(03) mar/aPr 2013

In the driving seatPoland and the European Union

An exclusive interview with Jerzy Buzek on the nation’s European future

page 22

Polish-French relations:thawing again after severalyears on ice. pages 28-32

Podlasie is emerging asa hothouse for the nurturingof start up talent. page 44-46

Working with Roman Polański as he directed ‘The Pianist’ in Warsaw. page 68

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Magazine • Portal • Conferences • find out more at www.poland-today.pl

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Białowieża Forest is the best-conserved  lowland for-est in the temperate climatic zone of Europe. It is the hab-itat of unique and endangered species such as wolf, lynx and bison. For many years scientists and non-govern-mental organisations have striven to protect and preserve it. Thanks to Greenpeace, in the last two years the num-ber of trees cut down in Białowieża Forest has dropped by over 60%. Centuries-old growth forest stands are included in special conservation programmes. If you want to help protect Białowieża Forest please visit: www.greenpeace.pl/puszcza and think about donating 1% of your annual tax to Greenpeace.

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22A real Gentleman Bojan Pancevski sits down with Jerzy Buzek, former Polish Prime Minister and President of the European Parliament, for an exclusive interview discussing Poland’s European future and the lessons Poland can offer to fledgling democracies on the cusp of democratic change.

politics 26Tusk on the ropes These are tough times for Prime Minster Donald Tusk. Despite a polarized political landscape and internal party bickering, if Tusk manages to survive the current turbulence his prospects could start to improve by the second half of the year, writes Jan Cienski.

country focus 28The beginnings of a rapprochement After years of lukewarm relations, Polish-French ties seem to be taking a turn for the better. Piotr Smolar describes how relations between the two countries have developed over the years and how they might evolve in the future.

30Hôtel de Monaco: Diplomacy atits most elegant Poland Today gets a rare glimpse inside the Hôtel de Monaco, the Paris residence of the Polish Ambassador to France. Ambassador Orłowski describes how his current home, a beautiful palace filled with a sea of gilt and stucco, represents centuries of shared cultural heritage between the two countries.

economy 34Shaking the EU piggy bank From new roads to museums and modern transport systems, EU funds are changing Poland’s landscape. Poland was the largest beneficiary of EU cohesion funds in 2007-2013, helping the country become the only EU nation to avoid recession. Adam Easton talks to leading analysts about what the EU’s budget for 2014-2020 really means for Poland.

36Start up nation Stifled by communist central planning Poland is experiencing an entrepreneurial renaissance. But it still lags behind Europe’s most innova-tive countries. Robert Kowalski outlines what Poland needs to do in order to unleash its full entrepreneurial potential.

sport 40A new dawn for Polish Football? There could yet be hope for Polish football fans. Philip Boyes, himself a football-addict, looks at what went wrong after Poland’s Golden Generation stunned the world in the 1970s – and what is now being done to bring Polish football back on track.

voivodship focus 44Poland’s green lungs Home to bison and small business, the Podlask-ie Voivodeship is starting to shrug off its image as a sleepy backwater. Liam Nolan explains how, despite its rural reputation, the area has successfully used EU money to support local entrepreneurs and lure foreign investment.

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history 66It happened in.. MarchHanna Kozłowska looks back at the events of March 1968, a prickly chapter in Polish history. Triggered by an internal power-struggle within the Communist regime, government purges led to an exodus of over 13,000 Poles, sowing the seeds for the future Solidarność movement.

68Eyewitness: Roman Polański’s ‘The Pianist’ in Poland From witnessing Polański’s creative genius to eating pike perch and pierogi with Adrien Brody, famous British actor Ed Stoppard gives a very personal account of his experience star-ring in Roman Polański’s Oscar-winning film ‘The Pianist.’

lifestyle

70A day in the life of… Rima Marrouch Białystok-born war correspondent Rima Marrouch depicts life – and death – on the front line. Having survived a lethal car bombing on the Turkish-Syrian border last month, she describes the emotional baggage that comes with her job.

72Do you know your anthem? As the Dąbrowski Mazurek, Poland’s national anthem, celebrates its 216th birthday, Hanna Kozłowska traces the anthem’s origins and looks into why so many Poles still struggle to get to grips with the lyrics.

74Tykocin: Podlasie’s forgotten pearl Italian student Constanza Tesei visits the picturesque village of Tykocin in the Podlaskie Voivodeship in northeastern Poland. Explor-ing the 11th century village, Constanza found herself eating traditional rosół with a group of local priests and celebrating the Jewish holiday of Purim at Tykocin synagogue.

76Rediscovering Poland’s culinary heritage There is more to Polish cuisine than merely meat and potatoes. Poles are becoming conscious of what they eat and are putting a premium on the quality of food they consume. Magdalena Kasprzyk-Chevriaux looks at how Poles are starting to search for their culinary identity.

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This is Poland Today’s third issue and I believe we’ve made quite an impact in a short space of time. In our second edition we featured an exclusive interview with marek Belka, the Governor of the National Bank of Poland, and in this issue we sit down with another major figure from Poland’s political and economic elite, Jerzy Buzek, former Polish Prime minister and President of the European Parliament

- again on an exclusive basis. Our first conference (Primetime Warsaw, 22 april) has already garnered strong support from heavyweight compa-nies and we’re proud that the Financial Times is a media patron. The list of speakers is impressive too.

We are often asked who we are aimed at, and the word ‘expat’ invari-ably crops up. I don’t particularly like that word. To me, it denotes a clique of foreigners keeping the natives at arm’s length, clinging on to traditions of the home country, a la Burmese Days. Foreigners living or doing business in Poland are very much an integrated part of society in this country. However, we are not aimed exclusively, or even primarily, at foreigners. Our core read-ership is professional Poles, a diverse group of well-educated, information-hungry, talented and motivated indi-viduals who are the driving force behind Poland’s economic success. It is a fast-expanding group and a wonderfully positive force in Europe.

Our Poland Today team reflects Poland’s changing dynamic, the easy overlap between the Polish and inter-national sphere; our first guest edi-tor, an Irishman married to a Pole; our guest editor this month, a Polish-British blend by way of Germany; our graph-ics, editorial and contributor team with american, French, Italian, not to mention Polish, backgrounds. all this would have been unimaginable back at the turn of the millennium, when I first arrived in this country. It is this healthy mix, with our strong editorial and business back-bone, which has helped us punch above our weight so far. We expect to con-tinue to do so.

table oF contents

Richard Stephens Publisher Poland Today

Voivodship focus: Mazowieckie. pages 48–51

The beginnings of a rapprochement. page 28

Diplomacy at its most elegant. page 30

Shaking the EU piggy bank. page 34

A real gentleman. page 22Eyewitness: shooting in Poland with Roman Polański. page 68

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Tucked away in the swanky part of Brussels, on the top floor of an elegant restaurant, was a farewell party for Jerzy Buzek, the outgoing President of the European Parliament. Perched against the bar was his razor-sharp Chief of Staff, dreaming of her first proper night’s sleep in two and a half years. Scattered across the room were his speechwriters and assistants, scouting the room for the nearest drink.

