Books on Poland
% of GDP
Update No: 102 - (27/10/05)
The Poles are free at last
Poland has just held elections to both its parliament and its presidency. The
fact that they took place in an open and fair manner is as important as the
For Poland has had a troubled and turbulent history, which is here summarised.
It was dismembered by Russia, Prussia and Austria in three great partitions in
1772 -95. An independent Poland was established at the end of World War I, with
Marshall Jozef Pilsudski as the country's first head of state. Pilsudski
remained in charge of the government until his death in 1935.
In 1939, Germany invaded Poland, marking the start of World War II. The
occupying Nazi forces built concentration camps, enacting the systematic
extermination of all Jews and Gypsies under a policy denominated as the
"Final Solution." Official figures estimate that six million Jews and
two million Gypsies were killed during the Holocaust. The global conflict ended
in 1945, and saw Poland losing some of its traditional territory to the Soviet
Union, while gaining some from Germany.
In the 1947 elections, which were deemed undemocratic by the Western powers, the
Polish Workers' Party (PPR) became the dominant political force, and established
a communist regime under Wladyslaw Gomulka and Boleslaw Bierut. Edward Gierek
took over as the de-facto leader in 1970.
In 1978 a Pole was elected pope, Pope John Paul II. His visit to his homeland
the next year, organized by a joyous people, presaged the end of Polish
communism, indeed of communism itself. In 1980, a dispute in a Gdansk shipyard
led to the formation of the Solidarity trade union. Leader Lech Walesa was
imprisoned one year later-along with many other Solidarity supporters-after the
country imposed martial law. Gierek was replaced by Stanislaw Kania as party
leader, and in 1982, Wojciech Jaruzelski took over with the backing of a
Solidarity's leaders were released in 1985, and three years later, the
government formally acknowledged the trade union. In 1989, negotiations between
Solidarity, the Catholic Church and the Polish government established a
timetable for democratic elections. Following the ballot, Solidarity's leaders
joined a coalition government headed by Tadeusz Mazowiecki. Walesa won the
presidential election in 1990.
In 1993, the Democratic Left Alliance (SLD) became the largest party in the
Diet, and formed a coalition administration with Waldemar Pawlak of the
Peasant's Party (PSL) as prime minister. In 1995, Pawlak was replaced by the
SLD's Jozef Oleksy.
Former Communist leader Aleksander Kwasniewski defeated Walesa in the 1995
presidential election. Kwasniewski went on to win a second consecutive term in
the 2000 ballot.
The 1997 legislative election was dominated by the Electoral Action Solidarity (AWS)
and the Freedom Union (UW), resulting in a government headed by Jerzy Buzek. In
September 2001, the Democratic Left Alliance-Labour Union (SLD-UP) emerged
victorious with 41 per cent of the vote and 216 lawmakers in the lower house.
SLD leader Leszek Miller headed a new government with the Peasant's Party (PSL).
In March 2003, the coalition split after PSL members refused to support the
government on a tax proposal. In June, Polish adults voted in favour of
accession to the European Union (EU). After the country officially joined the EU
in May 2004, Miller stepped down as prime minister.
SLD member Marek Belka was appointed as prime minister by Kwasniewski, and was
ratified by the Diet in June 2004.
In 2003, Poland joined the United States-led coalition effort in Iraq. In May
2005, the country had 1,700 soldiers in central Iraq, as part of a multinational
force of about 4,700 troops. In all, 17 soldiers from Poland have lost their
lives during the conflict.
In March 2004, Kwasniewski said Poland was "misled" into the war, but
added that Iraq today "is a much better place than Iraq with Saddam
Hussein." In April 2005, defence minister Jerzy Szmajdzinski said Poland
would withdraw its troops from Iraq at the end of the year, when the current
mandate expires. Szmajdzinski added that the mission could be extended if the
United Nations (UN) Security Council or the Iraqi government request Poland to
keep the troops in place.
