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Poland regained its independence in 1918 only to be overrun by Germany and the Soviet Union in World War II. It became a Soviet satellite country following the war, but one that was comparatively tolerant and progressive. Labour turmoil in 1980 led to the formation of the independent trade union "Solidarity" that over time became a political force and by 1990 had swept parliamentary elections and the presidency. A "shock therapy" program during the early 1990s enabled the country to transform its economy into one of the most robust in Central Europe, boosting hopes for acceptance to the EU. Poland joined the NATO alliance in 1999. 

Update No: 073 - (27/05/03)

The most astonishing development for the Poles of late is that they are experiencing a massive role reversal. For centuries they were occupied by others, Russian, Prussians, Austrians, then Soviets. Now they are to be occupiers themselves in Iraq. The country is to be divided into three zones, as in Turkish times, with the British based in Basra in the south, the Americans in Baghdad and the north, the Poles are to be in the 'upper south' where Shia Moslems live. They are taking up "the white man's burden," as Kipling put it.
This is not of course a politically correct way of putting things. Iraq is the cradle of civilisation, the most advanced of the Arab countries in numerous ways, education, gender relations and expertise in many fields. But it has had a terrible ordeal, decades of Baathism. The Poles, as a former subject nation themselves, should sympathise. They are, indeed very conscious of their responsibility here. The provision of 1,500 soldiers (perhaps not quite so many, it's still to be decided) in a 9,000 strong force is a major development, a coming of age as a born - again Western country, the natural leader of Central Europe.
The Poles are the Central European interlocutor in the Weimar triangle of France, Germany and Poland, which held its latest meeting in Krakow. The French and Germans took a very different line on Iraq, as all the world knows. But neither Schroeder nor Chirac are likely to make trouble for the Poles here. They owe too much themselves to the US to begrudge President Kwasniewski his "special relationship" with Bush.
France and Germany had Russia on their side. It is a pretty safe bet that the Poles will always be on the other side to the Russians in foreign policy. Poland's support for the "Free Iraq campaign" was ever likely.
The Poles have little enough to cheer about these days. Their economy is nearly stagnant, 1.5% GDP growth last year, 2.3% expected this; while unemployment is 18%. One half or more citizens live below the poverty line of US$10 per day. The government, although in office for less than a year, is deeply unpopular. But so still are those it replaced, the Solidarity bloc that led the way to independence. People are totally disillusioned and do not know what to expect.

The EU or the US option
There is one massively promising option on offer, however, inclusion into the West. The Poles, repressed by the Russians for centuries, would dearly love that.
But this is where their dilemma arises. Who is the West? The EU or the US?
For centuries the Poles looked to Paris, the centre of Western civilisation as far as they were concerned (French was for long the Poles' second language, now being pushed into third place by English). But France did not, indeed could not help them from being dismembered by the three partitions of Poland in 1772-97. Nor could they in 1831 or 1863 when the Russians brutally re-enforced their share of the spoils.
Polish independence in 1918-19 had to be fought for in 1920 against the Russians again, this time as Bolsheviks. The UK and France could do nothing to reverse the new dismemberment of Poland in 1939-40, the ostensible reason for the Second World War. The 'liberation' of Poland in 1944-45 was not at all welcome. Poland under the Russian knout once again.
The US option is in principle far more attractive. The US is powerful, it can and does throw its weight around, a massive plus. The Polish government, disillusioned with the Europeans, decided that the US was the heart of the West, those prepared to fight for the cause.
The Reagan Administration got it right, the Soviet empire was one 'of evil.' They were not prepared to admit that so was, in many ways, their very own empire in Latin America. That is not an item high on Polish lists of Western misbehaviour.

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Polish Airports receives US$245m credit to build second Warsaw terminal

Polish Airports (PPL) on 6th May signed an agreement with Austria Creditanstalt AG (BACA) bank and BPH PBK bank granting it access to US$245m for financing the development of Terminal 2 at Warsaw's Fryderyk Chopin Airport, PPL wrote in a statement on 6th May, PAP News Agency has reported. The total cost of the investment is estimated at US$300m.
Earlier, PPL signed a US$200m contract with a consortium of Ferrovial Agroman SA, Budimex SA i Estudio Lamela SL. In December 2002, PPL signed an agreement with the European Investment Bank worth 200m Euros.
PLL has said the project will be implemented without the guarantees of the State Treasury.