Enter Buzek. His striking daughter agata, a talented actress and former model, at his side. The 71 year-old had just flown in from Silesia, his constituency, having spent the past few years pinballing around Europe and the middle East. But he was beaming with energy. “Bolesławiec, something small from back home,” he said before handing out boxes of the exquisite porcelain. The evening ended with an impromptu karaoke session, the 30-member cabinet singing The Buzek Way – a cheesy rendition of Frank Sinatra’s classic. So what exactly is The Buzek Way? It is, no doubt, a well-honed skill at forging compromise. With both charm and humility. It is his passion for sharing valuable experiences, Poland’s and his own, with countries on the cusp of democratic change (see our exclusive interview with Buzek on page 22). But The Buzek Way also means understanding Europe, and Poland’s role within it.

Poland is becoming a force to be reckoned with in Europe. as Poland’s role within the EU evolves, so is its relationship with France. Despite a few hiccups over the years, relations between the two countries seem to be getting back on track, as illustrated by President Hollande’s standing ovation in the Polish parliament (see Piotr Smolar’s article on page 28). France and Poland have always shared a deep political affinity and strong cultural heritage. Think Chopin, think marie Curie, think Napoleon’s Polish legions. Or even roman Polański, born in Paris to Polish parents (read Ed Stoppard’s eyewit-ness account of working with Polański on page 68).

During Communism Polish intellectuals sought shelter in France, escaping Poland’s suffocating censorship: Jerzy Giedroyć, the founder of the Paris-based Kultura, the highly influential Polish emigré magazine in Paris was surprised one day to receive a toy sheep in the post from Poland, only to discover that it was stuffed with a manuscript. Poland has come a long way since those dark days. But it still has some way to go. Political squabbling, an innovation-defi-ciency (see our article on the state of Polish entrepreneur-ship on page 36) and deep-rooted corruption – including in football (page 40) – continues to dilute Poland’s potential. We hope this edition of Poland Today provides food for thought, some of it French flavoured.

Philip Boyes, who is half Polish and half English, is Guest Edi-tor of Poland Today’s March issue. Philip has written speeches, sometimes on the back of restaurant napkins, for presi-dents, prime minis-ters and congressmen. A former Reuters journalist, his work has been published in the New York Times, Wall Street Journal and Financial Times. He is a graduate of the London School of Economics and King‘s College London.

‘Poland is becoming a force to be reckoned with in Europe. As Poland’s role within the EU evolves, so is its relationship with France’

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Poland Today Sp. z o. o. ul. Złota 61 lok. 100, 00–819 Warsaw, Poland tel/fax: +48 224648269 mobile: +48 694922898, +48 505006606 www.poland-today.pl Publisher Richard StephensFinancial Director Arkadiusz Jamski Creative Director Bartosz Stefaniak New Business Consultant Tomasz Andryszczyk

Magazine layout www.bartoszstefaniak.com

Printing house Zakłady Graficzne Taurus Kazimierów, ul. Zastawie 12, 05–074 Halinów tel. +48 227836682, fax +48 227836000 Poland Today Magazine is printed on Munken Print Cream ecological paper © 2013 Poland Today Magazine reproduction without permission is prohibited

Philip BoyesLiam Nolan Hanna Kozłowska Adam Zdrodowski Alex Vladoiu

Adam Easton Agata Nałęcz Andrew Nawrocki Bartosz KwiatekBojan Pancevski Costanza Tesei Damien Moran David InghamEd Stoppard Jan Cienski Konrad Majszyk Maciej Szczepaniuk Magdalena Kasprzyk--Chevriaux Monika Rozlał Piotr SmolarRima Marrouch Robert Kowalski

Polska Agencja Fotografów Forum Polska Agencja Prasowa PAP

Bartosz Stefaniak

Tjaša Žurga Žabkar

Bartosz StefaniakTomasz Bersz Rafał Benedek

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primetime warsawdeveloping a sustainable european metropolis

Monday 22nd aPRil 2013copernicus science centre, Warsaw

Warsaw, due to its history and significance at the crossroads between East & West, is one of Europe’s great cities, the undisputed regional economic and political powerhouse. Basking in its status as capital of the EU’s most durable economy, there has never been a better time for the city on the Vistula river.

The first conference to focus on Warsaw in its entirety, it puts the city in a national and European context and brings you the opportunities and challenges that lie ahead.

primetime warsawdeveloping a sustainable european metropolis

Monday 22 aPRil 2013copernicus science centre, Warsaw

workshopFriday 19 April The National Ethnographical Museumul. Kredytowa 1, Warsaw

investors and district mayors meeting point Discuss residential property prospects with the mayors of Białołęka, Ursynów and Bemowo districts. Talk about commercial property perspectives with the mayors of Śródmieście, mokotów and Wola districts.

Warsaw’s complex administrative structure makes the investment process more compli-cated than in other Polish cities. The mayors of the capital’s 18 districts have gathered new powers related to the supervision of investments. Poland Today invites Prime-time Warsaw conference ticket holders to discuss the development perspectives of key Warsaw districts directly with the the mayors of mokotów, Śródmieście, Wola, Białołęka, Bemowo and Ursynów.

The workshops will cover these key questions:

How can general and district development strategies be reconciled?

What is the most effective way to conduct business with districts?

How do the development strategies of the different Warsaw districts differ?

Which Warsaw districts are more investor-oriented than others?

are district mayors politicians, managers or administrative officers?

Number of tickets limited

conference Monday 22 April Copernicus Science Centre, Warsaw

8.00 – 9.00 Registration and coffee

9.00 – 9.15 Welcome: richard Stephens, Publisher of Poland Today and Conference moderator

part 1: poland’s economic & business prospects 9.15 – 9.30A vision for WarsawOpening speech by the Mayor of Warsaw, Mrs Hanna Gronkiewicz-Waltz

In 1938 the then mayor of Warsaw, Stefan Starzyński, launched an exhibition to inspire Warsaw residents with the city’s ambitious plans for the future, which included a state-of-the-art metro system. Warsovians responded by attending in droves, but history was to cruelly destroy their collective aspira-tions for the capital. On the 75th anniver-sary of the exhibition, the present mayor of Warsaw recalls that spirit and vision, showing how it influences her thinking and will inspire the future development of Warsaw.

9.30 – 10.30How the economic environment affects city developmentLike every major city, Warsaw has to balance ambitious plans with economic real-ity. This is particularly true of Poland’s capital today. Warsaw has benefited greatly from European Union funding but it can not rely on this in the longer-term. How does the modern economic reality affect funding for sustainable infrastructural development going forward? How can a city maximize its resources? These and other questions will be debated by the panel.

Hanna Gronkiewicz-Waltz, The mayor of Warsaw

Professor Jerzy Buzek, Former Prime minister & President of the European Parliament

Other speakers to be announced. Speech and discussion in Polish.

10.30 – 11.00 Keynote speech: Poland’s place in the global and European economy. A promising future, but hard work ahead. a personal tribute to Warsaw - how I came to love the city. Why did Poland manage so well in 2008-9? The importance of luck and good policies. Looking ahead - gloomy near-term. mostly local policy mistakes rather than the euro crisis. The medium-term: Promising, but a real need for reforms. Warsaw in Poland and Europe - the city as a real magnet for growth and investment.

Lars Christensen, Chief Emerging markets Economist, Danske Bank

Speech in English.

11.00 – 12.00Warsaw… Poland… European Union… the WorldWarsaw’s business perspectives as the capital city of a dynamically developing EU country in an increasingly global village. How does Warsaw define its place – from a business perspective - in Poland, Europe and the world economy in these competitive and difficult economic times? How should the capital maximize its standing as the country’s pre-eminent city? How should it market itself to international corporations? What do industry leaders think about the city, its performance and its perspectives?

