that Article 7 of the Directive 90/314 did not apply. The CJEU did not agree with the insurer’s interpretation. In the opinion of the CJEU, the Article should be interpreted in such a way that it applies in cases when insolvency of a travel agent has been caused by actions of that agency which bear the attributes of fraud. This was the case with HanseMerkur Reiseversicherung AG. In Poland, tourists’ rights are protected in cases of insolvency of travel agencies under the Act on Tourist Services, to which provisions of the Directive 90/314 have been implemented.

Tax returns: where to put your 1 percent As in previous years, when submitting tax returns for 2011, it will be possible to give 1 percent of your tax to an organization that benefits the public. The Ministry of Labor and Social Policy has published a new list of such organizations. The list includes the data of more than 7,000 organizations (many of them charities) and their bank accounts. No other entities than the ones included in the list are authorized to receive 1 percent from tax returns. ●


Most taxi corporations are against the iTaxi system of the service. “I have enough business now and I don’t see the point of paying two companies,” he added, referring to the fact that iTaxi will charge taxi drivers for using the technology. Nonetheless, others have a more positive view. “This is a good technology,” said Micha∏ Wi´ckowski, chairman of Zwiàzek Zawodowy Taksówkarzy, the union of professional taxi drivers. “It is interesting and has potential … and

the system may make companies wake up and create opportunities for other [technologies].” However, while the system has appeal for consumers, it may have limited benefits for drivers, Mr Wi´ckowski said. “From what I understand iTaxi would take z∏.3 for each order. For a [driver in a] mid-level company with 200-300 routes a month, the cost for such orders would amount to [around] z∏.690. For some it won’t be

cost-effective, since they would have similar costs with their own companies,” he said. But according to Mr Felsztukier, “many [drivers] are calling us each day saying they would like to test the system but are afraid.” And with so many companies against iTaxi, he said his company planned to bring the matter to Poland’s anti-monopoly regulator. “We see this situation as illegal,” he said. Ella Pa∏ka

KGHM finalizes Quadra purchase, eyes more takeovers Polish KGHM, Europe’s second-largest copper producer, has completed its takeover of Canadian rival Quadra FNX for around z∏.9.5 billion, but is on the lookout for more purchases as a new mining tax is expected to eat into its Polish profits. In 2012, the company expects to see an operating profit similar to that of 2011, which climbed 20 percent year-on-year to z∏.7.5 billion. “Taking into account no disinvestments this year, we may expect operating profit to be comparable to last year’s at current copper prices and costs,” KGHM chief executive Herbert Wirth told Reuters. KGHM is in talks with other companies in order to reach an international output of 700,000 metric tons by 2018. “Two companies [takeover targets] are knocking on our door, we are in talks with them, but it’s not an overnight thing and we are now focusing on organic growth of the joint group,” Mr Wirth said. The news of the plans put a dent in KGHM’s stock on the Warsaw bourse, dropping by 3.6 percent to z∏.141.3 last



Poland’s Financial Supervision Authority (KNF) wants Spanish lender Banco Santander, which plans to merge its Polish unit Bank Zachodni WBK with Kredyt Bank, to be listed on the Warsaw Stock Exchange. The KNF would like the merged entity to free float at least at 25 percent. The tie-up between Santander and Kredyt Bank will create the third-largest financial institution in Poland, with the total value of the merged entity estimated at €5 billion. The deal requires KNF’s regulatory approval. ●

MARCH 12-18, 2012



Its z∏.9.5 billion takeover of Quadra barely completed, KGHM is already in talks over two other acquisitions Tuesday. The level was the lowest in two weeks. By the end of the week however, the stock had recovered, to reach 146.20. In separate news, KGHM topped business daily Parkiet’s ranking of the top 10 best dividend-paying companies in Poland. KGHM has paid out over z∏.55 per share in dividends over the last five years. The figure was more than half the value of one share at the beginning of 2009.

Meanwhile, Sierra Gorda SCM, 55 percent of which is owned by Quadra FNX, has received $1 billion in bank financing for the construction of an open-pit copper mine in Chile. The construction of the mine will cost around $3 billion, with the rest of the money expected to be provided by Sierra Gorda SCM’s owners. Sierra Gorda SCM is a joint venture of Quadra FNX and Japanese Sumitomo RG, GP Group.


MARCH 12-18, 2012

UK-Poland trade

Poland’s 62nd position in the

to £2.77 billion y/y in 2011. Polish exports to the UK grew 17 percent last year, while exports going the other way rose 14 percent.

World Bank’s latest ease of doing business ranking also discourages British exporters from doing business with Poland, British officials said.

Polish-UK trade (in GBP billions) Polish exports to the UK

UK exports to Poland 8 7 6 5 4 3

Could be better Poland had a larger trade surplus with the UK than any other country in 2011, a fact which is giving British officials something of a headache. “Although trade between our countries has grown dynamically over the past five years, the gap has grown in favor of Poland, which is certainly a challenge for us,” Robin Barnett, the UK’s ambassador to Poland, said at a conference last week. British data show that at the end of 2011 the UK was Poland’s second-largest export market, up from fourth place a year earlier. The UK, meanwhile, was Poland’s eighthlargest source of imports (no change on 2010), with the trade gap widening from £2.25 billion

High-end growth

That’s strong growth by most accounts, but a number of factors mean UK-Polish trade is proving to be more of a boon to Poland than to Britain. Clearly, the large number of Poles who live in the UK – estimated at over 500,000 in 2010 – creates strong demand for the import of familiar, Polish brands. But some of the explanation also lies with British companies, who prefer to export to countries with whom the UK has stronger historical trade ties, or to explore emerging markets outside of Europe. “British exporters are much more global than Poland’s, who focus their efforts mainly on the immediate region,” said Mr Barnett.

To close the trade gap, the UK needs to develop its understanding of the Polish market and people, and to foster closer cultural relations, said Alan Jarman, chairman of the British Polish Chamber of Commerce. Poland is also being branded internally in the UK as the kingpin in the “emerging Europe” region and as a potential gateway to other CEE markets. With Poland just two hours away from the UK by plane and its economy continuing to converge with richer, Western economies, the Polish market is seen as being ripe with opportunities for British exporters, particularly when it comes to highend goods and energy projects.

2 1 0 2007





Source: ONS Monthly Review of External Trade Statistics

Strong growth areas for UK exporters last year included whiskey, food (particularly salmon) and tea, with these all expected to provide further avenues for growth in 2012. British petroleum exports to Poland, meanwhile, grew 144.1 percent y/y in 2011. “Poland is the fastest-growing whiskey market in the world ... while we saw a 13,000 percent growth in tea exports to Poland last year, with a good proportion of that including

green tea,” said Martin Oxley, director of UK Trade and Investment at the British Embassy in Warsaw. Concerning the future development of UK exports and investments, ambassador Robin Barnett said, “It’s a myth that Britain is absent in Poland, but there is tremendous opportunity going forward.” “The challenge is to exploit the opportunities, in fields including nuclear [power] and Gareth Price shale [gas].”


Innovate and cooperate

Despite its positive economic performance in recent years, Poland will need to increase its capacity for innovation as well as improve its “social capital” if it wants to make the next leap forward in its development, said participants at last week’s Polish Economic Congress. Social capital is an often-used term in Polish that generally refers to using cooperation and trust to achieve social or economic results. “We are gradually exhausting simple growth reserves [such as relatively low wages] in Poland and can’t bank our future prosperity on them,” President Bronis∏aw Komorowski wrote in a letter to participants at the conference. “It is very important that we understand modernization and innovation in the Polish economy – not just as the absorption of

technology from outside but also as the creation of our own solutions.”

Ex-prime ministers speak One panel included five former prime ministers who also spoke at length about the need to develop innovation in order to keep Poland on the path of growth. “One mistake all the Polish governments up to now have made is that we completely neglected the need to create the infrastructure for the development of innovative solutions,” said Józef Oleksy, who was prime minister from 1995-1996. “We need to make up for that lost ground, as long-term economic development is impossible without innovation.” Kazimierz Marcinkiewicz, PM from 2004-2005, emphasized the need for institutions of higher education to cooperate with businesses in the creation of innovative technologies. “We need to bring our ossified academic institutions closer to business,” he said. Leszek Miller, prime minister from 2001-2004, pointed out the role of politicians in making

The central bank’s Monetary Policy Council decided last week to keep the benchmark seven-day interest rate at 4.5% – thereby keeping it unchanged for the past nine months. Economists believe that tweaking rates would not help lower inflation, which has been above 3.5%, the NBP’s upper limit, since December 2010. The z∏oty rose 0.1% against the euro on the news.

February unemployment rate at 13.5% The unemployment rate in Poland crept up to 13.5% in February, from 13.2% in January, meaning 2.17 million are registered as unemployed, according to data presented by the Ministry of Labor. February had the highest unemployment rate since April 2007, when the rate stood at 13.6%. Deputy Labor Minister Czes∏awa Ostrowska told reporters that she does not expect the jobless rate to increase in the next few months, using the low number of registered group layoffs to explain her forecast.

Fitch: Polish banking sector stable COURTESY OF THE EUROPEAN PARLIAMENT

In order to develop its economy further, Poland will need to improve its innovative abilities and tackle its low level of “social capital”


Interest rates unchanged

Sterling growth

Mind the gap UK authorities are concerned about the trade deficit that is opening up between Britain and Poland

President Komorowski emphasized the importance of Polish-produced technology it easier for businesses to innovate. “Entrepreneurs are the growth engine of the economy but they operate in specific legal realities that are created by legislators and politicians,” he said. “One of the most important challenges is [for legislators] to increase economic freedom in Poland.” Meanwhile, W∏odzimierz

Cimoszewicz, PM from 19961997, said Poland has come to a point in its development where cooperation and teamwork are now more important than the individualism that had brought the country’s economy so far. “Sociologists’ research shows that Poland has one of the lowest levels of social capi-

tal in Europe and that it has a negative influence on politics as well. Among Polish politicians, compromise is considered a defeat, a betrayal of the group one represents, and thus we have problems hashing out common policies that would be beneficial to the country as a whole,” he said. Remi Adekoya

The Polish banking sector appears to be stable and positive, according to Piotr Kowalski, CEO of ratings agency Fitch Poland, Puls Biznesu reported. Moreover, he said he does not think there is a risk of capital outflow from Polish subsidiaries to their parent companies. Polish banks are in a good shape overall with clear, precise and strong control policies in place, he added. According to Mr Kowalski, potential problems include issues related to long-term liquidity and the financing of foreign currency loans.●


Crisis good to Poland The economic crisis has been more of an opportunity than a threat, said the participants of a conference organized by the Polish Economic Congress in Warsaw last week. “The crisis is an opportunity, because the Polish economy is in quite a favorable situation compared to other European countries. [Poland’s] Economy is perceived as safe,” said Ma∏gorzata Zaleska, a board member of the National Bank of Poland. “We have already benefited from the crisis. It has sparked debate about how to improve public finances,” said Krzysztof Kalicki, president of Deutsche Bank in Poland.

