VOLUME 17, NUMBER 41 • OCTOBER 17-23, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

OOrraannggee ssqquueeeezzeeddYulia Tymoshenko has been sentenced to seven

years in jail. What now for Ukraine and the EU?

6, 11

Since 1994 . Poland’s only business weekly in English

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W.W

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The fallout Full post-election

political coverage

2, 3, 4, 5, 11

AAllll tthhaatt gglliitttteerrss ……Investing in gold is becoming more popular in

Poland. Will it remain a good investment?

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Poland’s political divide

between east and west

remains stark

The EC has put forth a

five-point plan to address

the debt crisis

Santander is in prime

position to take over

Kredyt Bank

News . . . . . . . . . . . . . . . . . . . . . . . . .2

Elections 2011 . . . . . . . . . . . . . . .3-5

Europe News . . . . . . . . . . . . . . . . . .6

Business . . . . . . . . . . . . . . . . . . . .7-8

Interview . . . . . . . . . . . . . . . . . . . . .9

Opinion & Analysis . . . . . . . . .10-11

In depth . . . . . . . . . . . . . . . . . .12-13

Lokale Immobilia . . . . . . . . . .15-19

Markets . . . . . . . . . . . . . . . . . . . . .20

The List . . . . . . . . . . . . . . . . . . . . . .21

Lifestyle . . . . . . . . . . . . . . . . . . . . .22

Last Word . . . . . . . . . . . . . . . . . . . .23

In this issue

REAL ESTATELokale Immobilia

• Port Praski

• Industrial parks

• Rogowski interview

15-19

Reacting tochangeFranklin Templeton

Investments’ director

for CEE tells WBJ that

his firm is confident

about Poland’s future

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A guide to Polish business and industry Przewodnik po polskim biznesie i gospodarce

Exhibition and

convention venues

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15

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Democr

atic Le

ft Allia

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Polish

Peopl

e's Pa

rty (PS

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Civic Pla

tform (PO

)

Law an

d Justic

e (PiS)

Poland

Comes

First (P

JN)

Paliko

t's Move

ment (RP

)

OCTOBER 17-23, 2011NNEEWWSS2 www.wbj.pl

Wa∏´sa

supports

Occupy Wall

StreetFormer Polish President

and Solidarity leader

Lech Wa∏´sa will fly to

New York following an

invitation from protesters

involved in the ongoing

Occupy Wall Street

protests. “How could I not

respond?” Mr Wa∏´sa

told Lublin-based

newspaper Dziennik

Wschodni. “The

thousands of people

gathered near Wall

Street are worried about

their future, about the

fate of their country. This

is something I under-

stand.” The former

shipyard worker and

Nobel Peace Prize winner

has not specified when he

intends to fly to the US.

Polish arrests

linked to

Norway

killings

Poland’s Internal

Security Agency (ABW)

arrested 19 people

suspected of illegal

manufacture, possession

and trade in explosives

on October 11 and 12.

The arrests are part of a

nationwide operation

initiated on the basis of

information provided by

Norway, in addition to

data contained in the

manifesto of Anders

Behring Breivik, the ABW

said in a statement. Mr

Breivak has admitted to

killing 77 people after he

detonated a bomb in Oslo

on July 22, before going

on a shooting spree at a

youth camp on Utøya

Island.

Poland praised

for Euro 2012

preparationsUEFA President Michel

Platini said he was very

satisfied with Polish

preparations for the Euro

2012 soccer

championships, during a

tour of host cities

Gdaƒsk, Poznaƒ, Warsaw

and Wroc∏aw last week.

Mr Platini said he was

pleased with “not only

the stadiums but the

whole infrastructure –

roads, airports, train

stations, which will be

very useful for the people

in Poland and Ukraine

after Euro 2012.” Nine

months ahead of the

event, the Polish

government estimates

around 80% of the

preparations are

completed. ●

AEW Europe ..............................16

Allegro ........................................12

Allegro Group ............................15

amazon ......................................23

Amber Gold ................................12

AP Holding SKA ........................17

Arcad ..........................................16

Atrium ........................................16

AXI IMMO....................................16

Bank BPH ..................................13

BZ WBK ..................................7, 13

CA Immo ....................................16

CB Richard Ellis Polska ............15

Comperia.pl................................12

Cushman & Wakefeld ............9, 16

Deka ..........................................16

Döllken ......................................17

Domino’s Pizza ..........................15

eBay............................................12

ECE ............................................16

Echo Investment ........................16

EcoCorner ....................................8

Eiffage Budownictwo Mitex ......16

Elektrim......................................15

Emmerson..................................18

Equinox ........................................2

Ernst & Young ............................15

Franklin Templeton

Investments..................................9

Gant Development ....................16

Goodman Group ........................18

gowebtrade.com ........................20

Gremi Media ..............................12

Grupa Capital Park ....................15

Grupa Mostostal ........................16

Heitman......................................16

Hochtief Polska..........................15

HSBC Bank Polska ......................2

IDMSA ........................................13

Impel ..........................................16

Invesco........................................16

Ipopema Securities......................7

Jeronimo Martins Distribution..15

Kredyt Bank ................................7

Lektronix Poland........................17

Limito ........................................17

Long Bridge ..............................18

Lorencic Polska ........................17

LOT ..............................................2

Lotos ............................................7

Mecom........................................12

Meyer Bergman ........................16

Mierzejewski Kasprzycki

Czaplicki ....................................18

Naftogaz ......................................6

Nielsen & Partners Law Office ..6

Norgips ......................................15

Opek ..........................................18

Pernod Ricard ............................12

Poczta Polska ............................12

Polit Elektronik ..........................15

Port Praski ................................15

Presspublica ..............................12

Pronox ........................................12

Robyg..........................................19

Rogowski Development ............19

Ronson Development ................19

Rossmann ............................15, 17

Ruch ..........................................18

Santander ....................................7

Segro ..........................................18

Skanska Property Poland..........15

SPS Construction ......................18

Standard & Poor’s ................6, 20

Technicolor Polska ....................15

Tieto Poland ..............................16

TNS OBOP....................................5

TNT Express ..............................17

Transpoint International ............17

Unibail Rodamco........................16

Union ..........................................16

Vantage Development................16

Warsaw Stock Exchange ..........13

Wealth Solutions........................13

World Gold Council ....................13

Wrobis ........................................16

X-Trade Brokers

Dom Maklerski ..........................20

Heads are likely to roll soon inPoland’s Democratic LeftAlliance (SLD) party after thegrouping’s surprisingly poorperformance in the country’sparliamentary elections onOctober 9. Party leader Grze-gorz Napieralski has alreadyannounced that he will be step-ping down, with his successordue to be selected during anupcoming party congress.

SLD finished a disappoint-

ing fifth in the parliamentaryelections, behind new partyPalikot’s Movement (RP) andthe rural Polish People’s Party(PSL). The party, which gov-erned Poland from 1993-1997and from 2001-2005, had previ-ously been one of the strongestin Poland. However, since los-ing power in the 2005 elections,in which it fared poorly, it hasstruggled to gain traction.

There was hope that the

party would do better underMr Napieralski, who finishedan impressive third in lastyear’s presidential elections.However, younger voters whohad previously tended to favorSLD’s socially liberal platformthis year seem to have decidedthat RP was a better option.Formed less than a year ago,RP received 10 percent of thevote in the elections.

Last week Mr Napieralskiannounced that he would bemeeting with the party’s leader-ship to speed up the organiza-tion of a party congress, atwhich new leaders would bechosen. Currently, front-run-ners to replace Mr Napieralskiare Warsaw MP and formerMinister of Internal AffairsRyszard Kalisz and Euro MPWojciech Olejniczak, whoheaded the party from 2005 to2008.

Meanwhile, former PrimeMinister and Foreign MinisterW∏odzimierz Cimoszewicz andformer President AleksanderKwaÊniewski, both of themprominent SLD figures in theparty’s heyday, have signaledtheir readiness to help thegrouping out, as long as thecauses of its electoral defeatare discussed honestly and itswhole leadership is replaced.

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10.2%was the surprisingly large share of the vote gained by

Palikot's Movement, making it the third-largest party

in the Sejm, Poland’s lower house of parliament.

z∏.0.70 was the amount per vote that Janusz Palikot spent on

his campaign. Civic Platform spent z∏.5.2 per vote, and

the Democratic Left Alliance spent z∏.16.7 per vote.

30%is how much less political parties spent on campaign

advertising in October’s parliamentary election than

they did in the election four years ago, according to

Equinox, a media house.

“[Janusz Palikot] exists, but for us it’s as if hedoesn’t exist.”

Law and Justice MP and spokesperson Adam Hofman explains his party’s

stance regarding the leader of Palikot’s Movement, a libertarian party that came

in third in this month’s parliamentary elections. He added that his party has a

“serious problem” with Mr Palikot.

Quote of the Week

PiS Angels hang up their wings

Law and Justice (PiS) had hoped to lure a new segment ofthe electorate with its Angels, a group of seven young andattractive female candidates. But none of them, including“Miss PiS” and Angelina Jolie-lookalike Sylwia ¸ugowska,made it to the Sejm. Log on to WBJ.pl to find out happenedto these ambitious women

On WBJ.pl

Numbers in the News

Company index

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17-19 POLAND AND CEE – MUNICIPAL AND GOVERNMENT PROJECTS

Event: This event includes a series of workshopsand lectures to promote local projects inPoland and Central and Eastern Europe.Location: InterContinental Warszawa hotel,Warsaw.pppinstitute.com

18-19 NUCLEAR POWER POLAND 2011Event: In this third edition of the forum, the issue of

nuclear power safety will be the main topicof discussion.Location: Courtyard by Marriott WarsawAirport, Warsaw.topconsult.nazwa.pl/nowa_tcct

24 COMMERCIALIZATION OF INNOVATIVE SCIENCEEvent: During this conference, participants will

learn about the opportunities and methodsfor commercializing scientific achievementsand innovations.Location: Warsaw International ExpocentreEXPO XXI. komercjalizacja-nauki.pl

25 INTERNATIONAL PPP FORUMEvent: Public and Private Sector Cooperation – the

Partnership Idea. This event will feature sev-eral discussion panels on PPP in Poland andaround the world. Hosted by economistRobert Gwiazdowski.Location: Plac Kolegiacki 17, Poznaƒ.bpcc.org.pl

26 RENEWABLE ENERGY FORUMEvent: This event will feature explanations of

Poland’s law on renewable energy sourcesand discussions on the role of environmentalfunds in financing renewable energy, as wellas their effectiveness in support of therenewable energy sector.Location: Warszawskie Centrum EXPO XXI,Warsaw. zpfeo.org.pl/konferencje

27 OFFICE IN POLAND CONFERENCEEvent: This conference, focused on Poland’s office

real estate market, features more than 30speakers representing the full spectrum ofviews and opinions, and nearly 200 partici-pants actively operating in the Polish officemarket, organizers say.Location: Marriott Hotel, Warsaw.konferencje.nowyadres.pl

October

DATELINE

The Democratic Left Alliance

IN THE SPOTLIGHT

Figures in focusPolitical costs

2011 parliamentary campaign costs by party,

in z∏oty per vote gained

Source: Puls Biznesu

Grzegorz Napieralski

OCTOBER 17-23, 2011 EELLEECCTTIIOONNSS 22001111 www.wbj.pl 3

18 - 20 listopada 2011 r.Hotel Aquarius ***** Kołobrzeg

Organizator

Partnerzy główni

Patroni medialni

Zapisy i szczegóły: www.profesjonalnyinwestor.org.pl www.sii.org.pl

Partnerzy Organizacyjni

Partner

Konferencja realizowana w ramach programu

Aleksander Grad Minister

Skarbu Państwa

Patronat Honorowy

Politics

PPoollaanndd ttoo hhaavvee nneeww ccooaalliittiioonnggoovveerrnnmmeenntt bbyy NNoovveemmbbeerr 2222 Prime MinisterDonald Tusk hasunveiled his plans forthe new post-electiongovernment

The first plenary session of thenew parliament will take placeon November 8 and a new gov-ernment will be sworn-in byNovember 22, while PrimeMinister Donald Tusk will rec-ommend Minister of HealthEwa Kopacz as the new Sejmspeaker, Mr Tusk revealedduring a press conference lastThursday.

The Prime Ministeremphasized that both he andhis current coalition partner,the Polish Peoples’ Party(PSL), are interested in con-tinuing their political coopera-tion.

“I have confirmed to thepresident that I have completed

the first serious discussion with[PSL leader] Deputy PrimeMinister Waldemar Pawlak andthat we both have the unequiv-ocal intention of forming acoalition,” said Mr Tusk.

Mr Tusk also revealed thatPSL is “interested in its cur-rent areas of activity” when itcomes to the division of min-istries in the government. Thejunior coalition party is cur-rently in charge of the Econo-my Ministry, the Ministry ofLabor and Social Policy andthe Agriculture Ministry. MrTusk’s comments suggest thatthis will remain the case.

A female speakerRegarding his support forMs Kopacz as the new Sejmspeaker, Mr Tusk said thathe “rejects the argument thatif a politician is to be effi-cient and rule firmly, he hasto be a man.”

“It really is not like that. Ihave come across manyfemale administrators whohave a very firm hand andcan govern better than men,”he said.

Mr Tusk was respondinghere to the views of some inPolish politics that believeMs Kopacz may have troublecontrolling the 460 membersof Poland’s lower house ofparliament.

The prime minister alsostated that no one shouldexpect “revolutionary” chan-ges in his government,adding that five or six minis-ters will keep their positions.“The changes will be morethan cosmetic but there willbe no revolution turningeverything upside down,” hesaid, adding that Poles hadvoted for stability and contin-uation in the recent elec-tions.

Internal oppositionWhen asked what would hap-pen to the current parliamen-tary speaker, Grzegorz Schety-na, a prominent PO politician,the PM said that although MrSchetyna was a close friendand ally, “he had been aspiringto the role of rival and leaderof the internal opposition.”

“We have to be sure thateveryone will work towardseffective and efficient gover-nance.”

Political observers suggestthat this could be a warningsignal for Mr Schetyna, who iswidely regarded as the num-ber-two man in PO. He isexpected to be given a ministe-rial position, although it is notyet clear which one.

The prime minister willpresent his government’s plansfor the next four years in thefirst week of December.

RReemmii AAddeekkooyyaa

Janusz Palikot

Huge win for Palikot’s party The ultra-liberalPalikot’s Movement isexpected to rufflesome feathers

The third-place finish ofPalikot’s Movement (RP) wasthe biggest surprise of theOctober 9 parliamentary elec-tions.

Headed by Janusz Palikot,the flamboyant former mem-ber of the ruling Civic Plat-form (PO) party, RP won 10percent of the vote on a plat-form that includes legalizationof soft drug use, liberalizationof abortion laws and supportfor same-sex civil unions.

Following talks with Presi-dent Bronis∏aw Komorowski,Mr Palikot said last week thathis party would be in the oppo-sition but that its oppositionwould not be “total,” TVN24reported, citing unnamedsources.

Mr Palikot has also urgedthe president to back the cre-ation of a government ofexperts and professionals. RPhas reportedly not asked forany ministerial positions, but

has not ruled out providingadvisors to the government.

RP received 23.3 percent ofthe votes of those agedbetween 18 and 25 years. Itseems the party struck a cordwith Poland’s youth, many ofwhom are dissatisfied with theperformance of the PO govern-ment, which relied heavily on

the youth vote in its victory fouryears ago.

Mr Palikot, a businessmanfrom the eastern Polish city ofLublin, proposes an 18 percentflat-tax rate on personalincome tax, corporate incometax and VAT, and a reductionin the size of government.