Olga Grygier-Siddons, Chairman, PwC Poland

Other speakers to be announced. Discussion in English.

12.00 – 12.45 Coffee break

part 2: the real estate section12.45 – 14.00Rolling panel discussionreal Estate as an integral part of the city’s urban fabric

Office: We’re all downtown now – defining Warsaw’s emerging business districts.Retail: How to balance the need for convenience shopping in retail centres with the desire for community shopping.Residential: What is the Warsaw buyer looking for today… and tomorrow?Warehouse: What is the future for city warehousing? How far out is too far?

Office & warehouse presentation: Jones Lang LaSalleretail presentation: DTZ

richard Stephens, Publisher, Poland Today (moderator) Tomasz Trzósło, managing Director, Jones Lang LaSalle Patrick Delcol, Poland Country Head, DTZ Piotr Krawczyński, managing Director, member of the Board, Kulczyk Silverstein Properties Waldemar Olbryk, managing Director, Skanska Property Poland Hochtief Development Poland Paweł Dębowski, Partner, Head of Central Europe real Estate, Salans

Other speakers to be announced. Discussion in English.

14.00 – 15.00 Buffet Lunch

part 3 – sustainable urban development15.00 – 16.00We get around - integrating Warsaw’s transport networkHow Warsaw can benefit from a fully-inte-grated transport network truly of the 21st Century. What are the plans, what are the realities, how far can the city go? To what extent is sustainability a part of Warsaw’s transport plan?

Tomasz Żaboklicki, CEO, PESa adrian Furgalski, Director, TOr Group of Economic advisors

Leszek ruta, Director of the Board, Warsaw Transport authority (ZTm)

Discussion in Polish.

16.00 – 16.45Sustainable Urban Development – what does it actually mean?Sustainability has been the buzzword for a few years now, which is undoubtedly a good thing – the world is more aware of limited resources and the need to use them carefully than it was before. But what does it actually mean, and how does it fit into urban development?

Łukasz Cioch, LC media (moderator) Bogdan rogala, CEO, Philips Lighting Poland John Banka, Partner, Colliers International

Other speakers to be announced. Discussion in English.

(Short break)

17.00 – 18.00The Vistula untappedWarsaw is the only capital city in Europe with a relatively undeveloped riverside. Sometimes it seems as if it’s not a part of the city, but a separate entity. Visitors are amazed when they see the sandy beaches and tree-lined banks. How to un-tap the vast potential of this ‘undiscovered’ area in the heart of the city while retaining its charm and nature? How can public and private bodies work together to shape the capital’s waterway?

Patryk Zaremba, Forum rozwoju Warszawy (moderator) adam Czyżewski, Director of the State Ethnographical museum in Warsaw andrzej Chołdzyński, architect michał Olszewski, Vice mayor of Warsaw

19.00 – 22.00 Cocktail party For conference attendees and invited guests. Venue to be announced

Conference in English and Polish with simultaneous translation. Transla-tion into other languages upon request in advance

Hanna Gronkie-wicz-Waltz, the mayor of Warsaw and Professor Je-rzy Buzek, Former Prime minister & President of the European Parliament lead a stong lineup of speakers

Conference in English and Polish with simultaneous translation. Transla-tion into other languages upon request in advance

Media Patron Partnershonorary Patrons organizing Partner

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EU cash in our pocketIt might have caused his wife to raise an eye-brow, but Prime Minister Donald Tusk called it the “happiest day in his life.” The Polish delega-tion at the EU budget negotiations managed to secure more money for Poland than they had hoped for, a total of €105.8 billion, which is four billion more than in the previous budget. For more on this, see page 34| Horse kiełbasa anyone?It is yet to be determined what role Poland has played in the Europe-wide horse meat scandal, but the General Veterinary Inspector-ate confirmed that samples of beef from three different Polish plants showed traces of equine meat. Thus far, Poland has also gained some ill repute for a horse trading fair in Skaryszew, a village close to Radom, just over 100km south of Warsaw, which is known to be a hub for the illegal sales of horses for slaughter. 

Owsiak givesauthorities an ultimatum on children’s healthcare Jerzy Owsiak, who runs Poland’s biggest charity, the Great Orchestra of Christmas Charity (WOŚP) has, together with his wife, questioned whether the foundation should continue its efforts to support children’s health-care. This came after two separate cases of children dying due to inappropriate care or out-right refusal to provide emergency aid. Owsiak is waiting for decisive action from the Ministry of Health and the Children’s Ombudsman.

An anti-climactic revolutionThe much anticipated changes in government hinted by Prime Minister Donald Tusk turned out not to be so revolutionary after all. Minister of Finance Jacek Rostowski was promoted to deputy prime minister while Minister of In-ternal Affairs Jacek Cichocki was moved to the Chancellery of the Prime Minister of Poland. In the latter’s place, Tusk chose Bartłomiej Sienkiewicz, a journalist and expert in Eastern European politics. Despite widespread political chatter speculating that the prime minister would let him go, Minister of Justice Jarosław Gowin retained his position.

Anti-gay remarks could hurt Wałęsa’s reputation forever Former president, Nobel Peace Prize winner and legendary opposition leader, Lech Wałęsa, said in a television interview that “gays should be sitting in the last row [of the parliament], or even behind a wall.” Wałęsa has tarnished his image of a democratic freedom fighter, perhaps irreparably, as news of his statement spread fast through international media outlets. In Poland he met with criticism from politicians of all persuasions.

Lectures interrupted by nationalist protestersTwo February lectures by public intellectu-als, professor Magdalena Środa, a well-known feminist and philosopher, and Adam Michnik, former anti-communist dissident and editor-in-chief of Gazeta Wyborcza, were disrupted by groups of violent, masked protesters. The incidents took place at the University of Warsaw and a school in Radom respectively.

Early anti-communist fighters commemorated around the country Members of post-World War Two anti-commu-nist guerillas were commemorated on 1 March. Official ceremonies were held all around the country, including at the Monument of the Unknown soldier in Warsaw. The holiday was established in 2011. On this day in 1951, 7 members of the guerillas’ leadership were executed by the communist secret police. Pictured is Stanisław Sojczyński (nom de guerre “Warszyc”), a captain in the Polish Army and later the creator and leader of the Under-ground Polish Army (KWP), which existed from April 1945 to as late as 1954 and whose purpose was to fight the communist-controlled government of Poland as well as the NKVD. Sojczyński was captured and executed in 1947.

The Polish Casey Anthony’s trial beginsIn perhaps the most widely-covered and con-troversial murder case in years, Katarzyna W., the mother of six month-old Madzia, is accused of killing her child last year after first telling police that someone had abducted the child. The evidence against Katarzyna W. is only circumstantial and she has pleaded not guilty in the trial that began on 18 February.

Unlikely heroes save the day, gain worldwide fameTwo women saved a bus-full of people when its driver fainted in Gdańsk. The women grabbed the wheel and steered the vehicle out of harm’s way in truly heroic fashion. Only one person was injured, a driver whose car the bus had hit. The news quickly went viral and was covered by media around the world.

