No threats to Poland's meeting its Euro 2012 commitments

Fitch Rating said it affirmed BRE Bank's long-term issuer default rating at 'A-' and raised the individual rating of the Polish bank to 'C/D' from 'D'.

Fitch said the success of the retail business has helped the bank diversify risks as well as sources of revenue, but noted the weakness of the bank's operating profitability relative to its peers.

Fitch also noted the significant strengthening of the bank's operating profitability last year and in the first quarter this year. BRE is Poland's fifth-largest bank with 24 corporate branches and 108 retail branches, the release added.

Source: forbes.com

Italy's UniCredit expects to complete Poland bank merger by year-end

Italy's UniCredit expects to complete the merger of its banks in Poland, Pekao and BPH, by the end of the year, the group's head of the Polish markets division, Federico Ghizzoni, was quoted as saying Thursday by the Polish Press Agency (PAP).

"We expect the process of the split-up of BPH and the legal integration into Pekao to be concluded by the end of 2007," Ghizzoni told an analyst meeting in Milan, PAP reported.

In April, the two Polish subsidiaries of UniCredit said the process would likely be concluded in the third quarter of the year.

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Under an April 2006 agreement with the Polish government, UniCredit, which acquired BPH through the takeover of its German parent HVB, undertook to spin off the lion's share of the bank's business and integrate it into Pekao, while selling the BPH brand name and some of its assets to a third-party investor.

In April this year, US conglomerate General Electric's finance arm, GE Money, won exclusive negotiating rights to the deal, but talks are reported as hitting the rocks.

"I understand there is the legal risk of having to tender a public bid for all the BPH shares, once the transaction is closed with UniCredit," DM Millennium analyst Marcin Materna said. "And, of course, the price being asked is quite demanding for a bank that is destined to be loss-making for years to come."

UniCredit is reported to be asking up to EUR 1.5 bln for the part of BPH it has put on the block. The so-called "miniBPH" will take over less than a fifth of the bank's assets but its entire back-office operations, along with the brand name and 200 of 485 branches.

The new bank will take over 21.9% of BPH's existing Tier1 capital, but only 13.1% of its assets. The overcapitalization, with capital adequacy ratio of 16%, means meager return on equity in the years ahead.

The new lender will have assets of PLN 8.6 bln, a loan book of PLN 5.6 bln, deposits of PLN 4.8 bln and PLN 1.4 bln in Tier1 capital. The figures mean that only 14.9% of BPH's existing loan portfolio and 12.4% of its deposit base will carry on to the slimmed-down version of the bank.

Pekao will take over the entire corporate-banking business of BPH, while "miniBPH" will hold on to the asset-management division, BPH TFI.
Source: gielda.wp.pl

Poland's Mercor launches IPO, plans to raise 73 mln zlotys to finance growth

Polish fire protection systems maker Mercor plans to raise 73 mln zlotys from its initial public offer (IPO) in Warsaw to finance acquisitions as it bids to becoming a top European player.

The whole offer, which is also to include existing shares, will be worth more than 200 mln zlotys, as the company set the IPO price range between 33 and 41 zlotys. Mercor plans to enter the Warsaw bourse on July 19, allowing new investors to own up to 49 pct of the company's enlarged capital.

'The construction market is set to rise by at least a few percent in the coming years, and the rise of the construction market means a rise in demand for fire protection systems,' Mercor's chief executive Marian Popinigis -- owner of a 31.3 pct company stake -- told a news conference.

Polish exporters have boomed in the last five years thanks to the removal of duties on EU entry in 2004 and low costs of labour and operations which give them a competitive edge over many western competitors.

Mercor raised its net profit in 2006 by 41 pct year on year to 15.8 mln zlotys, while sales almost doubled to 221.2 mln zlotys, also thanks to its acquisition of Czech peer Hasil.

Mercor says it leads the market in Poland, the Czech Republic and Slovakia, valuing the market at 1 bln zlotys.

'There is a chance to become a leader on a European scale,' Popinigis said. 'The European market is not very well-consolidated, which gives us a shot at dynamic growth by acquisition.'

The company, which produces equipment ranging from fire doors to fire ventilation systems, set up subsidiaries in Romania and Ukraine last year, as well as opening an office in Moscow.

'We are talking with a few, not more then ten potential acquisition targets, most of them foreign,' said Mercor's deputy head Krzysztof Krempec -- who also holds a 31.3 pct stake.

Source: forbes.com

EU continues legal action against UK, France, Poland, Portugal over VAT laws

The European Commission said it has continued its legal action against the UK, France, Poland and Portugal over various VAT provisions in domestic legislation that do not conform with EU rules.

For the UK, the legislation concerns the refund of VAT borne by taxable persons not established in the EU. For France, the measures relate to VAT rates applied to transactions performed by undertakers.

As regards Poland and Portugal, the measures relate to the inclusion of the amount of car registration taxes within the taxable amount of VAT in the case of supply of road vehicles.

The EU executive considers the registration tax should not be included in the taxable amount of VAT.

All the requests take the form of a 'reasoned opinion', the second stage in the EU infringement process. Failure to respond within two months can see member states before the EU courts.

Source: forbes.com

Greenpeace protests over Poland's carbon output

Greenpeace activists climbed one of Europe's biggest power plants on Tuesday to demand that Poland's government do more to cut carbon dioxide (CO2) emissions.