His party supports state-

subsidized in vitro fertilization,and is vehemently anti-clerical.

Many are expecting to seefireworks when RP comes upagainst the conservative Lawand Justice (PiS) party, eventhough the latter has said thatit planned to ignore Palikot’sMovment.

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Party leadership

Kaczyƒski to remain

Law and Justice leaderThe party has alsorevealed its thoughtson Janusz Palikot:“For us it’s as if hedoesn’t exist”

Jaros∏aw Kaczyƒski has saidthat he will stay on as leader ofthe conservative Law and Jus-tice (PiS) party, despite its sec-ond-place finish in the recentparliamentary election.

In 2008, the head of PiSpromised to step down if hisparty did not win the 2011 par-liamentary vote. In the end,PiS came in a distant second toCivic Platform (PO).

Last Wednesday, MrKaczyƒski explained that hischange of mind was influencedby three years of experience,including the April 2010Smolensk catastrophe.

Regarding his party’s sec-ond-placed finish in the elec-tion, party spokesperson andMP Adam Hofman told Polishradio station Radio Zet thatMr Kaczyƒski was not toblame. Instead, he said that theloss was caused by a higher

turnout than his party hadexpected. Internal party pollshad predicted PiS wouldreceive more votes than PrimeMinister Donald Tusk’s POparty, but the predictions werebased on there being fewervoters than the number thatwas actually cast, Mr Hofmansaid.

Mr Hofman admitted thatPO was able to effectivelymobilize its electorate. He alsoblamed “negative PR” fromPO, which he said his partyhad not been able to counter.

In the interview, Mr Hof-man also revealed his party’sthoughts on Janusz Palikot,the leader of Palikot’s Move-ment (RP). That party claimedthird place in the parliamen-tary elections, gaining 10 per-cent of the vote, on a platformthat included anti-clerical andpro-abortion planks.

“[Mr Palikot] exists, but forus it’s as if he doesn’t exist,”Mr Hofman said, adding thatthe party has a serious prob-lem with Mr Palikot.

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Mr Palikot is one of Poland’s most controversial politicians

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Ewa Kopacz is Prime Minister Tusk’s choice as new

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OCTOBER 17-23, 2011EELLEECCTTIIOONNSS 220011114 www.wbj.pl

Election results

MMiinniisstteerrss ggeett vvootteerrss’’ ccoolldd sshhoouullddeerrSome ministers in PMDonald Tusk’scoalition governmentfailed to impressvotersThere were several ministers inPrime Minister Donald Tusk’sgovernment who didn’t fair

well in the parliamentary elec-tions on October 9. Thebiggest loser was JolantaFedak, the current Minister ofLabor and Social Policy, whofailed to make it into parlia-ment from her Zielona Góraconstituency, after receivingroughly 1.4 percent of the vote.

Cezary Grabarczyk, themuch-criticized Minister of In-frastructure and one of CivicPlatform’s most powerfulpoliticians, also performedpoorly, though he earnedenough votes to return to par-liament. Mr Grabarczyk re-ceived fewer votes in his ¸ódê

district than his party colleagueand first-time MP, Nigerian-born John Godson. For apolitician viewed as one of themost influential in the rulingCivic Platform (PO) party, thiswas a heavy blow to take.

Another minister who per-formed below par was FinanceMinister Jacek Rostowski,who received just over 1 per-cent of the vote in Warsaw,though he managed to securea seat in the next parliament.The current Minister of Edu-cation, Katarzyna Hall, alsohad a less-than-impressiveshowing, winning around 2.4percent of the vote in herGdaƒsk constituency.

Out of the above ministers,it is widely expected that MrRostowski will hold on to hisposition as finance minister,while Mr Grabarczyk and MsHall are expected to losetheirs. It is still unclear whatwill happen with Ms Fedak, asshe is a minister who has been

put forward by junior coalitionmember the Polish People’sParty (PSL), and is a close allyof its leader Waldemar

Pawlak. Ministers are notrequired to be members ofparliament.

RReemmii AAddeekkooyyaa

LGBT issues

TTrraannsssseexxuuaall llaawwmmaakkeerr eenntteerrss ppaarrlliiaammeennttPoland will get its firstopenly gay MP, too

Poland will have its first open-ly transgender MP after AnnaGrodzka, from the Palikot’sMovement party (RP), gained19,451 votes in the Kraków IIelectoral district, winning aplace in the lower house ofparliament, the Sejm.

Ms Grodzka, founder andpresident of transgender advo-cacy NGO Trans-Fuzja, saysher victory means she will also

become the world’s only trans-sexual MP.

“Today, Poland is changing.I am the proof,” Ms Grodzkatold the AFP.

Robert Biedroƒ, co-founder of the Campainagainst Homophobia, whoalso ran with RP and waselected in Gdynia, will becomethe first openly homosexualMP in the Polish parliament.

Many political expertsbelieve that the libertarianparty’s surprisingly strong per-

formance is proof that therehave been some deep changesin Polish society over the pastfew years.

Ms Grodzka explained onher blog that after working foryears to fight discriminationagainst sexual minorities andtransgender people, she wantedthis battle to be fought morebroadly. “Palikot’s Movementgives me this opportunity. I willuse it,” she wrote.

Ms Grodzka, who complet-ed her sex change last year,

had been politically active withthe Democratic Left Alliance(SLD) for a number of yearsbut became disenchanted withthe party.

SLD as an alliance has“rotted, as did Polish democ-racy. SLD politicians for sev-eral years now only seek theirinterests and the interests ofmainstream voters, forgettingthat democracy is not dicta-torship of the majority,” MsGrodzka wrote on her blog.

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Minister of Infrastructure Cezary Grabarczyk earned fewer votes in his ¸ódê

constituency than first-time MP John Godson

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Anna Grodzka won 19,451 votes in Kraków

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Jolanta Fedak failed to make it into parliament

Law and JusticeCivic Platform

Demographic differencesThose in Poland’slargest cities (withpopulations of over500,000) votedlargely in favor ofPO, at 52 percent,compared to 24.7percent for PiS.Moreover, some10.2 percent of thosein Poland’s largestcities voted for Palikot’sMovement, while 6.9percent voted for SLD.Those living in villages gave36.4 percent of the vote to PiScompared to 28.7 percent forPO and 15.2 percent for PSL.

Voters between the ages of26 and 39 voted mostly infavor of PO, with 43.5 per-cent, compared to the 29.3percent who voted for PiS,while Janusz Palikot fromPalikot’s Movement receivedthe most voter support (23.3percent) from those agedbetween 18 and 25.

Meanwhile, among those 60years of age and over, the votewas relatively evenly splitbetween those who voted forPO (39.5 percent) and thosewho voted for PiS (38 percent).This age group also showed the

lowestsupport forPalikot’s Mo-vement at 4.9 percent.

Overall, female votersshowed a stronger prefer-ence for PO (42.4 percent)than male voters (36.5 per-cent). And almost twice thenumber of male voters (13percent) compared to femaleones (7.3 percent) chose tovote for Janusz Palikot. Sup-port for PiS was roughly thesame for both sexes, ataround 30 percent.

Unemployed voters casttheir ballots evenly both forPiS and PO at about 32.5 per-

cent. Similarly, retirees andthose receiving pensions gave39.1 percent of the vote to POand 37.8 percent to PiS. Pol-ish farmers showed the leastamount of support for PO at13 percent, compared to 40.8percent for PiS and 32.3 forPSL. Private entrepreneurs,and directors and specialists,however, showed a prefer-ence for PO at 48.9 and 51percent, respectively.

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The parliamentaryelections showed thatPoland is still sharplydivided between eastand westThe results of Poland’s parlia-mentary elections showed adeep political divide betweenPoland’s voters in the east andthose in western and centralregions. Out of Poland’s 16voivodships, 11 voted over-whelmingly for the Civic Plat-form (PO) party, while mostof eastern Poland votedstrongly in favor of Law andJustice (PiS), according to fig-ures from pollster TNSOBOP.

Of the five voivodships thatwere won by PiS – Ma∏opol-

skie, Lubelskie, Podkarpackie,Podlaskie and Âwi´tokrzyskie– four (all but Ma∏opolskie)are located along Poland’s so-called “Eastern Wall,” on thepoorer, more rural, easternedge of the country.

PO received the most sup-port in the Pomorskie voivod-ship (in Poland’s north), at51.4 percent, and the lowestin the Lubelskie voivodship(in the southeast) at 22.2 per-cent. PiS, meanwhile, wasmost strongly supported inthe southeastern Pod-karpackie voivodship (48.6percent) and received thelowest level of support (19.8percent) in the Lubuskievoivodship (near Poland’swestern border).

The Polish Peoples’ Party(PSL) received the highestsupport (at 20.1 percent) inthe Âwi´tokrzyskie voivod-ship followed by 15.5 percentin Lubelskie, 12.5 in Podlask-ie and 11.2 percent in Pod-karpackie. Palikot’s Move-ment, meanwhile, was moststrongly supported inZachodniopomorskie at 12.7percent and the lowest inPodkarpackie, at 6.8 percentof the vote.

Overall SLD received lessthan 10 percent of the vote inall of the voivodships except inWielkopolskie, where itreceived 10.5 percent of thevote. The lowest support forSLD came from Ma∏opolskie,at 5.3 percent.

Election breakdown

PPoollaanndd ddiivviiddeedd

OCTOBER 17-23, 2011 EELLEECCTTIIOONNSS 22001111 www.wbj.pl 5

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Polish business body prepares list

of demands for new government

An influential Polish businessassociation has presented a listof 36 recommendations that itsays the new governmentshould implement within itsfirst year in office.

The list was presented at aPolish Confederation of Pri-vate Employers Lewiatan(PKPP Lewiatan) conferenceheld at the end of last week.

The government shouldtake quick action to protectthe Polish economy “beforethe downturn,” PKPPLewiatan said. This will ensurethe protection of jobs and rev-

enues to the state budget, theorganization said.

To achieve these goals thegovernment should alsoimprove regulation andincrease the efficiency of pub-lic institutions that support theeconomy.

The list PKPP Lewiatanpresented included a proposalto create a ministry of entre-preneurship – a body thatwould be similar to the USSmall Business Administra-tion.

Robert Gwiazdowski, pre-sident of the Adam Smith

Center, a pro-business thinktank, however, has said hewould prefer to avoid theexpansion of the new admin-istration.

“As Ronald Reagan put it,government is not the solutionto the problem, it is the prob-lem,” he told Dziennik GazetaPrawna.

He said he would preferthat the government focusedon deregulation, or morespecifically on the eliminationof non-harmonized and use-less regulations.

GGaarreetthh PPrriiccee

International media

Democratic development,markets relievedInternational pressgenerally reported theresult of Poland’selections in a positivelight

Reports in newspapers and onwebsites, radio and televisionaround the world put a posi-tive spin on the results ofPoland’s elections. Almostwithout exception, thesereports reminded readers thatunder Prime Minister DonaldTusk Poland had been the onlyEU country to get through theglobal economic crisis withoutslipping into recession. Theyalso made a point of reportingthat by virtue of Civic Plat-form’s victory, Mr Tusk hasbecome the first Polish primeminister since communism tobe elected to two consecutiveterms. Some said that the

results showed that Poland’sdemocracy was developingapace, while others reportedrelief on the markets at theresults.

Here is a look at what someof them said:

The New York Times report-ed that “analysts hailed thevote for continuity as a sign ofpolitical maturity in Poland.”This election proved “anotherstep in the democratic devel-opment of the largest of theEastern European countries tojoin Western institutions.”

Financial markets “greetedwith relief” Poland’s parlia-mentary election results,reported the Financial Times.Reuters reported that“investors hailed the outcomeas a guarantee of political andeconomic stability in the Euro-pean Union’s largest easternmember in turbulent times.”

Time magazine remindedreaders that Poland holds theEU presidency and this elec-tion of the pro-European party“will likely calm nerves inBrussels as leaders there tacklethe ongoing euro zone crisis.”

Neighboring Germany’sDer Spiegel wrote in its Eng-lish-language online editionthat “more than half of Poleswho were eligible to votestayed home on Sunday,”because “many Poles regard[their politicians] as incompe-tent, petty, uneducated andoften even corrupt.”

Though the re-election ofCivic Platform is generallyexpected to lead to a continua-tion of cordial relations withMoscow, RIA Novosti, Rus-sia’s state-owned news agency,wrote that Poles were “prag-matists, not Russophiles.”

VVeerroonniikkaa JJooyy

OCTOBER 17-23, 2011EEUURROOPPEE NNEEWWSS6

S&P cuts

Spain’s rating

Standard & Poor’s

downgraded Spain’s

sovereign debt rating last

Thursday citing slowing

growth and a weakening

financial system. In an

announcement, the

agency knocked Spain’s

rating down one notch,

from AA to AA-. It also

kept the country’s rating

on a negative outlook. In

a statement S&P said

“the financial profile of

the Spanish banking

system” was a concern.

Gdaƒsk’s port

competes with

HamburgThe Gdaƒsk seaport will

now be able to compete

with some of the largest

ports in Europe for the

custom clearance of large

vessels, such as those

originating from China,

reported Dziennik Gazeta

Prawna. Up until now, the

German port of Hamburg

was regarded as more

attractive by importers

due to its more advanced

infrastructure. ●

www.wbj.pl

Contact: Miros∏aw Stefanik

ms@pnplaw.pl

Legal News

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

Amendment to the provisionson bank outsourcing On October 27, 2011 a new act will comeinto force that will amend the Act on Bank-ing Law. The new act will change the pro-visions concerning the possibility forbanks to commission entrepreneurs to actas agents to deal with various bankingservices.

Above all, the act will extend the scopeof activities that may be commissionedwithout a permit from the Financial Super-vision Authority, Poland’s banking-sectorwatchdog. These activities include theconclusion of and amendment to credit orloan agreements concluded with micro- orsmall entrepreneurs and debt collection inrelation to banks’ receivables.

The new law will also deal with theissue of sub-outsourcing, which is the out-sourcing of banking activities by parties towhom bank-related services have alreadybeen outsourced.

Finally, the act will also introduce a pro-hibition on contractual limitation of liabilityof the entrepreneur towards the bank fordamages caused to clients as a result ofnonperformance or inadequate perform-ance of an outsourcing agreement.

Payment services – new act In connection with the harmonization ofprovisions of payment services acrossthe European Union, a new act on pay-ment services will become binding inPoland on October 24. The act regulatesthe execution of payment services (bybanks, among others). It defines the con-

ditions of transparency related to con-tractual provisions, as well as require-ments concerning information about pay-ment services.

Moreover, it defines parties’ rights andduties resulting from agreements on per-formance of payment services. It alsodefines the rules by which payments insti-tutions and payment services agenciesshould conduct their activities.

Transforming perpetualusufruct into ownership: rule changes From October 9, 2011 the rules on granti-ng title to municipal and State Treasuryland have been changed.

In particular, starting from October 9,an application for transformation of per-petual usufruct rights to a real estate intoownership rights may also be submittedby legal persons. This means that joint-stock and limited liability companies, andnot only natural persons – as was the casebefore – can apply.

New provisions have also been intro-duced which are aimed at allowing trans-formations when there are several or sev-eral dozen perpetual usufructuaries. Earli-er, all perpetual co-usufructuaries of agiven real estate had to submit a relevantmotion. Now it is enough that the motionfor transformation is submitted by perpet-ual co-usufructuaries whose joint share inthe right of perpetual usufruct equals atleast 50 percent and the remaining co-usufructuaries do not submit any objec-tions to such a motion. ●

Polish and EU leadershave decried the ruling– but Ukraine says itisn’t final

Former Ukrainian Prime Min-ister Yulia Tymoshenko hasbeen sentenced to seven yearsin prison by a judge in Kiev. Thesentence was the maximumdemanded by prosecutors foralleged abuses of power con-cerning a gas contract shesigned with Russia in 2009.