Poland renewed its legislative branch on Sept. 25, 2005. Two centre-right
political organizations-the Law and Justice Party (PiS) and Civic Platform
(PO)-secured more than 280 seats in the 460-member Diet. Final results gave the
Law and Justice Party (PiS) 26.9 per cent of the vote, and 155 seats, followed
by the Civic Platform (PO) with 24.1 per cent, and 133 seats. The Law and
Justice Party nominated economic expert Kazimierz Marcinkiewicz as its candidate
for prime minister.
On Oct. 19, SLD member Marek Belka tendered his resignation as prime minister.
President Aleksander Kwasniewski asked Marcinkiewicz to assemble a new
2005 Presidential Election
Democratic Left Alliance (SLD) member Kwasniewski has been Poland's head of
state since 1995. Having served two five year terms, he was unable to stand
again. Kwasniewski urged voters to take part in the next presidential election,
saying, "We should profit from the opportunity that democracy has provided
us. Those who choose not to go to the polls should be aware that they in
effect have a real say on who will be elected president."
On Oct. 9, Donald Tusk garnered 36.33 per cent of all cast ballots in the first
round of the presidential election, with Lech Kaczynski, the Mayor of Warsaw,
finishing second with 33.10 per cent. Since no contender received the backing of
more than 50 per cent of all voters, a second round was scheduled for Oct. 23,
which Kaczynski won by 54% to 46%.
He will be sworn in as Poland's new head of state on Dec. 23.
Fall-out among the two conservative front-runners
Poland's two leading centre-right parties met on October 24th to begin talks
on forming a coalition government, a task made more difficult by the populist
promises offered by Lech Kaczynski, winner of the October 23rd presidential
During the election campaign Lech Kaczynski attacked liberal PO policies such as
a flat tax, expressed scepticism over privatisation of key state assets and
promised subsidies and benefits to farmers and miners. He also promised not to
reappoint Leszek Balcerowicz, architect of Poland's economic reforms, as
national bank president.
In a country where many people are afraid of what the future holds and rely on
government help to survive, the potentially costly social promises were the key
to Mr Kaczynski's victory. Mr Kaczynski is likely to devote much of his energy
to radical constitutional reform aimed at strengthening the presidency and
overhauling what he views as a corrupt and ineffective state. But Mr
Marcinkiewicz will have to figure out how to pay for all those promises.
It is a truism of politics that the real enmities exist within the same part of
the political spectrum rather than between the obviously different camps. The
party leading Poland's new conservative government found that coalition talks
with another possible coalition partner, the pro-business Civic Platform,
collapsed in acrimony. It won support, however, on October 27th from populist
and anti-Europe parties after Civic Platform said that there was little chance
it would become the junior partner in a government led by the Law and Justice
Party. "Based on our experiences, there is no clear possibility that Civic
Platform will be in the coalition, even though we deeply hoped to join it,"
said Lukasz Pawlowski, a spokesman for Donald Tusk, the party's leader. "We
have been overruled by Law and Justice on several issues," Pawlowski added.
The League of Polish Families, a nationalist, conservative and Roman Catholic
party led by Roman Giertych, and Self-Defence, another Catholic party led by
Andrzej Lepper, both supported Kaczynski during the second and final
presidential round, and they quickly moved to take advantage of the political
vacuum. They said they could support a minority government whose sceptical
policies toward Europe and its strong Catholic roots are shared by these two
The League of Polish Families, which won 34 parliamentary seats, and Self-Defence,
which won 56 seats, have been consistently opposed to the European Union, even
though farmers who form the backbone of Lepper's party have gained financially
since Poland joined the EU in May, 2004.
It had been widely expected that the Law and Justice Party and Civic Platform -
the two largest conservative parties in the Sejm - would find enough common
ground to form a government. But after the presidential election, the mood
between the camps soured when Law and Justice decided not to support Civil
Platform's candidate for speaker of the Sejm and also insisted that the larger
party control the powerful Justice and Interior Ministries.