In vitro children have “facial furrows”, priest saysIn vitro is a contentious subject in conserva-tive Poland, but esteemed law professor, Father Franciszek Longchamps de Berier has gone further than anyone in his attack on the treat-ment. Citing “scientific evidence,” he said that children that have been conceived through in vitro are much more likely to have genetic dis-orders and that they can be distinguished by a certain kind of facial furrow. De Berier has been widely condemned for his statements.

sport

Silver’s nice too...World Championship hopes were high for Polish cross-country skiing giant, Justyna Kowalczyk, but something went awry in Val di Fiemme. After a fall in the sprint and a fifth place in the double pursuit, she bet everything on the final event of the championships, the grueling 30km in classic style. In an extremely close and riveting race, Kowalczyk came sec-ond, losing to her arch-rival, the phenomenal Marit Bjoergen.

Clash of the titansTwo Polish boxing legends, 44 year-old Przemysław Saleta, former European  boxing champion, and 45 year-old Andrzej Gołota, bronze medalist from the Seoul Olympics, faced each other in Gdańsk on 23 February. The underdog Saleta ended the fight with a knockout in the 6th round. Hopefully there will be no rematch, unless switching disciplines to chess is an option.

Czaruś the dog, not quite a St. Bernard, but equally heroicIn a story that moved all of Poland, a dog saved a three-year-old girl not far from Zielona Góra. The girl wandered off and remained outside in freezing temperatures throughout the night. Her pet dog, a small black mutt, snuggled up to the girl to keep her warm and started barking when the rescue team approached, thereby saving her life.

Flying high In an unbelievable coincidence, ten years after Adam Małysz became World Champion in Val di Fiemme, Italy, Polish commentators could rejoice deafeningly once again, proclaim-ing Kamil Stoch the winner of that same title on that same hill. Several days later, the entire Polish team gave fans another treat by coming third in the team competition.

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Kwaśniewski 2: The former president makes a comeback

Putting an end to years of specula-tion, former President aleksander Kwaśniewski has announced his return to politics. He is the face of a new politi-cal initiative - “Europa Plus,” a moder-ate left-wing joint list of candidates for the European Parliament. Joining him are marek Siwiec and Janusz Palikot, who is not as politically ostracized as some thought he would be after several controversial comments involving the Deputy Speaker of the Sejm, Wanda Nowicka. In an effort to integrate the left side of the political spectrum, Kwaśniewski wants to piece together a jigsaw puzzle of strong personalities. The emphasis is on creating an alterna-tive force to the ruling Civic Platform.He's off to a rocky start. Former prime minister and head of the Democratic Left alliance (SLD), Leszek  miller,  has no intention of participating in any ini-tiative involving Janusz  Palikot  and is not happy that Palikot won  the  race to Kwaśniewski's political heart. Deep-ening this rift are the ongoing talks with ryszard Kalisz, a popular SLD politician, who is considering joining the project. His role would be to help “Europa Plus” curry favour with feminist circles after Palikot's mishaps. Kwaśniewski is still not sure whether he will be run-ning in the European elections him-self. But, then  again, he has always liked to tease. 

Model Citizens: global domination

If you don't have a lovely Pole strut-ting down your catwalk, don't even think about calling yourself an accom-plished designer. although their names still have to be abbreviated, changed, butchered – Jagaciak becoming Jac, Strusińska becoming Struss – Polish models have become top choices for the fashion world. anja rubik's (pic-tured) gorgeous face stares at you from every wall big enough to be cov-ered by a billboard. although the era of supermodels is long gone, małgosia Bela's stellar career certainly earns her the title. at 35, with a nine-year old son and an acting career under her belt, she is still appearing on the most prestigious fashion magazine covers in the world, including various inter-national editions of Vogue. a genera-tion apart, Zuzanna Bijoch, born 1994, already has Prada, Valentino and Gucci runways on her resume.

magdalena Frąckowiak's angelic face and devilish body got her a coveted spot as a Victoria's Secret angel, joining the likes of Heidi Klum and Gisele Bündchen. Frąckowiak, who has appeared in ralph Lauren and Oscar de la renta ad campaigns, is ranked 23rd among the world's top 50 models. also in the international limelight, but perhaps fur-ther from  high fashion runways and Vogue covers, Joanna Krupa repre-sents a different brand of a Polish model. Krupa, the “sexiest swimsuit model in the world,” according to maxim, has also jived on Dancing with the Stars,  and been ‘real’ on The real Housewives of miami. But Polish pride does not discri-minate: Joanna Krupa and anja rubik are both judges on the Polish version of the reality show Top model.

by Hanna Kozłowska, Associate Editor of Poland Today.

in Focus nazWa działu

Shakespeare in Gdańsk to be, after all

The famous Hamletian dilemma is over for the Gdańsk Shakespearean Theatre (GST). Come the end of 2013, it will indeed “be” rather than “not be.” Touch wood, as you never actually know what will happen when it comes to Polish cultural institutions. after construction was halted due to delays in September 2012, the theatre signed a deal with a new developer, Sopot-based NDI. They will finish the job for 43 mln zł.

The Gdańsk Shakespearean Theatre is an initiative to bring to the city a state-of-the-art cultural centre, the structure of which will resemble a 16th century English open-roof theatre, not unlike the famous Globe in London. The build-ing itself, designed by Italian architect renato rizzi, is primarily meant to refer to the historical Gdańsk Fencing School. a hefty brick form will envelop an interior, wooden construction of the Elizabethan theatre. The GST has been actively involved in theatre promotion for years, organising, for instance, the annual Shakespeare Festival in Gdańsk. after its mid-2014 opening, the theatre will stage year-round productions as well as organise workshops and other cultural events.

Golden Boy Zbigniew Boniek is on track to lifting Polish football out of a deep crisis. Philip Boyes looks at the history of the sport in the country, from the successes of the 70’s to the cronyism of recent years. see page 40

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Inglot nail polish is pretty, healthy and... halal

Not long before his death in February 2013, Wojciech Inglot, a Polish entre-preneur and chemist, won over some unlikely clients. He came up with a for-mula for 02m, a breathable nail polish which could solve the problem of mani-cure for many muslim women. In order to appropriately perform wudu – a ritual hand ablution – water has to permeate the entire surface being washed, includ-ing the nails. Until now, this prevented muslim women from wearing nail polish for an extended period of time, as they had to scrub it off before prayer.

after several women brought the new product to scholar mustafa Umar's atten-tion, he conducted his own research and experiments and declared O2m halal, or permissible. “It appears to me that there is a sound basis for believing the water seeps through to the nail when wearing O2m breathable nail polish,” he wrote on his website. Technically, as one woman who called the Inglot fac-tory was told, the varnish lets oxygen and water vapour through to the nails, but Umar sees that as sufficient.

There are several questions to be answered about the application of addi-tional coats and layers, and though cre-ating halal polish was not his original intention, mr Inglot became personally involved in the research process. as mr Umar's website states, despite the entrepreneur’s sudden death further tests are still planned, albeit with a delay. Inglot has 400 salons around the world and, according to an associated Press article, the company had not expected a big profit margin for the O2m prod-uct. after mr Umar published his post, however, Inglot experienced a substan-tial boost in the sale of O2m, though no specific numbers are yet available.