Ms Tymoshenko has alsobeen ordered to pay UAH1.5billion (about z∏.600 million) –the amount prosecutors saidthe state petroleum entityNaftogaz had lost as a result ofthe deal.

As the judge read out hisverdict, Ukraine’s former primeminister is reported to havestood up and spoken over him,calling on her followers to “fighton,” according to the BBC.

“We will fight and defendmy good name in the Europeancourt ... we have to be strongand defend Ukraine from thisauthoritarianism,” Ms Ty-moshenko told her supportersin court.

The news of Ms Tymo-shenko’s sentence was greet-ed with dismay in Brussels,with the president of theEuropean Parliament, Po-land’s Jerzy Buzek, saying in astatement that the “solution

applied to Tymoshenko isreminiscent of Soviet timesand the investigation waspolitically motivated.”

Poland’s Foreign Ministryhas said Ukraine is jeopardizingits image in the eyes of Euro-pean leaders.

“The manner in which thetrial is conducted and today’sconviction are an example ofpoliticization of the Ukrainianjudiciary. Ukraine’s image as acountry that is undertaking afundamental pro-Europeantransformation has been tar-nished,” Poland’s foreign min-istry said in a statement.

It seems likely, however,that the story could soon take a

new turn. Ukrainian PresidentViktor Yanukovych made clearin an official statement that thecourt’s decision was “not final”and might be changed followingan appeal.

“The appeal court still isahead. And, of course, the deci-sion it takes and under whichlegislation it takes this decisionwill have great significance,” hesaid.

Many observers expect theUkrainian parliament to adoptamendments to the criminalcode, which would annul theprovisions used as the legalbasis for Yulia Tymoshenko’sconviction.

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Ms Tymoshenko told her supporters to “fight on”

European debt crisis

EEuurrooppeeaann CCoommmmiissssiioonn sseettss oouuttffiivvee--ppooiinntt ddeebbtt ccrriissiiss rreessccuuee ppllaannThe euro zone’sbailout fund will alsobe expanded, followingratification by theSlovak parliament The European Commissionhas laid out a comprehensiveroad map to help Europe exitthe sovereign debt crisis.

The Commission’s planoutlines areas of action“designed to break the viciouscircle between doubts over thesustainability of sovereigndebt, the stability of the bank-ing system and the EuropeanUnion’s growth prospects,”the body said.

The plan “charts Europe’sway out of the economic cri-sis,” Commission PresidentJose Manuel Barroso said in aspeech.

It contains five planks thatinclude actions to ensure “alldoubt is removed” about thesustainability of Greece’seconomy. The plan includes

the release of the latesttranche of European bailoutfunds.

Banks may also have to setaside significant amounts ofcapital to help guard against

future losses. Moreover, thosethat are not able to cover theirlosses can dip into the Euro-pean Financial Stability Facili-ty (EFSF), the euro zone’sbailout fund. Those lenders

that do, however, should notbe able to pay out dividends orbonuses, Mr Barroso said.

If this requirement isaccepted, euro-zone banksmay have to set aside as much

as €200 billion in assets. The EC’s five-point plan

also calls for a “prudent valua-tion of all sovereign debt,”which could mean investorstake a 21 percent “haircut” onloans to the Greek govern-ment. In reality, this stepcould, some analysts say,prompt a near complete write-off of the value of Greekbonds, as well as sharp dis-counts on loans to Ireland,Portugal and other nations.

The plan also envisions theexpansion of the EFSF to€440 billion.

That measure appeared tobe in jeopardy early last weekwhen the Slovakian parlia-ment rejected it. Politicians,however, cobbled togetherenough support to ratify it onThursday, meaning all 17euro-zone countries have nowvoted in favor of the EFSFexpansion plan, completingthe approval process.

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Mr Barroso said the plan “charts Europe’s way out of the economic crisis”

Ukraine

Yulia Tymoshenko sentencedto seven years in prison

OCTOBER 17-23, 2011 BBUUSSIINNEESSSS www.wbj.pl 7

M&A

Santander poised totake over Kredyt BankThe Spanish lendercould become thethird-largest player inthe Polish market

Spanish bank Santander madea binding offer at the start ofOctober for the purchase ofBelgian financial group KBC’s80 percent holding in Polishlender Kredyt Bank, severalPolish media reported, citinganonymous sources. Laterreports, also citing unnamedsources, said American fundApax plans to join forces withSantander to buy Kredyt Bank.

Spokespeople at both KBCand Santander declined tocomment on the reports,although Virginie Lauwers ofKBC said that the divestmentprocess is ongoing.

The Belgian firm is sellingits 80 percent stake to help itpay back the €7 billion in aidgiven to it by the Belgian gov-ernment during the 2008-2009financial crisis.

News of bilateral talksbetween the Spanish bankinggroup and KBC emerged afew weeks ago.

Based on its stock price, a100 percent stake in KredytBank is estimated to be wortharound z∏.3.6 billion.

If Santander takes overKredyt Bank, the value of theSpanish group’s Polish bank-ing assets would amount toaround z∏.100 billion, as San-tander is already a majority

shareholder in BZ WBK andSantander Consumer Bank.

“Santander is an active play-er and has rich expectations. Atakeover of Kredyt Bank wouldmake it the third-largest playeron the Polish market,” saidTomasz Bursa, an analyst atIpopema Securities.

Speaking about the possi-bility of a merger betweenKredyt and BZ WBK, MrBursa said it would make

sense from the point of view ofbusiness diversification.

“A merger would create awell-diversified lender, as BZWBK is more involved in cor-porate banking while Kredyt ismore strongly involved in themortgage market. This willcause competition in the sec-tor to increase visibly, whichwill be a risk for other banks,”Mr Bursa added.

GGaarreetthh PPrriiccee

Oil refining

Lotos to miss z∏.1 billionnet-profit target, says CFOThe refiner expects toincur a large one-offcost related to theweakened z∏oty

The z∏oty’s recent weaknessagainst the dollar means it islikely Lotos, Poland’s second-largest oil refiner, will miss itsfull-year net profit target ofz∏.1 billion, Mariusz Macha-jewski, the company’s chieffinancial officer, told Blo-omberg.

Mr Machajewski said thecompany would likely have topay a one-off accounting chargeof “several hundred millionz∏oty” related to revaluation ofits dollar-denominated debt.

“I do not think this is anegative signal for responsi-ble investors because thez∏oty ... will not impact ourcore activities,” Mr Macha-jewski said. “Our operatingresult will be good.”

Following the completion

of development work thatsignificantly increased itsrefining capacity, Lotos earli-er this year forecast a netprofit of over z∏.1 billion for2011 earlier this year. Therefiner’s chief executiverepeated this forecast inSeptember.

The Polish currency hasseen significant falls againstthe world’s major currenciesrecently as investors havepulled money from assetsthat they perceive to be risky– like the z∏oty – in the wakeof the euro-zone debt crisis.

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“good” operating results

Kredyt Bank is valued at z∏.3.6 billion

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OCTOBER 17-23, 20118 www.wbj.pl BBUUSSIINNEESSSS

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After its launch thissummer in the UK,EcoCorner is eyingfurther expansion toFrance, Germany andSpain

Maciej Mazur, founder andowner of online storeEcoCorner, a retailer of envi-ronmentally-friendly products,is proving wrong a lastingstereotype about Poland–namely, that Poles aren’t inter-ested in environmentallyfriendly products.The successof his company, which wasamong the first to offer“green” lifestyle products inPoland and is now the leadingonline retailer in that sector,shows that many Poles areindeed hungry for eco-friendlyproducts. Despite havinglaunched in 2008, as the globalfinancial crisis hit in earnest,EcoCorner has more or lessdoubled its profit every yearover the period.

“The success of our compa-ny in Poland, where peoplehave lower incomes than inthe West, contradicts thestereotype that Poles are notparticularly eco-conscious,”said Mr Mazur. “Our maingoal is to promote a more pos-

itive view of green thinking,and to show that such thinkingcan be innovative, fashionableand stylish.”

The vast majority ofEcoCorner products sold inPoland, which includeEcoRecord notebooks (100percent recycled, made withvintage vinyl records, currentlythe company’s bestseller), andan EcoFurniture line, are alsodesigned and produced here.

Going internationalBuilding on its success athome, this summer Eco-Corner launched in the UK.

The expansion representsaround half of the initialinvestment. In 2008, MrMazur invested aroundz∏.25,000 from his own savingsto start the company, and hasinvested a further z∏.10,000-15,000 for the UK launch.

In Poland, EcoCornermainly targets professionalswith the disposable income tospend on the firm’s relativelyhigh-end products. While UKaverage earnings are muchhigher than in Poland, thathasn’t necessarily made thingseasier for the firm.

“We are still developing

our UK strategy,” explainedMatthew Malacha, who isresponsible for developing thebusiness outside of Poland.“When we first decided toexpand there we thought whatworked in Poland would workin the UK, but we soon sawthat the mentality of con-sumers is completely differ-ent. The eco-market is stillfresh and new in Poland, thereisn’t really any competition.Poles also want our productsbecause they are rare, where-as in the UK there are hun-dreds of ecological compa-nies, so the competition ismuch more fierce,” heexplained.

The company is currentlyin talks to enter into partner-ship with some establishedonline eco-product retailers.

“Once the company has aproper position in the UK, wewould love for it to generate30 to 40 percent of our busi-ness. We think this is achiev-able given that the potentialmarket is much bigger in theUK than it is in Poland, due tohigher incomes and a biggerpopulation,” said Mr Mazur.

“Afterwards, we would loveto expand to the rest of Europe,like France, Germany Spain.With our experience in the UK,

the process should be mucheasier and faster,” he added.

Mainstream or exclusive?Asked whether there were anyplans to go into partnershipwith mainstream retailers inPoland, Mr Mazur admittedthis was a difficult decision.The key here, he explained, isto strike a balance betweenbeing successful and maintain-ing an exclusive image.

“On the one hand wewould love to partner withmainstream retailers like

Empik for revenue, but on theother hand we know that wewould lose a part of ourauthenticity,” he said.

“We are doing everythingwe can to be independent. Weare working with independentartists, we are selling our prod-ucts in some small galleries –our idea is not to be exactly inthe mainstream. But that’s notso easy,” Mr Mazur said, refer-ring to the difficulties of main-taining authenticity while atthe same time maximizingpotential revenue.

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The majority of the firm’s products are designed,

produced and sold in Poland

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EcoCorner’s notebooks are 100 percent recycled,

and made with vintage vinyl records

Small business

EEccoo--ffrriieennddllyy ffiirrmm ttaakkeess PPoolliisshh ssuucccceessss aabbrrooaadd

OCTOBER 17-23, 2011 IINNTTEERRVVIIEEWW www.wbj.pl 9

Exports and

imports up

Cumulative exports after

the first eight months of

this year totaled €89.3

billion, 15.3% higher than

for the same period last

year, while imports came

to €98.4 billion, a 15.1%

y/y increase, according to

information from the

Central Statistical Office.

The rapid increases are

due mostly to fluctuations

in exchange rates and the

overall low value of the

z∏oty, according to

Tomasz Kaczor, chief

economist at Bank

Gospodarstwa Krajowego.

Inflation takes

a breather

Prices of consumer goods

and services grew by

3.9% y/y in September,

the Central Statistical

Office announced last

week. That’s slower than

the market had forecast

and down from the 4.3%

y/y seen in August.

September brought lower

prices of food, soft drinks

and transportation. On

the other hand, clothes

and shoes became more

expensive, but their

prices increased less than

in the same period of

2010.

Warsaw

attractive to

investorsWarsaw ranked 21st

place on a Cushman &

Wakefield survey of the

most attractive cities to

develop a business in

Europe, up three notches

from last year and ahead

of Vienna and Prague.

The cost of office space

and employing workers

were cited as Warsaw’s

main advantages. Still,

there remains much to

be done – those

surveyed gave the

quality of life and

environmental

conditions in the capital

the lowest marks.

Car production

down

Only 70,500 passenger

cars and delivery vans

left Polish factories in

September. That’s about

11.6% less than in the

same month in 2010.

September was the

seventh month this year

that has seen a decline in

domestic car production.

Only in February and

August did Polish plants

manage to manufacture

more automobiles than in

the corresponding

periods of 2010. ●

Investing

AAddjjuussttiinngg ttoo aa cchhaannggiinngg mmaarrkkeett

Remi Adekoya: What is theoutlook for Poland’s economy,taking into consideration thecurrent euro zone crisis?The perspectives are good,especially if you consider thelong term and not just theshort term. In the short term,economic perspectives areusually seen as super good orsuper bad. They tend to beperceived on one or other sideof the extreme.

Poland, meanwhile, has agrowing middle class. Peopleare growing richer, have moredisposable income and are liv-ing longer. They have to thinkabout their future incomewhen they are retired as thepensions they receive from thestate will not be enough.

We currently have an officein Warsaw with about 20employees and an office inPoznaƒ with about 300employees. We are planning toincrease the number in Poznaƒto 500 employees as we arevery happy with the skilledlabor that we find in Poland.This shows our confidence inthe country.

In your experience, what isthe level of sophistication ofPoles when it comes to usingfinancial services?The fact that you have finan-cial institutions offering iPadsto clients if they decide ontheir product says somethingabout the level of sophistica-tion of the market here. In amore sophisticated market,you wouldn’t hear about suchoffers.

Also, people don’t spendmuch time thinking abouttheir pensions in the future,but that is not only the case inPoland.

How has the current atmos-phere of anxiety affected peo-ple’s approach towards thefuture? Does it make themeven less inclined to planahead?That might be the case, but thebest way is to look at thingshistorically and ask whetherthe kind of things happeningtoday have happened before.The answer is: yes.

Which kind of solutionshave worked in such cases inthe past? Firstly, not keepingall your eggs in one basket:diversify your portfolio. Andkeeping it all in cash has notbeen a good idea in the past,since cash is, in the end, justprinted paper.

Real estate is usually a good

idea, but what happens if theproperty is not yours and youhave a mortgage on it in Swissfrancs? Then you might have aproblem. Stocks have tradi-tionally been good options.

On the issue of anxietyagain, the fact that everythingis so connected now and youcan move money from Brazilto China in a matter of sec-onds means we will now oftenhave situations where marketswill be up 20 percent one weekand down 20 percent the next.People will simply have to getused to that.

Is the fact that Poland is notin the euro zone helping ittoday?Yes, that is currently workingin Poland’s favor. Lookingback at the last three years, wesee Poland has handled thecrisis well. Why? Healthy lev-els of FDI, but also the econo-my’s flexibility regarding thez∏oty.

While the Swiss NationalBank has set a fixed exchangerate which it aims for vis-a-visits currency, Poland has notdone that. When you set sucha fixed rate, you are invitingspeculators who will try to testyou and speculate against yourcurrency. The Polish NationalBank has left itself room formaneuver.

Of course, Poland can stillafford to have its own currencybecause it has a large domesticmarket unlike, for example,Slovakia.

What future do you foreseefor the euro?Nobody can accurately pre-dict short-term currency val-ues, but we can look at imbal-ances today and forecastwhat they will lead to in the

long term. If today a Greektourist can go to New Yorkand buy a coffee in Starbucksor a laptop cheaper than inGreece, then we know thereis an imbalance somewhere.It’s because of the strongeuro, but why is the euro sostrong? Is the euro zonedoing so well? No. Will theeuro get stronger? Yes,maybe in the short term. Butcould it get back to paritywith the dollar in the long

term? Maybe, as well.The euro zone has one cur-

rency and one monetary policybut 17 different fiscal policies.That seems unsustainable inthe long run. There are twopossible scenarios I foresee.The first is that France, Ger-many and some other countrywill form a sort of core groupof the EU with all the conse-quences that will have. Thesecond is that we will see astronger grip of the strong onthe weak with institutions likethe European Financial Stabil-ity Facility (EFSF) playing a

much bigger supervisory role.