Eleven people reached the top of the Belchatow power plant in central Poland -- home to some of the biggest carbon-emitting installations in Europe -- from where they slid down on ropes to paint "Stop CO2" on a smoke stack.

The Belchatow plant is Poland's biggest energy producer, using brown coal from Europe's largest open-cast mine.

The plant's spokesman, Jacek Michel, said its activities were not affected.

The Polish government is reviewing its energy policy to meet European Union requirements. But it has launched a legal challenge to the European Commission for setting carbon emissions limits that it says will hurt the country's economy.

Greenpeace said it wants the government to make renewable energy sources and energy savings a priority and stop producing 90 percent of its energy from coal, which emits large amounts of the greenhouse gas widely blamed for global warming.

"Our government is completely ignoring climate change, they don't do anything, pretend that this topic doesn't exist and insist on using the oldest and most polluting energy sources," Greenpeace spokeswoman Ewa Jakubowska said.

Belchatow spokesman Michel said Greenpeace was wrong to target the plant because it was producing only two-thirds of the carbon emissions to which it was entitled under EU rules.

Conservation group WWF published a report in May listing the top "Dirty Thirty" power stations in Europe and found Belchatow was the most polluting in absolute emission terms, pumping out 30.1 million tonnes of CO2 in 2006.

The report found that most of the 30, which together account for 10 percent of the bloc's CO2 emissions, were in Germany and Britain, which each had 10 of the least environmentally efficient carbon dioxide (CO2) emissions..

The two dirtiest power stations in the EU in relative terms -- grams of CO2 per kilowatt hour -- were in Greece, it said.

Source:

Casino signs partnership with Whitehall to develop shopping centres in Poland

Casino Guichard-Perrachon said it has signed a partnership agreement with Whitehall real estate investment funds, managed by Goldman Sachs, to construct shopping centres in Poland and potentially in other Eastern European countries.

In a statement, the French supermarket group said Whitehall funds will finance 75 pct of the development costs of the joint entity, representing a minimum investment of 500 mln eur over the next five years.

Casino will hold the majority of the voting rights in the entity and should receive between 65 pct and 70 pct of the development margin, the group said.

Casino said its financial contribution 'should be limited to the transfer of outstanding projects to the partnership.'

The group already has 3 projects under construction in Poland, representing 127,000 square metres.

Casino said the business should make a recurrent contribution to its results from 2009 onwards.

Source: forbes.com

Talks resume in Poland's healthcare row

Talks between the Polish government and striking doctors and nurses are set to resume on Wednesday, following a proposal by the health minister to raise salaries next year.

If the proposal is accepted, the tent city of protesting nurses that sprang up across the street from the prime minister's office in central Warsaw could disappear, but the growing pressure to increase public sector wages will not.

Nurses have been protesting for more than two weeks. Doctors have been on strike for seven weeks, dozens are on hunger strike and hundreds more refuse to work in the public system. About 300 of Poland's 800 hospitals are affected.

Miners at the money-losing state-owned Kompania Weglowa coal mining company want a 30 per cent rise. Teachers are also calling for higher pay.

Public sector workers are looking to the private sector, where salaries in May rose at an annual rate of 8.9 per cent.

Poland's central bank last week unexpectedly raised interest rates by a quarter point to 4.5 per cent, its second increase in three months, noting that wages were rising faster than labour productivity.

The finance ministry said this week that inflation for June is expected to be 2.7 per cent, the first time it will be above the central bank's 2.5 per cent target in two years.

"I want to be able to live normally in Poland for my very hard work," says Jolanta Zakielarz, a nurse from the eastern city of Przemysl. Her monthly salary, after 15 years of experience, is 1,000 zlotys ($360, €265, £180), and she wants it raised to 3,000 zlotys. "I can't live on what I earn."

The mood in the nurses' camp dispute turned ugly after four of them managed to occupy the office of Jaroslaw Kaczynski, the Polish prime minister. Mr Kaczynski denounced them as politically motivated criminals who were trying to undermine his government.

The four nurses have since been persuaded to leave, but Mr Kaczynski is continuing to use harsh rhetoric against the strikers.

In his latest blast, the prime minister denounced "satans" who were behind the strike, while other ministers have warned that doctors could be forced to go back to work.

Verbal attacks like that have worked in previous battles between the populist government and judges, journalists, professors, foreign governments and intellectuals, but they are proving less effective against women dressed in nursing whites.

Poland has one of the lowest levels of healthcare spending in the European Union, with public spending on health at about 4 per cent of gross domestic product, about half the EU average. The government has promised to raise spending to 6 per cent of GDP, but now finds it does not have the money.

Mr Kaczynski's solution was to propose a referendum over whether to raise raise taxes on the wealthiest to pay for better health care.

Economists roundly condemned the idea of a referendum. The nurses are not in favour either.

"It's a ridiculous idea. It is just supposed to create a conflict between us and the rest of society," says Urszula Jablonska, a nurse who says she voted for the ruling Law and Justice party in 2005 but now regrets her choice.

Source:msnbc.msn.com,

Poland seeks to balance economic, security factors in immigration policy - minister

oland needs to balance economic and security issues before deciding on its immigration policy, Internal Affairs and Administration Minister Janusz Kaczmarek reiterated at a press conference Tuesday.