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Anne Applebaum gives Polish cooking a modern twist

Seemingly out of nowhere, major  pub-lications such as The Guardian and The New York Times started singing the praises of Polish cuisine, even going so far as to call Poland “the new Provence” of food. It's no coincidence, it's anne applebaum's new cookbook: From a Polish Country House Kitchen. We can all thank the journalist for her mission to dispel the myth that Poles eat only kielbasa, potatoes and lard, washing it down with some straight-up vodka.

applebaum, a Pulitzer-prize  win-ning author and columnist for The Washington Post, joined forces with her friend and Huffington Post editor Danielle Crittenden, to present to the world soul food à la polonaise. Inspired by applebaum's 19th century manor house in north-west Poland, they gathered over 90 recipes for mouthwatering twists on classic Polish dishes, such as “Pierogi with Duck and red Cabbage Filling, Sauteed in Orange  Butter.”  Kitchen goddess Nigella Lawson raves about the book. “This is Polish food for the modern palate: all of the flavours you would expect - sour pickles, tart beets, flavoursome game, bittersweet poppy seed - but lighter,  fresher, and easier than ever before.” In a recent interview with The New York Times, applebaum

described how trying out recipes and writing up her cookbook was a wel-come distraction from her other project, a 500+ page tome about communism in Eastern Europe. Both books were published at roughly the same time. The cookery book might also have earned applebaum brownie points with her husband, Polish Foreign minister radek Sikorski. It certainly does a lot to give Polish food a good name.

by Hanna Kozłowska, Associate Editor of Poland Today.

Ed Stoppard, the actor who played Henryk, Władysław Szpilman’s younger brother in The Pianist, shares his memories of working with Ro-man Polański, filming in Poland and eating questionable pierogi.see page 68

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18 February: activists forcibly took possession of a horse destined for slaughter at the horse market in Skaryszew, a village close to Radom. According to ratujkonie.pl, a web-site which campaigns for equine welfare, the horse - called Ma-ciek - was later put down humanely after money was raised to send him to a special-ist veterinary clinic in Warsaw. He had dam-aged his back, which witnesses said hap-pened when he fell off the ramp leading from the transporta-tion truck.

Photos by Thomas Karlsson

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22 23A REAl GENTlEmANIn an exclusive interview with Poland Today, former Polish Prime minister and President of the European Parliament Jerzy Buzek talks about the lessons Poland can offer to fledgling democracies.

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as  president of the European Parliament he was Poland's most senior international official and the first politician from the former Eastern Bloc to hold one of the key posts of the European Union, but  for Jerzy Buzek the most memorable moment of his time in office was when he gave his body-guards the scare of a lifetime.

Two days after Colonel muammar Gaddafi was killed in October 2011, mr Buzek became the first Western politician to travel to Libya; he immediately demanded to be taken to the martyrs Square in central Tripoli, where tens of thousands of people, most of them armed, were celebrating the fall of the old regime after months of a bloody uprising. as his security detail were getting increasingly nervous, mr Buzek felt right at home - the outpour of cathartic, mass jubilation at the demise of a totalitarian rule reminded him of his days as one of the leaders of Solidarity, the Polish trade union that helped bring down the Iron Curtain.

“Thank you Europe”So he just walked out of the armoured car to soak up the atmosphere, despite his guards' terrified pleas that were dis-appearing in the roar of gunfire as the crowd began shoot-ing at the sky with automatic weapons. “The square was full of people and they realized that I was coming from the EU, so they gathered around to greet us, shouting 'thank you Europe',” mr Buzek said. “almost everyone had a gun and they were shooting in the air for joy; my bodyguards were terrified and they shouted 'please mr President, we can't not possibly stay outside,' but people were just happy.” The anecdote seems to perfectly encapsulate the driving force behind mr Buzek's distinguished political career. Initially one of the key figures of Solidarity, the former Polish prime minister - the first to complete a full term after the fall of Communism - became a member of the European Parliament in 2004 and was then elected president of EU's assembly by the largest ever mEP majority.

mr Buzek's experience as a former leader allowed him to act with the gravitas of a statesman on the international politi-cal stage. During his stint as president of the Parliament, between 2009 and 2012, he left his mark on a number of key policy issues ranging from energy to privacy laws, but strengthening democracy and human rights always remained at the very heart of his political agenda; a deeply-felt, prin-cipal motive of his personal engagement. The charismatic 72-year-old speaks with firm conviction about the importance of a common European energy policy and the need for a generous EU budget, the main topics he focuses on as an mEP, but only when the conversation shits to civil liberties and the struggle for democratic change in Europe's neighbourhood does he become truly animated with the undi-minished passion of a veteran activist.

Walking the Long road to DemocracyWhen Poland Today met mr Buzek at his parliamentary office overlooking the centre of Brussels, he was preparing for a new trip to Tripoli, this time as a representative of the Club of madrid, the world's largest forum of former leaders of democratic countries, whose members include high-profile figures such as the once presidents of the US and the former Soviet Union, Bill Clinton and mikhail Gorbachev. The Club of madrid selected mr Buzek to discuss Libya's transition to liberal democracy with key local politicians including Prime minister ali Zeidan, because of his credentials as a Polish democracy activist and former prime minister.

"One of the most important points is that I am a Pole, with all of my experience in the Solidarity movement,” mr Buzek said. “They ask me how to tackle the problem of autocracy, how to reform the country, how to learn from our experience in Poland.” mr Buzek, a liberal-conservative Civic Platform mEP for Silesia, avidly supports the initiatives of the current Foreign affairs minister radek Sikorski for Poland to gain more clout in European and international politics, particu-larly in the immediate neighborhood of Eastern Europe and Northern africa. He is convinced that Poland must be leading the EU in its engagement with countries such as Ukraine and moldova, as well as the Western Balkan countries, all of which aspire to membership in the bloc. “They seek our support; they see Poland, maybe also partly because most of them are Slavic countries, as a country that can help them a lot with our example, with our experience of how to conduct reforms.” mr Buzek has personally visited all of those countries as an mEP and president of the Parliament and he was one of the most vocal European politicians during the arab Spring.

Point of no-returnThe trained engineer and  accomplished  academic, who entered politics as a pro-democracy activist in communist Poland, was one of the first European politicians to con-demn the “inhuman brutality” of Gaddafi's regime, calling the crackdown on the civilian population a “point of no-return”. He travelled to Cairo and Tripoli during a time of turmoil to demonstrate the EU's support as president of the European Parliament, but also, he says, as a Pole with experience in the struggle for democracy.

He urges Europeans not to be discouraged by the setback in democratic reform that has been observed in countries such as Ukraine or Georgia, but to remember instead the long process of change in Poland, which took decades of small steps toward full democratisation. “Once people's awareness

of what democracy and freedom means is raised, the clock cannot be turned back,” mr Buzek says. “It is now clear that most Ukrainians want to live in an independent country. This was not clear even during the Orange revolution, but now we know that even with a very low level of democ-racy they are absolutely conscious of their independence. “We should not despair over setbacks but push them towards democracy, human rights, freedom of expression, free market economy and independent judiciary, which is perhaps the most important thing."

Poland’s dutyHowever, his vision is not only strategic, but also deeply ideological: mr Buzek believes that it is Poland's duty as a nation to support struggling young democracies because his country emerged victorious from its troubled history and has a respon-sibility to share its experience in overcom-ing totalitarianism. “This is the biggest responsibility of our country and most citi-

zens understand this responsibility, because in the 1960s, the 1970s and the 1980s - especially in the 1980s - we had con-stant support from all over the democratic world,” mr Buzek says, his eyes lighting up as he recounts what he considers the seminal period of Poland's recent history. “all democratic countries were ready to help us create civil society, to sup-port our dissidents and even to go ahead with sanctions against the autocratic regime. “and we know we should pay this back - this is our own national, sovereign debt, if you will,” mr Buzek says, in reference to the sovereign debt crisis that has put Europe to the most serious test since its foundation.