So do you think the euro zonewill survive?When it comes to the eurozone, the US, for example,seems to doubt the willingnessof Europeans to save the euro.But the fact is that Europeanpoliticians want it to survivebecause it’s part of the wholebig European idea and thisidea is very good and hasbrought peace and stability to

Europe. They will do every-thing to make it survive.

Talking about the US, can youexplain why its bonds are nowselling at all-time lows despitethe national deficit problemand negative news coming outof the market?When we consider bonds, welook at the level of debt andwhether the country is grow-ing. The US has high debtand is not growing particular-ly fast, just like the euro zoneand Japan. So we have noinvestments in these coun-tries’ bonds. We like Asia, welike Poland and we like sev-eral countries in Latin Amer-ica. We wonder why any timethe environment gets riskier,everybody buys US bonds. Ithappens every time untilpeople pause for breath andtake a look at the fundamen-tals. On the other hand, thedoom and gloom newsregarding the US is alsoexaggerated.

A lot of economists are nowsaying world growth will befueled by the emergingeconomies. Do you agree withthat sentiment?Emerging markets are defi-nitely doing very well. But weshould start reconsidering

that term “emerging mar-kets.” The term is usually per-ceived as meaning economieswith higher-risk rates than theso-called developed eco-nomies. But many countrieslabeled emerging marketstoday have large foreignreserves and are growing. Sowhich is the emerging econo-my, Italy or Poland?

Greek bonds were rated A-not so long ago and now thatcountry might default. Soinvestors’ perception ofemerging economies is chang-ing.

So in general, do you thinkthe global economic outlook isnot as gloomy as is being por-trayed by some?I’ll answer that with someremarks that our founder SirJohn Templeton made in 1949when there was a bear market.“Right now, there is a bearmarket, but it will be tempo-rary because people don’tremain pessimistic forever.”

“There are numerous rea-sons why the stock marketmay go down today, but thereare also numerous reasonswhy it may go up today,” and“for those prepared inadvance, a bear market is nota calamity but an opportuni-ty.” ●

Borno Janekovic, director for the CEE Regionat Franklin Templeton Investments, talks withWBJ about the outlook for the euro zone,Poland’s economic strengths and where to lookfor investment opportunities in a market besetby uncertainy

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Borno Janekovic believes the long-term economic outlook for Poland is positive

“For those well-prepared, a bearmarket is not a calamity but an

opportunity”

OCTOBER 17-23, 201110 www.wbj.pl OOPPIINNIIOONN && AANNAALLYYSSIISS

Conventional wisdom holds thatforeign policy is not a majorinfluence on voters’ choices in

national elections. Whether this gen-eralization holds for Poland is debat-able, but in this year’s elections Polish

political parties did concentrate moreon domestic issues to attract poten-tial voters.

The parliamentary elections of2011 were hardly business as usual,however, as they were held in themiddle of Poland’s first ever turnat the head of the EU Council.When the election date was set,concerns were voiced that thefunctioning and efficiency of thePolish presidency would be at risk,and that the election campaignwould dominate government activ-ities during the presidency.Although the risk of serious com-plications was considered slightdue to the reduced role of therotating presidency since the Lis-

bon Treaty entered into force, itwas not altogether excluded.

Flexible coalition The victory of the ruling Civic Plat-form (PO) party, led by Prime Minis-ter Donald Tusk,along with the like-lihood that the cur-rent governingcoalition with thePolish People’sParty (PSL) willremain in place,should create a sta-ble foundation forthe continuation ofPoland’s foreignpolicy – a welcomeoutcome for itspartners in theEuropean Union.

The tone ofPoland’s foreignpolicy for the nextfour years will beset by PO, whichretains the Ministryof Foreign Affairs.As the most likely coalition partner,PSL seems to be aware of its relative-ly limited expertise with foreign poli-cy. That was apparent in PSL’s rathermodest foreign policy presentation inits election manifesto, a nod to thepreferences of PSL voters.

It also signals a flexible approachfrom PSL to any coalition negotia-tions. Having to resign itself to play-

ing the role of junior partner, it is rea-sonable for PSL to adopt a flexibleposition in areas less relevant to itstarget group and to develop a moreprincipled approach to its own priori-ties.

Therefore, the Polish People’sParty will insist on maintaining con-trol of the Ministry of Agriculture.This will guarantee influence overCommon Agricultural Policy (CAP),a key issue in European policy, andalso on the Multiannual FinancialFramework negotiations regardingthis particular scope.

But the election campaign also

created an opportunity for the rulingcoalition’s partners to emphasizetheir own positions on certain issuesthat tend to be blurred when workingin unison. Differences were apparent,for example, with respect to the pos-

sible adoption ofthe single curren-cy. In a question-naire survey con-ducted by the Pol-ish Institute ofI n t e r n a t i o n a lAffairs (PISM),PO claimed that areferendum onfuture euro acces-sion is not neces-sary, while PSLsaid a referendumwould be advis-able if there areserious doubts ordifferences ofopinion.

Tougher oppositionPolitical rivals of

the future ruling coalition will keep awatchful eye on the government’sforeign policy. Because of differentassessments of challenges and threatsto Poland, critical comments can beexpected from the three oppositionparties. This is especially true for Lawand Justice (PiS), the strongest oppo-sition group in parliament, as foreignpolicy forms an important part of that

party’s self-image. Another active participant in the

debate on foreign policy will be theDemocratic Left Alliance (SLD).This party strongly emphasizes itsexpertise and achievements in for-eign and European policy. SLD evendelivered a separate policy documentdevoted specifically to this domain.However, SLD’ serious defeat in theelection significantly reduced theirparliamentary representation andwill probably weaken their voice withregard to foreign policy for a longtime.

Finally, it is difficult to assess thefuture stance of the third-largestpolitical force in parliament, new-comer to the political scene, Palikot’sMovement (RP). On the one hand, amajor focus on domestic policy issuescan be expected. But on the otherhand, this party may hype up somespecific foreign-policy issues, espe-cially those that could have a polariz-ing effect on Polish society.

In order to avoid the risk of slidinginto demagogic or even populist slo-gans about foreign policy issues as aresult of polarization, all the mainpolitical groupings should strive toensure a high-quality foreign policydebate over the current parliamen-tary term. ●

Ryszarda Formuszewicz is an analystat the Polish Institute for

International Affairs (PISM).pism.pl

Next week in Gdaƒsk, around700 representatives of nationaland local governments, busi-

ness, academia and various organiza-tions will gather for the Baltic Devel-opment Forum. It is an importantevent. This year’s meeting is the 13th

since its inception in 1999 and itsvenue, Gdaƒsk – where the Solidaritymovement was born, setting inmotion the peaceful reunification ofEurope – is a timely reminder of howfar the region has come in terms ofgrowth and integration.

However, delegates also knowwell that the conference takes placeat a critical time for the world econo-my. On the positive side, we can notethat the Baltic Sea Region has per-formed better than Europe as awhole during the first phase of thefinancial crisis. Even so, the outlookis uncertain. Companies and otherborrowers know that bank financingis scarce. Availability of long-termloans at acceptable terms is limited.This is a problem at a time when weneed to invest and build for thefuture.

The European Union strategy

for the Baltic Sea Region aims tomake the region environmentallysustainable, competitive, accessible,safe and secure. These priorities tiein well with the overall EU 2020 tar-gets of smart, sustainable and inclu-sive growth. As the EU’s long-termfinancing arm, the EuropeanInvestment Bank continues to playan important role in this work in theregion, where we are, by far, thelargest international long-termlender. Over the last five years(2006-2010), our annual lendingvolume has doubled from around€4-5 billion to about €10 billion.The largest recipient country isPoland, which received 45 percentof EIB loans granted in the BalticSea Region during these years.

The EIB has financed rail proj-ects, broadband networks, waste-water treatment plants, bridges, tun-nels, roads, port facilities, energyprojects and a large number ofresearch, development and innova-tion projects. For large infrastructureprojects which receive structuralfunds financing, we also assist withfeasibility studies, project manage-

ment and other work through pro-grams such as the Joint Assistance toSupport Projects in the EuropeanRegions (JASPERS).

Looking ahead, it is evident thatthe difficult times in the world econo-my require the Baltic Sea Region tofocus even more on “smart growth.”This means making the investmentsthat can really pay off in higher long-term growth. In the public sector, it isabout providing better education andbetter professional skills. In the pri-vate sector, it means encouraginginnovative companies with highgrowth potential.

Equally important, in my view, isfor us to strive towards furtherregional integration. Throughincreased interaction and collabora-tion, the Baltic Sea Region can createlarger markets, reduce costs and pro-vide more investment and careeropportunities for people within andoutside of the region. The BalticDevelopment Forum – this year withthe prime ministers of Poland, Esto-nia, Finland and Lithuania as leadspeakers – is one example of the veryactive collaboration in the region.

Such initiatives help bring forwardthe investments that are needed incross-border infrastructure, in ener-gy, in the environment and in othersectors.

Several such projects are alreadyunder way. One of the about 50projects that we finance in theregion every year is the Estlink 2power cable project. Linking Esto-nia and Finland and part-financedby the EIB, it will almost tripletransmission capacity when com-pleted in 2014. By connecting theBaltic States with the rest of theNordic grid, Estlink 2 reduces pricediscrepancies and helps ensure sup-ply at times of peak loads. It is oneof the key projects under the BalticEnergy Market InterconnectionPlan (BEMIP), launched at the ini-tiative of the EU Commission in2008. Another example is theWroc∏aw water and wastewatertreatment program in Poland, alsopart-financed by the EIB. This proj-ect will greatly improve publichealth and environmental protec-tion not only locally but also in theregion and beyond by reducing the

pollution load of the Oder Riverand the Baltic Sea.

Projects like these are vital com-ponents of long-term growth whichis smart, sustainable and inclusive.To ensure such a future, increasedpartnership among national and

local governments, businesses, civilsociety organizations and others is acritical factor. I have no doubt thatpeople in the Baltic Sea Region willwork with determination towardsthose objectives. ●

Matthias Kollatz-Ahnen is vice-president of the European Investment

Bank with special responsibility forthe Baltic Sea Region

WWhhaatt ddoo tthhee eelleeccttiioonn rreessuullttss mmeeaann ffoorrPPoolliisshh ffoorreeiiggnn ppoolliiccyy??

“The main partiesneed to avoid the riskof sliding intodemagogic or evenpopulist slogansabout foreign policy”

“The Baltic Sea Regionhas performed betterthan Europe as awhole during the firstphase of the financialcrisis”

CCoollllaabboorraattiioonn iiss ccrriittiiccaall ffoorr BBaallttiicc SSeeaa RReeggiioonn

Ryszarda Formuszewicz

Matthias Kollatz-Ahnen

CO

UR

TE

SY O

F K

PR

M

HHaavvee PPoolleess ccrreeaatteedd aa mmoonnsstteerr??

OCTOBER 17-23, 2011 OOPPIINNIIOONN && AANNAALLYYSSIISS www.wbj.pl 11

Remi Adekoya

A fter making history on October9 by becoming the first primeminister in post-communist

Poland to lead his party to back-to-back parliamentary election victories,Donald Tusk is now flexing his musclesto let everybody know who’s the boss.

It all started with his first post-election interview last week, when hetold current affairs weekly Polityka

that he didn’t plan to make anychanges to government until afterDecember 31 this year, when Polandfinishes its term as president of theEuropean Union. The commentssparked controversy, with headlinessuch as: “Donald Tusk has appointedhimself prime minister,” dominatingthe media the next day.

His party colleagues also ex-pressed surprise, saying they had not

been informed of Mr Tusk’s inten-tions.

Usually, a PM-elect emergesafter the president has designatedhim as such, formally handing himthe mandate to form a majority inparliament and create a govern-ment. Of course, due to Civic Plat-form’s (PO) resounding electionvictory, President Bronis∏aw Komo-rowski would have asked Mr Tuskto form a government anyway. Butthe impression created was that thePM was arrogantly jumping thegun.

Donald Tusk later backed downfrom his Polityka comments andannounced last Thursday that a newgovernment would be in place byNovember 22 and that he had thepresident’s full support for his plans.

A declaration of war?At the same press conference, MrTusk also made some interestingcomments regarding Sejm SpeakerGrzegorz Schetyna, the number-twoman in PO.

Mr Tusk said he would be recom-mending Health Minister EwaKopacz, who is known to be fiercely

loyal to the PM, to replace Mr Schety-na as speaker of the Sejm, one of Pol-ish politics’ most important positions.The PM also referred to Mr Schetynaas the “leader of the internal opposi-tion [in PO] and someone who hadbeen aspiring to the role of rival,” atthe press conference.

One of Mr Schetyna’s allies hasdescribed Mr Tusk’s coments as “adeclaration of war.”

Mr Tusk has not yet specified whatposition he will offer Mr Schetyna inhis new government. This delay haswidely been interpreted as a publicslap in the face for Mr Schetyna, whowas once Donald Tusk’s personalfriend and closest political ally.

Pre-emptive strikeAll of this was to be expected. MrTusk’s move is understandable in aMachiavellian context. It was a pre-emptive strike. The PM knows thereare difficult times ahead. The world isbracing for a second economic crisis,one which would likely hit Poland farharder than the previous one did.

But even before that is felt, thegovernment is probably going to haveto make some spending cuts in order

to balance the budget. All this meansthat within a short period of time, MrTusk’s popularity is likely to slip sig-nificantly. It is in such situations thata pretender usually makes his play forthe crown.

The only person in PO strongenough to attempt a party coup is MrSchetyna, so the PM is doing every-thing he can to weaken his position inthe party.

A sign of things to come?The more pertinent question forPoland is whether all of this – a one-off display of brutal but perfectlyunderstandable political maneuver-ing – is a sign of things to come. Dueto his historic win, Mr Tusk nowenjoys the kind of hero worship TonyBlair did in the Labor Party after his2001 re-election victory.

Things did not end well for MrBlair, as he went on to defy opposi-tion from outside and inside his partyto embark on the Iraq War. The deci-sion tainted his reputation and willlikely be what he is most rememberedfor. Donald Tusk might not have todecide whether to take Poland to waror not, but he will certainly have to

make decisions that will have far-reaching consequences for the livesof millions of Poles.

Greater men than Donald Tuskhave fallen victim to vanity after less-er victories. If the PM eliminates allthose who disagree with him from hisimmediate circles then he will be leftwith sycophants and adoring fans.That would not bode well for Poland,especially in the face of the difficul-ties ahead.

The PM now has a cooperativepresident, a party grateful to him forkeeping them in power and, crucially,the backing of many in the media. Ifever there was a time when much-needed reforms could be made inPoland, that time is now. But if thereis nobody by his side but yes men,then Poland could end up being stuckwith a capricious emperor.

Let us hope that Donald Tuskunderstands the importance of politi-cal dissent, and that Poles will notwake up one day to discover theyhave created a monster. ●

Remi Adekoya is WBJ’s politics editor. Read his blog “The business of

politics” on WBJ.pl

Last Tuesday’s decision by aUkrainian court to sentenceformer Prime Minister Yulia

Tymoshenko to seven years in prisonwhile the country’s legislators look toimplement a legal solution that woulddecriminalize her offense constitutesa bet on the part of Ukrainian Presi-dent Viktor Yanukovych that he canget away with sidelining a political foewithout harming Ukraine’s Europeanprospects.

