Books on Poland
% of GDP
Update No: 088 - (27/08/04)
Death of a poet and a novelist
On August 14th came the death of Czeslaw Milosz, at 93 years old. Milosz
represented something of the conscience of the Polish people, a position some
might think occupied by the Pope or Walesa. But the broad mass of the population
could identify better with the extraordinary career of Milosz and his vibrant
prose and repercussive poetry than with the austere prelate in Rome or the trade
union leader, both of whom became isolated in palatial splendour far from their
roots. Milosz never lost touch.
He was born in Vilnius, then inside Tsarist Russia, in 1911. He sent much of the
1930s in Paris, but returned before the war and witnessed the failed Warsaw
rising in 1944. Despite being left-leaning, he broke with the regime in 1951,
and emigrated, a move well explained in his international bestseller, published
the same year, The Captive Mind, an account of the corrupting impact of a
totalitarian thought system, Marxism, on various types of intellectuals and
writers. It documented communist brain-washing techniques. Naturally, it
provoked vilification from the Polish regime and its intellectual supporters, as
well as from the Stalin-infatuated French Left.
A patron of other Polish writers and poets, he was something of a Polish Ezra
Pound. He translated TS Eliot, Walt Whitman, Simone Weil and Jacques Maritain
into Polish, as well as the Psalms and St Mark's Gospel. When Lech Walesa and
Solidarity began to make a stir in the early 1980s, Milosz made a triumphant
return home, being greeted as a national hero by the Gdansk shipyard workers.
His anthology, Postwar Polish Poetr, first published in 1965, went through
several editions and introduced Polish poetry to the English-speaking world.
Notoriously difficult to translate, poetry is usually the least influential
literary genre outside its natural habitat of native speakers. But Milosz had a
good command of English and, in tandem with Al Alvarez, the English poet, he did
a remarkably good job, both in translating others and his own poems. He won the
Nobel Prize for Literature in 1980.
Let him speak for himself, as a poet should in one of his spikiest and
What is poetry which does not save
Nations or people?
A connivance of official lies,
A song of drunkards whose
Throats will be cut in a moment,
Readings from sophomore girls
That he did not take himself too seriously is shown by his judgment that he
would be known to later times as:-
An item in the fourteenth volume of an encyclopaedia
Next to a hundred Millers and Mickey-Mouse
It is likely that posterity will be more appreciative of his great oeuvre than
Upheavals for Poland in the wake of EU entry
To turn to more mundane matters, Poland's 10-member Monetary Policy Council
raised all official interest rates by 25 basis points at its July monthly
sitting, and maintained its restrictive bias, to which it shifted from a neutral
bias at its April sitting.
The council said that it had hiked rates to bring Poland's fast-rising inflation
back to the bank's 2004 target level, the top end of which is 3.5 per cent. In
June, inflation exceeded analyst expectations for the second consecutive month,
reaching 4.4 per cent, a full percentage point above May's inflation. Analysts
have said that July inflation should reach 5 per cent.
"The significant increase of inflationary expectations, connected with the
rising probability of high economic growth, and thus demand rises, lead to a
risk of maintaining higher inflation," central bank President, Leszek
Balcerowicz, said at a press conference.
"The growth of wages will also be significant for inflation. They are
stable now but there are signs that demand for raises are appearing and this may
lead to inflation growth," he added.
The council stressed that higher inflation is a result of the growth of fuel and
food prices, growth of indirect taxes and other factors connected with the EU
accession, including increased foreign demand for Polish food.
The council said that factors expected to contribute to a decrease of inflation
include falling growth of corporate loans, fast productivity growth, high
unemployment levels - which keep wage growth low - and strengthening of the
zloty over the last two months which, if maintained, will serve to limit
Rising inflationary expectations of households, increasing producer prices in
domestic sales, rising industrial production, loose fiscal policy and high
prices of oil and food may cause risk of inflation, according to the council.
By the rates, the key 14-day intervention rate rose by 6 per cent from 5.75 per
cent. The council raised interest rates by 50 basis points on June 30th, 2004.
The June rate hike was its first in nearly four years and marked the council's
first rate change in a year.
While the market had widely expected the council to raise rates further, it had
been divided as to whether the move would come at the July sitting.
Poland's May 1st European Union accession continues to influence the economy,
often in ways not foreseen by analysts. Consumer inflation beat analyst
expectation for the second month in a row, rising to 4.4 per cent in June, from
3.4 per cent in May.
Meanwhile, industrial output slowed more than expected for the second
consecutive month to an annual 15.7 per cent in June, following a 12.3 per cent
year-on-year gain in the previous month.
Producer prices rose 9.2 per cent year-on-year in June, following a 9.6 per cent
annual spike in May. Food prices were flat in the first half of July, after
rising 2.4 per cent in the first half of June, prompting analysts to forecast
July consumer inflation rising to 5 per cent.
Cars sell cheaply in Poland
European Commission research shows that Poland is the cheapest country in Europe
in terms of car buying, Channel 4 news said on its Web site recently.
