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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: 122 - (26/07/07)

Bush and Kaczinski up the stakes
As if the world has not got enough on its plate, the US and Poland are led by men determined to threaten a new Cold War with Russia by deployment of new missile defences in the Czech republic (radar) and Poland (10 interceptors). 

These are scarcely a serious threat to Russia's vast missile forces of course, but Moscow is fearful that they might be a prelude to ones that would be. 

President George W. Bush has one striking attribute - he brings things to a head. this is not an unmixed blessing. So did Hitler, who said to Goering days before the Second World War broke out, not without his doing: "all my life I have gone for broke." He ended up broken himself; maybe so will Bush.

Two more of their kidney are Dick Cheney, who is urging a military showdown with Iran over its nuclear programme before they must both leave office, and Lech Kaczinski, Poland's president, who on July 16th met with Bush and emphasized the need to build a missile defence system in Europe that has strained relations with Russia. "There's no better symbol of our desire to work for peace and security than working on a missile defence system," Bush said with Polish President Lech Kaczynski at his side in the Oval Office.

The missile-defence system would provide security for Europe from countries where "leaders don't particularly care for our way of life and, or, are in the process of trying to develop serious weapons of mass destruction," Bush said. This is the sort of talk to give the troops, the ones still alive to hear the stirring message.

Nobody can be surprised that the Russians take this all as directed against them. On July 13th Russian President Vladimir Putin suspended Moscow's participation in the Conventional Forces in Europe (CFE) treaty from mid-December. The move was widely seen as an effort to raise pressure over U.S. plans for the anti-missile shield in Poland and the Czech Republic.

NATO on July 16th expressed concern at Russia's decision to suspend participation in the treaty, which covers the deployment of armed forces in post-Cold War Europe.

Kaczynski is one of Moscow's most outspoken critics and a key U.S. ally in Europe. He said he wanted to emphasize the "defensive" nature of the proposed missile shield and its intended use in protecting against countries that might have weapons of mass destruction. "I do hope the whole project will be completed successfully," Kaczynski said through a translator.

The White House said it would keep working with Russia on missile defence. Bush and Putin had met earlier in the month at the Bush family compound in Kennebunkport, Maine in an attempt to improve ties that have become frayed partly over the missile shield.

Putin made a new counter-proposal that expanded on his previous offer to use a radar system in Azerbaijan as an alternative to the U.S. missile-shield proposal. He suggested in Maine incorporating a radar system in southern Russia and bringing more European countries into the decision-making through the Russia-NATO Council. "The comments that the Russian president made up in Kennebunkport offered a certain amount of promise for moving forward. We continue to have discussions with them on it," White House spokesman Tony Snow said.

Washington wants to place interceptor missiles in Poland and a radar facility in the Czech Republic to protect against attacks from what it calls "rogue states" such as Iran and North Korea. Bush in June visited both Poland and the Czech Republic, which has agreed to host the radar site on its territory. Poland has held out, hoping to negotiate related military contracts or other concessions.

Polish and U.S. negotiators held a round of talks in late June in Washington and will continue the talks later this summer. Deputy Foreign Minister Witold Waszczykowski, who represents Poland in the talks, expects a deal in September or October.

The leaders of junior coalition partners may quit government and force early elections
It is not only Lech Kaczinski who is a man of confrontation, but also his twin brother, the premier. PiS Prime Minister Jaroslav Kaczynski took command of the rocky three-party coalition government including the populist Samoobrona and the right-wing LPR a year ago, after taking over from Kazimierz Marcinkiewicz. 

He sacked his deputy prime minister, Andrzej Lepper, the leader of a vital prop of his own government, recently - this for a second time. Kaczynski sacked Lepper last year over personal differences only to re-nominate him within a few weeks after a political scandal sent PiS popularity ratings into a nose-dive.

The leaders of Poland's two junior coalition partners were set to decide as a result whether to quit the tri- party Law and Justice (PiS) government of Prime Minister Kaczynski, a move which could precipitate early elections this autumn. 