Though Mr Yanukovych claimsthat he has no control over an inde-pendent judge passing the verdict,few believe that such a politically sen-sitive case would be left alone by thegovernment. Ukraine isn’t exactlyknown for its independent judiciary.

Swift reactionThe reaction to the ruling was swiftand strong. EU diplomacy chiefCatherine Ashton said that “justice isbeing applied selectively in politicallymotivated prosecutions.” WilfriedMartens, head of the European Peo-ple’s Party, the biggest party in theEuropean Parliament, called for sus-pending the signing of an associationagreement with Ukraine and saidthat “the court process and the deci-sion is shameful for a country that has

European aspirations.” Even the Polish Ministry of For-

eign Affairs, arguably the biggest sup-porter of Ukraine’s European inte-gration, released a statement admit-ting that “Ukraine’s image as a coun-try that is undertaking a fundamentalpro-European transformation hasbeen tarnished.”

The severity of the reaction inBrussels and throughout EU memberstates suggests that European leaderswill hold Yanukovych accountable forwhat’s been described as a “politicaltrial” and a “violation of democracyand the rule of law” by some ofUkraine’s closest supporters inEurope, heavyweight Polish MEPsJacek Saryusz-Wolski and Pawe∏Zalewski.

Difficult to defendThe conviction has made it very diffi-cult for Ukraine’s friends to argue thecase for its closer integration with theEU through the association agree-ment and the free-trade agreement tobe signed at the end of the year. MrYanukovych might have overplayedhis hand. Whether or not the EUdecides to cancel his planned Octo-ber 20 trip to Brussels will be the bestindicator of this.

Ms Tymoshenko’s conviction wasreceived in Warsaw with much con-sternation, but without surprise.Poland has made closer ties betweenthe EU and Ukraine one of the mainpriorities of its EU Presidency. Polandhoped the association agreementwould be a crowning achievement ofits six-month stint at EU’s helm. Overmany months, Polish diplomacy hasbeen working to avoid the train wreckof Tymoshenko’s conviction.

Poles know that Ms Tymoshenkois no saint, and have made the case tothe Ukrainian government that she isusing the trial to focus attention onherself both domestically and inter-nationally. Polish President Bro-nis∏aw Komorowski met frequentlywith President Yanukovych to makesure that he fully understood the con-sequences of her sentencing.

Nevertheless, Ms Tymoshenko’strial overshadowed the Eastern Part-nership summit that took place inWarsaw in mid-September, and nowthe guilty verdict threatens to derailthe important free-trade agreementbetween the EU and Ukraine, whichwould solidify Ukraine’s pathtowards European integration. MrYanukovych has made it very difficultfor Ukraine’s friends to help him.

Plenty of motivesMr Yanukovych’s motives for goingthrough with the trial were both polit-ical and economic. The guilty verdictbars Ms Tymoshenko from takingpart in the next parliamentary elec-tions, in which she and her supporterswould be the biggest challenge forYanukovych’s Party of Regions. Con-victing Tymoshenko also serves as ashot across the bow to other opposi-tion leaders in Kiev, as well as tobackbenchers in Yanukovych’s party.

The timing of the verdict is evenbetter explained by economic fac-tors. Yanukovych’s administrationis trying to renegotiate theextremely costly gas deal with Rus-sia that Tymoshenko signed and forwhich she was sentenced. Theagreement costs Ukraine millionsof dollars in inflated gas prices at atime when Ukraine, facing an eco-nomic crisis, can least afford it. Theconviction, which characterizessigning the agreement as a crimeand an abuse of power, willstrengthen Ukraine’s case to rene-gotiate the deal. Russian PrimeMinister Vladimir Putin appearedworried by this turn of events andcalled the guilty verdict “dangerousand counterproductive.”

The most likely scenario for thecoming weeks is for PresidentYanukovych to support a quick changeof the law, which would decriminalizeTymoshenko’s offense, leading to herrelease. Mr Yanukovych’s hope is that

this will quiet the European criticism,and he will be able to carry on businessas usual.

That might not be the result.European leaders are unlikely toaccept anything less thanTymoshenko’s swift release, thereturn of her full rights to politicalparticipation, and the cessation ofany other trials of opposition leaders.That would be hard for MrYanukovych to do without losingface. ●

Micha∏ Baranowski is a senior program officer with the German Marshall Fund’s Warsaw Office.

“Mr Yanukovych hasmade it very difficultfor Ukraine’s friends

to help him”

“Greater men thanDonald Tusk havefallen victim to vanityafter lesser victories”

YYaannuukkoovvyycchh’’ss ggaammbbllee Micha∏ Baranowski

CO-MANAGING EDITOR

GARETH PRICE(GPRICE@WBJ.PL)

CO-MANAGING EDITOR

ALICE TRUDELLE(ATRUDELLE@WBJ.PL)

POLITICS EDITOR

REMI ADEKOYA(RADEKOYA@WBJ.PL)

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COPY EDITORSDAVID INGHAMELLA PA¸KA

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JOWITA MALICH(JMALICH@WBJ.PL)

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PR & MARKETING SPECIALIST NATALIA ROGACZEWSKA(NROGACZEWSKA@WBJ.PL)

SUBSCRIPTIONS MANAGERAGNIESZKA MICHALIK(AMICHALIK@VALKEA.COM)

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Editorials are the opinions of WBJ’s editorial board. Other opinions are those of the authors alone. Comments, opinions and letters should be sent to editor@wbj.pl. Please include a name and contact information and clearly indicate if they are to be considered for publication.

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In times of economic andpolitical strife, gold has longbeen considered a safe havenfor investors, with the price ofthe shiny yellow commodityshooting up during wars,depressions and other periodsof uncertainty. Investors sim-ply feel a sense of safety withgold; no bond, share or finan-cial instrument is quite as tan-gible.

Nevertheless, just a fewweeks ago, with panic inEurope reaching a fever pitch,the price of gold plummeted.But why?

Economists seem to agreethat the phenomenon consti-tuted a simple correction fol-lowing gold’s dramatic rise.Despite the drop, the price ofgold remains nearly 40 percenthigher, in z∏oty terms, than itwas just a year ago.

Polish individual investorsfirst started buying up gold ona large scale in 2004, whengold for investment purposeswas relieved of VAT. And

according to the Mint ofPoland, interest in gold frombuyers in Poland has shot upalong with its popularity in therest of the world. In 2010 pri-vate investors bought around1,500 kg of gold in the country,the Mint says. This year thatdemand is expected to grow byan estimated 15-20 percent.Though the volume pales incomparison to that traded inWestern markets, the popular-ity of gold as an investment isclearly rising rapidly in Poland.

Buy and holdWith the popularity of gold onthe rise, so are the number ofbusinesses looking to helpPoles make their investments.As in the West, the internethas become a favorite tool.Along with websites dedicatedto trading gold, several firmshave taken to selling gold onAllegro – Poland’s top auctionwebsite, akin to what Brits orAmericans might be familiarwith in eBay.

Dominusarx is just one ofseveral companies currentlyselling gold bars on Allegro.Dariusz Garski, the firm’s co-owner, explained that follow-ing payment, the top bidderreceives his or her gold in themail. “Once the buyers think itis time to sell, they can takethe ingot back to the shop andsell it at the current marketprice,” said Mr Garski.

But Mariusz Przybylskifrom the Mint of Poland saidthat some of the gold soldthrough these channels is of

unknown origin, and may notbe completely pure. The ingotssold by official points such asthe Mint are certified, num-bered and monitored for puri-ty.

“Apart from this,” Mr Przy-bylski said, “the owner of suchingots can rest assured that alarge institution will buy anyamount of gold at the tradingprice on the London market,minus a commission.”

Such commissions can behefty though, according toJacek Kasparczyk from price

comparison website Compe-ria.pl. Another downside is thehigh administration and stor-age fees charged by such insti-tutions.

Virtual goldThere are other solutions forthose not willing to hold ontothe gold themselves or paystorage fees. Gdaƒsk-basedfirm Amber Gold has beenheavily marketing its golddeposit accounts, with a guar-anteed return of up to 15 per-cent for 60 months. This figure

OCTOBER 17-23, 2011IINN--DDEEPPTTHH:: IINNVVEESSTTIINNGG IINN GGOOLLDD12

Changes at

Pernod RicardFrench beverage

company Pernod Ricard

has announced that it will

be making several

structural changes to its

operations in Poland.

Poznaƒ-based Wyborowa,

a producer of vodka and

one of Pernod’s main

Polish assets, will

continue to focus on

production and export of

its Luksusowa and

Wyborowa brands, while

the Warsaw branch of

Pernod Ricard Polska will

start to focus on “all

distribution activities,

including sales and

marketing of all Pernod

Ricard’s international and

local brands represented

in the Polish market,” a

Pernod representative

said at a recent

conference.

Gremi Media

buys

PresspublicaGrzegorz Hajdarowicz, a

Kraków-based

entrepreneur and owner

of Gremi Media, has

acquired 100% ownership

of Presspublica, after

purchasing a 48.99%

share in the company

from the State Treasury.

Sources quoted by

Rzeczpospolita said the

transaction value was

z∏.55 million. Gremi Media

had purchased a 51.01%

stake in Presspublica

several months ago from

British publishing house

Mecom for z∏.80 million,

giving the group control

over titles including

Rzeczpospolita and

Parkiet.

Lingerie

and cigars

Pronox, a Polish

electronic equipment

producer and provider, is

planning a radical change

of strategy that its

management hopes will

allow it to sell more

exclusive products,

reported Parkiet.The firm,

which has recently signed

a bankruptcy agreement,

will now focus on the

production of luxury

merchandise including

lingerie, alcohol, cigars

and coffee. ●

www.wbj.pl

In Poland, as elsewhere, gold has become apopular investment alternative. And as long asuncertainty in the euro zone lingers, expertsexpect the price to remain high

Alternative commodity markets

available to Polish consumersWine: A “Bordeaux Portfo-lio” could see profits of 40percent over a year. The priceis increased by demand fromAsian countries, especiallyChina, where Premiere Crusfrom the French region’s topchateaux is sometimes givenas a gift between businesspartners and consumed by thenouveau riche. The minimum

recommended investment isaround £2,500.

Land: The premise of thisform of investment is to buyland in rural areas in the hopeof it becoming a city suburband seeing a hefty return.Return on investment couldbe over 500 percent in fouryears. Typically, the minimumrecommended investment is

z∏.100,000.Whisky: A whisky portfo-

lio – of professionally select-ed Irish (whiskey) and Scot-tish Single Malts – could seea return of up to 144 per-cent. The recommended in-vestment period is three tofive years. The minimumrecommended investment is€5,000. ●

Roberto Galea

Investment in gold

Golden opportunity

OCTOBER 17-23, 2011 IINN--DDEEPPTTHH:: IINNVVEESSTTIINNGG IINN GGOOLLDD www.wbj.pl 13

Judith Gliniecki is a Partner with Wierzbowski Evershedsjudith.gliniecki@eversheds.pl

Solid goldreturns

Legal Eye

Sovereign credit ratingsdowngraded, market turbu-lence, stagnant housingprices: Where can you putyour money these days?Despite the uncertainty,there is no lack of choices.Like me, you are probablyregularly receiving calls ande-mails from various finan-cial advisors with yet anothergreat investment offer.Among other things, global-ization has meant moreinvestment opportunities asonly a few legal restrictionsexist anymore. The problemstarts with trying to sortthrough all the information,solicitations and advertise-ments to find an appropriateinvestment. While there maynot be many limits on invest-ment options, they exist onthe claims that can be madein advertising.

Unfair practicesImproper advertising prac-tices are classified as unfaircompetition under Polishlaw. This means that a wholemurky area of “it’s just notright” can come into play. Inaddition to complying withlaw (such as special restric-tions on advertising alcohol),advertising should not crossthe line of decency orimpinge on human dignity.Especially important in thesetimes of uncertainty, fear asa sales tactic is also illegal.

The information in anadvertisement is supposed tobe truthful. If someone ispromising “solid gold”returns, they need to be ableto back up that claim. Anadvertisement may not bemisleading, if that half-truthcould influence your deci-sion whether or not to buysomething. Perhaps equallyimportant in an area likeinvestment services wheretrust is paramount, advertis-ing may not be hidden undera gloss of supposedly neutralinformation.

ComparisonsOn a related subject, howev-er, it is possible to make somecomparisons in an advertise-ment. Certainly, a showing ofhistorical returns versus othercomparative indicators is afavorite selling device forthose touting investmentopportunities. A whole num-ber of factors come into playin determining whether acomparison is permissible.Above all, the comparison

must be “apples to apples”and it is best if it can bebacked up with some objec-tive standard. This is the rea-son for all those references torankings and other statisticspublished by various financialmedia organizations. Manyother factors apply in deter-mining whether a comparisonis proper, including that anadvertisement cannot serveto discredit the competitionor play off on the renown of acompetitor.

The penalties for unfairadvertising can be severe,involving penal fines or evenimprisonment.

Restrictions Since Poland’s accession tothe European Union, theworld is potentially an oysterfor an investor in the coun-try. Who remembers theextensive prohibitions fromthe Foreign Exchange Act inPoland on foreign invest-ments from the 1990s? Forthat matter, the world hascome a long way. From the1930s to 1970s, for example,US citizens could not owngold bullion without specialpermission.

However, before gettingexcited about some exoticinvestment opportunity, it isa good idea to take a look atthose remaining investmentrestrictions. Poland’s ForeignExchange Act requires thatinvestors obtain individualforeign exchange permitsfrom the National Bank ofPoland to make more unusu-al investments.

For gold, the restrictionsare related to the countryfrom which it is to be pur-chased. You may purchasegold from a person or a com-pany resident in a countrythat is a member of theEuropean Union, EuropeanEconomic Area or Organiza-tion for Economic Coopera-tion and Development. Also,a general foreign exchangepermit allows the purchaseof gold from someone hail-ing from one of the morethan 60 nations with whichPoland has signed a BilateralInvestment Treaty. Whilethis sounds fairly compre-hensive, some major coun-tries, such as South Africaand Brazil, still fall outside ofthe ambit of either of these.Thus, if you want to pur-chase Krugerrands, you maywant to buy them fromsomeone in Poland. ●

3,000

4,000

5,000

6,000

OctSeptAugJulJunMayAprMarchFebJanDecNovOct2010 2011

Rise and shine

Price of gold, per ounce, PLN (8th of each month or closest date)

Source: Kursyzlota.pl

is well above Poland’s topbank deposit interest rates, atabout 7.5 percent.

Despite this, experts con-tacted by WBJ warned that it isbest to stick with a certifiedinstitution even if the returnmight be lower. When contact-ed by WBJ, Amber Golddeclined to comment.

Other available optionsinclude Exchange-TradedFunds (ETFs), which can betraded on the Warsaw StockExchange. On a global scale,gold traded on ETFs in 2010alone amounted to 2,100 met-ric tons – equal to the yearlyproduction of all the world’s

mines combined, according todata from the World GoldCouncil.

A simpler option for indi-vidual investors is to trade ingold certificates with a 1:1ratio of the price of the com-modity (based on monthlyfutures), said RobertRaszczyk, an economist fromBZ WBK Brokerage. MrRaszcyk said such invest-ments bring in returns equiv-alent to the change in theprice of gold traded on glob-al markets. With ETFs, aninvestor might also choose toinclude other commoditiesin the portfolio.

Maciej Bitner, chief econo-mist at Wealth Solutions, afund-management firm, saidthat ETFs are a better optionthan buying physical gold, asthe hidden costs are minimaland the return on investmentcould be up to 10-15 percent.