A task force, under the auspices of Prime Minister Jaroslaw Kaczynski and including officials from ministries of labor, foreign affairs and internal affairs and administration, as well as secret services, is working on an action plan to open the labor market to immigration from Asia or from post-Soviet countries.

"Only this body can carry out a full analysis, also from the point of view of security," Kaczmarek said. "For it is well known there have been countries that have absorbed large numbers of immigrants and have seen ethnic districts spring up in their cities and have seen organized crime associated with these districts."

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Poland, which has experienced a significant outflow of workers to the more affluent countries of Western Europe since its May 2004 accession to the European Union, expects to import labor in the run-up to the Euro 2012 soccer championship, which will require a massive infrastructure build-up. With a construction boom already in progress, some industry segments are already experiencing skills shortages, as unemployment - while still high - has been in a rapid decline and wages have soared.

When Poland was awarded co-organization of the European Championship in April this year, the government revealed the existence of a task force to decide policy priorities to address the issue of immigration.

"The task force is to make an evaluation of the labor market in Poland [] of the impact of legal migration and also of illegal migration," Kaczmarek said. "[It is charged with] carrying out an analysis of the phenomenon from the point of view of who we should open to."

Poland has in recent years attracted relatively small numbers of migrants from countries such as Ukraine and Vietnam.

"We have to decide, whether we want to orientate ourselves to Asians, who are looking at Poland as an attractive destination, and some want to even settle here," Kaczmarek said. "Or we should look to citizens from those countries, culturally close to us, such as Russia, Ukraine, Belarus."
Source: gielda.wp.pl

Poland's economic upturn supports sovereign rating – Fitch

Poland's ongoing economic upturn supports the country's sovereign rating, upgraded in January this year, as well as convergence of income levels with the more affluent EU members in Western Europe, Fitch Ratings said in a press release Tuesday.

"Fitch Ratings says in an updated sovereign report issued today that an economic upturn is supporting the ongoing convergence of Poland's income levels with wealthier EU countries," the agency wrote in the release. "It has also helped reduce external financing risks and improve the government's budgetary position, despite ongoing political risks. These ongoing trends were reflected in Fitch's January 2007 upgrade of Poland's Long-term Foreign Currency Issuer Default Rating (IDR) to 'A-' (A minus) from 'BBB+'."

The Polish economy expanded 6.1% last year and Fitch expects average growth of 5.5% over 2007-2009. While the solid economic expansion has led to some upward pressure on prices, the inflationary outlook remains benign. External deficits are well contained at a forecast 2.5-3.5% of GDP to 2009 and are offset by the strong foreign direct investment (FDI) inflows.

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"Combined with currency appreciation, these financing trends are likely to continue to mitigate the growth of Poland's external debt ratios," Fitch wrote.

The fiscal imbalance, a traditional weakness of Poland's sovereign ratings, has been less of a factor at the time of a solid economic performance, as the general-government deficit narrowed to 3.9% of GDP in 2006.

"Fitch expects the general government deficit to stabilise at around 3.5% of GDP in 2007-2009," the agency wrote. "This should be sufficient to keep the level of general government debt at 48%-49% of GDP, despite the ongoing costs of pension reforms."

While the cost of diverting social-security contributions to private-sector pension funds will contribute to fiscal deficits in the medium term, the financing of future pensions by the non-public sector is a significant boost for the long-term outlook on Polish public finances, Fitch wrote.

Political risks to Poland's sovereign creditworthiness have, in Fitch's view, moderated, though it cannot be discounted in view of the populist presence in the governing coalition. To date, however, the Law and Justice (PiS) party, the dominant force in the coalition, has been able to contain the less-benign influence of Samoobrona (Self-Defense) and the League of Polish Families (LPR), the junior partners in the coalition.

"The populist nature of the PiS's partners and lack of any fundamental shared economic ethos is nevertheless likely to mean that the political landscape will continue to be characterised by periodic intra-coalition conflict and there is the potential for populist spending policies to undermine recent improvements in the financial position of the government," David Heslam, director at the emerging Europe sovereign team in London, is quoted as saying in the release.

In the current political landscape, however, any structural and fiscal changes will likely remain modest and focused on efforts to reduce the tax burden, which Fitch evaluates a constructive development on the condition balancing cuts in expenditures can be found.

"Euro adoption is unlikely to be a major ambition for the euro-sceptic government, which has promised a referendum on the issue, and is not expected by Fitch until 2012," the agency also wrote.

Source: gielda.wp.pl

BOS, Unicredit's BPH possible targets for Poland's PZU - report

Poland's biggest insurer PZU may consider bidding for state-controlled Bank Ochrony Srodowiska (BOS) as it seeks to enter the banking sector, Parkiet business daily reported, citing unnamed sources.

PZU's chief executive told daily Dziennik yesterday the unlisted insurer was seeking to buy a Polish bank.

Parkiet said PZU could also be interested in Unicredit's smaller Polish unit BPH if the Italian bank's talks with US-based General Electric Co (nyse: GE - news - people ) fall through.

Neither PZU nor the two banks were immediately available for comment.

Source: forbes.com

Poland ranked No. 7 among top worldwide FDI investment draws – Ernst&Young

Poland is now the world's seventh most attractive destination for foreign direct investment (FDI) – although the country is losing ground to attractive economies in Asia, according to a report by Ernst & Young and the Polish Information and Foreign Investment Agency (PAIiIZ), presented Tuesday.