Both Kaczynski and his twin brother Jaroslaw, who leads the Law and Justice
Party, promised during the parliamentary and presidential election campaigns to
stamp out corruption and also rid the bureaucracy and administration of former
Communists. They claimed previous governments had not carried out a thorough
overhaul of the public sector, either on the national or local levels. Control
of the Justice and Interior Ministries would give them a freer hand to pursue
Civic Platform was offered the Treasury, as well as the Finance, Economy and
Infrastructure Ministries - which are powerful positions and appear to be plum
assignments. "They seem beautiful," Pawlowski said, "but we don't
want to find ourselves in a situation that we have to cover their
Law and Justice promised to increase pensions and family welfare payments, in
addition to building three million new homes and spending more on health
services. It said some of the expenditure would be financed from sharp cuts in
the state administration.
Eugeniusz Smolar, director of the independent International Relations in Warsaw,
said Civic Platform was faced with the difficult choice of being compromised or
marginalized, depending on whether they joined the coalition or stayed in the
opposition. "The party believes it could be manipulated if they were part
of the coalition," said Smolar. He added that "Law and Justice made a
lot of big promises for which Civil Platform could be blamed if the government
did not deliver on them. On the other hand, if it remains in the opposition it
runs the risk of being marginalized." But Pawlowski said Civil Platform
"was used to being in opposition."
LOT finally admitted that it is purchasing Boeing airplanes
Polish flagship airline company LOT finally admitted that it is purchasing
Boeing airplanes to replace its long-haul fleet, Warsaw Business Journal
The airline's supervisory board accepted the recommendation of the company's
management and the carrier will purchase seven Boeing planes for US$500-900
million. "LOT will be the first European airline to receive 787
planes," said Marlin Dailey, deputy president of Boeing Commercial
Airplanes. "The replacement of the 767 with the 787 will allow more
innovative solutions in terms of travel comfort for passengers on transatlantic
routes. It will have a key importance in launching new connections with Asia.
The 787 perfectly fits into our cost-cutting strategy," said Marek Grabarek,
president of LOT. The new planes will be delivered in mid-2008, while the
purchase rights will be executed between 2011 and 2019. Details related to the
Boeing offer are confidential.
PGNiG opens tender for LNG feasibility study
The management board of Polish Oil and Gas (PGNiG) announced a tender for the
creation of a feasibility study of a Liquefied Natural Gas (LNG) terminal
project, the Warsaw Business Journal reported on October 7th.
The project will have a strategic meaning for national power security, as it
will enable Poland to become much less dependent on gas supplies from Russia.
The price of LNG in Europe oscillates between US$117 to US$146 per 1,000 cubic
metres, while the price of gas imported from Russia is US$200 per 1,000 cubic
metres. The deadline to submit offers is November 7th.
PGNiG did not want to reveal the value of the tender. The company estimates that
the construction of the terminal will be anywhere between 200 million Euro to
600 million Euro. It will enable the transportation of 3-5 billion cubic metres
of gas to Poland a year. The completion for the construction works has been
scheduled for 2010.
Thermal power plant Kozienice up for grabs
Poland's State Treasury will negotiate the sale of an undisclosed stake in
Poland's Kozienice, one of the largest thermal-power stations in Europe, with
all six investors that submitted binding offers, the treasury ministry said,
Interfax News Agency reported.
The interested investors are: Czech CEZ, Spanish Endesa, Polish power
distributor group Enea, Spanish Iberdrola, German PCC and Swedish Vattenfall.
The size of the stake on offer has not been revealed but, according to earlier
reports, it could be 40-50 per cent of Kozienice's share capital. Kozienice,
which is profitable, also plans to offer 15.75 million shares, 35 per cent of
share capital, during an initial public offering (IPO) scheduled for November.
Kozienice is the largest thermal-power station in Poland and one of the largest
in Europe. It complies with all EU criteria and has an installed capacity of
2,845 MW. The net profit of Kozienice dropped 40.5 per cent year-on-year to 25.6
million zlotys in the first half of this year as revenues rose just 1.22 per
cent to 880 million zlotys from 869.4 million zlotys.
During the second quarter the plant's net profit was up 44.7 per cent
year-on-year to 16.4 million zlotys.
In the first quarter the power plant recorded a 9.2 million zloty net profit on
sales revenues of 464.7 million zlotys.