Timing is keyThe weakening of the z∏otyagainst the dollar has workedto the benefit of Polishinvestors, as the exchange ratehas somewhat broken the fallin the price of gold. AndIDMSA analyst Kamil Oziem-czuk said that the price of goldcould continue downward for

another few months. “We arein a period of consolidationand we should expect prices tohit a level of around $1,400[per troy ounce].” Mr Oziem-czuk said now is a good time tostart investing.

The first phase of a reces-sion usually results in a sharpincrease in the price of gold,while the second phase ischaracterized by a droppingtrend because of market cor-rections, Mr Oziemczukexplained.

“The tense situation in theeuro zone and other signs ofdeterioration in the global cri-sis are likely to result in aquick improvement in theprice of gold,” wrote MaciejBitner in a comment at theend of September. “US infla-tion should also positivelyaffect the price of gold. Thesituation in 2008 – when thehigh increase in prices quicklygave way to deflation – shouldnot repeat itself this timearound.”

These opinions are reiter-ated by Bank BPH chief econ-omist Maja Goettig, who saidthat while it is hard to predictthe exact movement of gold,the economic climate indicatesthat its price is set to rise.

Most experts agree that theprice of gold should increasebut only as long as there is tur-moil in the European Union.And judging by the manyunresolved problems stillplaguing Europe’s financialsystem, a solution to the bloc’sdebt crisis may still be a longway off. ●

“The tense situation inthe euro zone andother signs ofdeterioration in theglobal crisis are likelyto result in a quickimprovement in theprice of gold”

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LLOOKKAALLEE IIMMMMOOBBIILLIIAAW a r s a w B u s i n e s s J o u r n a l ’s w e e k l y s u p p l e m e n t o n r e a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t • OCTOBER 17-23, 2011, LI 16/41

JMD office

building

topped out

Construction company

Hochtief Polska held a

topping-out ceremony to

mark the completion of a

Jeronimo Martins

Distribution office

building in its shell-and-

core phase. The building

in question is located on

ul. Dolna in Warsaw’s

Mokotów district.

Construction on the

facility began 15 months

ago and completion is

planned for the first

quarter of 2012. The

nine-storey building,

which will comprise

18,540 sqm of space, will

feature a commercial-

service area on the

ground floor as well as a

five-storey underground

parking lot.

Rac∏awicka

Point fully

leasedGrupa Capital Park has

leased the last available

space in its Rac∏awicka

Point office building in

Warsaw. Tenants at the

2,444 sqm property,

which is located at the

intersection of

ul. Rac∏awicka and

ul. Wo∏oska in the

capital’s Mokotów

district, are Technicolor

Polska, Norgips, Polit

Elektronik, Rossmann

and Domino’s Pizza.

Grupa Capital Park has

been active in the Polish

real estate market

since 2005. ●

Redevelopment

PPoorrtt PPrraasskkii zzoonneedd ffoorr sskkyyssccrraappeerrss The new developmentwould transform theskyline of Warsaw’seast bank

The zoning plan for the long-neglected Port Praski (PragaPort) river port neighborhoodof Warsaw’s Praga Pó∏noc dis-trict, has been completed byWarsaw City Hall, and isexpected to be voted on in thenear future. If approved, theredevelopment of the area,which will be situated next tothe planned Stadion subwaystation, will include four sky-scrapers with heights of 100m,120m, 140m and 160m respec-tively, a move which is set tocompletely transform thePraga skyline.

In addition, residentialunits will be built on the water-front. A park and recreationalarea will be built in the south-ern part of the 38-hectare plot.

In terms of the potentialprofitability of the project,

Mikolaj Martynuska, a direc-tor at CB Richard Ellis Polska,believes it will be a success.

“I am convinced this proj-ect may be a commercial suc-

cess if it is planned and target-ed properly. Assuming thatthe project will be structuredin the right manner, I have nodoubt it will be profitable for

the developer. The only ques-tion is the time line of thepotential return,” he said.

But with regard to the sky-scrapers, which form a central

part of the proposed develop-ment, Mr Martynuska believesthis will be a more long-termproject in terms of seeingreturn. “In this sense, properphasing of the whole develop-ment is one of the key issueswhich will finally build value ofthe entire project,” he said.

The development plan cancurrently be viewed up toNovember 8, 2011, on the 19th

floor of the Palace of Cultureand Science from 8 am to 4pm, Monday to Friday.

Port Praski was built duringthe interwar period to serve asa reloading dock and winterport. The facility comprisedthree port basins and severalbuildings and was closed in1963 when its functions weretaken over by another of thecapital’s ports – Port ˚eraƒ.

Most of the land coveredby the newly drafted zoningplan is owned by Elektrim’ssubsidiary Port Praski.

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Port Praski zoning . . . . . . . . . . .15

Skanska’s Green Towers . . . . .15

Delta44 in Wrocław . . . . . . . . . .16

Aquarius Business House . . . .16

Investment in CE . . . . . . . . . . . .16

Property-related stocks . . . . . .16

Industrial parks . . . . . . . . . . . . .17

Luxor Residences in Warsaw .18

Wilanów developments . . . . . .18

Rogowski Development inter-

view . . . . . . . . . . . . . . . . . . . . . . .19

In this issue

1918

Warsaw’s Wilanów is losing its

popularity with residential

developers

Rogowski Development is

planning new housing

projects in Warsaw

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The planned redevelopment of Port Praski could transform the waterfront and

surrounding area in Warsaw’s Praga Pó∏noc district

Office development

Construction starts on Green Towers’ second phaseThe scheme willdeliver 11,600 sqm of leasable space

Developer Skanska PropertyPoland has begun constructionwork on the second phase ofthe Green Towers office com-plex project in Wroc∏aw. Thescheme, which will comprisetwo 10-storey towers, is beingbuilt over two phases – one foreach of the towers.

The second phase of thescheme, which is located on ul.Strzegomska, will offer 11,600sqm of leasable area.

The value of the wholeinvestment is €48 million.Completion of the first phaseof the project is scheduled forthe end of the first half of2012. The whole scheme isexpected to be delivered at theend of 2012.

“We have decided tolaunch the second phase dueto the great potential ofWroc∏aw and its image of adynamic city eager to supportnew investments. We also seeincreasing demand for officespace in green buildings,both among future tenantsand investors,” WaldemarOlbryk, president of SkanskaProperty Poland, said in astatement.

In January of this year,Ernst & Young signed a leaseagreement for 1,800 sqm ofoffice space in building A,while two further lease con-tracts were concluded inSeptember 2011, one of whichwas with Allegro Group. Thatcompany will take up approxi-mately 1,500 sqm of space inthe same building.

The other contract was

signed for the lease of com-mercial space in both build-

ings. That space will host can-teens, which will be run by a

local catering company andcover a total area of approxi-mately 500 sqm.

“Green Towers is anexceptional project, both interms of its architecturaldesign and location. I amconfident that the tenantswho have selected GreenTowers will be satisfied withthe sustainable solutionsapplied in the project. Thegreen, innovative technolo-gies will not only ensure anexcellent working environ-ment, but will also result insignificant savings for the ten-ants”, Mr Olbryk said.

Green Towers is a class-Agreen-office complex, built incompliance with the principlesof sustainable development. Itis a LEED pre-certified officebuilding.

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The value of the whole investment is €48 million

To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

Warsaw Business Journal presents Real Estate weekly newsletter

• Know about the newest projects before they’re on the market• Keep up to date on the latest tenders and auctions• Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate

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OCTOBER 17-23, 2011LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE16 www.wbj.pl

Murawa Office

Park award

The Murawa Office Park

building in Poznaƒ won

this year’s “Best Office

Development for Poland”

category and was the

only office building in

Poland to receive a “Five

Star” title at the 17th

annual European

Property Awards, which

were held on September

23 in London. Murawa

Office Park is a

collection of five

interconnected three-

storey class-A buildings.

The buildings are linked

by glass passageways,

and offer a total of 7,500

sqm.

Bogatynia

mall open

for tenantsAXI IMMO has commenced

the commercialization of

Gant Development’s Park

Handlowy Bogatynia retail

project in Bogatynia,

Lower Silesia

voivodship. Located

between the city’s

ul. Daszyƒskiego and

ul. Spó∏dzielcza and

scheduled to open in the

summer of 2012, the

scheme will deliver a

total of 7,000 sqm of

leasable space. ●

Security Closing % change 52-week 52-week % change Total Marketprice (week) low high (year) shares value

on Oct 13 (z∏. mln)

BUDIMEX 74.00 7.25 64.00 109.20 -22.51 25,530,098 1,889.23

CELTIC 18.80 -1.10 15.55 60.55 N/A 34,068,252 640.48

DOMDEV 25.00 6.34 23.50 50.80 -45.65 24,560,222 614.01

ECHO 3.81 12.72 3.24 5.55 -28.79 420,000,000 1,600.20

ELBUDOWA 107.40 5.09 98.00 183.00 -41.95 4,747,608 509.89

ENERGOPLD 2.70 0.37 2.45 4.10 -28.95 70,972,001 191.62

ERBUD 18.95 -4.05 14.70 61.00 -62.48 12,644,169 239.61

GANT 8.40 10.09 7.30 19.70 -57.98 20,499,953 172.20

GTC 12.25 3.03 9.33 24.98 -45.80 219,372,990 2,687.32

HBPOLSKA 0.85 4.94 0.70 3.40 -75.07 210,558,445 178.97

JWCONSTR 7.65 17.69 6.10 18.00 -57.50 54,073,280 413.66

LCCORP 1.09 4.81 0.85 1.69 -34.34 447,558,311 487.84

MARVIPOL 7.77 2.24 7.22 12.81 -28.65 36,923,400 286.89

MIRBUD 2.54 3.25 2.25 4.75 -38.94 75,000,000 190.50

MOSTALWAR 25.00 12.61 19.70 68.00 -60.88 20,000,000 500.00

MOSTALZAB 1.29 5.74 1.07 3.55 -63.46 149,130,538 192.38

ORCOGROUP 17.57 11.20 15.70 40.00 -44.22 17,053,866 299.64

PBG 82.50 16.69 56.05 227.50 -64.71 14,295,000 1,179.34

PLAZACNTR 1.95 4.28 1.80 5.15 -61.39 297,174,515 579.49

POLAQUA 7.80 -1.27 7.50 20.60 -55.22 27,500,100 214.50

POLIMEXMS 1.70 13.33 1.23 4.30 -61.10 521,154,076 885.96

POLNORD 13.99 23.48 11.03 38.16 -63.51 23,798,439 332.94

RANKPROGR 9.38 4.11 8.64 13.60 -6.20 37,145,050 348.42

ROBYG 1.07 0.00 1.04 2.13 N/A 257,390,000 275.41

RONSON 0.95 -6.86 0.94 1.66 -44.12 272,360,000 258.74

TRAKCJA 1.75 10.76 1.39 4.97 -61.96 232,105,480 406.18

ULMA 61.90 -1.59 57.00 88.00 -21.55 5,255,632 325.32

UNIBEP 6.17 -0.32 4.47 10.30 -26.98 33,927,184 209.33

WARIMPEX 5.77 4.91 5.30 10.89 -36.24 54,000,000 311.58

ZUE 8.21 -6.81 7.90 15.14 N/A 22,000,000 180.62

Property-related stocks

Contractor selected forWroc∏aw Delta44 project

Developer Vantage Develop-ment has selected Grupa Mos-tostal’s Wrobis as the generalcontractor of its Delta44 officeand service building inWroc∏aw, Lower Silesiavoivodship. Construction onthe project, which will belocated on the city’s ul.Dàbrowskiego, is set to launchwithin the next few weeks andfinish in the last quarter of2012.

“We are glad that theinvestment will be built byWrobis, one of the most expe-rienced and best-known con-

tractors in the Wroc∏aw mar-ket. The scheme will be readyby the end of 2012 and thelaunch of the construction isscheduled for the turn ofOctober and November thisyear,” Roman Meysner, mem-ber of Vantage Development’smanagement board, said in astatement.

The Delta44 developmentwill be a four-storey B+ classoffice-retail-service facilityoffering a total of 3,857 sqm ofleasable space. The projectwill comprise 2,768 sqm and1,089 sqm of office and retail-

service space, respectively, andwill feature under- and above-ground parking spaces for atotal of 34 cars.

Vantage Development ismostly active in the Wroc∏awmarket where the company’sprojects include the Prome-nady Wroc∏awskie mixed-usecomplex, the Gamma officebuilding and Osiedle Centau-ris residential scheme. War-saw Stock Exchange-listedImpel is one of the largestshareholders in VantageDevelopment.

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The Delta44 development will offer 3,857 sqm of leasable space

Investment in

region to reach

€6 billion in 2011Real estate investment activi-ty in Central Europe has con-tinued to accelerate in recentmonths, with a total of €2.32billion having been investedin Q3 2011 in the propertymarkets of Poland, the CzechRepublic, Hungary, Romaniaand Slovakia, according to arecent report by Cushman &Wakefield.

The figure marked a con-siderable increase on the€706 million invested in theregion in the second quarterof this year. C&W expertspredict that with a numberof new transactions now inthe due-diligence phase andexpected to close in Q4, thetotal annual investment vol-ume in Central Europecould reach €6 billion by theend of 2011.

“Transaction activity isback at 2005 levels and Q42011 is expected to bestrong in Poland, Czech andHungary. That said, we can-not ignore the increasingeconomic uncertainty whichis starting to impact oninvestor confidence and alsothe availability of finance,

both of which could slowmarket activity in the clos-ing months of this year,”stated Charles Taylor, part-ner at Cushman & Wake-field.

Some €4.61 billion hasbeen invested in CentralEurope so far this year, withthe Czech Republic (€1.9

billion) and Poland (€1.82billion) having been the twomajor target markets.“Looking at the transactionpipeline, however, we antic-ipate Poland to regain themain spot as we move intothe final quarter,” the C&Wreport said.

According to the study,some of the most activeinvestors in Central Europethis year are CA Immo,AEW Europe, Atrium, Uni-bail Rodamco, Deka,Union, Invesco, Heitman,ECE and Meyer Bergman.

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Tieto to be main tenant atAquarius Business House

IT company Tieto Polandhas leased 8,000 sqm in thefirst building of Echo Invest-ment’s Aquarius BusinessHouse class-A office projectin Wroc∏aw, Lower Silesiavoivodship. The scheme islocated at the intersection ofthe city’s ul. Borowska andul. Swobodna; constructionhas been carried out byEiffage Budownictwo Mitexsince June and is scheduledto finish in November nextyear.

“We would like to thank

Tieto Poland for appreciat-ing our experience in thedevelopment of offices inPoland,” Rafa∏ Mazurczak,sales director in the officeprojects department at EchoInvestment, said in a state-ment.

He added that AquariusBusiness House competedwith several other very goodbuildings during the finalstage of Tieto’s analysis ofprojects. “I think that thisproves that the technologicalsolutions applied by us in

Aquarius Business Househave once again met therequirements of our clients,”Mr Mazurczak said.

Designed by the Kielce-based Arcad architecturalstudio, the Aquarius Busi-ness House development willcomprise two seven-storeybuildings offering a total of25,000 sqm of leasable officespace. Construction on thesecond building in the com-plex will start in May 2012and finish in October 2013.

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“Transaction activity isback at 2005 levels”

OCTOBER 17-23, 2011 LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE www.wbj.pl 17

Industrial parks

PPrriimmee llooccaattiioonnss ffoorr bbuussiinneessssGrudziàdz IndustrialPark and the UpperSilesian IndustrialPark are bothexpanding

Two major Polish industrialparks are attracting significantlevels of investment due to anumber of key attributes.

The Grudziàdz IndustrialPark, which is located inGrudziàdz, in the Kujawsko-Pomorskie voivodship, and theUpper Silesian Industrial Parkin Katowice, Silesia voivod-ship, offer investors significanttax exemptions and a goodlocation. Both are locatedwithin special economic zones(SEZs).

