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POLAND


 

 

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 209,563 187,670 176,300 24
         
GNI per capita
 US $ 5,270 4,570 4,230 71
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 120 - (30/05/07)

Poland has a government that is not unlike the Bush Administration and a president not unlike Bush in Lech Kaczynski. They both bring things to a head. 

Indeed, Poland is deemed the US's staunchest ally by Bush. The UK is lukewarm by comparison, excepting its subservient premier, shortly to depart in ignominy.

The Poles constitute the third largest coalition force in Iraq and are staying the course, while the British are winding down there.

Then there is a little matter of the US defence shield, to be deployed on Poland and The Czech Republic, which threatens a new Cold War and arms boom no less.

President to discuss U.S. shield with Klaus in Brno 
The Czech and Polish presidents, Vaclav Klaus and Lech Kaczynski, discussed the U.S. missile defence shield whose elements are to be stationed in their countries at a meeting of central European presidents in Brno on May 24-26. Klaus told Kaczynski about his talks with Russian President Vladimir Putin last month.

Russia is much critical of the U.S. plans to station a radar base in the Czech Republic and a base with 10 missiles in Poland. Putin said after his talks with Klaus that the U.S. project resembles the deployment of U.S. Pershing missiles in Europe in the past century, and warned that Russia would retaliate.

The Czech Republic and the United States started official negotiations on the stationing of a U.S. radar in the Brdy military district, southwest of Prague, in May. The negotiations are expected to be held on the level of the defence and foreign affairs ministries.

The talks will last several months, and next year the Americans would like the Czechs to say whether they will accept the radar on their territory.

Poland has already made it clear that it wants to coordinate the negotiations with the Czech Republic. The Czech political scene is not united on the issue and the public is rather opposed to the radar.

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The law of lustration
The government has pressed ahead with a new lustration law, bringing things to a head once again.

A new law which came into effect in conservative Poland on 15 March, has ordered everyone in a public position - including lawmakers, government ministers, judges and teachers - to sign declarations confirming they didn't co-operate with Communist era secret police, if they hadn't already done so.

The last sentence of the controversial bill warns that failure to submit the declaration means losing a public position.

It's a warning currently facing first Prime Minister of democratic Poland, Tadeusz Mazowiecki, and professor and MEP Bronislow Geremek, 75. The former dissident and Polish foreign minister on refusing to submit a new law-bound declaration that he did not cooperate with Communist-era secret police. Some argue that one cannot choose which laws he or she should respect. Others say that Geremek's refusal was a dramatic but necessary act of civil disobedience.

Interview 
Bronislaw Geremek: 'I am ready to pay the consequences'

How did you feel when you received the notification?

Above all, I felt embittered. The written statement from the National Electoral Commission that I received looked a lot like the letters informing me that I was denied a passport, which I used to receive in the time of the Polish People's Republic. In the documents that the Commission sent to me recently, I was informed that as a consequence of my refusal to comply with the new invigilation law, my mandate as an MEP was being taken away. I received a letter from the president of the Commission declaring it was a part of his responsibility to inform me that the process was already in motion.

When I submitted my previous declaration on the subject of collaboration with the Communist secret services, I was speaking in a different legislative context. I was declaring something, and the voters were making their own decisions about it when I was running for a public post. And now, automatically, the decision of hundreds of thousands of voters is being reversed not because of the fact that I collaborated with former secret services, but because I did not file another bureaucratic form proving that I didn't. 

This is unacceptable. I think about it with deep pique. Poland is a free country - we cannot make others responsible for solving our problems. A bad law was created by a democratic institution, and this is why my voice is a voice in the name of certain rules. An official cannot invalidate the voices of 120, 000 voters.

What do you think about the fact that major European politicians spoke on your behalf? The information about your situation was covered in over 70 European daily newspapers.

I would like to see this as an expression of support and trust towards Poland. This is not a provocation. It is very nice, but I would rather my own country was conscious of the fact that the new law is bad, and that I wouldn't need the help of other countries. And because we are a democratic country, we should be able to reverse this law. I hope that the public authorities will come back to their senses. 

I receive a lot of declarations of support from European governments and their top representatives. The European parliament president Hans-Geert Poettering himself said that he found it imperative that I remain a member of the European Parliament. The Parliament will consider whether or not the acts of the Polish government were an element of political persecution, which goes against the idea of parliamentary immunity.