This EC survey examined the new EU member states and underlined that the average
price differential among countries is now down to 4.4% (from 4.9% over April
2003-April 2004), although there are price differentials of over 20% on some
larger cars and luxury models. Of the older 15 EU member states, Finland remains
the cheapest place to buy, though prices in Poland are 9% lower. Countries where
cars are the most expensive include Germany and Austria.
Standard & Poor's assigns credit rating to PZU
Standard & Poor's, a rating firm, has assigned an A credit rating to PZU,
the state-controlled insurance giant, PZU president, Cezary Stypulkowski,
welcomed the news, saying the company enjoys the highest rating for any
financial institution in the Central and Eastern Europe region, Warsaw Business
Journal reported recently.
He also pointed out that PZU debt is rated on a par with government bonds. But
the company could still face a bumpy road ahead, as Eureko, a Dutch strategic
investor, is taking its conflict with the government over the ownership of the
firm to the court of arbitrage in Stockholm. Recently, the State Treasury
reneged on its promise to sell an additional 21% stake in PZU, which would give
Eureko control over the company. The government says Eureko lacks the necessary
funds to complete the transaction and its case recently received a boost when
the Insurance and Pension Funds Supervisory Commission (KNUiFE) refused to give
regulatory approval for the transaction due to a lack of proper funding on the
part of Eureko. The company, however, dismissed the decision as "utter
nonsense" and "blatant political manipulation."
LUKoil still interested in Gdansk refinery - Alekperov
Russian oil major LUKoil is still interested in acquiring Gdansk Oil Refinery,
LUKoil President, Vagit Alekperov, New Europe reported recently.
"We are still interested in buying Gdansk Oil Refinery, and if the
government in that country puts the company up for sale, LUKoil will take part
in the tender, as we plan to further develop the company's presence on the
market in the Polish Republic," Alekperov said.
He said that at the moment LUKoil has a network of 200 filling stations in
Poland. The company not only plans to expand this chain, but also to sell gas
fuel at most of these stations, exported to Poland from Kaliningrad region.
"Our plans in Poland are very pragmatic and based on further expanding the
sphere of various services. For this reason we are interested in the refinery in
Gdansk," he said.
LUKoil is interested in acquiring not less than 50% of Lotos, which includes
Gdansk Oil Refinery, the production company Petrobaltic and three refineries in
the south of Poland.
Polish oil group to be modernized in US offset deal
The Gdansk, northern Poland-based Grupa Lotos SA oil company will be modernized
according to latest technological and environmental standards. The US$700m
project will be part of offset arrangements accompanying Poland's purchase of
F-16 fighters from the US, PAP News Agency reported.
Hi-tech lines necessary for the upgrades will be supplied by F-16 manufacturer
Lockheed Martin. Considerable reductions in the plant's sulphur dioxide and
nitrogen monoxide emissions are planned.
Lotos also has offset contracts with Kellogg Brown & Root and Shell Global
ABB wins US$96m deal to build compressor station
Swiss engineering group ABB won a US$96m contract to build Poland's fifth
compressor station along the Yamal-Europe natural gas pipeline, which connects
natural gas deposits on Russia's Yamal Peninsula with Western Europe, a company
statement said recently, Interfax News Agency reported.
Under the contract awarded by Polish pipeline operator EuroPol Gaz and Polish
pipeline contractor Bartimpex, ABB will build the compressor station, which is
to include three 25 MW turbo compressor units, near the northeastern Polish city
of Zambrow. The Zambrow station, ready for start-up at end-2005, will complete
the Polish section of the pipeline's first line, helping boost annual capacity
to nearly 33bn cubic metres up from its current 20bn cubic metres, ABB said.
The construction agreement follows ABB's US$190m contract, signed earlier this
year, to build two compressor stations near the cities of Szamotuly
(northwestern Poland) and Ciechanow (central Poland). A second line along the
route, designed to increase annual gas transmission capacity to 65bn cubic
metres, was part of the original agreement between the sides, but has suffered
The line could become a policy priority for the EU, Polish officials said in
May, adding that a decision on the investment should come by the end of this
year. EuroPol Gaz said in March that negotiations between Polish and Russian
officials over construction of the second line should begin again in 2005.
However, Russian gas giant Gazprom said earlier this year that it intends to
delay a decision on its role in a second Yamal stretch for 5-6 years, until
markets are more clearly identified.
The Russian company has increasingly mentioned of late that it will lay out
plans for construction of a gas pipeline in the Baltic Sea bed as an alternative
way of supplying gas to Western Europe. The Yamal-Europe transit pipeline spans
PKE exceeds 2004 profit forecast
Poland's top power producer, Poludniowy Koncern Energetycny (PKE), increased its
net profit by nearly 65% year on year to 205.7m zlotys in the first half of
2004, exceeding its full year forecast of 150-180m zlotys, the company said in a
recent statement, Interfax News Agency reported.