Prime logistics spot Located some 120 km from thesea ports of Gdaƒsk and Gdy-nia, the city of Grudziàdzboasts access to the under-con-struction A1 highway. Thisroute will connect the northand south of Poland. Grudz-iàdz currently provides accessto transportation routes tosome of Poland’s major citiesincluding Olsztyn, Toruƒ, Byd-goszcz, as well as Poznaƒ andLódê.

Essentially, Grudziàdz

Industrial Park representativessay, any road traffic comingfrom Gdaƒsk or Gdynia willhave to pass by the city, makingit a prime spot for logisticscompanies.

The industrial park is see-ing a boom in the construc-tion of warehouse facilities,with the Rossmann logisticscenter and the Limito ware-house both currently underconstruction. The Rossmannfacility will comprise 35,000sqm and employ 500 peoplewhen it is completed in 2015.The first phase of construc-tion, due to be completed atthe end of this year, will pro-vide 25,000 sqm. Building onthe second and third phaseswill begin in 2013 and 2015respectively.

Joanna John-B∏a˝yƒska,the president of GrudziàdzIndustrial Park told LokaleImmobilia at the recent ExpoReal real estate fair in Munichthat “one of the reasons Ross-mann chose the city wasbecause of its location in theSEZ which allowed the com-pany real estate tax exemptionsfor up to nine years.”

In August, Gdaƒsk-basedLimito, laid the cornerstone ofa facility in Grudziàdz Industri-al Park that will host produc-

tion and storage facilities forsmoked salmon, much ofwhich will be exported. Thescheme will cost around z∏.25million to build and offerapproximately 11,500 sqm.Construction is due to finish bythe end of this year, with pro-cessing of salmon set to beginin 2012.

Ms John-B∏a˝yƒska said thepark also has space for anotherlogistics center, a retail centerand a hotel.

Green credentialsThe Upper Silesian IndustrialPark in Katowice has around8 ha of space on which, inaddition to existing ware-house-office buildings, foureco-friendly office buildings(8,800 sqm each) are beingbuilt. The first is due to be fin-ished in May 2012. The newbuildings will use the Trigen-eration technology systemwhich can “simultaneouslyproduce electricity, heatingand cooling from a gas.”According to Justyna Bartec-ka, marketing director of theUpper Silesian IndustrialPark, this will help todecrease operational costs.

Construction of the sustain-able building was followed bythe decision to apply for a

BREEAM certificate, anaccreditation that demon-strates a high level of environ-mental awareness. The projecthas a chance to achieve a highrating in the BREEAM assess-ment method thanks to the fol-lowing solutions it employs:Trigenaration system, rainwa-ter recycling, undergroundparking space, including park-ing for alternative means oftransport (bicycles), charging

stations for vehicles poweredby electricity, a green roof, aheat recovery system, lightintensity sensors and manyother “green” solutions.

Already there are severalfirms in the Upper SilesianIndustrial Park which arelocated in the warehouse andoffice building, such as TNTExpress, Lektronix Poland, APHolding SKA, Lorencic Pols-ka, Döllken, Transpoint Inter-

national and many others,which represent diversifiedbranches.

If the recent proliferationof companies moving into theGrudziàdz Industrial Parkand the Upper SilesianIndustrial Park is any indica-tion of future potential, bothinvestment parks couldbecome major industrial cen-ters for Poland.

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The Rossmann logistics center will comprise 35,000 sqm of space

A guide to Polish business and industry Przewodnik po polskim biznesie i gospodarce

The 2011 edition of Bookof Lists is now available!

• Find key information about the dominant players in the market • Expand your portfolio of contacts• See who’s on top of your sector

To order:Please contact us at +48 22 639 85 68 or kwilinski@valkea.com

OCTOBER 17-23, 2011LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE18 www.wbj.pl

Warsaw’s Wilanów lesspopular with developersThe number of apartmentsavailable for sale in the capital’sWilanów district is decreasing,with cautious developers hav-ing recently stopped creatingnew projects in this area,according to a recent report byreal estate services providerEmmerson. During the pre-cri-sis residential boom Wilanówwas one of the hottest locationsin Warsaw; as recently as thefirst half of 2010 the district fea-tured the largest offer as far asthe primary housing market is

concerned, the study noted.While the primary residen-

tial offer in Warsaw has recent-ly seen growth, this has notbeen the case in Wilanów,where 30 projects with a totalof almost 1,400 available apart-ments are already located. Thebulk of them are completedunits designed before the crisis.According to the report, theydo not completely meet theexpectations of today’s buyersand are thus difficult for devel-opers to sell.

Even though consecutivephases of a number of ongoingdevelopments are expected toappear in the market soon, thehigh number of existing invest-ments in Wilanów has general-ly prevented developers frominvesting in new projectsbefore the current supply isabsorbed. This has resulted indevelopers shifting their atten-tion to other parts of the Polishcapital, the Emmerson reportsaid.

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Long Bridge building residences in S∏u˝ewiecDeveloper Long Bridge is inthe process of building the firstof two apartment buildingsthat will comprise the LuxorResidences residential schemein Warsaw. The buildings willbe located at the corner of ul.Wynalazek and ul. Cybernety-ki, in what used to be an indus-trial area of S∏u˝ewiec in thecapital’s Mokotów district.

The apartments are to bebuilt in two phases, the first ofwhich is to be completed in theautumn of 2013. The firstbuilding will have seven

storeys and offer 58 apart-ments ranging in size from 42to 110 sqm. The second build-ing will be seven storeys talland offer 194 units sizedbetween 33 and 146 sqm. Allunits will have a balcony.There will also be a two-levelunderground parking area.

The developer has not dis-closed when work on the sec-ond phase of the scheme willbe started or completed.

Pricing of the units willrange from z∏.7,700 to z∏.8,800per sqm while a parking space

is set to cost z∏.36,600. One ofthe advantages of the area isits close proximity to Warsaw’sChopin airport. The LuxorResidences are also within thevicinity of shopping mall Gale-ria Mokotów, several schoolsand medical centers.

Mierzejewski KasprzyckiCzaplicki is the architecturaloffice that furnished thedesign of the project. Con-struction on the scheme isbeing carried out by SPS Con-struction.

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priced from z∏.7,700 to z∏.8,800 per sqm

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Wilanów was one of the capital’s hottest locations during

the pre-crisis construction boom

Pick up the latest edition of Warsaw Business Journal Group’s popularseries of busines guides.

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Segro to build

for Opek

UK-based real estate

investment and

development company

Segro will build a 7,600

sqm modern warehouse

facility at Tulipan Park in

¸ódê for Polish courier

company Opek. The

building, which Opek will

use as its main sorting

hub in Poland, is set for

completion in the third

quarter of 2012.

Ruch in Kraków

logistics center

Industrial space provider

Goodman Group has

leased 5,200 sqm of

warehouse space and

650 sqm of space for

offices and other

functions at the second

warehouse of its Kraków

Airport Logistics Centre

complex in southern

Poland to press

distributor Ruch. The

latter company is the

second tenant in the

warehouse which,

following the deal, is

now fully leased out.

Construction on the

second warehouse in the

Kraków Airport Logistics

Centre project will

deliver over 22,400 sqm

of space. ●

OCTOBER 17-23, 2011 LLOOKKAALLEE IIMMMMOOBBIILLIIAA –– RREEAALL EESSTTAATTEE www.wbj.pl 19

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Residential developers

Rogowski to launch new Warsaw projectsThe company willremain focused on theupper standard andluxury segments of thecapital’s housingmarket

Bia∏ystok-based residentialdeveloper Rogowski Develop-ment is working on a numberof new housing projects inWarsaw. By the end of thisyear the company wants tostart construction on itsOgrody Potoki scheme whichwill be sitting on a three-hectare plot in Mokotów;plans for the near future alsoinclude two smaller develop-ments located on the district’sul. Post´pu and ul. Pu∏awska.

Last month RogowskiDevelopment commencedconstruction on the secondphase of the ApartamentyWilanowska project, which isbeing built on 20,000 sqm ofland located at the intersectionof Warsaw’s Al. Wilanowskaand ul. Dolina S∏u˝ewiecka.The scheme comprises 219apartments whose total valueexceeds z∏.200 million.

All of Rogowski Develop-ment’s new projects in Warsawwill be upper-standard or luxu-ry schemes. The company isfocused on the delivery of

prestigious investments inwhich buyers can find largeapartments. The developer isnot planning to be present inthe popular segment of thecapital’s housing market,which has seen lots of develop-ment activity of late.

“We have been buildingand will continue to buildupper-standard and luxuryapartments. We have theambition to deliver high-quali-ty units. We want the Rogows-ki Development logo to con-tinue to be associated withhigh-quality finishing andinteresting architectural solu-tions,” said RemigiuszRogowski, president of thecompany’s managementboard.

Rogowski Developmenthas been present in the War-saw market for more than 10years now, with the company’scompleted projects in the cityincluding Apartamenty Cyber-netyki and Apartamenty Steg-ny, both of which are locatedin Warsaw’s Mokotów district.Construction is currentlyunderway on Apartamentyprzy WyÊcigach in Mokotówand Apartamenty Miƒska inPraga Po∏udnie.

When the developer wasdebuting in Warsaw, it hadalready been active in the east-

ern Polish city of Bia∏ystok,Podlaskie voivodship, for sev-eral years. It took the companyjust half a year then, MrRogowski stressed, to gothrough the whole praparatoryprocess and launch its firstWarsaw project, on ul. Cyna-monowa in the capital’sUrsynów district.

Strong in home cityMeanwhile, Rogowski Devel-opment remains one of thelargest players in its home citywhere the company’s currentland bank should allow it tocontinue construction for thenext seven to eight years. “InBia∏ystok, we are building alarger number of apartments.In Warsaw, the number ofunits is smaller but the value ofour projects in both cities issimilar,” Mr Rogowski said.

He added that the compa-ny’s decision to be simultane-ously active in Bia∏ystok andWarsaw resulted from the factthat the former city’s marketcould not absorb more than the600 apartments that the com-pany builds there per year. Newprojects will be regularlylaunched in both markets withRogowski Development having30 hectares of land in Bia∏ystokalone, Mr Rogowski said.

“For the time being, we are

not planning investments incities other than Warsaw andBia∏ystok,” Mr Rogowski said,adding that the company hasprepared long-term invest-ment strategies for those two

markets. “Before we finishconstruction on the plannedprojects, we are not going toinvest in any other cities,” MrRogowski said.

AAddaamm ZZddrrooddoowwsskkii

Ronson homes

sales growthDeveloper Ronson

Development sold 300

housing units in the first

nine months of this year,

40% more than in the

same period of 2010.

“Gemini II is definitely

the hit in our offer this

year. Even before

construction was

launched, 40% of all

apartments had been

sold and now, a year

before completion, only

one-fifth of the units

remain available,”

Andrzej Gutowski, sales

and marketing director at

Ronson Development,

said in a statement.

Robyg boosts

Gdaƒsk

presenceDeveloper Robyg wants

to launch construction on

almost 400 apartments in

the northern Polish city

of Gdaƒsk next year. The

units will be located in

the company’s

Lawendowe Wzgórza,

Albatross Towers and

S∏oneczna Morena

projects. According to the

developer, the Gdaƒsk

market currently has the

largest growth potential

in Poland. ●

CO

UR

TE

SY O

F P

RE

ST

IGE

PU

BL

IC R

EL

AT

ION

S

Remigiusz Rogowski says his firm is not planning

investments in cities other than Warsaw and Bia∏ystok

OCTOBER 17-23, 2011MMAARRKKEETTSS20 www.wbj.pl

SO

UR

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SE

PLN-EUR

4.37

79

4.32

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4.34

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4.31

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4.29

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3.18

65

3.19

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3.13

52

3.14

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3.11

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PLN-GBP

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11.1

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5.06

12

4.98

73

4.99

08

4.91

40

4.92

85

4.90

40

4

5

6 PLN-CHF

3.54

10

3.49

22

3.52

28

3.48

70

3.49

74

3.47

04

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3.45

3.70 PLN-RUB

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27

4.16

04

4.16

46

4.09

72

4.08

70

4.04

48

4

5

currency rates

Still no plan

for Greece

Currency report

The main topic on last week’sfinancial markets remainedthe Greek crisis. After themeeting over the weekendbetween Angela Merkel andNicolas Sarkozy, investorswere reassured that the eurozone would aid Greece, butno details were revealed.Moreover, the last obstacleto accepting the expansion ofthe European Financial Sta-bility Facility (EFSF) wasremoved after the Slovakiangovernment voted in favor ofthe plan. The markets need-ed some positive signals andthey got it. The EUR/USD aswell as the z∏oty began torally.

On Thursday however,the ECB warned that forcingbanks to accept large losseson Greek debt could have asevere impact on the bankingsector and consequently onthe whole economy. The

ECB was reluctant to accepteven the previous solution(agreed on in July) but sinceit is certain that Greece can-not sustain its debt, someoneneeds to take losses. To addmore uncertainty, the S&Pratings agency loweredSpain’s rating to AA-. Moredetails and action are expect-ed after the G20 meeting thatbegins in November.

Throughout the week, theEUR/USD continued itsrebound, reaching $1.38, itstwo-week high, and was bal-ancing around that level bythe end of the week. The par-liamentary elections held lastSunday did not have mucheffect on the local currencyas the ruling party, PO, won.Decreased risk aversionhelped the z∏oty climb to itstwo-week highs at z∏.4.28against the euro and z∏.3.09against the dollar. ●

Adam Narczewski, X-TradeBrokers Dom Maklerski SA

SO

UR

CE

: N

BP

Major indices

Top 5 Closing % change (week) 52-week high 52-week lowIGROUP 0.47 56.67 0.59 0.16EUIMPLANT 0.27 28.57 0.81 0.18BORYSZEW 0.63 28.57 2.31 0.39TRITON 2.64 27.54 6.50 1.86KOMPUTRON 5.38 24.25 10.90 3.90

WIG 39,608.13 (October 13 close)

Change for the week: 4.47% 52-week high: 50,371.74

Change year to October 13: -20.43% 52-week low: 36,549.47

Top 5 Closing % change (week) 52-week high 52-week lowPBG 82.50 16.69 227.50 56.05GETIN 8.51 16.58 15.29 6.76LOTOS 26.70 16.54 49.42 22.70POLIMEXMS 1.70 13.33 4.30 1.23ASSECOPOL 46.50 11.64 56.45 35.45

Bottom 5 Closing % change (week) 52-week high 52-week lowPOLREST 0.08 -50.00 0.65 0.05ANTI 1.05 -28.57 3.08 1.05AMPLI 1.43 -20.11 4.35 1.43OLYMPIC 4.50 -15.89 7.22 4.50TFONE 2.18 -12.10 6.69 0.24

Bottom 5 Closing % change (week) 52-week high 52-week lowTVN 14.68 -4.30 18.80 11.25PGNIG 3.93 -1.01 4.64 3.45TPSA 17.06 1.67 19.01 15.10PGE 19.70 2.07 24.90 17.01BZWBK 227.00 2.39 239.00 210.00

WIG20 2,272.42 (October 13 close)

Change for the week: 4.56% 52-week high: 2,932.62

Change year to October 13: -21.11% 52-week low: 2,089.84

mWIG40 2,247.25 (October 13 close)

Change for the week: 5.39% 52-week high: 2,987.72

Change year to October 13: -24.06% 52-week low: 2,086.64

sWIG80 8,967.57 (October 13 close)

Change for the week: 3.17% 52-week high: 12,932.00

Change year to October 13: -29.04% 52-week low: 8,483.22

NewConnect 42.02 (October 13 close)