‘Once people's awareness of what democracy and freedom means is raised, the clock cannot be turned back.’

Bojan Pancevski is the European Union correspondent of the British news-paper The Sunday Times. Prior to that he reported from Central and Eastern Europe for leading international media including The Times, The Sunday Times, The Telegraph Group, and Al Jazeera.

Jerzy Buzek inaugurating the Esplanade Solidarność at the European Parliament in 2011 (left page)

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24 25President Buzek talking to Libyans on Martyr Square in October 2011, two days after the death of Muammar Gaddafi.

the entrance criteria set by the maastricht Treaty in three to four years. Under rules set by the Treaty, every EU member must eventually joint the common currency, except Britain and Denmark, who have secured so-called opt outs from the euro. However, the people of Sweden have refused to join the eurozone when the proposal was put to a referen-dum. The governments of the Czech republic and Bulgaria, who are in a similar situation to Poland, have openly said that they would postpone their entry until the problems of the eurozone are resolved. and while mr Tusk's government has been relatively vague about when and how Poland is supposed to join the euro, mr Buzek clearly says that his country must wait for the eurozone to reform itself before deciding to join the common currency. “First and probably most importantly (for Poland to join the euro) the eurozone must be healthy,” mr Buzek says. “We would not like to pay for the sovereign debt of any other country, because we are not prepared for that."

a real gentleman mr Buzek's mandate as an mEP expires in 2012, but he refuses to reveal any future plans or political ambitions, saying only that he needs to fully focus on his work at the European Parliament - without indicating any intention to retire after that. Leading EU politicians have heaped praise on mr Buzek's for his role in European politics after he finished his term as president of the parliament. For Herman Van rompuy, the president of the European Council and former prime minister of Belgium, mr Buzek is first and foremost a

“real gentleman” and man with “strong European convictions, always looking for 'more Europe'.” “Fortunately, Jerzy will remain actively engaged in European issues as he moves on to new challenges. I look forward to our future encounters,” mr Van rompuy added.

The German Chancellor angela merkel has said that mr Buzek's great commitment to the European idea was of

“priceless value,”  while Jacques Delors, the former president of the European Commission, the EU's executive, called mr Buzek a “point of reference”  for a Europe that is “united in its diversity, influential, generous, and able to overcome even the greatest of crises.” Through successful leadership in Brussels mr Buzek also a performed great service to his home coun-try, according to Norman Davies, one of the most prominent historians of contemporary Europe and a leading expert on Poland. “He has raised the profile of his home country, Poland; has proved that the recent entrants of the EU can participate at the highest level, and has demonstrated that differences among members of the European family can be overcome by a spirit of purposeful cooperation,” mr Davies said.

Proudest momentBut for all the acclaim for his work in European politics, when asked about his proudest moment in the almost four-decade-long political career, mr Buzek returns to the core beliefs that have guided his political activism since his early days of trade union activism. animated once again, he leans over the table to recount the seminal 1981 Solidarity con-gress in Gdansk that shaped his life and political career.

“my proudest achievement was to be elected chairman of the first national congress of independent, self-governing trade unions - Solidarity,” mr Buzek declares.

"There was a communist ocean around us, with Soviet war-ships in the Baltic sea and 140,000 Soviet soldiers waiting for orders to invade - and yet we were in a completely free hall in Gdansk with 1000 delegates and had elections  in purely democratic way on behalf of 10 mln members of Solidarity. We were feeling, as a matter of fact, quite free in a commu-nist country. It was very risky, but incredible. “You can be a prime minister, or a president of the European Parliament, but only one time in history you can lead such a congress.”  by Bojan Pancevski

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Good dealUnlike most of the EU, the former Soviet Bloc countries in par-ticular, Poland has so far managed to sail unharmed through the worst economic downturn since the Great Depression, with the country's economy steadily growing despite the woes of the eurozone. Part of that success is due to the effi-cient use of EU funds, which is why the negotiating team around Prime minister Donald Tusk has been under immense pressure to get a good deal for Poland during the recent marathon negotiations of the bloc's seven-year budget. In the end, although the compromise of European leaders produced the first ever cut in EU spending, Poland came out of the negotiations as one of the nations that actually benefited from the arrangement.

mr Buzek, who fought hard for the European Parliament to have more say in the budget negotiations, claims that Poland has managed to secure a good arrangement, both in terms of past and future subsidies. Under the new deal, Poland will receive a bit less funding for agricultural subsidies but it will retain it's payments for regional and struc-tural development. according to mr Buzek, one of the key reasons why the Polish economy has performed so well in the crisis is because the country clev-erly tapped the funds that have been allocated in the past budget period.

Poland's so-called absorption  rate - the amount of EU funds allocated to a country that actually get spent

- is approaching 80%. That is far from  typical in the EU; the figure stands in stark contrast to the absorp-tion rates in countries such as romania, which only manages to actually utilize around 8% of the funds it receives."(EU) funds helped improve many parts of our country, especially the eastern part, which used to be much poorer and less developed,” mr Buzek says, add-ing that after seven years of funding via the EU budget the gap between the East and the more prosperous regions has become much less pronounced.

“We were a very good example during the budget negotiations of a country in which European money could be used in a very fruitful and efficient way - and that also helped Poland's negotiating position.” But mr Buzek warns that in light of the budget cuts the country should move on from reliance on gener-ous EU funding packages and focus on fostering growth and improving internal and external competitiveness.

From coal to natural gasWith equal sense of urgency he speaks about the need to tackle Poland's reliance on russian gas, which is supplying over 80% of the country's consumption. after his tenure as president, the work on a framework for a single European energy market has become mr Buzek's flagship project. If completed, the so called European Energy Community

- which at this stage is a bold concept - would enable full access to all producers, distributors and consumers across Europe and eventually bring down energy prices. To illustrate the significance of the initiative, he quotes the example of Bulgaria, where the centre-right government was recently

forced to resign following violent unrest that was largely due to the exorbitant energy prices imposed by a monopolized market. “Prices of most things and competitiveness in gen-eral largely depend on the energy costs and this is most important for both the business community and the consum-ers, which is why we have to improve the networks and the supply,” mr Buzek says.

Poland currently produces electricity with 100% of own resources - mainly coal - which mr Buzek deems “extraordi-nary and unique” in Europe. But at the same time he warns that using highly polluting coal plants to generate energy is

not going to be sustainable in the long term because of the ever more stringent climate regulation of the EU. Shifting from coal to natural gas, mr Buzek says, would enable Poland to meet the cli-mate targets. One way to achieve that without becoming ever more depend-ent on russian exports would be for Poland to come up with a viable way to extract the allegedly vast reserves of shale gas, a type of natural gas con-tained in sedimentary rocks. “We would become much more independent if we started extracting our own shale gas,” mr Buzek said. “In america, we can say that extracting shale gas has changed geopolitics: Saudi arabia will not be so important for the USa as it was ten or fifteen years ago. “The same would happen to the russian presence on our continent if we start shale gas extrac-tion here. It is very important for the security of supply and also from a geo-political point of view."