"This is another year where we are one of the world's top 10 most attractive countries," said Agnieszka Talasiewicz, Ernst&Young partner for tax law, during a Tuesday press conference.

Poland was ranked No. 5 in 2006. The released report compiles information included in the annual Ernst & Young European Attractiveness Survey for 2007 with hard figures for 2006 provided by PAIiIZ.
Ernst&Young based the study on the opinions of 809 international "decision makers," mostly from Europe, but also from the United States and Asian countries. FDI figures came from the company's database, which includes the results of monitoring of foreign direct investment projects.

Within Europe, which is seen as the world's most attractive region for investment, some 18% of respondents said Poland was the most likely destination for future operations. The country maintained its No. 2 spot in terms investment attractiveness in Europe, behind neighboring Germany with 20% of votes cast and ahead of the Czech Republic, whose popularity is growing, with 13% support.

The report shows, however, that European markets are beginning to lose out to more attractive economies in Asia.

Other factors may also undermine Poland's position in the future, the report reads. Among the top 15 European states for FDIs projects in 2006, Poland occupied the sixth place with 152 investments, compared with Britain, which held the top spot with 686 projects. In terms of the number of projects, Poland's result last year dropped 16%, and it also declined when compared to 2005 when it had 180 foreign direct investment projects.

Once known for low labor costs, Poland has also seen a steep increase of salaries of more than 8% since the beginning of the year. Moreover, companies are struggling with shortages in skilled labor force, as the unemployment rate continued on a downward path to 13% in May from more than 20% in January 2004.

FDI projects also contributed to the decline of unemployment Poland. In 2006, Poland maintained its lead in Europe as the number one destination for job creation through FDIs, with 31,115 newly created jobs from 37,745 positions the prior year.

"While Central and Eastern Europe attracted only 26% of investment projects [in Europe], they benefited from 51% of the new jobs created by foreign investors," the report reads. "This represented an average of 217 jobs per project, compared with 64 jobs per project in Western Europe. Poland was the largest creator of FDI jobs, with almost 15% of the total."

The FDI workplace figures for Poland resulted from a high number of labor-intensive industrial investments, which accounted for 65% of all FDI projects in 2006. Robust development of the manufacturing sector contradicts, however, the country's plans to switch on the highly advanced technology investments and research and development (R&D) centers, the report said.

"High-technology projects are a priority for us and this direction is unlikely to changes for years ahead," said Pawel Wojciechowski, Chief Executive Officer for PAIiIZ. "So far, Western Europe has attracted much more technologically advanced projects, and we're making our first steps in this area. This is the main challenge ahead."

Ernst&Young's Talasiewicz said Monday that to maintain its strong position, Poland should not only put more efforts into creating and promoting an attractive image of its economy abroad, but also improve the legal environment to make it more transparent, reduce bureaucratic procedures and develop its transport infrastructure, which 54% of respondents pointed as the factor playing the most important role for making decisions about investment destination.

Source: gielda.wp.pl

Poland safe from terrorist Al-Qaeda attack for time being - Counterintelligence Service chief

Poland is currently safe from a terrorist attack from Al-Qaeda, Counterintelligence Service Chief Antoni Macierewicz said on the public radio Monday.

"The activity of such circles has been noted in Poland," Macierewicz said on Polish Radio's Sygnaly Dnia program. "It is true that such a situation exists, but there is no reason to worry at the present time."

The United Kingdom has declared a status of high terrorist alert following the discovery of a bomb in London and the explosion of a car bomb in the Scottish city of Glasgow over the weekend.
Source:

Poland's PZU plans to raise 2007 net profit to 5 bln zlotys

WARSAW (Thomson Financial) - Poland's unlisted top insurer Grupa PZU hopes to raise its net profit by almost 60 pct to 5 bln zlotys in 2007, and plans to buy into one of the country's banks to bolster its market position, company managers said.

Last year the group, owned by the state and Dutch insurer Eureko, earned 3.2 bln zlotys, all of which it allocated to go on future investments.

'Everything points to the fact that 2007 will be another record year for PZU,' the group head Jaromir Netzel told daily Dziennik in an interview. 'The group's goal for 2007 is to have a profit of 5 bln zlotys.'

Life insurer PZU Zycie, which contributed 1.9 bln zlotys to the group's profit in 2006, plans to build or buy a medical services unit, and enter the banking sector.

'If PZU Zycie wants to make its position stronger in the bancassurance business, it should buy into one of the banks,' PZU Zycie chief executive Henryka Rupik told Dziennik.

Source:

Anger grows in Poland over hospital strikes

Families shouted abuse at medical workers when patients were shuttled between hospitals after staff said they could no longer care for them at the weekend. Although emergency services are still available, many hospitals are providing reduced care. Medical workers and unions met the health minister on Monday, but talks ended with no sign of a deal.Protesting Polish doctors and nurses came under growing criticism over their two-month-old pay strike on Monday with patients' groups and media accusing them of putting lives at risk. "It is a shame the sick are becoming hostages in a fight for money," said patients' group Primum Non Nocer in a statement on its Website, while adding that it understood the pay demand. "Doctors, has Satan possessed you," read the headline in Poland's best-selling daily, Fakt. The mass market Super Express daily said "It's enough. Doctors you can't do this to us." State medical workers feel left behind by big pay rises for other professions since Poland's entry to the European Union in 2004 stoked an economic boom. Emigration has also led to a tighter labour market and helped push wages higher. "We have a right to strike like any other Polish citizen," said one striking nurse, adding the action would eventually benefit patients. Growing demonstrations and hunger strikes by some hospital staff have increased pressure on the conservative government of Prime Minister Jaroslaw Kaczynski, but he has so far refused to meet the demands for big pay increases. "We are willing to talk about everything, but not immediately, and without thought for economic consequences," Kaczynski told a news conference. "We are not going to let them terrorise us." (Additional reporting by Dagmara Leszkowicz)
Source: By Agnieszka Flak, Reuters, alertnet.org

