Polmos Lublin 2005 figures tumble

Polmos Lublin 2005 figures tumble

Polmos Lublin has posted a fall in sales and profits for last year.

The Polish vodka distiller said yesterday (3 March) that sales in 2005 slipped to PLN81.1m (US$25.6m) from PLM85.6m in 2004.

Net profit plunged to PLN2.24m from PLN17.63m in 2004. In July, the company posted a net loss for the first six months of last year of PLN3.8m, blaming a disagreement with a key distributor and one-off costs related to its failed attempt to buy rival Polmos Bialystok.

In early January, the distiller boasted of a record-breaking end to the year, with the last three months of 2005 being the best in its history.

Operating profit for the full year was also down, at PLN9.9m from PLN26.18m a year earlier.

EC to sue Poland for blocking Pekao/BPH merger

EC to sue Poland for blocking Pekao/BPH merger

The European Commission confirmed Friday it will sue Poland to EU court for blocking the merger of PKO SA and BPH banks, which are owned by Italian UniCredito bank. The decision is to be taken on March 8.

Poland opposes a merger of Pekao and BPH banks which were acquired by UniCredito as a result of the fusion with German HVB.

Poland's government claims that in clearing the UniCredito and HVB merger, the European Commission did not take into account its consequences on the Polish market, that is a Pekao SA and BPH merger. Poland claims that a Pekao privatisation agreement banned UniCredito from owning any other Polish bank.

Unicredito offer for Poland's BPH ends with no shares tendered

Unicredito offer for Poland's BPH ends with no shares tendered

Unicredito Italiano SpA said the mandatory offer for the 28.97 pct it does not already own in Poland's Bank BPH SA ended on March 1 with no shares tendered.

Unicredito was offering 702.11 zlotys in cash for each share of BPH, which it controls indirectly after its takeover of BPH owner HVB Group AG last year.

On March 1, BPH shares closed at 800 zlotys, it said.

Unicredito is facing opposition from the Polish authorities to its plan to merge BPH with Unicredito's Polish unit Bank Pekao.

Clash Over UniCredit Testing Powers

Clash Over UniCredit Testing Powers

Poland's refusal to back down in a dispute with the European Union over the continent's largest banking deal is emerging as a key test case of the EU's aim to create an open market versus a growing wave of protectionism.

While older bloc members have their own spats with Brussels over single market laws, newcomer Poland has defied the EU by blocking Italian bank UniCredit's takeover bid for local Bank BPH.

The disputes are being closely observed to see if the EU can rein in national interests as it aims to create an unobstructed market.

UniCredit's bid for BPH, part of its larger takeover of German lender HVB that is firmly backed by the European Commission, is also being watched for signs of whether Poland's new conservative government will embrace protectionist policies in the largest of the new, mostly former communist EU members.

Prime Minister Kazimierz Marcinkiewicz and his government came to power last fall pledging to protect Polish interests in the EU, and their stance on the takeover has resonated with people who believe post-communist privatization deals were rigged to benefit the elite.

"It is more about giving a signal to their voters that 'we are the first government in many years trying to defend national interests, and we aren't selling everything to international investors,'" said Marek Juras, an analyst at Bank Zachodni WBK SA.

Still, he said the core of the dispute, which has dragged on since late last year, lies in the balance of power between national governments and the European Commission.

The European Commission contends that Poland broke EU law when it blocked UniCredit Italiano SpA's bid for BPH _ part of its euro15.4 billion (US$18.7 billion) merger with German lender HVB Group AG.

The Polish government denies charges of protectionism, saying it is merely upholding a 1999 privatization agreement UniCredit signed when it bought a 53 percent stake in Poland's second-largest bank, Pekao SA. That deal forbade the Italian bank from engaging in any other "competitive activities" in the Polish banking market, a provision meant to prevent a concentration of the banking sector by one entity.

"The privatization agreement for Pekao SA was sealed in goodwill," Treasury Ministry spokesman Marcin Mazurek told The Associated Press. "Nobody forced anybody to sign the agreement. And UniCredit is now breaking that agreement."