President signs budget bill President Bronis∏aw Komorowski signed the budget bill for 2012 into law last Thursday. The act stipulates that the government deficit cannot surpass z∏.35 billion in 2012. It is expected that government revenues will reach z∏.293.8 billion this year, while spending will amount to an estimated z∏.328.8 billion. GDP is forecast to grow 2.5% and inflation to rise by 2.8%. Unemployment is expected to be 12.3% by the end of the year.

French insurer to leave Poland Hit by the euro-zone debt crisis, and more specifically by losses related to the high number of Greek bonds it holds, French insurance company Groupama is selling its assets, including its Polish division, Proama, to fill a €2 billion hole, reported Puls Biznesu. In previous announcements, the company had said that Poland was one of its key markets and that the Polish division was not for sale. ●

MARCH 12-18, 2012

European Union

Lewandowski: don’t slash the EU budget Janusz Lewandowski, European commissioner for financial programming and the budget, talks to WBJ about work on the EU budget for 2014-2020, the impact of the financial crisis, and what Poland can count on from the next budget Ewa Boniecka: Do you think the draft budget for 2014-2020 that was proposed by the European Commission, and on which you are currently negotiating, stands a chance of being accepted in this present time of economic crisis? Janusz Lewandowski: My role is not to speculate on the possibility of the budget being accepted or not. I am neither a pessimist nor an optimist, but an activist. This means that my role is to defend the EU budget in such a way as to have more Europe and not less Europe, in line with what was agreed in the Lisbon Treaty. Of course the European Union now has more responsibilities at the community level than ever before. The dramatic circumstances connected with the financial crisis are not helping because in the public consciousness, mostly of net payer [countries], the rescue packages for the euro zone are being confused with contributions to the EU budget. This creates a climate in which it is tempting for politicians to claim that they have to defend their taxpayers. And it is easier to defend them at the cost of a united Europe than at the cost of cutting different social expenses back home. Yet I know that any deep cuts in the EU budget would be destructive, taking into account that our present proposal is at any rate lower than what we originally proposed. The European Commission has proposed that the new seven-year EU budget should amount to €972.2 billion, compared to €925 billion for the current (2007-2013) budget. How deep could the cuts be? Right now I hear from net payer countries that they want to cut our proposal by some €100 billion. At the same time,

those countries acknowledge off the record that our initial budget proposal was modest, responsible, in no way provocative, and well-adjusted to a period of budgetary restraint in Europe. This is logical because it is a budget which will be adjusted for inflation only, for seven years. The EU budget for 27 member states cannot operate below a certain threshold, therefore I am ready to fight to preserve decent financing for Europe’s regions, businesses, researchers and students. So the goal is to maintain the next budget at a level comparable to the current one? The [budget for the] future financing period would be lower than the current one, which was born in a climate of prosperity, trust and optimism. Europe in 2005 was different than it is today , in spite of the fact that the wealthier countries already knew they had to deal with the cost of an historic enlargement of the EU. These costs were hidden in many different ways and are only visible now. For instance, the new member states partly subsidized direct payments to farmers from their own budgets, so the EU did not bear the whole cost of the agricultural budget. But the present, and much more difficult circumstances constitute a test for the EU. First of all, [it is a test of the EU] as an anti-crisis mechanism, a thing that we are just learning to do right now, so we are continually talking about Greece, Ireland or Portugal, or the future of the euro. But it is also a test for EU institutions, on whether they are able to deliver a budget awaited by millions of beneficiaries all over the EU. How can Poland help to ensure



Commissioner Lewandowski believes cuts to the EU budget would be “destructive” that the budget is at a level that would be adequate to its needs? Poland has already helped the European Union and all those who would like the EU to have an adequate budget in the future because Poland proves that by wisely using structural funds it is possible to defend oneself against the crisis. This is a very important argument because at the beginning of 2012 Europe discovered that it is not enough to make savings, that one must use the funds to stimulate growth, competition and to create jobs. Poland is a model in this respect but

unfortunately there are also “anti-models” in Europe, which fuel euroskeptic propaganda. Poland, of course, faces some challenges connected with absorbing huge ... amounts of euros. We are now, and should remain, the biggest beneficiary of EU funds. Today, there are no countries on the EU’s horizon like Turkey or Ukraine, which could oust Poland from this position of main beneficiary. Poland’s positive role does not end here because Poland is also a credible proponent of the community method and a

skillful organizer of the group of friends of the cohesion policy. Why are those living in Western European countries currently hearing so much about the costs of the 2004 EU enlargement, when statistics show that the old member states gained significant economic benefit from this change? I have not heard official voices blaming the enlargement of 2004 for the current problems. Anyway, that would be totally untrue. The enlargement was a win-win situation. But we are


MARCH 12-18, 2012

witnessing many undesirable changes in Western public opinion. It associates Europe with problems caused by other reasons and as a result is becoming reluctant towards [participating in] the EU, with enlargement becoming a scapegoat. All of the statistical data, available also in the Netherlands or Britain, to mention some of the most euroskeptic countries, show that enlargement was mutually beneficial. I know what I am talking about since I was the first – as minister of privatization in Jan Krzysztof Bielecki’s government in the years 19901991 – to invite Dutch and British investors to Poland. This was very beneficial for those countries because companies such as Philips, Unilever and Tesco are still today very much present and successful in Poland. So we have a lot of evidence that enlargement was

its budget deficit from becoming too large? I want to underline that Poland is [fighting the crisis well, partly] due to its excellent handling of structural funds. The image of Poland is that of a positive and spirited country, which has an enthusiastic stance towards the euro, which is lacking elsewhere in Europe. The problem is that EU members cannot benefit as much from the European project as they could during the decade of generosity, when the Iberian countries, as well as Greece and Ireland, were in a very comfortable situation due to their being able to draw financial benefits from the EU. Now the situation is very different, and Poland, while drawing benefits from its EU membership, must also make a contribution to the European Union. In the coming years certain regions in Poland will reach the same status as richer parts of the EU. This will be a sign of success, but they will no longer qualify for EU funds. It is a perverse measure of success: As a country moves up the prosperity ladder in the EU, it gradually receives less and pays more to the common budget.

“My role is to defend the EU budget in such a way as to have more Europe, not less” very profitable for Western Europe. Nevertheless, stereotypes are currently fueling an increasingly xenophobic part of Western public opinion, which is seeking shelter from the current troubles in national states and not, unfortunately, [viewing things] from a European perspective. In what ways will the establishment of a fiscal pact influence negotiations over the EU budget? We live in an interconnected world, so Greece’s problem is also Poland’s problem, and there is also the problem of the fiscal pact and of the budget. Everything is linked together. That 25 countries signed the code of good financial practices should calm the situation down and when properly implemented, it should help a little. At the same time, it is a very strict pact of budgetary savings which could influence the members’ positions in negotiations concerning the EU budget. It has an impact on the political climate, focusing on strict financial responsibility. The fiscal pact imposes a quite restricted straitjacket on the ministries of finance of 25 countries and it makes discussions about contributions to the EU budget even more difficult. How will Poland’s negotiating position in regards to the EU budget be affected by the healthy economic growth it has recorded and by the fact that its laws are designed to prevent

What is your attitude towards the idea that the EU could earn additional income from taxing financial operations? The situation is so difficult that there is a need to talk without taboo, so for the first time for many years we have to think seriously about how to finance the EU budget from additional sources – not just from members states. We have returned in a way to the spirit and the letter of the Rome Treaties, which included the concept of “own resources of the European budget.” We are proposing … a financial transactions tax. … The political climate has improved, yet I know that some members, like Britain and Ireland, are against it – since some 10 percent of their national incomes comes from financial operations. For Poland, such a tax would be a very small burden and it would even facilitate our lives, because it would reduce Poland’s direct contribution to the EU budget and help to consolidate our finances. So I understand that you support the idea of introducing a tax on financial operations? I must confess that I am a liberal in economic matters and liberals do not like taxes. Yet, as Lech Wa∏´sa’s famous saying goes: “I don’t want to, but I must.” So, while there is pressure for reducing national contributions to the EU budget, we have to look for additional sources of financ-

ing which would be the least harmful to the real economy. And in my opinion the least harmful for industry and the service sector would be a tax on financial operations. All other taxes would be more restrictive for economic growth. As an economic liberal, how do you view the fact that public money is being used to rescue banks and some industries in Europe and the US? Will this see a lasting return to Keynesian state intervention? Well, when there is a fear of financial collapse, state intervention is often seen as being a rescue operation. So all those proud financial corporations that thought that the state is a marginal player in the world economy are joining the queue for state help. Yet it is difficult to predict whether that return to … state intervention will form a long-lasting trend. I hope it will not. From a liberal point of view, the European Union is perceived as being over-regulated, with some issues that could very well be dealt with at the national level. And for me, as a determined liberal, this is a matter of concern. With Polish public opinion now divided on the matter, how do you see Poland’s road to joining the euro? Poland’s confidence towards the European Union is not necessarily linked to the common currency, because Poles are aware of the crisis in the euro zone and some of them now have negative opinions about the euro. However, they know that having a common currency has many advantages, and that it would help in eliminating the hazards of currency exchange rates. The government’s attitude towards Poland’s road to the euro seems reasonable to me. No date has been set for joining as was done elsewhere. … Now Poles are evaluating how the European Union is dealing with the reconstruction of the euro zone and depending on the outcome, Poland will make its concrete decision. Do you think the euro zone could collapse if Greece were forced to leave? There is a robust political will to buy time for Greece, while checks are being carried out to ascertain whether it is doing its homework – for example, whether it is implementing structural reforms. That assessment has to be made jointly by EU institutions and the IMF, yet without humiliating Greece. That is the scenario that we are working on. Our task is to do our utmost to assist Greece in this time of crisis. ●




MARCH 12-18, 2012

Who lost Greece?


Finland, and some in Germany, were wondering aloud why Greece should remain in the euro. In Athens, exasperation has reached new heights, and the bitterness of the disputes has started to echo dangerously the rabid disputes over German reparations of the 1920s. “Who lost China?” American strategists asked in the 1950s, following the victory of Mao Zedong’s communists in 1949. Europeans may well soon start asking themselves the same question about Greece.