FOOD & DRINK
Hochland targets new market and doubles its capacity
Hochland Polska, the number one company on the processed cheese market (with a
54 per cent market share) and the second largest domestic blue cheese producer
has ambitious plans of becoming the leader among hard cheese producers, the
Warsaw Business Journal reported on October 7th.
To achieve this end, the company has just opened a new cheese factory at a cost
of 45 million Zlotys. "Over the next five years we would like to gain
control of 30 per cent of the hard cheese market," declared the president
and director general of Hochland Polska. He added that the company will try
partly to increase its share in the market at the expense of its competitors,
such as Mlekpol and Mlekovita.
The company will soon increase its production from 6,000 to 10,000 tonnes of
cheese a year, which also means that its demand for milk will grow by a fifth.
"We are getting close to the production limits established by EU for local
farmers. Now we need to negotiate the largest possible reserves, so that we do
not lack milk," said Jerzy Mrozowski, production director.
Poland to cooperate With Kyrgyzstan
Poland is interested in active cooperation with Kyrgyzstan, the Ambassador of
Poland in Kyrgyzstan, Vladislav Sokolovsky, said at the opening of the recent
international exhibition "Bishkek - 2005", Interfax News Agency
Sokolovsky said that Polish businessmen arrived in large numbers at the Bishkek
exhibition. The entrepreneurs were acquainted with opportunities in the country
and how to plan ways of cooperation. According to the Ambassador, Poland joined
the European Union one and half years ago. In turn this is a good opportunity
for Kyrgyzstan to introduce new technologies together with the Polish
enterprises in manufacturing and to develop industry. "Kyrgyzstan is the
country with which it is possible to cooperate and work. The Polish businessmen
in your country are interested in stability and the investment climate,"
Whirlpool opens Wroclaw factory
American Whirlpool on September 9th opened a factory producing cookers in
Wroclaw, the value of which was not disclosed, but it is an element of a larger
project worth 100 million Euro, Warsaw Budapest Journal reported.
Last year the company decided that this was the budget to launch the production
of cookers, develop existing production of fridges and expand its Wroclaw
excellence centre. The enterprise expects that it will complete all the projects
by 2008, which will further develop its 20 per cent market share.
IT company ATM is planning a turnover of 108m zlotys
IT company ATM is planning a turnover of 108m zlotys and a net profit of eight
million zlotys in 2005, Warsaw Business Journal reported recently, citing a
During the first half, ATM managed to secure 50 per cent of the revenues
figures, but only five per cent of the net profit. ATM operates in the
telecommunication and IT sector, which is strongly influenced by the season and
usually the second half of the year is better in terms of results.
Polfa hammers out deal with PHF
The management boards of Polish Pharmaceutical Holding (PHF) and three Polfa
companies, which constitute the holding, finally reached an agreement concerning
how to finance the holding, Warsaw Business Journal reported.
According to Andrzej Kleszczewski, the head of PHF, this is a very important
step in the process that will shape the future activity of the entity.
"Until now PHF functioned thanks to a dividend from the Polfa companies.
But due to taxes this solution is not good from the financial point of view.
Apart from that, the agreement also describes some other elements of our
Comarch-In&phone pact ups exports
IT solutions provider Comarch signed a contract with a Swiss telecoms operator,
In&phone, to implement billing and network management systems, Warsaw
Business Journal reported on September 16th.
This is yet another mobile network from western Europe which chose to work with
a Polish company. The value of the deal was not revealed. "In&phone's
choice confirms the very high quality of our services," said Christophe
Debou, member of Comarch's management board. Exports have become a very
important source of the Krakow based company's revenues. In 2004, it constituted
a 20.8 per cent share of its revenues and amounted to 68.8 million zlotys.
Foreign tourism on the rise
This summer was among the record years in terms of the numbers of foreign
tourists visiting Poland, according to businessmen from the tourism sector,
Warsaw Business Journal reported on September 19th.
It was also the first year for some time that the number of domestic tourists
did not decrease. The number of foreigners who will visit Poland in the entire
year is estimated at around four million. The largest number of foreign visitors
comes from Germany, but Italy and France are not far behind. There was a clear
increase in the number of those visiting not only the tourist hotspots, but also