Marcinkiewicz's socially conservative Law and Justice party is also concerned that the merger of Pekao SA and BPH under UniCredit would create a foreign-owned rival to the state-owned market leader, PKO BP. Poland's new government has floated the idea of creating national champions _ state-controlled companies to lead the way in specific sectors.

"This government is fascinated by the idea of building national leaders," Juras said. "It is convinced that not only the private sector should play an essential role in the economy."

Charlie McCreevy, the European Union commissioner for the internal market and services, criticized France and Luxembourg last week for moves he said were designed to protect steel maker Arcelor SA and other companies from takeovers. And Spain approved measures Friday designed to block German utility E.On AG's takeover bid for power and gas company Endesa, placing itself on a collision course with EU regulators.

McCreevy threatened Poland with a lawsuit over the bank takeover, saying its attempts to prevent the deal showed that the problem was not just confined to old members of the EU.

But Marta Jezewska, an analyst at BRE Bank in Warsaw, played down the role of protectionism in Warsaw's opposition to the bank takeover, saying the government could be trying to wrangle a better position for the Polish banks in a combined HVB-UniCredit.

Despite threats by the European Commission to take Poland to the European Court of Justice, the EU's highest court, Poland's government is sticking to its defenses and has itself filed an appeal with the court against Brussels' approval of the UniCredit deal.

"We didn't break European law," Mazurek said. "We are waiting on a decision from the European Court of Justice."

Poland to get SFR 489 million from Switzerland in aid for new EU states

Poland to get SFR 489 million from Switzerland in aid for new EU states

Switzerland will spend SFR 1 billion to aid the new EU members under an accord signed today with the EU. Poland will receive SFR 489 million.

The funds are to be spent on regional and national development within the next 5 years.

Thanks to this gesture of solidarity Switzerland has considerably helped reduce economic and social differences in the enlarged EU, EU-chairing Austria's foreign minister Ursula Plassnik said on Monday.

Poland will stick to its word and adopt euro - finance minister

Poland will stick to its word and adopt euro - finance minister

Poland will not back out of its obligation to adopt the euro, despite being the only EU newcomer which has not set a date for joining the eurozone, Finance Minister Zyta Gilowska said

"We have committed ourselves to adopting the single currency, but for the moment we are not saying when that can happen. However, attempts to back out of this obligation are out of the question," Gilowska told the Rzeczpospolita daily in an interview

Gilowska said that if Poland decided not to join the single currency, "our reputation internationally would suffer"

He said: "It would also be very expensive. The European Commission could seriously limit our access to structural funds." Poland's conservative President Lech Kaczynski said last week he believed that Poland should put off joining the euro as long as possible because he was concerned that membership would lower Poles' standard of living

"The effects of introducing the euro even in powerful countries like Italy were unfavourable. Prices rose and caused a fall in living standards," Kaczynski told Agence France Press

Meanwhile, Gilowska said Poland would launch a major reform of public finances before the end of June

The aim would be to reform institutions that control public finances in order to control money flow more effectively and in a more modern way, she told Rzeczpospolita

The changes would allow "planning the budget over many years, especially concerning investment," and improved management of European Union funds, which currently are distributed under a system of "happy improvisation"

Poland proposes treaty on energy security in EU

Poland proposes treaty on energy security in EU

Poland put forward here on Monday an initiative of signing a treaty on energy security based on the principle of solidarity, deputy foreign minister Stanislaw Komorowski announced.

Komorowski represented Poland at a meeting of EU diplomacy heads.

We suggested that the matter in question should be discussed separately at a summit meeting of the European Council in March, Komorowski told newsmen.

A related letter an energy security treaty was addressed by Prime Minister Kazimierz Marcinkiewicz to prime ministers of the 32 EU and NATO member states as well as to EU, EC and NATO officials on Friday.

According to the PM "the principle of solidarity" should be applied to energy transmission and storing.