I would not want this situation to be seen as a personal one, but rather as a situation which shows that Poland is an important member of the European community, and that the Union is a family of countries which joined it.

How would you comment the words of French MEP Daniel Cohn-Bendit (European Greens leader) about the 'Stalinist or fascist ways' of the Polish government?

The things that Cohn-Bendit say are his own responsibility. He is quite a personality and he is famous for using a language which makes the truth more dramatic. I think that the comparisons that he made to describe Poland cannot relate to its current government, of which I do not approve, and which was nonetheless chosen democratically. I also think that this democratically chosen government will be changed in the next elections.

How do you envisage the situation as developing? Is it a real possibility that you could lose your mandate in parliament?

I have always taken into account the possibility of losing my parliamentary representative mandate. When I made my decisions I was aware of the risk that they entailed. I am now ready to pay the consequences.

There are many scenarios right now and everything is in the hands of the Polish authorities. They can declare that my mandate be automatically taken away, due to the new regulations. But it would be paradoxical - the act that is being punished here, using the most severe punishment available in this situation, is not the act of collaboration with Communist secret services itself - I have never done that. It's punishing the act of refusing to fill in a piece of paper that I was requested to submit. It's an abuse of a certain legislative culture. 

Poettering declared that if he receives a document from the Polish authorities he will pass it on for consideration to parliament's legislative council, and then it will also be considered by the parliament in a plenary session.

In that case a conflict would arise, which may prove detrimental to Poland. The conflict between the Polish Republic's government and parliament would have to be resolved by the Council of Europe or by the European Court of Justice. Because there is no precedent about a situation like this in the history of EP, the only thing we can do now is to wait.

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The following report is exceptionally interesting:-

Report: Poland's Gen. Jaruzelski threatens to discredit Solidarity if brought to court
Gen. Wojciech Jaruzelski, Poland's last communist leader, said he would try to discredit the Solidarity freedom movement should he be brought to court on charges of imposing martial law in 1981, according to an interview published on April 30th.
Polish prosecutors filed charges in March against Jaruzelski for violating the constitution by imposing martial law Dec. 13, 1981, as the Soviet-backed regime tried to crush Solidarity. If brought to court and convicted, the 84-year-old Jaruzelski could face up to 11 years in prison.

"If I am forced to, I will show that Solidarity, despite its moderate leaders and its historical role ... was not a club of angels," Jaruzelski told Italian daily La Repubblica. "The trial is not a personal matter. Today, I am here, maybe tomorrow I won't be. It is about the country's destiny, not mine," he was quoted as saying.

Jaruzelski also said the legal case was part of a push by the conservative government of Prime Minister Jaroslaw Kaczynski and his twin brother, President Lech Kaczynski, to purge former communists from political life and positions of influence. "There's an emotional desire for revenge," Jaruzelski was quoted as saying. "It's a pity: mouths full of nice, religious words, they quote (the late Pope) John Paul II, but they act exactly against his philosophy."

After martial law was imposed in 1981, thousands went to jail, including Solidarity leader Lech Walesa, and 100 people were killed. The clampdown lasted 18 months.

The crackdown remains a topic of public debate, with Jaruzelski defending the move as the "lesser evil," the only way to forestall an invasion by the Soviet Union.
Solidarity helped peacefully topple Poland's communist government in 1989, making it the first nation to do so and sparking the fall of communism across eastern Europe.

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It is a curious afterthought of history, but actually Jaruselski's defence, plausible at the time, was false. We now know that the Soviet politburo, which already included some of the reformers who launched glasnost and perestroika, had ruled out the use of force entirely. Even the hardliners realised that Polkand was quite a different proposition than Hungary or Czechoslovakia. Neither of the latter two had a military tradition.

Poland most certainly did and was a much tougher, bigger opponent to face. The Soviet leadership were well aware that the Poles would have put up a real fight. The prospect of taking on the formal host nation of the Warsaw Pact would have buried the pact and the Soviet control of Central Europe forthwith.

Again they knew how guiltily the West felt about the betrayal of Poland in 1944-45 by the allies. A new siege of Warsaw by the USSR in emulation of the Nazi one of 1944 was just not on the cards, more especially with Reagan and Thatcher around. There would have been a much, much stronger Western response than in 1956 or 1968, when Suez and Vietnam were so distractive. Massive military aid and covert military operations would have been a certainty. The USSR would have been put into purdah.