The company's net profit amounted to 124.9m in the same period of 2003. PKE also
increased its revenues to 1.88bn zlotys in the first half of 2004 up from 1.81bn
zlotys in the first half of 2003. "The better results are an effect of the
benefits stemming from consolidation of eight entities, which now comprise PKE.
The concern is conducting a cost-reduction programme, which includes carrying
out a policy of joint fuel purchasing," the statement read.
PKN Orlen's Q2 earnings continue rising
New Europe reported that Poland's lead fuel group, PKN Orlen, are likely to have
retained strong profitability in the second quarter with a bottom line near 500m
zlotys thanks to high refining margins, its new German operations and positive
inventory effects caused by rising oil prices, analysts said.
"We expect very good results for PKN Orlen, of which the net profit should
be 476m zlotys - even better than the high net profit reached in the first
quarter of 2004. The company benefited from high a Ural/Brent differential (a
price differential of nearly US$3 per barrel) and increase of refinery margins
to US$6 per barrel in the first quarter of 2004," Millennium brokerage
house said in a report.
Netia shows interest in GSM/UMTS bid
Polish independent telecoms operator, Netia, voiced interest in the available
GSM and UMTS frequencies and said it intends to bid in two parallel tenders,
Poland A.M. reported recently.
Company President, Wojciech Madalski, has disclosed that the operator is looking
for potential investors. "It must be an important player on the
international market, with big ambitions, which would like to enter the Polish
market and would have the financial means of doing so. We have to realise that
the likely investment cost in the case of UMTS is at least one billion
Euro," he explained. Madalski does not exclude the possibility of a new
shares issue if the situation calls for it.
Kulczyk agrees to sell 13.5% stake in Telekomunikacja Polska
Kulczyk Holding, an investment company owned by Jan Kulczyk, the richest man in
Poland, has agreed to sell its 13.5% stake in Telekomunikacja Polska (TPSA), the
national fixed-line operator, to France Telecom (FT), TP SA's chief shareholder,
Warsaw Business Journal reported recently.
The transaction, worth zl.9.64bn (€2.2bn), plus an extra zl.175bn (€40m) in
"recuperating costs," will bring FT's stake up to 47.5%. This opens
the door to FT further extending its stake through a purchase of the remaining
3.02% shares still held by the State Treasury. Minister, Jacek Socha, has
already declared his willingness to go through with the deal, which has been in
the pipeline since last year. According to unconfirmed reports, after gaining
majority control of the national operator, FT will likely integrate its
mobile-phone arm, PTK Centertel, into FT's pan-European mobile network, Orange.
The valuation of Kulczyk Holding's stock at more than zl.50 per share means that
FT will pay a premium of more than twice the current price of TPSA's shares,
which currently trade at just over zl.15.
TPSA revenue falls short of target in H1
Poland's dominant telecom, TPSA, which is controlled by France Telecom, posted
9.2bn zlotys in preliminary consolidated revenues in the second quarter of 2004,
on a lower-than-expected 1.5% increase, against the same period last year, the
company said in a statement, Interfax News Agency reported.
Landline operator TPSA's revenues fell 5.8% year-on-year to 6.8bn zlotys in the
first half of 2004. The group's mobile operations surged by 28.6% year-on-year
to 2.7bn zlotys in the first half.
The poor result probably dooms the company's revenue-growth prognosis of 3.5%
for 2004, analysts claim. Kaczmarczyk said the forecast is likely to be amended.
One analyst complemented the group for the revenues generated by mobile arm
Centretel and for the fast pace TPSA has hit in adding new clients to its ADSL
The mobile arm of TPSA was affected by the launch of the Heyah pre-paid brand by
top Polish mobile operator PTC; for the first time in its history, Centretel's
number of pre-paid clients shrunk in the second quarter from the first.
Paradoxically, the company benefited in terms of average revenues per user (ARPU)
on the outflow. Centretel's ARPU for the prepaid users surged to 32 zlotys in
the first half from 28.2 zlotys in the corresponding period of 2003. General
ARPU increased to 71 zlotys.
The outlook for the TPSA's full-year bottom line and operating results will not
be affected by the weaker results, Kaczmarczyk claims, as Centretel is likely to
show higher-than-previously-expected margins.
Motorways in the offing
The government has received the Ministry of Infrastructure's periodic study
on the motorway construction schedule for 2004-2005, - The Polishmarket.com
The data released to the government show that, in 2004 an overall 67 kilometres
of motorways will be completed and a further 273 kilometres will be under
construction. In 2005 these figures will be 222 kilometres and 564 kilometres
respectively. The government is also planning to complete by late 2005 a 150km
section of the A-2 motorway, to link Nowy Tomysl beyond Poznan with Lodz, and to
link Krakow with Wroclaw along one stretch of motorway, and begin the
construction of the A-4 motorway towards the western border. The construction of
the A-1 motorway is also afoot, especially the northern section from Gdansk to
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