But this is where mr Buzek says the cuts in the EU budget will have a nega-tive effect, because proposed spend-ing for research and development, new technologies and energy infrastructure has been rejected by European lead-ers, most of whom are struggling with austerity measures at home. In order to counter that negative effect, mr Buzek says, the European Parliament, which has power to veto the EU budget, will now engage in tough negotiations with the bloc's leaders before approving their compromise. mr Buzek and other mEPs demand that the European Council, the forum of heads of states and govern-ments, be more flexibile in the alloca-tion of budget monies, which would allow for funds to be moved from one area into another as well as between fis-cal years in order to be able to respond to financial challenges as they emerge. This will be a pre-condition for the par-liament's approval of the budget, mr Buzek says, but at the same time he

is confident that a compromise between mEPs and EU lead-ers will eventually be forthcoming.

Eurozone?The greatest challenge for Poland in this decade, according to mr Buzek, will be to join Europe's common currency, the euro, at a time when the eurozone is undergoing fundamen-tal changes as it struggles to overcome the worst crisis since its inception over a decade ago. Poland's good economic performance has brought it to the doorstep of the eurozone, and, according to mr Buzek's estimates, the country will fulfil

‘All the democratic countries were ready to help our citizens to create civil society. We should pay this back - this is our own big national sovereign debt.’

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Jerzy buzekJerzy Buzek, born 3 July, 1940, is a prominent Polish politician and Member of the European Parliament. He is affiliated to Civic Platform (PO). Buzek is originally from Śmiłowice in the Zaolzie region, which now belongs to the Czech Republic. An alumnus of the Silesian University of Technology, he is an accom-plished scientist and professor of chemical engineering. A member of the anti-communist opposition before 1989, Buzek was elected to the Polish parliament in 1997, and was prime minister for the 1997–2001 term. With nearly 400,000 votes, he was the most popular Polish politician to be elected to the European Parlia-ment in 2004. After his re-election in 2009, he was chosen as president of the European Parliament for a 2.5 year term. His daughter Agata is a well-known Polish actress.

Activist Buzek (first on the left) with colleagues at the first Solidarność convention in Gdańsk, 1981.

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Donald Tusk has an eye for the sweet spot, whether it is in his beloved sport of football, where he spends most of the game far up the field on the opponent's side waiting for a pass he can drive into the goal, or in politics, where he has a knack for the political centre that has made him Poland's longest serving dem-ocratic prime minister. Tusk, 55, came to power in 2007 at the helm of his Civic Platform (PO) party in large measure due to the reaction to the excesses of two years of right-wing rule by the Law and Justice (PiS) party, which managed to offend Poland's foreign partners and dismay domestic critics who worried about PiS's authoritarian tendencies.

Tusk promised a breath of normality – even once going on national television to tell Poles to get grilling to celebrate a national holiday instead of devoting his address to lofty patriotic themes. His new government quickly patched up relations with Brussels and turned Germany from a feared rival and ancient foe, as it had been under PiS's leader Jaroslaw Kaczyński, into Poland's clos-est foreign political and economic part-ner. Frayed ties with moscow were reset and relations, while not close, are now cordial. That new approach has made Poland an increasingly significant player in the European Union, where its status as the biggest ex-communist economy in the EU and the Union's sixth largest country by population gives it weight in Brussels – as seen in recent nego-tiations over the upcoming EU budget where Poland will remain the EU's larg-est financial beneficiary until 2020.

Small Stepsalthough Tusk and Civic Platform have portrayed themselves as liberal and pro-business, the hallmark of his five-and-a-half years in power has been what he calls “small steps” - caution and a reluctance to take any revolutionary measures, in large part out of fear of offending the centrist voters who pro-vide him the bulk of his political sup-port. The onset of the global economic crisis in 2008 also put paid to any grand reform schemes, as Tusk and his increasingly important finance minis-ter Jacek rostowski – recently elevated to deputy prime minister – have spent most of the last five years trying to steer the country through very turbulent eco-

only 2% in 2012 with many analysts see-ing even more sluggish growth this year. Unemployment has jumped to 14.2%, its highest level in six years, and the country's reputation as the EU's “green island” of growth is looking tattered. But Tusk is a dangerous man to under-estimate, as the many people who saw him as a political lightweight and were later shoved aside or the football rivals who ignore his presence near the goal can attest. If he manages to survive the current turbulence, his prospects could start to improve by the second half of the year when the economy could start to revive – giving him time to again take over the political centre prior to elec-tions in 2015. “I think that Tusk definitely has enough energy to be prime minis-ter for a third term,” Grzegorz Schetyna, a sidelined PO rival, told the Gazeta Wyborcza newspaper. by Jan Cienski

nomic waters. There Tusk was rewarded with a bit of luck, as earlier tax cuts and a steep depreciation in the zloty helped Poland become the only EU country to avoid recession in 2009.

Tusk was also fortunate in his oppo-nents. Kaczynski's radicalism spooked many voters who, while not thrilled with the government's colourless poli-cies, held their noses and voted for Civic Platform in 2011 in order to deny the mer-curial Kaczynski a return to power. But the balancing act required to continue dominating the centre of Polish politics, and the long streak of luck that helped keep him in power, appears to be fray-ing. Tusk is facing a growing rebellion from his party's conservatives, gathered around Justice minister Jaroslaw Gowin, who helped scupper a recent attempt to start work on a bill on civil partnerships, which would have given both gay cou-ples and heterosexual pairs living out-side formal marriage some extra rights.

Stormy SeasThat defeat incensed Tusk, who warned the conservatives in a recent closed meeting: “You were successful. For the first time in the history of the Platform something was voted through against my recommendation. This is a dan-gerous time,” according to the Polish edition of Newsweek. The failure of the civic partnership legislation upset PO's most liberal supporters – with agnieszka Holland, a well-known firm director, saying: “I will not vote again for the frauds from Civic Platform.” The fight has also revived Tusk's politi-cal opposition; PiS is stressing its anti-gay credentials, while left-wing parties underline their social liberalism

– all while PO sags in opinion polls.Tusk's economic luck is also waver-

ing. The economy has slowed much more than expected, posting growth of

Tusk on the ropesThese are tough times for Donald Tusk. Will he be able to fight his way back?

Tusk is facing a growing rebellion from his party's conservatives

Politics

Jan Cienski is the Warsaw and Prague correspondent for the Financial Times. He has been in Warsaw since 2003. Prior to that he spent five years as the Wash-ington correspond-ent for the National Post, a Canadian newspaper. He also spent several years in the US working for the Associated Press. From 1992 to 1995 he worked in Moscow for the German News Agency DPA. Jan has a degree in interna-tional relations from the University of Toronto.

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Poland is the first, and so far only country in Central Eastern Europe visited by French President Francois Hollande. He also came to Poland dur-ing his presidential campaign.

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There is a difference between polite applause and a standing ovation. The former is simply a formal “thank you” whereas the latter pays homage to the show which has just been performed. When François Hollande concluded his speech to Polish parliamentarians in November 2012 the French President was encouraged by the warmth of the applause. Notably, because it came from all sides of the political spec-trum, from the ruling Platforma Obywatelska (Civic Platform) to Prawo i Sprawiedliwość (PiS) and SLD (Democratic Left alliance) in the opposition. This across-the-board apprecia-tion was testimony to his skill. The French President suc-ceeded in being vague enough not to alienate anyone and sufficiently generous in flattery to make everyone happy. above all, the standing ovation represented an old friends’ reunion, or at least the begin-ning of it. It marked the end of a long chain of mutual incomprehension, misunder-standings, ill-chosen words and missed opportunities. For a long time, France and Poland had all the ingredients for a strong and stable alliance, but they had achieved exactly the opposite.