It was the Soviets who had their own Vietnam, moreover, in Afghanistan, a war that was already going very badly for them. The Soviet chief-of-staff at the time, Marshall Orgachev, had warned strongly against the Afghan affair, but been overruled by Brezhnev. In 1981 it was clearly out of the question to wage a two-front war - for an alliance between the Afghans and the Poles would have materialised immediately, backed by the West. 

All of this seems obvious stated now and is confirmed by the latest research (see John Lewis Gaddis, The Cold War, a brief history, Penguin Press, 2005, the summary of a life's work by the acknowledged doyen of Cold War historians and a great read). It was nothing like so clear at the time. 

Moscow was bluffing throughout the crisis. Its bluff worked; otherwise communism would have ended nearly a decade sooner. 

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BANKING

AIB's Polish Bank BZ WBK to expand retail network


Irish AIB's Polish Bank BZ WBK management-board member Michal Gajewski recently announced to reporters that the bank plans to expand its retail network in a bid to up market share to at least 10 per cent in 2010, Interfax News Agency reported. 
"We want to have at least 10 per cent of the market in loans and deposits," Gajewski was quoted as saying. In a bid to contain costs of expansion, the bank is adding franchised outlets, as well as proprietary branches, to its network. BZ WBK plans to open 50 branches this year and expects to have 100 franchised outlets under the name of "minibank," targeting less affluent customers and offering the simplest products, such as transfers, payment cards and cash loans.

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CREDIT RATINGS

Fitch gives BB rating for Getin Holding's bond issue

Fitch Ratings wrote in a statement on May 9th that Getin Holding's unit earned a long-term BB rating from Fitch for its 350-million-Euro bond issue, according to Interfax News Agnecy.
"Fitch Ratings has today assigned Getin Finance Plc's (GF) 350-million-Euro bond issue a Long-term rating of BB," Fitch wrote, adding: "The bonds are issued under GF's one-billion-Euro debt issuance programme." The senior bonds, guaranteed by Getin Bank, mature in May 2009. "Getin Bank's ratings are Issuer Default BB with Stable Outlook, Short-term B, Individual D and Support 5," Fitch wrote. Getin Finance is a special-purpose vehicle to issue bonds that finance Getin Bank's operations. The bank is 99.35-percent-owned by Getin Holding, a privately-owned integrated financial group quoted on the Warsaw Stock Exchange. At end-2006, the bank's total assets amounted to 11.2 billion zloty.

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ENERGY

Polish energy summit to diversify energy worries Russia

Poland's efforts to launch energy cooperation with Black Sea and Caspian region nations are significant enough to worry Russia, with Russian President, Vladimir Putin, visiting Central Asia to keep Kazak President, Nursultan Nazarbayev, from participating in a Polish energy summit, Prime Minister, Jaroslaw Kaczynski, told reporters on May 11th, Interfax News Agency reported.
"From the outset it was clear he wouldn't come," Kaczynski said. "Now you can see how important this conference is. If President Putin goes to Kazakstan especially to stop President Nazarbayev, who will by the way take part in the conference over the phone, from attending with his own physical presence, then that shows how important are the actions we are taking."
Poland was due to host an energy summit with the presidents of Azerbaijan, Georgia, Lithuania and Ukraine on May 11-12th. At the same time Nazarbayev was meeting his counterparts from Russia and Turkmenistan.
President Lech Kaczynski, the prime minister's twin brother, expected the upcoming summit in Krakow to launch energy cooperation between the participating nations. Poland hopes the summit will be a step towards the construction of a pipeline to pump crude oil from the Caspian region to Poland and on to Western Europe via Ukraine.
The project envisages the reversal of the flow of the Odessa-Brody pipeline, which would also be extended to the Polish city of Plock. The pipeline at present carries Russian crude southwards to the Black Sea port of Odessa.
The pipeline extension is a key part of the Polish government's agenda to diversify energy supplies. At present, Russia supplies more than 90% of Poland's hydrocarbon imports.
However, the project faces considerable hurdles as the government of Kazakstan, which holds the biggest reserves in the Caspian region, is insisting on Russia's participation in the project. The Polish government says the project could go ahead even if only Azerbaijan agrees to supply the crude.
Meanwhile, the energy summit was dubbed as anti-Russian by Russian daily newspaper Kommersant. "A day before the opening of the anti-Russian energy summit in Poland, which will discuss the search for alternatives to Russian sources of crude oil and natural-gas - Moscow has made a decisive counter attack, which is being led by President Vladimir Putin," the Russian daily wrote, as cited by the Polish press service PAP.