Sacked in early July from the post of deputy prime minister over allegations of corruption, Lepper, leader of the populist Samoobrona farmers party, said that his party wants to quit the coalition with PiS. But a final decision would be made after consultations with Roman Giertych, head of the Catholic nationalist League of Polish Families (LPR) junior PiS coalition partner. 

In Early July Lepper and Giertych suggested they may quit the government and join their parties into a new formation, Liga and Samoobrona (LiS). 

Lepper has called for a special parliamentary commission to probe an Anti-Corruption Bureau (CBA) operation which he claims tried to frame him for bribe-taking. 'The role of politicians in this case, perhaps the prime minister in all this, in thinking up this entire affair, must be investigated,' Lepper told reporters in Warsaw. Lepper alleged the CBA, created by Kaczynski's government to rid the state of graft, was being used as political police to eliminate PiS rivals. Opposition politicians have demanded the CBA be dismantled. 

Kaczynski announced Lepper's shock dismissal from the post of deputy prime minister and agriculture minister on July 9th in connection with a CBA probe which the Polish daily Dziennik claims appears to have tried to set up Lepper in a bribery investigation. CBA investigators appear to have no concrete evidence suggesting Lepper took a bribe in connection with the case, based on re-zoning agricultural land for commercial and residential use in the Mazurian Lakes region, a popular holiday destination in north-east Poland. The Samoobrona party leader and former minister of agriculture insists he is completely innocent. 

His dismissal cast a shadow over the future of the Kaczynski government, with the prime minister himself saying early elections were possible this coming fall. 

Poland's next scheduled general election is due in the autumn of 2009. 

Poland's real estate prices likely to increase on labour demands of 2012 sporting events, analysts aver
Poland is suffering from a massive labour drain, many to the UK, after EU entry. Poland will likely face further real estate price increases over the next few years because the UEFA 2012 soccer tournament - partly hosted by Poland - and the London Olympic games held the same year will compete for skilled workers and drive up material costs, Polish credit agency and financial advisory platform emFinanse analysts wrote in a report.

"The accumulation of two sports events [2012 UEFA tournament in Poland and Ukraine and 2012 Olympics in Great Britain] are likely to cause detrimental changes for our housing market," Tomasz Szmidt of emFinanse wrote. "The lack of skilled workforce and the increase of building materials' prices are basic factors that may influence further raise of living space's square meter prices." 

Poland and the Ukraine won their bid to host the 2012 UEFA tournament on April 18. The two host nations will now need to launch massive construction efforts, building sports facilities, roads, railways, airports and border crossings.

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This all puts a question mark over Polish EU membership, although this is doubtless not seriously at issue. So does a certain abrasive style of Polish negotiators in EU councils, consonant with the confrontational Kaczynski brothers. The following is self-explanatory:-

Poland Celebrates Summit Deal at Home as EU Criticism Grows 
By Katya Andrusz
The Polish government is being feted at home after agreeing to a last minute compromise at a summit of European Union leaders on a new governing treaty, while abroad, criticism of its negotiating style is growing. 

''They've more or less sold it to everyone in Poland,'' said Krzysztof Bobinski, director of the Warsaw-based Unia & Polska Foundation research institute, by phone. ''But I don't think this country quite realizes what's going on in the outside world -- the losses that Poland has taken over this whole issue are huge.'' 

Polish President Lech Kaczynski, heading the country's delegation at the marathon talks in Brussels that ended in the early hours of Saturday, bowed to pressure from the EU's other 26 members and agreed to back changes to the bloc's decision- making system that Poland had criticized for diminishing its influence on EU policy. 

As many as 55 percent of Poles believe that their country wholly or partly ``won'' at the summit, according to a survey of 500 people by GfK Polonia, a polling agency, published in the newspaper Rzeczpospolita today. Only 11 percent said Poland had definitely failed at the meeting. No margin of error was given. 

Germany, which holds the rotating EU presidency until the end of this month and chaired the meeting, is less certain that Poland made the summit a success. 

''The Polish strategy bordered on blackmail,'' said Stephan Raabe, head of Germany's Konrad Adenauer Foundation in Poland, at a conference in Warsaw on June 25th. 
Distrust 

''Poles used a strategy of distrust against the German presidency and that now has to be fought and limited,'' said Raabe. Germany's biggest selling tabloid, Bild, was critical of EU concessions to the Polish government. ''Why is Poland getting extra wurst?'' the paper asked. 