Poland shocks Brazilians in opening-game upset

All the pre-game hype surrounded Brazilian teenager Alexandre Pato, but it was Poland that ended up showing off a young star of its own.

Grzegorz Krychowiak scored in the first half yesterday as Poland shocked heavily favoured Brazil in the opening match of the world under-20 soccer championship.

The 17-year-old defender scored on a sweeping free kick from about 25 yards out.

"He is one of our future stars," said beaming Polish head coach Michal Globisz. "I am very happy. This is the first time in 34 years a Polish team has beaten Brazil, and it makes it better to do it in such an important tournament."

Brazil, a team filled with potential superstars, was unable to pierce the disciplined defensive shell put up by Poland after taking the lead.

"We felt we had more chances than our opponents, but we weren't able to penetrate their defence," said Brazilian coach Nelson Rodrigues. "Obviously, (the players) are sad, but we will use this to become stronger."

Source:

Polish Airlines Lose Their Experienced Pilots To Poland's Competitors

Poland's state owned airlines LOT is losing its experienced pilots. They are joining the hundreds of thousands of Polish people taking employment in foreign lands because of low pay in Poland.

The exodus of people from Poland continues. With the Government focusing on getting even with old communists, criticising gays and destroying the opposition political parties, talented workers not waiting for conditions in Poland to improve and are going West where they are finding living conditions and pay much better than in Poland.

The Minister of Labor has said that there is a critical labor shortage in Poland. The shortage in that sector is so bad that the Government is looking East for replacements. Severe labour shortage in Poland with unemployment down to 13%

The labor shortages most often cited relate to the construction industry. In light of the pressure put on the Poland to prepare for the Euro 2012 football championships, this gets particular attention. Poland's Prime Minister To Replace Polish Emigrants With Chinese And Indians

But shortages exist in other sectors. They do not yet affect as many businesses to be getting significant media attention. And because the wages in these sectors are controlled by the Government, the Government does not make much mention of shortages that it can cure by raising the wages and improving work conditions.

There are reports of large numbers of police leaving Poland for the West. Poland is said to be becoming a training ground for police forces and security agencies in Europe. See Polish Police leaving for better pay

And then doctors and nurses are leaving with projections for an increase if they do not settle the current strikes for wages. They are currently getting a lot of attention as they strike. But little is being said about how many are leaving. See Poland Is Short Doctors As Polish Medics Emigrate For Opportunity

Pilots are also leaving.

In the past couple months about 30 experienced pilots have left the Polish airline LOT to work for competitors. And they are difficult to replace.

Polish pilots take home pay is 4 to 6 thousand zloty per month. They are leaving for jobs that will give them 15 to 25 thousand zloty per month.

Lufthansa needs 300 pilots and Rynair about 1000. Each are making offers to Polish pilots.

Polish pilots at LOT have long had a reputation of being some of the finest pilots in the airline industry. Many of them are accomplished sailplane pilots and among the very best in the world.

The departure of this talent for foreign carriers will have a definite affect on LOT and Poland.

Source: masterpage.com.pl

Poland Sees US Missile Shield Deal By October; As Russia Beefs Up Kyrgyzstan Base

Poland and United States could reach a deal by September or October on installing part of the US anti-missile defence system in the central European country, local media reported Wednesday citing a top foreign ministry official. Deputy foreign minister Witold Waszczykowski, who just completed a round of negotiations with the Americans, told Polish journalists in Washington that Warsaw was "satisfied" that US officials had accepted several of Poland's demands.

These included the immediate sharing of information obtained from a proposed radar system to be installed in the neighboring Czech Republic.

Washington wants to site 10 interceptor missiles in Poland as part of an extended defence shield against airborne attacks, along with a powerful tracking radar in the Czech Republic.

Russia however has strongly objected to the US plan and threatened to retaliate if the system is installed in central Europe. Moscow does not accept Washington's argument that the system is purely defensive and meant to target possible attacks from what the US calls "rogue states" such as Iran.

Instead Russian President Vladimir Putin has proposed to US President George W. Bush sharing a radar alert system located in northern Azerbaijan.

"The Russian proposal is interesting, it has not been rejected," said Waszczykowski. "It is being looked at as a complementary system to the installations in Poland and the Czech Republic, not as a replacement."

The next round of talks on the anti-missile shield will take place during Polish President Lech Kaczynski's visit to Washington next month, followed by negotiations between the defence experts in early August in Warsaw.

Source: spacewar.com

Videocon plans LCD plant in Poland

Indian based company Videocon Industries wants to expand it's presence in Europe. The company plans to set up a LCD TV plant in Poland.