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BPH PBK breaks off GBG buyout deal

Poland's third-biggest bank BPH PBK, controlled by German banking giant HVB, has broken off talks with an unnamed investor interested in buying 71 per cent of small southern Polish bank GBG, seen to be worth some 150m zlotys, Interfax News Agency has reported. 
"Currently BPH PBK together with its adviser, CA IB Financial Advisors, is considering various options for further proceedings with GBG. "One of the options is to start negotiations with other interested investors," a bank statement said. 
BPH PBK praised the good performances, which GBG had recorded despite the difficult situation on the Polish banking market, which during last year depressed nearly all banks' results. GBG's net profit in 2002 was 36.4m zlotys. The bank has been continuously strengthening its position in auto financing, according to the bank's statement. GBG's return on equity at end-2002 was 23.8 per cent and its cost-to-revenue ratio was 51.1 per cent. BPH PBK has also promised a boost in its net profits this year after a 58 per cent drop to 148m zlotys in 2002 from 352.3m zlotys in 2001, as shabby banking sector conditions and the absence of a tax refund in 2002 drove the final result down. A decision regarding the sale of GBG was to be a profit driver.

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Michalski announces new Eurobond issue in H2

"Poland's Finance Ministry intends to issue Euro-denominated bonds on the domestic market in the second half of the year as part of a sign of things to come," Deputy Finance Minister, Ryszard Michalski, said in a statement, Interfax News Agency reported. 
Michalski explained that the ministry was preparing to issue new products in order to "widen the offer and at the same time make it more attractive." "So, we intend to issue bonds denominated in our future currency - the Euro - on the domestic market," Michalski said during an Internet chat held on the ministry's own web site. Referring to the time-frames, the minister dated the issue somewhere in the second half of the current year. 
Prior to these announcements, Michalski had said in March that the ministry intended to issue bonds worth nearly US$250m on the Japanese market in June 2003. Preliminary plans from the ministry had also seen it issuing US$1bn of bonds in the United States. Poland's last issue was of bonds worth €150bn on European markets in January 2003.

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Russia's Lukoil wants to continue negotiations on Polish refinery privatisation

Russia's Lukoil wants to continue negotiations with the Polish government on the privatisation of the Gdansk refinery (RG). In order to take part in privatisation processes going on in Poland, Lukoil is ready enter into alliances with international firms, Nikolay Ivkhikov, Lukoil Polska's executive director, said on 7th May, PAP News Agency has reported. Ivkhikov added that Lukoil is not interested in the privatisation of the PKN Orlen oil concern.
Nafta Polska, which is conducting the privatisation of the Polish fuel sector, has been negotiating the sale of 75 per cent of shares in RG with the consortium of Rotch Energy and Lukoil. In the coming 10 years, Lukoil is planning to increase by 20 per cent deliveries of crude oil to its refineries outside Russia. This will make it possible for Lukoil to double the number of its petrol stations in Europe from the current 1,100 to 2,100. Lukoil plans to develop its networks of petrol stations mainly in Belarus, Ukraine, Romania, Serbia, Greece, Turkey and Poland, Ivkhikov said.
He also added that the number of Lukoil petrol stations will go up irrespective of the results of the RG privatisation.

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CCHBC gains full control of Polish Maspex

International beverages giant Coca-Cola bought a 100% share of Polish mineral water producer Multivita, owned by Poland's largest beverages producer, Maspex, Interfax News Agency reported.
Coca-Cola is buying the stake via its Greek branch, Coca-Cola Hellinic Bottling Company (CCHBC), the company said in a statement. "We have signed the deal with Coca-Cola. The buyer now awaits for anti-monopoly regulatory permission to make the agreement valid," Liszka said. The value of the transaction was not released. The purchase is in line with Coca-Cola's strategy to broaden its stable of beverage brands, CCHBC said in its statement. Maspex will use proceeds from the sale for investments, mainly into newly acquired past producer, Lubella. Meanwhile, the Greek arm of the beverage giant was due to announce its first quarter 2003 results. Coca-Cola HBC is one of the world's largest bottlers of The Coca-Cola Company and has operations in 26 countries serving a population of more than 500m people.