The culprits The main culprits, of course, are the Greeks themselves. The fecklessness of their politicians has plumbed new depths, patronage has poisoned their government, Transparency International’s corruption index ranks their country 80th in the world, and, in


he blame game in Europe has not yet begun. An agreement between Greece and its private creditors and public lenders will enable it to meet its next debt repayment deadline of March 20. The Europeans should be commended for a significant step in the direction of realism. Private creditors have accepted a haircut of more than 50 percent on their claims and a lowering of interest rates, bringing the total debt relief to more than two-thirds. But, while a solution was found in extremis, many people believe that it will merely postpone the day of reckoning, as Greece will not implement the promised austerity, and will end up either deciding to exit the euro zone or being pushed out following an eventual default. Even before the latest deal, political leaders in the Netherlands and

September 2011, the Greek treasury had carried out only 31 of the 75 tax audits of high-income individuals promised for the year as a whole. But it would be too easy to leave it at that and absolve the rest of Europe of responsibility. European officials’ first error was to procrastinate for months, only to produce an unrealistic assistance program that foresaw Greece’s return to the capital markets by 2013. It is now clear that it will take years, perhaps a decade, to reform the economy and correct its imbalances. Europe’s second error was its incoherent response to the solvency crisis. Two strategies were possible: either an early reduction of Greece’s sovereign debt, thereby restoring solvency rapidly, or mutualization of Greek debt in the name of preserving the collective reputation of all eurozone sovereigns. Either strategy would have been coherent, but Germany and France agreed on a cocktail of both, which was not. The Germans and French pretended that Greece was solvent and lent to it at punitive interest rates, which made the situation worse. It took 18 months to abandon this policy. The third error was getting priorities wrong. From the outset of the crisis, the International Monetary Fund diagnosed a twin problem: weak public finances and a severe loss of competitiveness. Unfortunately, policymakers focused on the former, and

blithely hoped that structural reforms would resolve the latter. The Greek authorities invested most of their meager political capital in budgetary adjustment rather than in building a competitive economy. The program now being finalized reverses the order of priorities, putting competitiveness and growth ahead of completion of budgetary consolidation. Still, the question remains why this decision had to wait almost two years.

Stimulate growth, share the burden Fourth, nothing substantive has been done about growth. An adjustment program is necessarily recessionary, but this need not thwart efforts to mobilize tools for economic recovery. Greece could in principle have counted on a large amount of regional development aid from the European Union budget, which was underutilized owing to a lack of local cofinancing. It took until last summer to recognize – and even then only to a modest degree – that this aid could be used to support economic recovery. Europe’s final error was a certain level of indifference to fair burdensharing. It is understandable that the IMF, a technocratic institution, does not venture beyond macroeconomics. But the EU is a political entity that has made social justice one of its fundamental goals. It cannot call for a

Jean Pisani-Ferry cut in the minimum wage while assigning secondary importance to tax evasion among the top tenth of income earners, which costs onequarter of income-tax receipts. Contrary to much facile criticism, Europe cannot be reproached for imposing austerity on the Greeks. This is the necessary counterpart of a

“There is enough blame to go around” major effort at financial support, and a country with such huge imbalances must inevitably be subject to extreme rigor. But Europe can be reproached for an initially late, badly designed, unbalanced, and inequitable program. If the question as to who lost Greece arises one day, there will be enough blame to go around. ● Jean Pisani-Ferry is director of Bruegel, an international economics think tank, professor of economics at Université Paris-Dauphine, and a member of the French prime minister’s Council of Economic Analysis. Copyright: Project Syndicate, 2012.

A devaluation option for Southern Europe Emmanuel Farhi, Gita Gopinath, and Oleg Itskhoki

“The solution does not require abandoning the euro” The crisis has exposed the deep disparities in competitiveness that have developed within the euro zone. From 1996 to 2010, unit labor costs in Germany increased by just 8 percent, and by 13 percent in France. Compare that to 24 percent in Portugal, 35 percent in Spain, 37 percent in Italy, and a whopping 59 percent in Greece. The result has been large trade imbalances between euro zone countries, a problem compounded by large fiscal deficits and high levels of public debt in southern Europe (and France) – much of it owed to foreign creditors.

Euro-zone breakup? Does addressing these imbalances require breaking up the euro zone? Suppose, for example, that Portugal were to leave and reintroduce the escudo. The ensuing exchange-rate devaluation would immediately lower the price of Portugal’s exports, raise its import prices, stimulate the economy, and bring about muchneeded growth. But a euro exit would be a messy affair. The resulting turmoil could very well trump any shortterm gains in competitiveness from devaluation. There is a remarkably simple alternative that does not require southern Europe’s troubled economies to abandon the euro and devalue their exchange rates. It involves increasing the value-added tax while cutting payroll taxes. Our recent research demonstrates that such a “fiscal devaluation” has very similar effects on the economy in terms of its impact on GDP, consumption, employment, and inflation. A currency devaluation works by making imports more costly and exports cheaper. A VAT/payroll-tax swap would do exactly the same thing. An increase in VAT raises the price of imported goods, as foreign firms face a

revenues in proportion to the country’s trade deficit. For countries that are suffering from weak competitiveness and, as a consequence, running trade deficits, this typically means more revenues, especially in the short run.

Winners and losers



his year is likely to mark a makeor-break ordeal for the euro. The euro zone’s survival demands a credible solution to its longrunning sovereign-debt crisis, which in turn requires addressing the two macroeconomic imbalances – external and fiscal – which are at the heart of that crisis.

higher tax. To ensure that domestic firms do not have an incentive to raise prices, an increase in VAT needs to be accompanied by a cut in payroll taxes. Moreover, since exports are exempt from VAT, the price of domestic exports will fall. The desired competitiveness effects of exchange-rate devaluation can thus be had while staying in the euro. This policy can also help on the fiscal front. As is true of an exchange-rate devaluation, the positive impact on growth of an increase in competitiveness can strengthen the fiscal position by raising tax revenues. Moreover, an important advantage of fiscal devaluations is that they generate additional

Like exchange-rate devaluations, fiscal devaluations create winners and losers. Both act as a wealth levy: inflation means that bondholders suffer a real loss in proportion to their wealth and the size of the devaluation. If taxes on capital are not adjusted, holders of domestic stocks suffer a comparable loss. By contrast, many transfers, such as unemployment benefits, health benefits, and public pensions, are indexed to inflation and thus maintain their real value. The same is true of minimum wages. These distributive effects play an important role in the politics of exchange-rate devaluations, and most of these effects appear in fiscal devaluations as well. Fiscal devaluations already have

some advocates. Indeed, French President Nicolas Sarkozy’s government just announced one. And concerns that a fiscal devaluation will conflict with euro rules can be met by simply pointing out that Germany’s government carried one out in 2007, though by another name, when it raised VAT from 16 percent to 19 percent and cut employers’ contribution to social insurance, from 6.5 percent to 4.2 percent. In short, there are simple fiscal alternatives to exchange-rate devaluation that can address southern Europe’s short-term competitiveness problems. To be sure, feasible fiscal devaluations would be limited in size. But, together with debt restructuring, accommodative monetary policy, liquidity support from the European Central Bank, and much-required structural reforms, they can help to put these troubled economies on a sound footing without a euro breakup or a major austerity-induced recession. ● Emmanuel Farhi is professor of economics at Harvard University. Gita Gopinath is professor of economics at Harvard University. Oleg Itskhoki is a professor of economics and international affairs at Princeton University. Copyright: Project Syndicate, 2012.


MARCH 12-18, 2012

Poland’s battle on the right


response to Law and Justice (PiS) leader Jaros∏aw Kaczyƒski’s recent announcement that he is not interested in running for president, his rival on the right, Zbigniew Ziobro, has stated that he will seek to become president in three years’ time. Mr Ziobro, a former justice minister and current head of Solidarity Poland, said that since Mr Kaczyƒski had “abdicated” his role as a presidential candidate, he could not imagine that the Polish right would be deprived of a conservative with a “realistic” chance of winning the presidency.

Kaczyƒski’s dilemma So does Mr Ziobro have a realistic chance of becoming president in 2015? Today, it seems highly unlikely indeed. Current President Bronis∏aw Komorowski regularly garners approval ratings in the high-sixties, and barring any political earthquakes or monumental gaffes, looks like a shoo-in for reelection. Meanwhile, Mr Ziobro is the leader of a group of politicians that

decided to quit PiS and form their own party last year. He was once deputy leader of PiS and many expected him to be Mr Kaczyƒski’s successor. But Solidarity Poland is not even officially a party yet. Its inaugural congress is scheduled to take place this month, but so far they have zero party structures and hardly any money. Nevertheless, three years is an eternity in politics and besides, Mr Ziobro is not playing to win the presidency but rather to win the battle against Mr Kaczyƒski for supremacy on Poland’s right. With Mr Kaczyƒski having stated publicly that he is not interested in the presidency, he now has a problem. He can retreat from his words and run anyway, in which case he’d have to go toe-to-toe with his former


mass dissent in Russia, meeting Monday with opposition groups and his former presidential rivals. Even though the protest groups were never a legitimate threat to Putin’s power, the persistent demonstrations led the world to question whether Putin was still the unshakable, strong leader of an increasingly powerful country. His meetings will not allay the anti-Kremlin protest movement entirely, but they reveal that Putin is trying to smooth over the political disruptions from the protests and show the world that he still has control of Russia. In turn, Putin wants this to translate into the perception that Russia is still an influential force in the world. This message is one that will be welcomed by some, accepted by many and dreaded by others. As expected, the majority of the former Soviet states were quick to convey their congratulations to Putin on his election victory, reasserting that they are strategic partners with Russia. Russia’s resurgence into many of its former Soviet states has been steadily moving forward, and the former Soviet states see Putin’s return as a sign that the strategy will continue, if

Remi Adekoya

“Mr Ziobro is not playing to win the presidency, but rather to win the battle against Mr Kaczyƒski”

deputy for the conservative vote. If he ends up getting fewer votes than Mr Ziobro in the first round of voting, his status as the leader of the right could be irreparably damaged. If, however, he keeps to his word and doesn’t run, then he will have to look for another candidate from

within PiS who could take on Mr Ziobro in the election. But PiS doesn’t have any other politicians who appear even remotely presidential. Such personalities have either all been kicked out of the party by Mr Kaczyƒski or died in the 2010 Smolensk plane catastrophe which also claimed then-President Lech Kaczyƒski, Jaros∏aw’s twin brother. A weak PiS presidential candidate would give Mr Ziobro the opportunity to shine in the campaign and boost his leadership credentials among

conservatives. Whichever way you look at it, come 2015 Mr Kaczyƒski will have a bit of a dilemma.

Long-term battle Mr Ziobro also knows that in the long-term battle for supremacy of Poland’s right, age is on his side. He is 42. Mr Kaczyƒski is 20 years his senior. If Zbigniew Ziobro is able to shine in the forthcoming presidential campaign, then it will be much easier for him to convince Polish conservative voters that he is the future of the right – and that Mr Kaczyƒski’s time is up. ● Remi Adekoya is Warsaw Business Journal’s politics editor. Read his blog, “The business of politics” on

With elections over, Putin focuses on perceptions ith the final votes counted, Russian Prime Minister Vladimir Putin’s presidential victory was confirmed last Monday. It was not much of a surprise that Putin won a third presidential term. Still, the reaction in Russia – and in the world – has been important to watch because it is directly related to how strong of a leader Putin is expected to be. Coming out of the December parliamentary elections and leading up to the presidential elections, the mood in Russia seemed split, with the country experiencing its first mass political protests in decades. Hundreds of thousands protested Putin’s run for president as well as what they believed were unfair parliamentary elections, though the anti-Kremlin protest groups never coalesced into an actual movement that could threaten the current Kremlin regime or Putin’s chances for reelection. After the elections there were plans to protest Putin’s victory, but the demonstrations seemed to fizzle out, with only a fraction of those previously seen coming out onto the streets. It seemed that Putin also wanted to start to move beyond the story of


not intensify. Putin confirmed last Monday that in his next term as president, Russia’s primary foreign policy focus would be on the former Soviet states.