The company bought a TV tube and screen plant from the French group Thompson in 2005. The company`s management is slated to talk with Polish authorities regarding the investment. The investment is worth $7 billion. The new plant can be up and running within two years and would employ around 3,000 people. With this investment Videocon will become the largest Indian investor in Poland, local media reports.
Source: evertiq.com

Kimball Electronics Awarded Major New Business;

Kimball Electronics Group, Inc., a subsidiary of Kimball International, Inc. (NASDAQ:KBALB), announced today (June 29) that the Company’s Kimball Electronics-Poland facility has been awarded a major new business program to manufacture automotive steering systems for the European market. Kimball Electronics Group is a global contract electronics manufacturing services (EMS) company that specializes in durable electronics with applications in the automotive, medical, industrial controls, and public safety industries.

The new business is related to the next generation of electronically power-assisted steering, with production slated to begin in late 2008. Total value of the program is estimated at 130 million euros (approximately $170 million) over 5 years. The selection of Kimball Electronics-Poland to supply the new steering electronic control units and components is significant, as the rapid acceptance of electronic steering by the European market is expected to continue, putting Kimball in a strong position for growth.

“This acceptance is driven by the eco-benefits in improved fuel economy and emissions as well as the advanced functions and easy packaging the system offers”, said Angus Watson, Director, Automotive Industry Solutions, Kimball Electronics Group.

“Our relationship with this particular customer is long-standing and we have made significant investments in recent years to expand the relationship in order to support growing business in Europe. We view this new business award as a strong testimonial in support of the partnership, and is the result of the team effort and hard work by people located in both the U.S. and Europe", stated Don Charron, President, Kimball Electronics Group.

Jim Thyen, President and Chief Executive Officer, Kimball International, added, “We are honored to have the opportunity to continue our service as a strategic supplier. We remain committed to the automotive end market and to our diversification strategy to expand our coverage of applications, vehicle brands, and geographies.”

About Kimball Electronics:

Kimball Electronics Group is a global contract electronics manufacturing services company that specializes in durable electronics for the automotive, medical, industrial and public safety markets. Kimball Electronics Group is well recognized by customers and industry trade publications for its excellent quality, reliability and innovative service. Kimball Electronics Group has manufacturing operations in the U.S., Mexico, Thailand, Poland, Wales, Ireland, and China. Kimball Electronics Group is a business unit of Kimball International, a $1.2 billion publicly held company headquartered in Jasper, Indiana.

To learn more about Kimball Electronics Group, visit our website at: www.kegroup.com

About Kimball International:

Recognized with a reputation for excellence, Kimball International is committed to a high performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Kimball employees know they are part of a corporate culture that builds success for customers while enabling employees to share in the Company’s success through personal, professional and financial growth.

Kimball International, Inc. (NASDAQ:KBALB) provides a variety of products from its two business segments: the Furniture segment and the Electronic Contract Assemblies segment. The Electronic Contract Assemblies segment provides engineering and manufacturing services which utilize common production and support capabilities to a variety of industries globally. The Furniture segment provides furniture for the office and hospitality industries, sold under the Company’s family of brand names.

To learn more about Kimball International, Inc., visit the Company’s website on the Internet at: www.kimball.com

Source:

Norway, Poland agree financing for new gas pipeline supplying Poland

Polish and Norwegian authorities have agreed on the financial terms for a pipeline to channel natural gas from Norway's offshore fields to Poland, which is trying to lessen its reliance on Russian energy, Norwegian Prime Minister Jens Stoltenberg said.

'We have reached agreement regarding the financing of a pipeline from the Norwegian continental shelf to Poland,' Stoltenberg told reporters during a visit to Poland, without giving details.

'There are agreements regarding the participation of Polish companies in such a pipeline,' noted Stoltenberg at a joint press conference with his Polish opposite number Jaroslaw Kaczynski.

'What is now remaining is to reach an agreement on the commercial terms,' Stoltenberg added.

Kaczynski said that Poland was 'achieving progress in terms of diversifying our natural gas supplies.'

Like its counterparts in the former communist bloc, Poland is growing increasingly jittery about its dependence on Russian energy.

Russia has been involved in a string of rows with countries that depend on it for gas and oil or which are key transit routes for the energy Russia sells to European Union nations.

The planned gas pipeline from Norway to Poland is due to run via Denmark.

In May, the Polish gas company PGNiG reached a deal on the pipeline with Denmark's Energinet.dk.

In March, as part of the project, PGNiG also agreed with

ExxonMobil (nyse: XOM - news - people ) to purchase a 15-percent stake in three Norwegian offshore gas exploration and production licences.

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New Norwegian gas link to Poland

Polish and Norwegian authorities have fixed some terms for a pipeline to channel natural gas from Norway's offshore fields to Poland.

Because Poland is trying to diversify its natural gas supplies, the two countries have reached agreement regarding the financing of a pipeline from the Norwegian continental shelf.

While there are some agreements regarding the participation of Polish companies in the pipeline, an agreement now has to be brokered on the commercial terms.

Like its counterparts in the former communist bloc, Poland is growing increasingly jittery about its dependence on Russian energy.
Source: story.malaysiasun.com

AEGON and BRE Bank to Merge Polish Pension Funds

THE HAGUE, The Netherlands, June 29 /PRNewswire-FirstCall/ -- AEGON has signed an agreement to merge its Polish pension fund management company PTE Ergo Hestia SA with BRE Bank's PTE Skarbiec-Emerytura SA. Under the agreement, BRE Bank has granted AEGON an option to acquire BRE Bank's shareholding in the combined pension fund, once the merger process is complete. The purchase price shall be approximately EUR 100 million, increased by the net current asset value of PTE Skarbiec-Emerytura, the exact amount of which shall have been determined at the time of the merger of the companies.