Relations between Poland and Germany have deteriorated over the past two years, even though Germany strongly supported Poland's inclusion in the 2004 enlargement of the EU that brought in eight former communist countries from eastern Europe. 

Former Polish Defence Minister Radoslaw Sikorski last year compared a deal between German companies BASF AG and E.ON AG with Russia's OAO Gazprom to build a natural gas pipeline underneath the Baltic Sea -- thus avoiding crossing Polish territory -- with the Molotov-Ribbentrop Pact that carved up Poland between Germany and the Soviet Union ahead of World War II. 

'Absurd' 
Remarks by Polish Prime Minister Jaroslaw Kaczynski ahead of the summit that Poland would have a population of 66 million today rather than the current 38.5 million if it had not been for the war irritated EU leaders. Luxembourg's Prime Minister Jean-Claude Juncker called the comments ''inappropriate'' and Danish Prime Minister Anders Fogh Rasmussen termed them ''absurd.'' 

''I was absolutely amazed -- and appalled -- at what the Poles were saying,'' said Julie Smith, deputy director of the Centre of International Studies at the University of Cambridge in England, by phone. ''I knew about the Kaczynskis but I didn't expect their complete insensitivity.'' 

The June 23 agreement -- if it wins final approval -- will see the EU continue voting under the present system until 2017 which gives Poland almost the same number of votes as Germany even though Germany has more than twice the population of Poland. From 2017 at the latest a so-called ''double majority'' rule will come into effect allowing laws to be passed if they are agreed to by 55 percent of the governments representing 65 percent of the EU population. 

Veto Right 
According to Eugeniusz Smolar, president of the Center for International Relations in Warsaw, the vote weighting is of little significance anyway, as each country will retain a veto right over sensitive areas such as taxes and foreign policy. 

The new rulebook will also create the post of permanent president and foreign minister and streamline the system for passing EU laws. Leaders pledged to ratify it before European Parliament elections in 2009. 

Italian Prime Minister Romano Prodi said he was ''disgusted'' with the manner of debate at the summit, saying EU-sceptics had set the tone of the talks and weakened Europe. ''Over all the years, I've never seen with such painful clarity that two Europes exist -- one, the majority, which believes in Europe and wants to move forward, and a second, for which seeking to reduce the EU's influence is a national political goal,'' Prodi told Italian newspaper La Repubblica after the summit. 

Haggling will now begin in earnest as the EU set the end of this year as a deadline to complete the draft treaty that must then be ratified by all member states. 

''The Poles are going to find it very difficult now if they want any favours from anyone in Brussels after all this,'' said Bobinski. ''Now we can blunder into some new crisis.'' 

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AUTOMOBILES

Auto product exports up more than 32% on year


Poland's Chamber of Automotive Industry (PIM) announced on July 5 in a release that the country's automotive product exports grew 32.5 per cent year-on-year (y/y) to 1.43 billion Euro in March, and increased 16.6 per cent on the previous month, Interfax News Agency reported. In the three month period ending March, exports increased nearly 20 per cent y/y, or 652.52 million Euro, totalling 3.92 billion Euro, on the back of passenger cars, commercial vehicles, spare parts and diesel engines, it was reported. 

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ENERGY

PGNiG co-ownership of pipeline with Germany ruled out

Bartimpex ruled out on June 13th the co-ownership of Poland's gas monopolist PGNiG in the firm that may construct a pipeline between Poland's Szczecin and Germany's Bernau, Interfax News Agency reported. 
However, Bartimpex would welcome Polish state-owned gas pipeline operator Gaz-System as a co-owner. "PGNiG as an owner is out of the question due to its character of a (partially) private company, but we would welcome Gaz-System," Bartimpex General Director, Aleksander Gudzowaty, was quoted as saying on television channel TVN24. Gudzowaty added that the company has received the green light from Polish officials to build the pipeline, but that it needs the cooperation of PGNiG and Gaz-System in the project. "We have offered PGNiG an equal share in the project, but received no offer thus far. We also submitted an offer to Gaz-System but also received no answer," Gudzowaty was quoted by Interfax as saying, adding: "We will send the offers again and see what they say." Poland's Economy Minsistry does not support Bernau-Szczecin gas pipeline project, claiming that it would strengthen Russia's gas monopoly to Poland, via Germany, while Poland's priority is to diversify its gas supplies, Interfax reported.