Global reaction The first country to offer its support to the re-elected president was Russia’s large eastern neighbor, China. For Beijing, the extension of support was not so much about Putin. Rather it was intended to legitimize the current Russian regime and reinforce a strong Russia. This is part of China’s belief in encouraging alternative great powers in the world besides the United States. Since it is undergoing a leadership transition of its own, Beijing hopes that Moscow will extend the same sort of support to the Chinese regime. The majority of the European heavyweights have been notably silent about or aloof from the Russian elections. The European Council and the European Commission were both quiet. Neither the European Union nor France offered any congratulations to Putin but instead focused on the election irregularities.

Poland and Germany – two key European states – were vocal about the Russian elections. These countries’ relations with Russia have sharply contrasted each other, with Poland doing whatever it can to resist the return of Russian influence throughout Eurasia, and Germany opting to work with Russia in trying to manage the region. With that in mind, their reactions came as no surprise. Polish Foreign Minister Rados∏aw Sikorski mocked the Russian elections, calling them undemocratic. Alternatively, German Chancellor Angela Merkel personally phoned Putin to wish him success and offered Germany’s “strategic partnership” to Russia. The last important reaction came from the United States. Washington and Moscow have been in a tense standoff over a string of issues. Russia has been pushing for a change in the United States’ plans to deploy missile defense systems in Central Europe and has called for an end to US support for some key former Soviet states such as Georgia. In turn, the United States wants Russia to cease its support for the anti-US regimes in Iran


and Syria, both of which were quick to offer their compliments to Putin on his victory. The United States has been publicly supportive of the antiPutin protest movements in Russia, hoping they would keep the assertive Russian leader’s focus inward and not on foreign issues. Washington’s reaction to the elections was tepid, congratulating the Russian people on their elections without commenting on Putin. Washington sees Putin’s return to the presidency as a sign that the countries’ many disagreements could intensify in the future. The United States knows that Putin has been heavily focused on these elections over the past few months. Now that they are wrapped up, Putin will be able to shift some of his attention to trying to create the perception that he is returning to his former position just as strong as he was the last time. ● This edited version of “With elections over, Putin focuses on perceptions” is reprinted with permission of STRATFOR.

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










































Enea and PGNiG to team up Polish utility Enea is considering pairing up with gas monopoly PGNiG to build a series of gas-fueled power plants, according to Maciej Owczarek, chairman of the board at Enea. “We are considering jointly building not one, but several gas-fired power plants,” Mr Owczarek told Rzeczpospolita. Previous plans between Enea and PGNiG to build a gas power plant at the Kozienice power station, Poland’s second largest, didn’t materialize, but Mr Owczarek says talks never ceased.

Polish eggs for Bulgaria? Polish Agriculture Minister Marek Sawicki is considering asking Polish producers to export their eggs to Bulgaria. This came after a phone conversation last Thursday with his Bulgarian counterpart, Miroslav Naydenov, who “presented the plight of the Bulgarian consumers,” plagued with high egg prices, according to a statement on the Polish ministry’s website. According to Mr Najdenov, egg prices in Bulgaria have soared by as much as 40% in the last few weeks.

Regulator set to approve new gas tariffs Poland’s Energy Regulatory Office (URE) will approve a set of new gas tariffs this week, URE head Marek Woszczyk said in an interview with TVN CNBC. Polish gas monopoly PGNiG has been arguing for a hike in consumer gas prices for several months. PGNiG says it is paying more for the gas it imports from Russia than the amount it is authorized to charge domestic customers. ●

MARCH 12-18, 2012

Rail tragedy

Disaster response Brendan Melck Will the government finally start to give rail safety the attention it requires? A head-on collision between two passenger trains in southern Poland on March 3 resulted in the country’s deadliest rail disaster in over 20 years, setting in motion a debate about the state of the country’s railways and the working conditions of its operators. At 8:57 PM on Saturday March 3, a Tanie Linie Kolejowe (TLK)-operated train travelling from PrzemyÊl to Warsaw, collided head-on with an InterRegio WarsawKraków service that was travelling on the wrong track. The incident took place close to the town of Szczekociny, in the Silesia voivodship. The accident was the worst on Poland’s railways for 22 years, killing 16 people and injuring 57 others. On the day following the disaster, President Bronis∏aw Komorowski announced two days of national mourning.

Speculation abounds Feverish speculation has followed the accident, with most of it centered on the actions and psychological condition of the rail controller who operated the signals at Starzyny, near where the incident occurred. The controller is due to be charged with unintentionally causing the accident by diverting the Warsaw-Kraków train onto the wrong track. Nevertheless, the individual concerned has not yet been formally charged, having been taken to a psychiatric ward at a nearby hospital to receive treatment for shock. Reports concerning attempts by the rail operator to falsify official records of the events of that night have added a fresh layer of intrigue to the unfolding story. However, just as it was starting to seem as if human error was the main cause of the catastrophe, more recent reports have suggested it may have been the infrastructure itself which was to blame. According to rail documents



The worst rail tragedy in Poland in decades killed 16 people and left over 50 injured received by news channel TVN24, faults were detected at signal boxes at Starzyny, and at nearby Sprowa, several minutes before the catastrophe. One of the points at Starzyny is reported to have broken down, which made it impossible for the Warsaw-Kraków train to get back on to its proper track. At Sprowa, meanwhile, the exit signal is report-

Main opposition party Law and Justice (PiS) has said that the lower house of parliament’s infrastructure committee should convene to discuss railway safety. The ruling Civic Platform (PO) party’s junior coalition partner, the Polish People’s Party (PSL), has reportedly supported this suggestion. The catastrophe also put

“It is indefensible that now, only after the catastrophe, the process of looking for new solutions and answers is starting” ed to have failed, a fact which prompted the use of a backup signal. All this on a section of track that had undergone major modernization just last year.

Political fallout Whatever the truth behind the cause of the catastrophe – and this is now being investigated by a number of agencies – it has become a focus of intense political debate, with the parlous state of Polish railways once again the center of attention.

into sharp relief the government’s request that €1.2 billion in EU funds for rail investments be transferred for use in road investments. The government has now backtracked and said the money will be invested in rail infrastructure. In the aftermath of the catastrophe and having faced the ire of railway workers who pointed to underinvestment in the rail network, Transport Minister S∏awomir Nowak told a press conference that raising safety standards for

rail transport was a priority, stating that the accident must be a catalyst for the process of finding new and better solutions to improve rail transport safety.

Safety first Rail safety is therefore certain to occupy more attention in the coming weeks and months, and the management – or mismanagement – of the process of liberalizing Poland’s rail market has been cited by some as a factor behind the deterioration of safety on the rails. Leszek Mi´tek, the president of the Union of Polish Train Drivers, was quoted by daily Rzeczpospolita as saying that “there is no organization which really takes care of the co-ordination of safety on the railways.” Transport expert Stanis∏aw Biega was quoted by rail industry news website as saying that there are increasing numbers of accidents involving freight trains – these, thankfully, are without victims – as well as an increasing number involving passenger trains. This pattern, he said, culminated in the

Szczekociny disaster. Mr Biega blames an overall lack of coordination and structure in the rail system, which is manifested in frequent line closures, repeated timetable changes and ineffective management of infrastructure tenders. The editor of rail transport portal, Karol Wach, shares these concerns. “Poland’s Railway Transport Authority [UTK] is supposed to be responsible for safety on the rails,” Mr Wach told WBJ. “But at present, the position of director of the UTK’s safety department is vacant – which doesn’t help. On top of this, the recent sacking of the head of the UTK, Krzysztof Jaroszyƒski, shows that even an organization such as this is not above politicization.” There is also considerable concern about the increasing work pressures that railway workers find themselves under, and about the age of railway staff, with train drivers’ average age above 50. It is clear that Polish State Railways (PKP) is not employing sufficient numbers of young


MARCH 12-18, 2012

PO and PiS struggling

“In terms of its stance on rail investment, Poland is out of step with much of the rest of the world” wholly unacceptable. Poland’s railway system is underfunded, and the money concerned is badly needed – for rolling stock, infrastructure upgrades and safety improvements. The European Rail Transport Management System (ERTMS) – which is a European standard – should be implemented as soon as possible. However, it is difficult to say whether the political will is there from the government to do this.” From an outside perspective, Poland’s failure to take the bull by the horns and invest in its railways is baffling. David Briginshaw, editor-inchief of International Railway Journal, sees Poland in an isolated position. “In terms of its stance on rail investment, Poland is out of step with much of the rest of the world,” he told WBJ. “Most other countries are reducing the amount that they invest in roads and increasing the amount they invest in rail.”

No Euro woe? Concern has been expressed in the Polish and international media about the potential effect of the disaster on sup-

A survey by pollster TNS OBOP indicated support for the ruling Civic Platform (PO) party at 29% , not far ahead of main rival Law and Justice (PiS), which received 22% support. In January, PO polled at 37% – far higher than currently, but below the 39% support the party received in the October parliamentary election. COURTESY OF BIALYSTOK.NASZEMIASTO.PL

people to fill gaps when key workers retire. The main problem, experts say, is that PKP doesn’t do enough to attract new staff, because pay and conditions are not competitive. Moreover, a situation in which commitments by the government to improve Poland’s railways are made only in the days immediately after a major disaster cannot be allowed to continue, said Mr Wach. “Above all, it is not acceptable that the transport minister comes out with these commitments only after such a catastrophe,” he emphasized. “It is indefensible that now, only after the catastrophe, the process of looking for new solutions and answers is starting. It should be an ongoing, continuous process – and it requires increasing the funding for railways and changing the system of training railway workers.” In these circumstances, the notion of shifting EU funds earmarked for railway investments to roads should have been out of the question, Mr Wach said. “In my view, this idea is


PGNiG appoints new CEO

Poland must revise its current railway policy, experts say porters arriving in Poland for this summer’s Euro 2012 soccer championship. “While many foreign soccer fans may be unaware of the accident, it does depend on how long the accident remains in the news,” Mr Briginshaw said. “It is up to the Polish government and the railways to discover the root cause of the accident as quickly as possible, and then to take steps to ensure such an accident can never happen again and there-

by reassure people that Poland takes railway safety seriously. Poland cannot continue to have an on-off railway policy,” he added.’s Karol Wach, however, noted that rail travel has a favorable safety record when compared to road travel. “Rail remains a safer form of transport than roads. Accidents on railways happen considerably less often than on roads. For this reason – as well as the competitive journey times – I don’t think it will

make any difference [for Euro 2012],” he said. It remains to be seen whether the Polish government’s commitment to making the necessary changes to the railway network will be followed through. If it is not, it can only be hoped that it does not take an even more deadly accident before the government finally takes the matter of upgrading the country’s railways – and improving the conditions of its railway operators – seriously. ●

Polish gas monopoly PGNiG appointed Gra˝yna PiotrowskaOliwa as its new CEO last week. Ms Piotrowska-Oliwa’s term will start on March 19 and is set to expire two years later. PGNiG’s new CEO has in the past headed Orange, the cellphone unit of former Polish telecom monopoly TPSA. She currently sits on the management board of refiner PKN Orlen, where she has tendered her resignation, effective March 18. ●

Legal Forum

Prohibition of chaining of limited liability companies – be cautious Ludomir Biedecki Partner So you decided to start your business in Central and Eastern Europe and, thanks to discussions with friends who are already based in the region, you have chosen to establish a limited liability company (in Poland: sp. z o.o., in the Czech Republic and Slovakia: s.r.o., in Romania: SRL, in Hungary: Kft). You have been told that such a company will protect you against possible claims to your personal assets if anything goes wrong. True, the Polish Code of Commercial Companies (and equivalent provisions of law in other CEE countries) explicitly states that shareholders of a limited liability company are not liable for its obligations. But since you are already a shareholder of a limited liability company in your home country, it seems reasonable to “chain” those companies together. That seems great: You will become the sole owner of your own corporation!