This agreement will strengthen AEGON's position in the rapidly-growing Polish pension market and marks another step toward further expanding the Group's businesses in Central and Eastern Europe. Together, PTE Ergo Hestia and PTE Skarbiec-Emerytura will become the fifth largest pension fund management company in Poland, with a market share of approximately 5 percent. Combined, the two funds have more than 800,000 members and nearly EUR 1.7 billion assets under management (1).

The agreement between AEGON and BRE Bank is subject to approval from Poland's Financial Supervision Commission (KNF) and the country's Office of Competition and Consumer Protection (OCCP).

Donald J. Shepard, AEGON's Chairman and CEO, said: "Our strong and expanding business in Poland is key to AEGON's Central and Eastern European growth strategy. Pensions are one of AEGON's core strengths and, as such, we welcome this opportunity with BRE Bank to further enhance AEGON's ability to provide quality and reliable retirement solutions to customers throughout Poland".

Jarosaaw Kubiak, Chief Executive Officer of PTE Ergo Hestia, added: "Combining our two funds will create a company that has enough scale and commercial reach to make a difference in the Polish market. Together, we will have an opportunity to increase our market share and make use of our considerable strengths in distribution and in asset management. In addition, we will be able to leverage AEGON's significant global resources and global expertise".

Mr. Kubiak will become Chief Executive Officer of the newly-combined pension fund, upon the merger's approval by the regulatory and supervisory authorities in Poland. The merger process is expected to take between 8 and 12 months.

AEGON currently has pension and life insurance operations in four countries in Central and Eastern Europe -the Czech Republic, Hungary, Poland and Slovakia. AEGON acquired PTE Ergo Hestia in April 2007. PTE Ergo Hestia will shortly be renamed PTE AEGON. In January 2007, AEGON also signed a joint venture agreement with Banca Transilvania to start a pension business in Romania later this year.

AEGON aims to expand its businesses in the region over the next several years, increasing its number of pension fund members from 1.2 million currently to 2 million members by 2010. AEGON also aims to double its assets under management in Central and Eastern European countries to EUR 8 billion.

ABOUT AEGON

AEGON is one of the world's largest life insurance and pension companies, and a strong provider of investment products. AEGON empowers local business units to identify and provide products and services that meet the evolving needs of customers, using distribution channels best suited to local markets. AEGON takes pride in balancing a local approach with the power of an expanding global operation.

With headquarters in The Hague, the Netherlands, AEGON companies employ approximately 29,000 people worldwide. AEGON's businesses serve millions of customers in over twenty markets throughout the Americas, Europe, and Asia, with major operations in the United States, the Netherlands and the United Kingdom.

Respect, quality, transparency and trust constitute AEGON's core values as the company continually strives to meet the expectations of customers, shareholders, employees and business partners. AEGON is driven to deliver new thinking with the ambition is to be the best in the industry.

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Poland needs national road program ahead of Euro 2012 soccer tournament – business body

Poland needs to draft a national road building program to avoid delays in the road infrastructure development ahead of the Euro 2012 European soccer championships, awarded to Poland and Ukraine, said Roman Rewald, president of the American Chamber of Commerce (AmCham) business body in Poland.

"A real danger is the short period of time required for the completion of some parts of the infrastructure," Rewald said. "We suggest the creation of a national road building program."

Drafting of a national road building program is a key element of AmCham's report, presented Thursday after a two-year study. The reports describes barriers hampering Poland's road infrastructure plans and sets a list of recommendations for the government to improve transport conditions, seen as one of key conditions for the country's economic growth.

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AmCham recommends the appointment of an official at deputy prime minister level, who would be responsible for inter-ministerial coordination of Euro 2012 projects.

"A person in the rank of a deputy prime minister should be made responsible for the issue of road construction," said Rafal Kasprow, managing partner for consulting firm MDI Strategic Solutions, which helped prepare the report together with another consulting firm, CEC Government Relations.

AmCham said legal processes and difficulties with kick-starting public-private partnership (PPP) - seen as vital to fulfilling its stadia and infrastructure commitments - were identified as problem areas. AmCham recommended the reduction of bureaucratic regulations and improvement of public procurement and environment protection laws.

"There is no possibility to hit the deadline without the participation of private companies," said Rewald referring to the PPP legal framework. "We should keep a friendly approach towards the public-private partnership."

The number of public-private initiatives remains limited in Poland, mainly because of strict legal rules for involvement of private companies. The Economy Ministry earlier announced its intention to amend the law and simplify procedures in order to encourage small and medium-sized companies to take part in public-private projects.

Poland is also struggling with the tightening of the construction market.

The sector's companies suffer from skilled-labor shortages, rising prices for construction materials and a lack of qualified design services. To address those disadvantages, the Polish government should open its market to companies from outside Poland, AmCham said.

"We think that an internationalization of the process is needed," said Jaroslaw Roszkowski, AmCham representative for road infrastructure issues. "We should also give wider access to our labor market."

The report has been sent to Polish Prime Minister Jaroslaw Kaczynski, but Rewald said the premier has not yet given his response.