Change for the week: -1.48% 52-week high: 64.39

Change year to October 13: -32.74% 52-week low: 42.02

WIG-Banki 5,684.52 (October 13 close)

Change for the week: 3.58% 52-week high: 7,387.49

Change year to October 13: -21.17% 52-week low: 4,944.19

DIJA11,478.13 (Oct 13 close)

3.19% (for the week)

CHANGE: -3.92%

(year to Oct 13)

52-week high: 12,928.50

52-week low: 10,362.30

NASDAQ2,620.24 (Oct 13 close)

4.52% (for the week)

CHANGE: -6.34%

(year to Oct 13)

52-week high: 2,887.75

52-week low: 2,298.89

S&P5001,203.66 (Oct 13 close)

3.32% (for the week)

CHANGE: -7.37%

(year to Oct 13)

52-week high: 1,370.58

52-week low: 1,074.77

FTSE1005,403.40 (Oct 13 close)

2.12% (for the week)

CHANGE: -10.32%

(year to Oct 13)

52-week high: 6,105.80

52-week low: 4,791.00

DAX5,914.84 (Oct 13 close)

4.78% (for the week)

CHANGE: -19.05%

(year to Oct 13)

52-week high: 7,600.41

52-week low: 4,965.80

NIKKEI2258,823.25 (Oct 13 close)

3.53% (for the week)

CHANGE: -17.68%

(year to Oct 13)

52-week high: 10,891.60

52-week low: 8,227.63

world stock indices

35,000

36,600

38,200

39,800

41,400

43,000

16.0

9

19.0

9

20.0

9

21.0

9

22.0

9

23.0

9

26.0

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9

29.0

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2,000

2100

2,200

2,300

2,400

2,50016

.09

19.0

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21.0

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22.0

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2,000

2,100

2,200

2,300

2,400

2,500

16.0

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19.0

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20.0

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21.0

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22.0

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06.1

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07.1

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8,000

8,500

9,000

9,500

10,000

16.0

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19.0

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20.0

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12.1

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13.1

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41.0

42.2

43.4

44.6

45.8

47.0

16.0

9

19.0

9

20.0

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21.0

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22.0

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23.0

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26.0

9

27.0

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30.0

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03.1

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04.1

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05.1

0

06.1

0

07.1

0

10.1

0

11.1

0

12.1

0

13.1

0 4,900

5,100

5,300

5,500

5,700

5,900

16.0

9

19.0

9

20.0

9

21.0

9

22.0

9

23.0

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26.0

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27.0

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28.0

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03.1

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05.1

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06.1

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07.1

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11.1

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12.1

0

13.1

0

Other indices

Stocksseesaw

Stocks report

After stronger-than-expect-ed non-farm payroll datawas released in the US onFriday, October 7, stocksopened last week withgains. Aside from animproved jobs situation forSeptember in the world’slargest economy, stocks alsogot some relief with yetanother strong pledge byGerman and French leadersto resolve the debt crisisover the weekend of Octo-ber 8-9. Gains were short-lived though, with indicesseesawing throughout theweek.

Monday, October 10, sawthe strongest gains of theweek, with the WIG up 2.93percent, while the WIG20gained 3.44 percent. Gainswere even stronger acrossthe Atlantic, with theS&P500 breaking its 50-daymoving average for the first

time since July, a bullishtechnical signal. On Tuesdaystocks oscillated up anddown, shortly before a keyvote in Slovakia on expand-ing the euro zone rescuefund. The Slovakian parlia-ment rejected the much-needed increase, leadingstocks to close lower. OnWednesday, after Slovakianleaders pledged to pass thevote by the weekend,momentum buying took holdand stocks saw furtherincreases. The WIG gained2.2 percent, while theWIG20 saw a 2.42 percentgain.

Global stocks fell onThursday, as a mix of poorearnings and macroeconom-ic data eclipsed the tiringeuro-zone situation. Still,Friday saw solid gains, withthe WIG ending the week 4percent higher. ●

Andrew Nawrocki, Market analyst & trader, gowebtrade.com

OCTOBER 17-23, 2011 TTHHEE LLIISSTT www.wbj.pl 21

Construction & Real Estate

Exhibition and Convention VenuesRanked by total gross indoor exhibition space www.bookoflists.pl

Notes: NA = Not Applicable, NR = NotRanked, WND = Would Not Disclose.All information provided byPolska Izba Przemys∏u Targowego.

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissionsand typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. JoannaRaszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List maynot be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

Rank

Company nameAddressTel./FaxE-mailWeb page

Gross indoor exhibitionspace (sqm) /

Outdoor exhibitionspace (sqm)

Conference roomsspace (sqm)

Total number of fairsorganized in 2010

Total number of fairsorganized in 2010:

Own fairs /Polish organizers /Foreign organizers

Other events organized in 2010:

Conferences /Congresses /

Corporate meetings

Other events organized in 2010:

Concerts /Sport events /

Galas

Other events organized in 2010

Total number of events organized in

2010

Total number of fairsand events organized

in 2010

1

Mi´dzynarodowe Targi Poznaƒskie Sp. z o.o.ul. G∏ogowska 14, 60-734 Poznaƒ61 869-2000/61 866-5827info@mtp.com.plwww.mtp.pl

107,65430,622

9,006 68653-

1,4462231

615

401 1,980 2,048

2

Targi Kielce SAul. Zak∏adowa 1, 25-672 Kielce41 365-1222/41 345-6261biuro@targikielce.plwww.targikielce.pl

35,00065,000

916 55541-

2892

114

1226

41 475 530

3

Mi´dzynarodowe Targi Gdaƒskie SAul. Beniowskiego 5, 80-382 Gdaƒsk58 552-3600/58 552-2243sekretariat@mtgsa.com.plwww.mtgsa.com.pl

14,5953,575

260 231211-

215

---

- 8 31

4

Warszawskie Centrum EXPO XXI Sp. z o. o. ul. Pràdzyƒskiego 12/14, 01-222 Warsaw22 256-7130/22 256-7111sales@expoxxi.plwww.expo21.pl

13,5002,200

950 43-

385

3121544

1-

25399 2 442

5

Mi´dzynarodowe Targi Polska Sp. z o.o.ul. Makowska 95, 04-307 Warsaw22 529-3950/22 529-3930info@mtpolska.com.plwww.halamtpolska.pl

10,0004,000

250 22-

211

31510

--2

147 195 217

6

Demuth Alfa Sp. z o.o. - Ostróda S.K.Aul. Grunwaldzka 55, 14-100 Ostróda89 647-7800/89 647-7810bk@demuth-group.comwww.ostroda-mtm.pl

9,250-

- 22--

---

---

- - 2

7

Targi w Krakowie Sp. z o.o.ul. Centralna 41A, 31-586 Kraków12 644-5932/12 644-614biuro@targi.krakow.plwww.targi.krakow.pl

6,0007,000

WND 171061

2742

313

15 55 72

8

Mi´dzynarodowe Targi Katowickie Sp. z o. o.u. Bytkowska 1B, 40-955 Katowice32 789-9100/32 254-0227info@mtk.katowice.plwww.mtk.katowice.pl

5,1004,000

550 17116-

3-

19

-1-

28 51 68

9

Mi´dzynarodowe Targi Szczeciƒskie Sp. z o.o. ul. Struga 6-8, 70-777 Szczecin91 464-4401/91 464-4402office@mts.plwww.mts.pl

4,15060,000

320 19118-

111

1-4

21 29 47

10

Targi Toruƒskie Sp. z o. o.ul. Szosa Che∏miƒska 27, 87-100 Toruƒ56 658-2090/56 658-2099biuro@targitorunskie.plwww.targitorunskie.pl

3,06517.000

320 1082-

81310

1-2

7 104 114

11

Mi´dzynarodowe Targi Lubelskie SAul. Dworcowa 11, 20-406 Lublin81 534-4614/81 534-9295mtl@targi.lublin.plwww.targi.lublin.pl

2,8007,000

200 14122-

5-2

1--

15 15 29

A new restaurant review feature from WBJ

Le CedreAl. SolidarnoÊci 61lecedre.pl

Although the Praga neighbor-hood of Warsaw has becomeincreasingly trendy in recentyears, few would probably thinkof going there for a businesslunch. It’s time to think again,because just one tram stop awayfrom the Old Town, Lebaneserestaurant Le Cedre makes anexcellent case for why oneshould.

Its refined, traditional Le-banese cuisine is worlds awayfrom the omnipresent kebabswhich most Poles seem to havedeveloped a great taste for.And one of the best ways totake advantage of the wonder-ful array of exotic dishes avail-able at Le Cedre is to pick oneof the four set menus, pricedfrom z∏.118 to z∏.190 for twopeople. Each offers a selectionof between 14 to 21 warm andcold appetizers (mezzah) andmain courses.

Tabbouleh (a lovely, freshparsley-based salad) and hum-mus (a homemade chickpeaand sesame sauce puree), two

absolute musts of any Lebaneselunch, are representative of theexotic yet fresh tastes on themenu. Also worthy of recom-mendation is kibbeh nayeh, aLebanese tartar with pine nuts,and basterma, which is slicedsmoked beef with a specialblend of spices (which arebrought back from Beirut byowner Tony Nasr several timesa year). A savory vegetarian setmenu is also available.

On top of offering a widevariety of tastes, set menus areideal for sharing, which helps tocreate a favorable atmospherefor team-building and develop-ing business relationships, says

Mr Nasr. But while the relaxedatmosphere and lush decorinvite a feeling of celebration,Le Cedre also offers a quiet,private setting where it is possi-ble to get work done. Therestaurant provides privaterooms and free wireless inter-net access.

Before you leave, don’t for-get to try the Lebanese coffee(with cardamom) or tea (withcardamom, cinnamon andmint), paired with some of War-saw’s freshest baklavas – its sim-ply divine. ●

Reservations: 22 670 11 66,lecedre@lecedre.pl

OCTOBER 17-23, 2011LLIIFFEESSTTYYLLEE22 www.wbj.pl

Anna CalviPalladium ul. Z∏ota 9 October 17

English singer Anna Clavi hasalready been likened to EdithPiaf and PJ Harvey, despiteonly releasing her debut albumin January of this year. As wellas being nominated for theprestigious 2011 MercuryMusic Prize, she was alsodescribed by legendary produc-er Brian Eno as “phenomenal,”and “the biggest female talentsince Patti Smith.” This concertwill be the only chance to hearher unique sound, which is driv-en by intense indie guitar andbrooding vocals, in Poland thisyear. ●

For more information log on topalladium.art.pl

Concert

Britain’s next big talentC

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Estampas Porteñas –“Tango Feeling”PKiN Sala Kongresowa Pl. Defilad 1October 22, 7 pm

Founded in Buenos Aires in1996, Estampas Porteñashave been entertaining fans

around the world with theirown blend of music anddance, based on the tradition-al roots of tango, for the last15 years. The troupe is com-posed of the most experi-enced dancers from Argenti-na’s best dance schools and at

the helm is the brilliant balle-rina and choreographer,Carolina Soler. Tickets forthe event are priced fromz∏.95. ●

For more information log on tokongresowa.pl

Dance

Tradition and tango

Britten SinfoniaWarsaw Philharmonicul. Jasna 5October 19, 7:30 pm

A concert from the series“Orchestras of the World,” this

event will see the celebratedand innovative Britten orches-tra play works both by contem-porary composers, namelyErkii-Sven Tüür and JamesMcMillan (the conductor), as

well as by classical forefatherslike Beethoven. Tickets for theevent are priced at z∏.25-50. ●

For more information log on tofilharmonia.pl

Concert

A ‘world’ of classical music

5th Five Flavours Film FestivalKino Muranówul. Gen. Andersa 5 October 20-25

For the fifth time in Poland,East Asian and SoutheastAsian cinema will be the focusof the Five Flavours Film Festi-

val. This is the first time thatJapanese films are beingscreened, with “NorwegianWood,” the adaptation ofHaruki Murakami’s novel ofthe same name, directed byTran Anh Hung, and “13 Assas-sins,” by cult director TakashiMiike, among those to be

shown. Movies will be accom-panied by discussions withsome of the directors and pro-ducers, as well as other eventsincluding lectures, exhibitionsand concerts. ●

For more information log on topiecsmakow.pl

Festival

A taste of Asian cinema

An oasis just across the river

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Le Cedre offers Lebanese delights in a unique setting

Anna Calvi

Britten Sinfonia

OCTOBER 17-23, 2011 LLAASSTT WWOORRDD www.wbj.pl 23

Good technology + bad literature = satisfaction

Tech Eye

Techeye is an unabashed fan of bad lit-erature. We love all kinds of stories,from the ribald wit of Chaucer andthe fusty gothicity of Horace Wal-pole (who, by the way, serendipi-tously coined the word “serendipi-ty”) to the metaphor-slatheredtrysts of Danielle Steele. But there’ssomething spectacular about thebooks whose words lumber ponder-ously across the page, like a walruslured across a beach by the sirensong of the sea cucumber. The sto-ries which open up a huge can ofPandora’s box but never quiteclose it, or build precarious plotslike houses of cards and then putthem on the backburner until theepilogue.

Ah, drivel. It warms the verybottom of our heart.

Perhaps the greatest thingwe’ve ever read was “The Nightof the Sprightly Glockenspiel,”a semi-autobiographical novel-la written by a retired pizzadelivery guy who lives downthe hall from us. This master-piece is about a magicalglockenspiel that embarksupon a journey of self-discov-ery in Omaha, Nebraska. Itultimately realizes that it has

always been attracted to other glocken-spiels of the same key, and the storyends with a torrid glockenspiel-on-glockenspiel scene which culminates ina frenzy of aural ecstasy.

It’s a real page-turner. Or at least itwould be, if the pages of our neighbor’smanuscript weren’t slick with pizzagrease. Anyway, he plans to publish itsoon and he’s eyeing Amazon’s self-publishing platform because “the pub-

lishing establishment doesn’t under-stand real art.” The upshot is that peo-ple who buy Amazon’s forthcomingKindle Fire may soon be able to savor“Night of the Sprightly Glockenspiel”for themselves.

The Kindle Fire, which shipsNovember 15, is the online retailer’sfirst foray into the tablet market. It hasa seven-inch touchscreen, a dual-core 1GHz TI OMAP CPU, 512 MB of RAMand 8 GB of internal storage. Underthe hood is a scarcely recognizable

Android operating system.Perhaps most enticing of all is the

$199 price tag. The Kindle Fire can’tcompete with the iPad 2 (the marketleader) on hardware specs – it’s smaller,thicker and lacks cameras, for example– but it costs less than half what Applecharges for the cheapest version of itssecond-gen tablet. Amazon is also bank-ing on content, in the form of its Ama-zon Instant Video and Amazon MP3services, not to mention its catalogue ofKindle e-books, periodicals and theability to buy Android apps.

In addition, the company is pushingcloud-related services, such as its Ama-zon Silk “cloud-accelerated web brows-er. The jury’s out on this, however, sinceSilk puts all your web-surfing data inAmazon’s hands, which raises seriousquestions about privacy and security.This has the potential to be the softunderbelly of the Kindle Fire’s Achilles’Heel, but only time will tell.

The Kindle Fire may not appeal todiehard geeks who comprise Apple’smost loyal demographic, but it’s a seri-ous contender in the tablet market.And the combination of access to leg-endarily bad e-literature and a pizzagrease-free touchscreen will appeal toan important group of consumers –people like Techeye.

Ever embarked upon a journey of self-discovery in Omaha, Nebraska? Let us know: techeye.wbj@gmail.com

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“The Kindle Fire costs less thanhalf what Apple charges

for the iPad2”