Now, let’s take a short pause here. Although it sounds fantastic, you will have to consider one small detail regarding the chaining of limited liability companies in Poland (but also in the Czech Republic, Slovakia and Romania). It’s a provision of the Polish Code of Commercial Companies (and similar regulations in the other countries mentioned above) that causes a bit of a problem. It says that a Polish (Czech, Slovak or Romanian) limited liability company cannot be incorporated (or owned) by another limited liability company (whether French, English, German, American or other) that has just one shareholder. The stipulation stems from European regulations, according to which EU countries may adopt special provisions or even sanctions for cases in which a company owned by one person is the sole shareholder of another company.

What does that actually mean? Well, the view shared by many of the new EU members of the 2004 and 2007 accession waves is that it allows them to prohibit the chaining of companies. In effect, it means that you will have to co-opt, at least at the beginning, with another shareholder, whether you want to or not.

Polish solution Polish practice has solved this problem in a very simple way. Since Polish legal provisions state that a limited liability company must have more than one shareholder only at the moment of incorporation, immediately after incorporation the shares can be unified (e.g. by way of transfer or redemption), thus reaching the desired – and economically most reasonable – structure. This is good news, since Polish academics have confirmed this

pattern and have distinguished between limited liability companies held by one shareholder at an initial (i.e. from incorporation) stage and limited liability companies at a secondary (i.e. following unification of shares) stage. This means that at the secondary stage in Poland, subject to local regulations, one can be the owner of two single-shareholder companies. How does it look in other counties in the CEE region? In the Czech Republic and Slovakia the solution is slightly different – 1 percent of shares is given to the grandparent company. In Romania on the other hand, a small shareholding stake is in the hands of the limited liability company itself in order to circumvent a similar prohibition in its corporate law. Hungary adopted the most liberal approach. Their lawmakers simply deleted the former prohi-

Legal Forum is a paid-for module which gives law firms in Poland an opportunity to discuss and inform readers about important developments in the market. The content is created in consultation with Warsaw Business Journal's editorial staff.

bition on chaining. The Czech Republic is reforming its corporate law and their measures prohibiting the chaining of companies will no longer be effective as of 2014. These are interesting examples of positive changes in law in the CEE region aimed at facilitating business growth. It is good to note that reasonable people are slowly beginning to realize that the basic capital (initial share capital) is, in any case, not the most efficient measure for protecting a company’s creditors (let’s be frank: you can incorporate a Polish limited liability company with a share capital of z∏.5,000 – this does not represent real protection for your creditors). Let’s hope that Polish legislators will soon come to the same conclusions. Until then, ask your lawyer whether the corporate structure you have in mind will work. ●

Poland received lots of attention at this year’s MIPIM property fair in Cannes, France

UBM’s Peter Obernhuber talks about the company’s plans for the Polish market




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

Celtic builds Iris project in Warsaw Developer Celtic Property Developments is building the third phase of its Cybernetyki Office Park project in Warsaw. Called Iris and scheduled to be completed in December this year, the five-floor facility will deliver approximately 14,300 sqm of space. The Cybernetyki Office Park development is located on ul. Cybernetyki in the capital’s Mokotów district. Currently, the investment comprises two completed office buildings: Helion and Luminar. ●

In this issue New Warsaw skyscraper . . . . .14 ECE’s latest mall . . . . . . . . . . . . .14 MIPIM 2012 . . . . . . . . . . . . . . . . .15 UBM interview . . . . . . . . . . . . . .16 Warsaw’s investment appeal .17 Royal Wilanów project . . . . . . .17 Piano House permit . . . . . . . . . .17 Property-related stocks . . . . . .17


New skyscraper planned for downtown Warsaw BBI Development’s latest tower will provide approximately 55,000 sqm of usable space Developer BBI Development NFI revealed a preliminary architectural design of a new office high-rise building that it will build in central Warsaw at the MIPIM 2012 international property fair in Cannes, France, last week. The scheme, which the company will develop in partnership with the Roman Catholic Archdiocese of Warsaw and St. Barbara’s Parish, will be located at the intersection of the capital’s ul. Emilii Plater and ul. Nowogrodzka. The investment, which has

and functionality,” Micha∏ Skotnicki, president of BBI Development’s management board, said in a statement. A preliminary investment agreement between BBI and the Warsaw Archdiocese was signed in August last year. A special-purpose vehicle set up by the entities will be responsible for the development, leasing and sale of the property. Warsaw Stock Exchangelisted BBI Development NFI is currently also involved, together with Liebrecht & Wood, in the construction of the Plac Unii mixed-use highrise building in the Polish capital. Planned projects of the developer include the Nowy Sezam scheme in central Warsaw.

been designed by Juvenes – Projekt, is expected to rise approximately 180 meters tall and comprise some 55,000

“Our goal is to create a building of premium architectural quality” sqm of usable space. Warsaw City Hall has already granted its approval for a high-rise structure at the site. “Our goal is to create a building of premium architectural quality, distinguished by its elegant form, moderation

Adam Zdrodowski


A new passenger terminal was opened at the international airport in Wroc∏aw, Lower Silesia voivodship, on February 28. The facility has a usable area of 38,670 sqm and is expected to increase the airport’s capacity to over 3.5 million passengers a year. The contract for the expansion of the existing Wroc∏aw Airport was carried out by a consortium of Hochtief Polska and Hochtief Solutions. Work on the project started in September 2009, with the investment’s value estimated at more than z∏.300 million.

MARCH 12-18, 2012, LI 17/10

The skyscraper is expected to stand at around 180 meters tall


ECE to open new mall in Bydgoszcz in 2014 The shopping center will be the developer’s largest in Poland so far Developer ECE Projektmanagement Polska will build a new shopping center called Galeria Kujawska in Bydgoszcz, Kujawsko-Pomorskie voivodship, by the end of 2014. The company is now carrying out design work and plans to start construction in spring next year. Galeria Kujawska will comprise approximately 48,000 sqm of leasable space and house some 180 stores. The mall will be the largest shopping and entertainment center in Bydgoszcz and will also be the largest retail scheme that ECE has built in

Poland so far. The investment, whose value is estimated at €170 million, will be developed on Bydgoszcz’s ul. Wojska Polskiego, at the site of the former ORTIS printing house. Demolition of the ORTIS facility was completed at the beginning of this year. “The environmental impact decision is being prepared, we expect to obtain it in a few months. We are planning to apply for a building permit in autumn this year,” Leszek Sikora, development department director at ECE Projektmanagement Polska, said in a statement. ECE has been developing and designing shopping center projects since 1965. Currently,


New Wroc∏aw Airport terminal opens

The shopping center will offer 48,000 sqm of leasable space the firm manages 180 malls in 16 countries. In Poland, the

firm’s Galeria Kaskada shopping center in Szczecin is

among its most well-known Adam Zdrodowski projects.

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

MARCH 12-18, 2012



MIPIM 2012

Poland a safe bet in troubled times

Investors, developers and financiers from across the globe descended once again on Cannes last week for this year’s MIPIM, a real estate exhibition that takes place at the same location every March. As always, the event set its sights firmly on Europe, although Middle Eastern countries including Qatar and Bahrain, with its $2.5 billion Bahrain Bay mixed-use development, were also in the spotlight. New projects and potential investments on show were varied, but for both Poland and the City of London there was a shared sense of expectation about opportunities created by two very different sporting events – the Euro 2012 soccer championship and the Summer Olympic Games.

Euro 2012 boost Representatives of the four Polish Euro 2012 host cities – Gdaƒsk, Poznaƒ, Warsaw and Wroc∏aw – were keen to emphasize what they see as being the tournament’s positive influence, both in the short and long term. In Gdaƒsk, major improvements to infrastructure such as a new direct train line from the airport to the downtown area, as well as hotel developments in the city’s metropolitan area over the last 3-4 years, have made the city more attractive to both investors and tourists, Deputy Mayor of Gdaƒsk Andrzej Bojanowski told Lokale Immobilia. These positive sentiments were echoed by Marcin Przy∏´bski, head of Poznaƒ’s investor relations department, who said “infrastructure investments in Poznaƒ will help our city become more attractive for office and retail space and we have recently seen several new developments so far which we believe are a direct result of Euro 2012.” However, real estate industry experts are more cautious, suggesting that the tournament will not have a major impact on the real estate market in the short term. What many said, though, is that preparations for Euro 2012 have moved the country’s development forward at a much faster pace than would have been otherwise possible, and in so doing, have prepared

the ground for future investment. “It’s the same as with the London Olympics: a sporting event is not going to transform the market. But what it does do is speed up the process with regards to investment in areas such as infrastructure, which will inevitably help investors in the future,” said Sean Doyle, a senior consultant at CBRE Poland.

Room for optimism Polish market players and analysts were more or less unanimous in their opinion that Poland will be the main real estate investment location in the CEE region during 2012. As a result of the way the country has weathered the economic crisis, the perception of Poland as a relative safe haven is still shared by both investors and financiers alike. This, experts say, bodes well for the future. “Investors definitely see this as an active market. There are currently low vacancy rates on all buildings and in this sense there is a massive difference between Poland and other countries in the CEE region,” said Philippe Mer, head of territories for the CEE region and CEO of Poland for BNP Paribas Real Estate.

“In the mind of investors, Poland is a Western country” “And as a conservative bank interested in safer options, if we are accelerating investments in Poland then this clearly shows that the opportunities here are very good,” he added. However, despite the relatively optimistic outlook, the investment growth dynamics seen in 2010 and 2011 are unlikely to be maintained this year, as purchasers continue to pick their real estate investments selectively, experts say.