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Poland, Hungary, Czech Republic, Slovakia suffer from reform fatigue; rating upside limited - S&P's

Poland, Hungary, the Czech Republic and Slovakia are suffering from reform fatigue that could limit further improvements in credit quality, Standard & Poor's wrote in a report out Thursday.

"Political unwillingness or inability to tackle structural reforms and further consolidate public finances could limit improvements in credit quality of the four largest Central and Eastern European countries (the CEE-4)," S&P's analysts wrote in a report titled "Reform Fatigue Clouds A Brighter Outlook For Central European Sovereign Ratings."

The four nations all enjoy solid economic growth rates, while their external balances are either improved or generally strong, the agency wrote. These factors justify solid ratings for the Czech Republic (foreign currency A-/Positive/A-2; local currency A/Positive/A-1), Republic of Hungary (BBB+/Stable/A-2), Republic of Poland (foreign currency A-/Stable/A-2; local currency A/Stable/A-1), and the Slovak Republic (A/Stable/A-1).

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But upside for these ratings is limited due to political risks, S&P's analysts wrote, singling out Hungary as the best of the class.

"Political determination or ability to pursue structural reforms and further consolidate public finances is generally limited, however, and governments are not using the currently favorable economic conditions to reduce structural deficits," said credit analyst Kai Stukenbrock is quoted as saying in a press release accompanying the report. "The notable exception in this regard is Hungary, where the unsustainable state of public finances has pressed the government to embark on a comprehensive course of fiscal consolidation."

Reform momentum has waned since the general elections, held in Poland in late 2005, and in mid-2006 in the remaining three countries.

"With the policy anchor of EU accession gone and reform fatigue setting in, governments are changing the focus of their economic and fiscal policies," S&P's wrote.

Poland and Slovakia, the two fastest-growing countries, come in for particular blame, as their populist-dominated governments display a marked tendency to use any extra revenues to pursue policy agendas rather than for deficit reduction.

"Consequently, deficits in all four CEE-4 states will remain above or narrowly below 3% of GDP in 2009, with a limited perspective for further significant reductions," S&P's wrote in the report. "With reform fatigue prevailing, and the desire to implement social policy agendas consuming potential space for accelerated fiscal consolidation, the room for further rating improvements in the CEE-4 remains limited. Only a more decisive stance on these issues would bring improvements in credit quality."
Source:gielda.wp.pl

Go, Poland! Stadiums construction will be financed from the budget

Warsaw (Puls Biznesu, 28.06.07) - The stadiums needed for EURO2012 will be financed by taxpayers. Four arenas for European championships will cost PLN 3 billion (EUR 794.3m). Not a single eurocent will be subsidized by EU, not a single zloty will come from public-private partnership programs. The budget is going to cover the costs. The budget, or the taxpayers. It’s not a problem to build the stadiums but to make them necessary when EURO2012 is over. If the state is to take care about it, the stadiums will not be crowded.

The four stadiums planned for European championship will cost PLN 3 billion, including PLN 1.25 billion for the national sports center in Warsaw.

“Polish arenas for EURO2012 will be built without EU funds”, Anna Siejda from the Ministry of Regional Development said.

Rafal Dutkiewicz, Wroclaw president, believes that private business will not want to invest in the stadiums.

“I’m almost sure they will be financed from public funds. There’s no time to do it in any other way. According to UEFA requirements, we must be ready in 2010 and not 2012”, Rafal Dutkiewicz said.

Poznan and Gdansk have some hopes, however.

“We have known from the beginning that the central budget would cover the costs of the stadiums. But it’s not difficult to build something. It’s difficult to make it useful and profitable later on. Local authorities are not able to do this. We hope the business will”, Maciej Frankiewicz, Poznan deputy CEO said.

Poznan would like a private company to operate the stadium for, let’s say, 20 years, and partly invest in the project. Gdansk authorities on the other hand hope that nearly 45-50 percent of the costs of building Baltic Arena (PLN 670m) will be covered by private investors who in turn will receive attractive lots nearby the stadium or in other parts of the city. Gdansk considers issuing bonds to build the stadium.

(PLN 1 = EUR 0.265)

Source: pulsbiznesu.pl

Poland will have to raise taxes if doctors demand more than PLN 6 bln in pay rises – Deputy PM

Poland's state budget subsidy of PLN 6 bln for the healthcare sector is the maximum amount possible without raising taxes, Polish Deputy Prime Minister Przemyslaw Gosiewski said on public radio Thursday.

"If we were to give more [than PLN 6 bln], then we would have to increase taxes because for the budget this is the maximum amount," Gosiewski said on the Sygnaly Dnia morning program.

The government is proposing to increase health sector spending in 2008 by PLN 6 bln to finance higher wages, as demanded by medical professionals who organized street protests in June. According to Gosiewski, if this is not accepted and demands for a further increase continue, then a referendum will have to be held on hiking tax rates.

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Poland's National Union of Doctors (OZZL) announced that it wants a three-year collective agreement to be signed between trade unions and the government determining the minimum wage for medical professionals before it can encourage activists to end a sit-in that started in mid-June in front of the prime minister's chancellery. Four nurses who had occupied the prime minister's chancellery for more than a week, left yesterday following talks with Prime Minister Jaroslaw Kaczynski.
Source:gielda.wp.pl