PGNiG to pay 600m Euro credit

Poland's gas monopolist PGNiG announced on May 9th that it will pay a 600-million-Euro term loan from the company's own sources, Interfax News Agency reported. 
"On May 8th, the PGNiG's management board approved a resolution on reduction of the company's debt by payment of a term loan of 600 million Euro from the company's own sources," the company statement said, adding: "These are other sources than the ones gained by the company from the B-series share issue." The management board also cancelled previous resolutions that allowed the company to use the B-series share issue to reduce the company's debt. PGNiG will pay the 600-million-Euro credit and will secure at the same time possibility to use such an amount as a part of the renewable credit. The company pointed out that reduction of the debt from the company's own sources - other than from funds gained during the B-series share issue - will not affect the schedule of the investments. "With this operation, the company will decrease costs of debt servicing," the statement said, adding: "Thanks to that PGNiG will no longer be in a situation that when using credit it is at the same time an investor of these funds on the financial market carrying cost of the market margin."

CP Energia acquires 2 regional gas distributors

CP Energia, Polish natural gas distributor, bought two regional gas distributors, Carbon and Projekt Energia, the company recently confirmed in a statement, Interfax News Agency reported. 
"The takeover of those two attractive network projects will allow CP Energia to strengthen its position in the natural gas distribution sector," CP Energia Chief Executive Marcin Buczkowski was quoted as saying in a press release, adding: "We will expand our coverage with our gas network by four communal areas [gmina] of the Masovia region." The companies distribute gas to individual clients and are currently developing two projects to expand its gas distribution network in Poland's Masovia region, according to CP Energia press release. Projekt Energia has a network with the estimated end-user sales capacity of 2.5 million cubic metres a year. Carbon is currently developing its network in three Polish gmina districts and will begin selling liquefied natural gas (LNG) to retail customers before its network is connected to the public system. Carbon's estimated end-user sales are at 27 million cubic metres a year, it was reported. CP Energia considers LNG sales as a temporary solution for customers who will later be connected to the Polish gas transmitting system operated by Gaz System. "LNG is also an alternative for distant locations, where it is impossible to build links to the national gas distribution network" Buczkowski was quoted as saying. Only 40 per cent of Poland is covered by gas pipeline infrastructure, it was reported. CP Energia closed the acquisition of ZAO Kriogaz, a Russian specialist in liquefying gas, in January. Currently the company is developing new energy gas processing facilities enabling the company to expand its LNG gas production for extra 30 million per year. After signing a deal with Gazprom, Russia's export monopolist on the gas market, CP Energia is the second Polish company able to import gas, alongside state-owned PGNiG. "Our investment in Russia applies to Russian market," Buczkowski told Interfax Central Europe, adding: "Although we could sell the surplus amounts of LNG gas to Poland and the Baltic States, according to the agreement we have with Gazprom." When asked whether CP Energia would ever distribute LNG gas extracted in Russia to Poland on a regular basis, Buczkowski said the company believed other markets offer better business opportunities for the segment. "We deliver LNG to our Polish clients, however in a longer term the distribution to Russia and the Baltic States make more economic sense in terms of the distance and the cost of transportation," he said.