Business capital Nevertheless, Warsaw is currently second only to Paris in terms of the amount of new office buildings currently under construction, with some 700,000 sqm of office space set to be delivered in the 20122013 period, according to a recent report from CBRE. Demand for class-A office buildings in Warsaw is expected to be maintained through most of 2012, according to Monika Rajska-Woliƒska, managing partner at Colliers


Despite expectations of economic difficulties this year, participants at MIPIM 2012 seemed convinced that Poland would remain the CEE market’s top dog

Optimism abounded for Poland’s real estate market at MIPIM 2012 International. “The upcoming year will bring a significant increase in total modern office stock with new supply at double the level recorded in 2011,” Ms RajskaWoliƒska said. “In the first half of 2012 tenant activity should remain stable, however weaker demand for office space in the second half could be seen, due to the uncertain economic climate,” she added. Ghelamco’s highly anticipated Warsaw Spire skyscraper development is one new office project that is set to dramatically transform the capital’s skyline when completed in 2014. The 220-meter tower, along with two accompanying 55-meter buildings, will provide some 100,000 sqm of space when finished. According to Ghelamco’s managing director for CEE, Joroen van der Toolen, the firm is currently in negotiations with three potential tenants over the pre-lease of space in the development. This year’s MIPIM event also witnessed an announcement by BBI Development of the details of another planned skyscraper, which would join Warsaw Spire in changing the capital’s rapidly evolving skyline. If all goes to plan, the proposed 180-meter development will be built at the junction of ul. Emilii Plater and ul. Nowogrodzka.

Regional development Although Warsaw is still the center of Poland’s office sector, increased interest in new retail developments in smaller cities, as well as in built-to-suit office space from the Business Process Outsourcing (BPO) market is ensuring that

Poland’s smaller cities are also benefiting from new real estate developments. At an event to promote the city of ¸ódê, Waldemar Olbryk, the president of Skanska Property Poland, said the local region is a perfect location for companies from the

BPO sector. As evidence of this, he pointed to his own company’s under-construction Green Horizon office building. Built with the specific needs of BPO companies in mind, the office scheme is already 97 percent pre-leased. “The BPO sector [compa-

nies] are happy to install themselves in ¸ódê and we are happy to satisfy their needs by providing them [with] offices,” Mr Olbryk said. The view that the BPO sector will continue to grow in importance for Poland in coming years was supported by numerous experts in Cannes. “BPO companies are more and more interested in the Polish market due to the low level of rent as well as the country’s well educated personnel,” said Colliers’ RajskaWoliƒska. So it seems that regardless of the realization that 2012 may be a more difficult period for Poland, in terms of its real estate market, the country still remains a safe bet in the CEE region. “In the mind of investors, Poland is a Western country,” said Mr Mer of BNP Paribas. “This is because of the room for growth, it’s safe, there are low levels of corruption … and the right population in terms of number, education and spending power – all of which are fundamentals of a good economy,” he said. David Ingham



MARCH 12-18, 2012


UBM going for retail in the regions Adam Zdrodowski: You recently opened your first shopping center in Poland, and another mall is in the works. What was the rationale behind entering the sector? Peter Obernhuber: We have analyzed the shopping center market for a long time now. The reason for our interest in the sector is the strategy of diversifying the company’s activities, as well as its sources of revenue. This is a market in Poland that is still not saturated, even though it is seeing very dynamic growth. Where will future UBM malls be built? Since the very beginning, we have been focusing on cities with populations of more than 200,000 and we will continue to analyze the market with this criterion in mind. The next retail project, which we will launch at the beginning of 2013, will be developed in Sosnowiec. For the time being, Warsaw is outside the scope of

our investment interests. In which sector of the retail market do you see room for new schemes? The concept of the new projects that we already have in mind will not be much different from that of the centers which we have in our portfolio. We plan to build shopping centers with some 20,000 sqm of space that will comprise independent elements such as a supermarket and a shopping gallery. In our opinion, this concept works best in regional cities. The Warsaw office market saw a record lease level last year. How was this reflected in the commercialization of your Poleczki Business Park office project in Warsaw? Last year, a total of more than 14,000 sqm of office and service space was leased in both phases of Poleczki Business Park. In May, two buildings with a total floor area of

21,000 sqm, 40 percent of which has already been leased out, will be delivered. For its part, the first phase has been 95 percent commercialized. When will the next phase of the park be launched and is UBM also planning some other office projects in the Polish market? The development of the third phase of the project is obviously contingent on the progress in leasing, which means we are prepared to launch construction on a speculative basis as soon as a lease level of 75 percent is secured. We are currently also analyzing two projects in Kraków, one of which is being finalized, but I cannot reveal any details yet. What is the company planning in the residential market? In the residential market we are mostly focusing on the ongoing projects – Oaza Kampinos near Warsaw, Villa Galicja in Kraków and Ogrody Bielaƒskie in Bielany Wroc∏awskie. We are considering launching two new developments in Kraków, each of which would offer up to 300 housing units.

“We are not expecting any major difficulties when it comes to financing new investments”


Lokale Immobilia talks to Peter Obernhuber, member of the management board of developer UBM Polska, about the company’s development plans in the Polish retail, office and residential markets

Mr Obernhuber said UBM is concentrating its retail activities in regional cities How much, approximately, will you invest in the Polish market this year? We are watching the market very carefully and at this stage I can just say that our priority is to finish the projects that have already commenced and to start those which are planned. We plan to invest

approximately €50 million in 2012 in finishing the ongoing projects and launching the office scheme in Kraków. How are you financing your projects and what is your view of the current situation concerning bank financing? We develop all of our projects

with the support of bank financing. We use the services of both Polish and Western European banks. Thanks to the diversification of our activities and our presence across Europe, we are not expecting any major difficulties when it comes to financing new investments. ●


MARCH 12-18, 2012



Warsaw was topped only by London

by 12 percent of the investors polled) ranked only lower than London (37 percent) and higher than cities including Paris (9 percent), Munich (8 percent) and Berlin (7 percent). According to Colin Waddell, managing director of CBRE in Poland, Warsaw has benefited from the resilience of the Polish economy. “The position of Warsaw among the most desired prop-

Warsaw is the second-most attractive city in Europe in the eyes of international real estate investors, according to the “Real Estate Investor Intentions” survey that CBRE announced at the MIPIM 2012 property fair in Cannes, France, last week. The Polish capital (chosen

Leading London Which city in Europe do you believe to be the most attractive investment destination? (% of respondents) 40 37.2 35 30 25


12.1 8.6



6.9 3.4





2.4 urt

d dri

nkf Fra




urg Sto







rlin Be

nic Mu

Pa ri

aw Wa rs





Source: CBRE


erty investment destinations in Europe reflects Poland’s well-deserved perception of a market with strong underlying fundamentals, able to weather global and European economic volatility,” Mr Waddell said in a statement. “The number-two score of the Polish capital, right after London and before Paris, Munich and Berlin, presents an optimistic outlook for developers and investors engaged in the Polish market, as well as for those intending to make an entry,” he added. In terms of countries and entire regions, the UK is the most attractive real estate market for investment in Europe (31 percent of respondents), followed by Germany (27 percent) and Central and Eastern Europe (19 percent), the CBRE study said. Adam Zdrodowski

Royal Wilanów office project commercialization gets underway Developer Capital Park Group is going ahead with the commercialization of its Royal Wilanów office project in Warsaw. The company has just selected Colliers International as the exclusive leasing agent for office space in the scheme. Located at the intersection of ul. Klimczaka and ul. Przyczó∏kowa in Warsaw’s Wilanów district, in the vicinity of the Miasteczko Wilanów housing estate, the Royal Wilanów development will feature five

floors with a total of 28,000 sqm of office and 7,000 sqm of retail-service space. “Royal Wilanów is an excellent alternative to the increasingly congested Mokotów where more and more offices are being built every year. The business part of southern Warsaw is moving towards Wilanów,” Dorota Ejsmont, leasing director at Capital Park Group, said in a statement. The Royal Wilanów investment, which was designed by

the Warsaw-based JEMS Architekci studio, has already secured a building permit. Construction on the facility is expected to last 24 months. Capital Park Group has been active in the Polish property market since 2003, investing jointly with the Patron Capital Partners international private equity fund. Planned projects of the company in Warsaw include Eurocentrum Office Complex in the capital’s Ochota district. Adam Zdrodowski

Icon Real Estate gets go-ahead for Piano House apartments in Warsaw ment process. “We have just received a building permit and plan to officially launch apartment sales in April but we already have a considerable level of reservations, especially for the largest apartments,” Beata Staniak, head of sales of Piano House, said in a statement.


Developer Icon Real Estate has obtained a building permit for its Piano House multifamily housing project in Warsaw. The scheme will be located at the intersection of ul. Topiel and ul. Zaj´cza in the city’s PowiÊle neighborhood and will deliver approximately 60 upmarket apartments. Construction on the project, designed by the Grupa 5 Architekci studio, is scheduled to launch next month. The developer is now in the process of selecting a general contractor for the investment. Icon Real Estate touts the convenient location of Piano House, which will be built close to two planned subway stations and stresses that buyer interest in the project is large despite the early stage of the invest-

Icon Real Estate is currently also building the Na Sowiƒskiego residential project in Warsaw’s Wola district, and is revitalizing two tenement houses on the capital’s ul. Ordynacka and ul. Poznaƒska. Planned developments include Villa Icon in Warsaw’s Mokotów disAZ trict.


Warsaw second in Europe in terms of property investment attractiveness

The perception of Warsaw has improved due to the performance of the Polish economy

Property-related stocks Security

Closing price on Mar 8

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)



















































































































































































































































MARCH 12-18, 2012


Construction & Real Estate

Commercial Real Estate Agents


Ranked by total commercial property leased in 2010

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

Property leased commercial (sqm)

Property leased Property leased Property leased warehouse office (sqm) retail (sqm) (sqm)

Examples of property leased in 2010-2011

Number of contracted employees / Number of agents / Year founded

Number of offices in Poland / Locations

Ownership: Polish / Foreign

130 33 1991

1 Warsaw



250 WND 1962

1 Warsaw

State Treasury - 100% None

ProLogis; Panattoni; Skanska Property Poland; Helical Poland; TK Maxx

153 36 1997

3 Warsaw; Kraków; Wroc∏aw

WND - 35% CMN - 65%

Market research; strategic advice; investment advice; ING; Skanska Property property portfolio management; Poland; Keen Property project management; valuations; Partners; Echo Investment; customer real estate financial Shell service; real estate management

220 40 2000

3 Warsaw; Gdaƒsk

None WND

Goldman Sachs; PKP Intercity; Ghelamco; Yareal; Microstrategy; Agromex Development 1; Bainbridge; Reinhold; PPHU WILK

279 23 1994

1 Warsaw



98 11 1991

7 Katowice; Kraków; Poznaƒ; Warsaw; Wroc∏aw; ¸ódê; Gdaƒsk



Selected clients

Top local executive / Title

1st half of 2011 / 2010 / 2009 / 2008

Cushman & Wakefield Polska Sp. z o.o. Pl. Pi∏sudskiego 1, 00-078 Warsaw 1 22 820-2020/22 820-2021

122,494 278,000 245,800 194,585

67,000 106,500 110,000 84,585

55,494 171,500 135,800 110,000

53,414 145,000 140,000 283,602

Green Horizon; Platinium Business Park; Port ¸ódê; Panattoni Park Âwi´cice

Polski Holding NieruchomoÊci SA ul. Âwi´tokrzyska 36, 00-116 Warsaw 2 22 526-3107/22 620-9960

WND 129,470 WND WND

WND 120,000 WND WND




Colliers International Poland Sp. z o.o. Pl. Pi∏sudskiego 3, 00-078 Warsaw 3 22 331-7800/22 331-7801