PKN Orlen, Grupa Lotos in cooperation talks

Refiners PKN Orlen and Grupa Lotos announced recently that they are discussing cooperation in upstream projects. "In an effort to improve the security of raw materials (supplies), both companies, having included in their strategies the development of upstream projects, discussed the possibilities of joint participation in selected projects," the statement read. Due to recently rising concerns regarding the security of supplies of global energy resources, PKN Orlen and Lotos are considering exchanging experiences in supplying oil to their refineries, and may jointly purchase crude in future, according to Interfax News Agency. 
"It would be aimed at better use of a joint purchase potential in relations with current and potential new suppliers," the statement read. Both companies showed the will to cooperate in realising the government's energy security policy. However, they emphasised that joint actions concerning Poland's strategic interests will have no impact on their competition on the Polish market, it was reported. PKN Orlen recently slowed down its efforts to gain access to oil fields, as in an updated strategy announced in early June, the investments in oil trade and upstream activity are planned at 1.5 billion zloty, compared to a total investment plan 21.2 billion zloty. Lotos is developing its upstream activity on the Baltic Sea, which it plans to increase from current levels of around 250,000 tonnes of oil annually to one million tonnes of oil annually in 2012.

Petrolinvest unlikely to break even next year

Petrolinvest CEO, Pawel Gricuk, recently told reporters that the company will likely see its net loss widen in 2007 from 21.6 million zloty in 2006 and is unlikely to break even in 2008. "The loss may be higher this year than in 2006 because we have a lot of investments to carry out," Gricuk was quoted as saying, adding: "It is also unlikely to reach a break-even point in 2008," Interfax News Agency reported
Petrolinvest posted a 21.57-million-zloty net loss in 2006, against a 2.7-million-zloty net profit in 2005, while sales revenues increased slightly to 213.7 million zloty in 2006 from 206.5 million zloty in 2005, the company wrote in its issue prospectus, ahead of an initial public offering in July. The company pointed out that the loss in 2006 was mainly a result of costs related to beginning exploration works on oil fields in Kazakstan and Russia's Republic of Komi. Petrolinvest purchased 50-59.99 per cent stakes in seven companies which own a total of 10 concessions for exploration of the oil fields in Kazakstan and Russia's Republic of Komi, Interfax reported. In Kazakstan, Petrolinvest's concessions are located near super giant class oil fields Kashagan and Karachaganak.

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MINERALS & METALS

KGHM foresees results on German project in 1-2 years

KGHM Polska Miedz Vice President, Maksymilian Bylicki, told a press conference on July 10th that the company expects preliminary results of exploration work on copper fields in Germany in one to two years, Interfax News Agency reported. 
In June, KGHM stated that through its subsidiary KGHM Cuprum it received permission to carry out exploration work on the Polish-German border.
The approval allows KGHM to carry out drilling and analysis exploration at the depths of between 800 to 1,500 metres, Interfax reported. KGHM is the world's sixth largest copper producer and the second largest silver producer - with a 2006 record net profit of 3.39 billion zloty on 12.3 billion zloty in sales revenues.

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TELECOMMUNICATIONS

Fixed-to-mobile calls may decline 20% in 2007

Electronic Communication Office (UKE) Chairwoman Anna Strezynska announced on June 25 that Poland's telecoms regulator expects the price of fixed-to-mobile calls to decline "up to 20 per cent this year," with further price reductions down the line. "Since we have also worked out a timetable to come down with wholesale tariffs in future, and we will continue to use the timetable to come down with margins, I think it can cause up to a 20 percent decline this year and further declines in following years," Strezynska said in an interview for Radio PiN news channel. 

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