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FOOD & DRINK

India's Tata Tea to buy Vitax and Flotsana

On April 26, India's Tata Tea announced that it would acquire the Vitax and Flotsana brands from Poland's Premium Foods, Deutsche Presse-Agentur (dpa) reported. 
Tata Tea's Britain-based subsidiary Tetley Group had signed an agreement with Premium Foods for the acquisition, the company said in a statement. 
The acquisition would place Tetley in the number two slot in the Polish tea market. The combined turnover of Vitax and Flotsana brands is US$23 million. The move is part of Tata Tea's plans to gain larger market share of the fast-growing specialty tea segment. 
Vitax's specialty teas include fruit, herbal and green teas. They would complement Tetley's portfolio of black and Earl Grey teas, the statement said. 
"There is significant potential to grow in the market in Poland, and it makes sense for us to acquire an established and successful range of fruit and herbal products rather than start afresh with a new Tetley range," Tetley Group's managing director of Europe and emerging markets Garry Neild was quoted by dpa as saying.
Tata Tea has also acquired Czech specialty tea brand Jemca and US-based Good Earth, which makes herbal teas. Tata Tea also bought 30 per cent of US-based Energy Brands' Glaceau vitamin water for US$677 million in August. 
US trade magazines Beverage Digest and Beverage Business Insights, quoting unnamed sources, recently reported that soft-drink maker Coca-Cola was in serious negotiations to acquire a substantial stake of Glaceau or all of it. The reports said Coca-Cola might make an announcement about the deal in early May. A Tata Tea official refused to comment, saying the reports were speculative. 

Ukraine's Rosan Argo bought out by Duda

Polish listed meat producer Duda announced on April 24th that it has acquired a 100 percent stake in Ukrainian stock-raising and meat-processing enterprise Rosan Agro for 16 million zloty, Interfax News Agency reported. 
"Take over of the Rosan Agro group brings us closer to our strategic aim, meaning the establishment on the Ukrainian market of a group of companies in segments of stock-raising, meat production, meat processing and trade of total revenues at the level of 700-800 million zloty," Duda's CEO Maciej Duda was quoted as saying in the company release. The acquisition of Rosan Agro, the fifth fresh meat producer, will be financed from recent share issue, it was reported. Rosan Agro is the third Ukrainian company taken over by Duda since it started investments on that market in 2006. Duda reported an 86 percent higher net figure for 2006 of more than 50 million zloty, on 1,041 million zloty in sale revenues against 870 million zloty seen in 2005.

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MINERALS & METALS

KGHM's 2007 Q1 net profit expected to drop

Analysts announced on May 4th that Polish copper miner KGHM's first-quarter net profit is expected to drop by nearly 20 per cent year-on-year when the company reports stand-alone results May 7th, despite higher revenues, which will be impacted by lower production and sales volumes as well as the negative impact of hedging transactions, Interfax News Agency reported. 
KGHM will post a first-quarter net profit of 704.7 billion to 748 billion zloty, compared with the 872 million zloty for the year-earlier period, according to analysts. Revenues are expected to be within the range of 2.46 to 2.85 billion zloty, against 2.46 billion zloty in the first quarter of 2006. Analysts expect that KGHM's revenues, although driven by still-high copper prices, will be affected by the strong zloty and hedging transactions. "We expect KGHM to report a top line of 2.5 billion zloty, driven by copper prices (up 21 percent year-on-year) and silver prices (up 37 percent year-on-year (y/y))," Erste Bank analysts were cited as saying in a forecast. "Revenue is substantially diminished by the strengthening of the Polish currency, and … hampered by a hedging loss (exceeding 0.3 billion zloty)." Production levels are also of concern to analysts, as are unit production costs, which analysts expect to have increased by more than 10 per cent or, in extreme forecasts, even by over 20 per cent in the first quarter of 2007, it was reported. "KGHM is likely to disappoint with very weak production volumes," DM BZ WBK brokerage house analysts wrote in a forecast, adding: "We estimate copper sales volumes down 10 percent and silver volumes down 5.8 per cent y/y, while unit production costs increased by 22 per cent y/y to 10,300 per tonne." The copper and silver volume sales are expected to drop seven percent year-on-year in the first quarter this year, but analysts emphasise that KGHM can expect a better performance in the second quarter of the year. 

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TELECOMMUNICATIONS

Mobile operator P4 now distributes 150 outlets

P4, Poland's fourth mobile operator, which launched its services in March under the brand Play, now distributes through 150 outlets, the company's marketing director Jacek Hensler told media portal Wirtualne Media, cited by Interfax News Agency.
Another 200 outlets are ready to open, according to Hensler. "We have 150 fully operational shops, with another 200 waiting to open," he was recently quoted as saying. "Our pre-paid services can be bought from more than 20,000 outlets nationwide."
One of the company's main shareholders, listed alternative telecom Netia, said recently it expected P4 to win more than 500,000 customers by the end of this year. Netia also said it would decide on the possible merger with P4 in late 2008

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