63,500 107,300 55,500 73,000

41,800 85,000 43,000 61,000

21,700 22,300 12,500 12,000

400,000 350,000 260,503 250,000

CB Richard Ellis Polska Sp. z o.o. Rondo ONZ 1, 00-124 Warsaw 4 22 544-8000/22 544-8001

95,000 70,000 187,000 140,000

50,000 45,000 137,000 111,000

45,000 25,000 50,000 29,000

21,000 53,000 35,000 34,000


DTZ Polska Sp. z o.o. ul. Z∏ota 59, 00-120 Warsaw 5 22 222-3000/22 222-3001

47,631 61,295 68,942 183,271

29,334 24,187 27,837 78,271

18,297 37,108 41,105 105,000

31,608 8,516 6,400 28,736

Crown Square; Trinity Park III; Mokotowska Square; Galeria Leszno

Knight Frank Sp. z o.o. ul. Mokotowska 49, 00-542 Warsaw 6 22 596-5050/22 596-5051

44,372 61,280 20,376 30,373

43,612 60,874 19,145 29,118

760 406 1,232 1,056

900 3,124 -

University Business Centre I, II; Financial, development and Riverside Park; Centrum investment advice; market Biurowe Lubicz I, II; Altus; research; valuation; commercial Skalar Office Center real estate management

Kancelaria Brochocki Sp. z o.o., Sp.k. Krakowskie PrzedmieÊcie 14, 7 00-325 Warsaw 22 826-1414/22 828-1545

22,700 49,300 57,900 47,580

22,000 46,800 51,400 45,000

700 2,500 6,500 2,580


Poleczki Business Park; Skylight; Jerozolimskie Business Park; Zebra Tower; Millennium Park

Re-negotiations of lease contracts; real estate management; preparing tenders; market analysis; real estate promotion and PR

TUW TUZ; Ministry of Foreign Affairs; Kapsch Telematic Services; VOS Logistics; Solid Security

19 14 1993

2 Warsaw; Wroc∏aw

Andrzej Brochocki 70%; Maciej Pe∏da 30% None

Ober-Haus NieruchomoÊci Sp. z o.o. ul. Marsza∏kowska 111, 00-102 Warsaw 8 22 528-5454/22 528-5455

14,010 38,000 42,650 85,070

10,800 30,000 31,100 61,870

3,210 8,000 11,550 23,200

10,000 6,000 4,100 4,900

Gdaƒsk Megaron; Gdaƒsk Garnizon; Nowogrodzka 21; Trinity Park III


Eagis Media

WND WND 2000

WND Warsaw; Kraków; Poznaƒ; Gdaƒsk; ¸ódê

WND Realia Group Oy

MAXON NieruchomoÊci Sp. z o.o. ul. Okopowa 58/72, 01-042 Warsaw 9 22 530-6000/22 530-6001

WND 32,400 34,900 37,100

WND 31,000 32,000 36,000

WND 1,400 2,900 1,100

WND 9,400 4,400 17,200


Real estate market agency


9 58 1989

1 Warsaw

Janusz Iracki None

Janusz Iracki; Anna Danielewicz

A&A Marketing Sp. z o.o. ul. Piotrkowska 146, 90-063 ¸ódê 10 42 632-0000/42 636-9474

28,550 28,560 WND WND

18,400 18,560 WND WND

10,150 10,000 WND WND

110,000 108,000 WND WND

Asseco; Lorenz Bahlsen; Bank Millennium; Aunde Poland; Polkomtel

WND WND 2004



Sylwia Borusowska

Jones Lang LaSalle Sp. z o.o. ul. Królewska 16, 00-103 Warsaw NR 22 318-0000/22 318-0099





GTC; Heitman; Rockspring; Aberdeen; BBI Development

340 52 1994

4 Warsaw; Gdaƒsk; Kraków; Katowice

None WND

Notes: NA = Not Aplicable, NR = Not Ranked, WND = Would Not Disclose. Research for The List was conducted in September 2011. Number of employees and ownership structure are as of August 2011. All information pertains to the companies’ activities in Poland. Companies not responding to our survey are not listed.

Property management; financial Atrium European Real and investment advice; valuation; Estate; Inter IKEA market research; network client Centre Neinver; Polska; Tesco; PKP services


Investment advisory; real estate Mokotów Nova; Europa valuation and management; Centralna; Panattoni Park construction project Âwi´cice; ProLogis Park management; asset Wroc∏aw III; Brama Zachodnia management; market research


Own commercial real estate Grota Roweckiego 8 Pabianice; leasing; facility management; Piotrkowska 60 ¸ódê; comprehensive lease service; Wersalska 47/75 ¸ódê; events organization for tenants; Biurowe Centrum Biznesu ¸ódê GSM antenna space leasing

Equator II; Bonarka 4 Business; Libra Business Centre; Galeria Wilanów; Inter IKEA Lublin

Investment advice; real estate management; valuations; commercial real estate lease agency; project management

Richard Petersen Managing Partner

Rafa∏ Krzemieƒ President

Monika RajskaWoliƒska Managing Partner

Colin Waddell Managing Director

Patrick Delcol Country Head of DTZ in Poland

Monika A. D´bska; Joseph Borowski; Katarzyna Bàczyƒska President; Vice-President; Managing Director

Andrzej Brochocki Managing Partner

Jolanta Loranty President

President; Vice-President


John Duckworth Managing Director CEE

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (+48) 22 639-8569, or via e-mail to 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.



MARCH 12-18, 2012

Stocks report

world stock indices DJIA


12,907.94 (Mar 8 close)


2,970.42 (Mar 8 close)

-0.56% (for the week)


1,365.91 (Mar 8 close)

-0.62% (for the week)


5,859.73 (Mar 8 close)

-0.60% (for the week)

-1.21% (for the week)

Eyes on China

NIKKEI225 6,834.54 (Mar 8 close)

9,768.96 (Mar 8 close)

-1.54% (for the week)

0.63% (for the week)

CHANGE: 4.12%

CHANGE: 12.15%

CHANGE: 6.96%

CHANGE: 2.80%

CHANGE: 12.49%

CHANGE: 14.12%

(year to Mar 8)

(year to Mar 8)

(year to Mar 8)

(year to Mar 8)

(year to Mar 8)

(year to Mar 8)

52-week high: 13,055.75

52-week high: 3,000.11

52-week high: 1,378.04

52-week high: 6,103.73

52-week high: 7,600.41

52-week high: 10,549.17

52-week low: 10,404.49

52-week low: 2,298.89

52-week low: 1,074.77

52-week low: 4,791.01

52-week low: 4,965.80

52-week low: 8,135.79

Pessimism marked the start of last week on the Warsaw Stock Exchange with investors worried by forecasts of 7.5 percent economic growth in China in 2012 (which would be the worst result since 2004), and a worse-than-expected reading of service-sector activity in the euro zone. On Monday, the main WIG index and the bluechip WIG20 index lost 1.33 and 1.76 percent respectively. The downward trend continued on Tuesday. The WIG20 saw further losses with only the stocks of PKO BP, PZU and PGE finshing the day in the black. On the whole market, only 75 companies saw gains, while 291 firms finished the day in the red. The negative sentiment was overcome on Wednesday when the Warsaw bourse not only saw gains, but also an increase in turnover to more than z∏.937 million. Of the WIG20 companies, the performance of developer Globe Trade Centre was particularly strong – the company’s stock

Major indices WIG

41,533.87 (March 8 close)


2,320.89 (March 8 close)

Change for the week: 0.67%

52-week high: 50,371.74

Change for the week: 1.02%

52-week high: 2,932.62

Change year to March 8: 8.39%

52-week low: 36,549.47

Change year to March 8: 5.78%

52-week low: 2,089.84





41,800 2,300 41,200














































Closing 10.65 0.34 9.76 3.48 5.75

% change (week) 52-week high 52.14 10.94 41.67 1.65 21.24 9.76 20.00 4.79 18.07 5.75

52-week low 2.88 0.16 2.07 1.99 1.98


Closing 3.85 137.00 36.25 2.38 333.00

% change (week) 3.22 3.09 2.60 1.71 0.60

52-week high 4.65 155.00 58.85 15.29 398.60

52-week low 3.25 116.10 30.33 2.01 283.10


Closing 24.00 0.85 6.19 3.07 54.00

% change (week) -24.76 -20.56 -17.47 -14.25 -13.94

52-week low 21.26 0.41 2.91 2.85 52.50


Closing 54.00 7.47 24.98 1.58 51.30

% change (week) -13.94 -10.97 -10.47 -8.14 -3.02

52-week high 205.00 21.79 49.50 3.77 55.45

52-week low 52.50 6.83 21.30 1.19 34.50

52-week high 38.15 1.11 12.40 5.84 205.00


High volatility

10,335.11 (March 8 close)


5,954.18 (March 8 close)





























5,720 20.02
















52-week low: 4,944.19


Change year to March 8: 7.41%


52-week low: 40.23


52-week high: 7,387.49

Change year to March 8: 3.13%


Change for the week: -0.18%


52-week high: 59.16


Change for the week: 0.16%


Adam Narczewski X-Trade Brokers DM SA












52-week low: 8,218.71









42.79 (March 8 close)

52-week high: 12,932.00







9,000 24.02























Change year to March 8: 20.12%


52-week low: 2,076.52


Change year to March 8: 13.13%


Change for the week: 0.17%


52-week high: 2,987.72


2,477.88 (March 8 close)

Change for the week: 0.63%

Adam Zdrodowski

Currency report

Other indices mWIG40

price grew by 7.25 percent. KGHM, Pekao, Kernel and TVN all helped push the index into the black. Positive sentiment on other European bourses, as well as good news from Athens, led to the continuation of this trend on Thursday. The WSE saw a turnover of slighly above z∏.1 billion with 253 companies finishing the day with gains and 97 with losses. The WIG20, bolstered by the performance of PKO BP, KGHM, Pekao, PKN Orlen and PGNiG, grew by 1.37 percent. Friday started with indices rising, again on news of improving sentiment on the main European stock exchanges. However, in the case of the WIG20 the bulls did not manage to maintain the gains and the index finished the day with a 0.06 percent loss. The stocks of Getin, Bank Handlowy, JSW and TVN were some of the stronger performers.