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Emax, Euroimpex launch new system, seek higher earnings

Polish IT firms Emax and Euroimpex, the Polish distributor of the NRG group's Nashuatec goods, both part of the Ricoh group, have launched a printing optimisation system that should give a huge jolt to revenues, Interfax News Agency reported.
Emax and Euroimpex will equally split revenues and costs of sales, with Emax estimating revenues at four to five million zlotys in 2003. The system, named printoscope, will be distributed worldwide by NRG International, and will become one of the first Polish-designed products to be sold through the NRG global network. In Poland, Emax said some 30,000 licences would be sold by year-end. "Our analysis sees one million users after three years. This is the launch stage, but we believe our forecasts to be realistic," NRG international Sales Director, Christian Thibeault, was quoted as saying. The introduction of the printoscope into NRG's distribution network required extensive verification of Emax, whose subsidiary, Max Electronik, produces the product. The positive result of the analysis allowed for the start of the companies' cooperation. 
Emax plans to sell more new products via NRG's network. Emax will look to sell the printoscope to corporations already among its clients, like Poland's largest insurer PZU or the largest retail bank, PKO BP.

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Polish Steel burdened by high debts, lack of consolidation

The PHS (Polish Steel) Corporation's main problems are high debts and poor consolidation, with the debt issue needing resolution prior to the company's sale into private hands, according to Anton Lukac, strategy boss at possible PHS investor, US Steel Koszyce, PAP News Agency has reported.
PHS's current debt exceeds 5bn zlotys (US$1.3bn). Lukac said the PHS's debts should be brought down to an "acceptable level" before its takeover by new owners. He added that if US Steel decided to buy the company it had a chance to come out of the red by 2006.
Lukac also said steel plants belonging to PHS were practically unconsolidated and were currently the company's subsidiaries only on paper. Consolidating PHS's mills will be a major challenge for the company's future strategic investor, Lukac said.
According to unofficial sources, Poland's treasury ministry has only until 12th May to pick a strategic investor for the PHS.

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Orange rebrand still on hold

The rebranding of PTK Centertel's Idea mobile phone network, as Orange may be further delayed, according to analysts who say that the current wireless market saturation is not conducive to sudden brand changes, the Warsaw Business Journal reports.
The move to rebrand Idea has been anticipated since France Telecom, which holds a 34% stake in the Polish operator, announced in 2001 that its worldwide mobile assets would be taken over by its mobile unit Orange, a move that was initially anticipated in 2002. The remaining stake in PTK Centertel is held by TPSA, whose strategic investor is also France Telecom.
During a recent meeting, TPSA's management said that no decision on the rebranding has been made and that it would depend on whether it made sense in terms of the value it would add to the offering since Idea is a well-known brand name.
"Right now no decision has been made regarding the rebranding of Idea," said Jacek Kalinowski, Centertel's spokesman, "nothing seems to be standing in the way of new clients joining the network under its present name, and its success is undeniable."
No one at Orange's headquarters in the United Kingdom responded to a phone call or an e-mail seeking comment.
Meanwhile, a source inside TPSA said that France Telecom is keen to focus its attention on the fixed-line telecoms firm and to try to maintain Centertel now might be an expense that France Telecom would be happy to avoid.
Bob Creamer, a telecoms analyst at Raiffeisen Capital and Investment Polska said the present situation on the cellular market is not favourable to brand changing and the success of a possible Idea relaunch as Orange would depend on the level of mobile penetration on the local market.
"With growth still to come, one could try rebranding at an early stage, while at a higher level of penetration a new name would not matter to the clients anymore," he said. "But at the current stage where the level of mobile penetration is approximately 40% and where most subscribers are expected to be signing up within the next two years, the timing to change brands would be very odd."

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