The z∏oty market experienced big swings this past week. Uncertainty surrounding Greece caused a larger corrective movement and a depreciation of the local currency to z∏.4.17 against the euro and z∏.3.18 against the dollar during the first part of the week. The increased risk aversion was also seen on the EUR/USD, which declined to test the $1.31 level. Markets got some relief in the second part of the week, when European Central Bank president Mario Draghi said he was positive about the two rounds of ECB LTRO financing carried out so far, adding that he had not ruled out another round if necessary. At the same time the ECB left interest rates unchanged. The important news from

Thursday, although overrated by investors in my opinion, was an exchange that saw a reduction of privately held Greek debt. The Greek tragedy is not over yet due to next month’s parliamentary elections, and political risk is therefore now once again in the spotlight. The US proved that its labor market its bouncing back, with 227,000 new jobs added in the nonfarm sector, but high oil prices might slow that growth. On the local market, Poland’s rate-setters kept the main interest rate unchanged at 4.5 percent but mentioned that there is a higher chance of a hike than a cut in the future. The z∏oty appreciated in the second half of the week and on Friday reached z∏.4.09 against the euro, z∏.3.12 against the dollar and z∏.3.40 against the Swiss franc.●

currency rates 3.8083 02.03



3.9164 29.02


3.8960 28.02


3.8049 24.02


0.1058 02.03






0.1065 29.02

0.1067 28.02


0.1058 24.02


3.4125 02.03






3.4492 29.02

3.4472 28.02


3.4119 24.02


4.9053 02.03






4.9788 29.02

4.9787 28.02


4.9423 24.02


3.1126 02.03






3.1631 29.02

3.1557 28.02


3.1023 24.02


4.1143 02.03






4.1578 29.02

4.1570 28.02


4.1125 24.02






MARCH 12-18, 2012

Radwaƒska third in WTA earnings this year

Poland’s Agnieszka Radwaƒska is the third-highest-paid among women’s tennis players this year. The 23-year-old from Kraków has earned $832,084 since January. Belarusian Vic-


Euro 2012


Her sister also made it into the ranking of the top 100 highestpaid women’s tennis players

toria Azarenka leads the field, having earned $2,921,950, ahead of Russia’s Maria Sharapova, who has earned $1,231,350 since January, the Polish Press Agency reported. Last year Ms Radwaƒska, who turned 23 last Tuesday, entered the WTA’s BMW Malaysian Open in Kuala Lumpur, as the highest seed in late February. After winning two rounds, she forfeited in the

quarterfinals, due to a right elbow injury. The only other Pole in the top 100 was Ms Radwaƒska’s younger sister, Urszula, who came in 78th place, earning $57,976. The next two highest ranking Poles were Alicja Rosolska, who came in 127th place, and Klaudia Jans-Ignacik, in 178th place AK

Advantage Azarenka

Abramovich pays €1.2 mln for Poland-Russia skybox: report The Russian tycoon is worth an estimated $13.4 billion Russian billionaire Roman Abramovich paid €1.2 million to secure the presidential box for the Poland-Russia match at the upcoming Euro 2012 soccer championships, daily Puls Biznesu reported last week, citing unnamed sources. If accurate, this would mean that neither President Bronis∏aw Komorowski nor Prime Minister Donald Tusk will occupy the box during the game, which takes place at

Warsaw’s National Stadium on June 12. Mr Abramovich, who has an estimated fortune of $13.4 billion, was ranked 53rd in Forbes’ 2011 list of the richest people in the world. He is the owner of the Chelsea soccer club in London. Robert Korzeniowski, marketing advisor to UEFA and former race-walk champion, told the newspaper that VIP packages for Euro 2012 games are proving popular. “In Poland, over 400 customers have purchased ticket packages so far and that num-

ber is growing fast,” he said. Mr Korzeniowski added that VIP packages are still available for each match. The price reportedly paid by Mr Abramovich, however, is in no way indicative of the prices of most match-day VIP packages. The average price for one package is €1,700, with those for the final costing an average of around €6,900, the newspaper wrote. The National Stadium says on its website that prices for VIP boxes are agreed to on an individual basis. GP, EP

Top earners on the WTA tour this season Player Victoria Azarenka Maria Sharapova Agnieszka Radwaƒska Kim Clijsters Petra Kvitová Sara Errani Julia Görges Caroline Wozniacki Svetlana Kuznetsova Vera Zvonareva

Country Belarus Russia Poland Belgium Czech Republic Italy Germany Denmark Russia Russia

Earnings $2,921,950 $1,231,350 $832,084 $492,691 $492,201 $417,810 $414,920 $388,668 $348,831 $321,976

Urszula Radwaƒska Alicja Rosolska Klaudia Jans-Ignacik

Poland Poland Poland

$57,967 $32,149 $24,970 Source: PAP

Polish World Cup legend Smolarek dies, aged 54 COURTESY OF WIKIMEDIA COMMONS

Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. ... 78. 127. 147.

Agnieszka Radwaƒska

Legendary Polish soccer player W∏odzimierz Smolarek died at his home in Aleksandrów ¸ódzki at the age of 54, the Polish Football Association reported last Wednesday. The organization’s communique did not indicate the cause of death. Mr Smolarek, who played as a striker, is among Poland’s greatest-ever soccer players. He represented his country in over

60 matches, including at the 1982 World Cup in Spain where Poland finished in third place. He played professionally at Widzew ¸ódê, Legia Warszawa, Eintracht Frankfurt (Germany), as well as at Feyenoord and FC Utrecht in the Netherlands, where he lived for many years. Polish Football Association president and former

national team player Grzegorz Lato said on the federation’s official website, “I find it hard to believe. W∏odek was my friend and an on-field colleague. He always had a good spirit within the team.” Mr Smolarek was the father of former Poland international player, Ebi Smolarek. Gareth Price



MARCH 12-18, 2012


Angry Birds March 15-May 6 Museum of Modern Art in Warsaw ul. Paƒska 3


According to curators at the Museum of Modern Art in Warsaw, the mass protests in the streets of Moscow have

been accompanied by a revival of the art world there. The exhibition “Angry Birds” will present works from young artists making a name for themselves in this new art scene in the Russian capital. The exhibition takes its name from the 2009 mobile

phone-based video game, in which the curators see parallels with protest movements against authoritarian regimes around the world. (The diverse array of angry birds represents the protesters, their enemies, the pigs, represent the authorities and the birds’ stolen eggs represent the young protesters’ future.) The title was proposed by the artists themselves and also reflects the mood of today’s Moscow, the museum’s curators say. “Viewers of the exhibition will be surprised by unfamiliar references, fantasies and fears. This strangeness shows how little experience over the last 20 years has connected Poland and Russia,” they add. Andrew Kureth

For more information, log on to

Voyage for love


Following on from his brilliant interpretation of Madame Butterfly and King Roger, director Mariusz Treliƒski returns to the stage

Paco Peña in 1984


Strumming flamenco Paco Peña Flamenco Dance Company March 20, 7 pm Sala Kongresowa Palace of Culture and Science Pl. Defilad 1 Warsaw Perhaps the greatest flamenco guitarist in the world, Paco Peña has been wooing packed theaters for decades, supported by a powerful, passionate cast of dancers.


The Flying Dutchman March 16, 7 pm Teatr Wielki / Polish National Opera Plac Teatralny 1 Warsaw


Moscow’s angry avians

with his take on Wagner’s The Flying Dutchman – the story of a cursed sailor searching for love. “Wagner had been absent from the stage for years, so we decided to initiate a return to this composer with his first mature work. I hope the result will be an intriguing, modern show as I return to my first musical fascinations,” Mr Treliƒski said in an interview for the Rzeczpospolita daily. The Flying Dutchman is one of Richard Wagner’s most often staged operas. The composer based his libretto on Heinrich Heine’s story of a sailor condemned to an endless voyage until he finds a woman who will be faithful to him until death. The story made a huge impression on Wagner. Then, during a voyage to London in 1839, he survived a powerful storm on the North Sea. He wrote later that this was when he came up with the opera, which premiered four years later. Andrew Kureth

For more information, log on to

Mr Peña founded the Paco Peña Flamenco Dance Company in 1970, and is credited with helping flamenco gain international popularity. He has been playing guitar since the age of six, and has been performing professionally since age 12. Although he is most wellknown for his flamenco playing, he also delves into other genres, such as jazz, blues and classical music.

In a February 2011 review, The New York Times said that there was “no weak link” in the performance put on by Mr Peña, the dancers and other musicians. His concert in Warsaw promises to be one to remember. Tickets cost between z∏.85 and z∏.255. AK

For more information, log on to

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

Green Gallery ul. Krzywe Ko∏o 2/4

Simonis Gallery ul. Burakowska 9

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

State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏)

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

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

Galeria XX1 Al. Jana Paw∏a II 36

Rempex Art and Auction House ul. Karowa 31

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

Galeria Zoya ul. Kopernika 32 m.8

Royal Castle Pl. Zamkowy 4

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MARCH 12-18, 2012


Tech Eye


Rumors flew fast and furious in the lead-up to Apple’s coquettishly teased press event last week. Maintaining its typical “Talk to the hand, Geeklings” attitude, the Cupertino, California-based firm neither confirmed nor denied the gossip. “Apple will unveil the iPad 3, with new scratch ‘n’ sniff technology,” one site claimed. Another alleged that the House that Jobs Built would forgo an iPad upgrade in favor of the brand new iSuperfluous-Third-Nipple, a wearable computer so named because it attaches in the chest region and employs nipples one and two as bio-antennas. Then the day of the great unveiling arrived, and we learned that Apple had nothing quite so futuristic up its, er, blouse. What it did have was a new iPad model, which it rather annoyingly refuses to call the iPad 3. The “new iPad,” as it’s being referred to, marks a significant advance on the iPad 2. The display is still 9.7 inches across – still shy of the 10.1 inches many competing products boast, in other words – but the resolution has been bumped from 1024 x 768 up to 2048 x 1536. The number of pixels, meanwhile, has


Apple unveils the iPad 3 new iPad

Apple TV

The new iPad been roughly quadrupled to 3.1 million (about a third higher than an HD TV, by Apple’s count) and color saturation is now 44 percent greater. If you’ve ever had a hankering to watch full 1080p, HD-resolution films on a tablet, here’s your chance. You’ll be able to count your favorite actor’s nose hairs. Other improvements include a quad-core graphics chip (up from dual-core) and a five-megapixel iSight camera in the back (up from 0.7 megapixels). Apple’s latest is also 4G LTE-capable, which is great pro-

vided your local telecom is up to it. On the other hand, the device is slightly thicker and heavier than its predecessor. Battery life is about the same, unless you’ve got 4G switched on. The new iPad hits shelves this Friday in select markets (sorry Poland). The top end (wi-fi + 4G, 64GB) model costs $829, while the entry-level version (wi-fi only, 16GB) runs $499. Colors available: white and black. Alongside its third-generation iPad, Apple also unveiled an update

to Apple TV, a product which has been politely ignored by most consumers since its 2007 debut. Despite the name, Apple TV isn’t actually a television – it’s a digital media receiver (the little box in the foreground of the photo above) that beams Appleapproved media (chiefly iTunes, but also Netflix, YouTube, Vimeo and others) straight to your TV set. The latest incarnation of Apple TV increases output resolution to 1080p and upgrades the CPU to a single-core A5. There’s more to it, but little that’s exciting. The device

only costs $99, so if you’re a diehard Mactard or have been gagging to have iTunes on your TV, it might be worth it. That was pretty much it from Apple last week. OK, yes, there were some moderately interesting software updates, but it’s the gadgets that really matter. And, frankly, the lack of iSuperfluous-Third-Nipple was disappointing, particularly for us menfolk, whose nipples could really use some kind of raison d’être. Maybe next year. ●

Ever yearned for a scratch ‘n’ sniff tablet? Let us know:

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WBJ #10 2012  
WBJ #10 2012  

Warsaw Business Journal, vol. 18, #10, March 12-18, 2012