Solidarity with Poland my parents left Poland for France in the aftermath of the march 1968 purges, leav-ing behind most of their family. I remem-ber my mother at Christmas time packing food parcels. “To do Polski” she would say firmly so that nobody would dare touch them. We took these boxes to the Place de la Concorde in the heart of Paris from where trucks would leave for Poland. at that time there was an extraordinary wave of support for Solidarnosc in France - from workers to intellectuals and civil society. The imposition of martial law and the wave of repression had shocked pub-lic opinion. There was an emotional, heart-felt, response to Poland’s predicament. When the socialist President François mitterrand welcomed General Jaruzelski at the Elysée Palace in December 1985, Prime minister Laurent Fabius admitted, before the Parliament, that he was “puzzled” by that meeting.

Negligence replacing romanticismWhat has happened since then? The fall of the Berlin Wall. This extraordinary event uprooted François mitterand’s clas-sic view of the world – a reactionary view, forged by the world wars and their aftermath. Germany obstructed the visual field of this old socialist leader. Even though he and Chancellor Helmut Kohl formed a powerful partnership in the European project, in mitterrand’s view, the idea of reunifica-tion carried a shadow, a potential threat, a possible economic and political imbalance in Europe. In that context, the eman-cipation of Eastern countries, their right to sovereignty and prosperity, could only come in second place. This is how neg-ligence replaced romanticism in France’s links with Poland.

France had supported the enlargement of the European Union in 2004 to ten new members. François mitterrand had

left office. Jacques Chirac, a right-wing president, was in charge of the country. But French diplomacy had difficulty keeping up. It scarcely anticipated the implications of this expansion, notably the emergence of Poland as a centre of stability and growth to the East of Germany. France viewed the new members with a mixture of sympathy and arrogance, as needy countries upon which to bestow charity. To top it all the ingrates turned to Washington for their security! The pur-chase by Poland of US F16 fighter planes, direct competition to the French military industry, was viewed with disdain. When the leaders of eight European countries, including Poland,

supported intervention in Iraq in January 2003 the French reaction was harsh and patronizing. In Jacques Chirac’s words the Eastern European countries had “lost a good opportunity to keep quiet.” Could there have been a more contemptuous way of saying that on the European train some travel first class while others should be grateful for their place in second?

The Polish plumber In 2005, France organized a referendum on the European Constitutional treaty. The campaign was marked by the overly-academic impotence of its supporters, bogged down by the technical minutiae of the text. By contrast, the opposition had the wind in their sails with their bogey-man figure: the Polish plumber. It was a sad moment in democracy when real-ity disappeared behind a populist cliché. This plumber became the incarnation of a threat: French jobs and salaries were menaced by unscrupulous competitors from the East. On the other hand, the rise

to power of the Kaczyński twins was not a welcoming invita-tion to dialogue. The weak pro-European stance of PiS and the party’s incessant witch-hunt for Communists projected the image of a reactionary, inward-looking country.

The election of Nicolas Sarkozy in 2007 did not change the political tone of Paris-Warsaw relations. The new presi-dent was not a great fan of European dialogue for he con-sidered that there were too many players involved. He preferred to talk with the big players, his equals. In his view, there was not much more than a vast buffer zone between Berlin and moscow. Time-wasting should be kept to a mini-mum, Sarkozy thought, as he did not grasp the significance of the new strong axis emerging between angela merkel and Donald Tusk, gradually weakening France’s position within the Weimar Triangle.

Enter HollandeThis was the situation that François Hollande found himself in when he came to power in may 2012. as with other countries neglected by his predecessor, the French president launched an operation to win back goodwill. He found in Donald Tusk an ally of consequence at the moment of negotiations on the European budget. The former defended the Common

ThE BEGINNINGs OF A RAPPROchEmENTTangled Polish-French ties could be taking a turn for the better.

The standing ovation repre sented above all the coming together again of old friends, or at least the beginnings of a reunion.

Piotr Smolar cov-ers Central Europe, the Western Balkans and the former So-viet republics for the French newspaper Le Monde having pre-viously written about domestic security issues for the paper. A former Le Figaro journalist, Piotr used to co-ordinate the French-Russian Cen-tre for Journalism at Moscow University. He is the author of a book on Russia’s heartland, called Gloubinka, prom-enades au cœur de la Russie.

Gdańsk, Septem-ber 1967, French President Charles de Gaulle in Poland. Scouts greet the gen-eral by the Wester-platte memorial.

agricultural Policy which benefits French farmers so much; the latter used his political credibility to uphold the pres-ervation of cohesion funds for which support had been so decisive to the spectacular growth of Poland. Hollande also declared his support for the participation of Warsaw as an observer in the reform of the eurozone. Nicolas Sarkozy had been opposed to this.

There remains the need to find a common language on the future of the EU. Not an easy task. Poland is the strongest advocate of a political dialogue with the eastern neighbours. It hopes that the prospects of integration will be a lever of

Translated from French by Valerie Higgins.

change in Ukraine. France grimaces at the idea of expansion beyond Croatia, and perhaps Serbia and montenegro. The second major divergence of opinion is the question of political integration. Everyone says they are in favour, but how many definitions are there? Poland is very German in its defence of financial orthodoxy. France is very French in its appeal to soli-darity across the continent, while at the same time refusing to give up a substantial part of its national power. as the Italian elections have shown, austerity and the lack of democratic legitimacy of EU institutions are a common danger: Europe is drifting away from its citizens. by Piotr Smolar

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The Hôtel de monaco, the Polish ambassador’s residence, is the perfect place for strengthening Polish-French ties. It is said to be one of the most beautiful palaces in Paris. For over two hundred years it has been an important public and social meeting point for the aristocratic, political and cultural elites of Paris. This is still true of the Hôtel de monaco today as it continues to play an important diplomatic role; a role which requires the highest standards in terms of caring for its outside appearance and interiors. The care and attention put to maintaining the palace is testimony to the importance that both the French and Poles dedicate to the preservation of cultural heritage. It is this shared cul-tural heritage, at show here at the Hôtel de monaco, which is the basis for long-standing Polish-French relations.

by Poland’s Ambassador to France,

Tomasz Orłowski

ambassador orłowski Born in 1956 in Łódź, Ambassador Orłowski studied archaeology and medieval history at the University of Łodz, Mikołaj Kopernik University in Torun and Poitiers University. He joined the ranks of the Polish Foreign Ministry in 1990, starting off as first secretary and councillor at the Polish Embassy in Paris before going on to work as the Deputy-Director of the European Depart-ment in Warsaw. Between 1996 and 2001 he was the chargé d'affaires in Rome before becom-ing Secretary-General of The Polish National Commission for UNESCO. In 2005 Ambassador Orłowski was made Director of Diplomatic Protocol. He was appointed Polish Ambassador to France and the Principality Monaco in 2007. In February 2013, Ambassador Orłowski was awarded the French Legion of Honour, the highest decoration in France in addition to many other distinctions. Ambassador Orłowski is married and has two daughters.

Hôtel de Monaco: Diplomacy at its most elegant

Poland Today gets a rare peak into the Polish ambassador’s residence in Paris.

Apart from during World War II, when the Nazis used it as their Office of Cul-ture, the palace has been the property of the Polish state since 1936.

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For centuries France and Poland have been allies, strategic partners and even friends, be it sometimes of convenience. Never has a Polish and French army taken up arms against each other, something very rare in European his-tory. French influences have peppered Polish culture and cuisine. A history of Polish-French relations would not be complete without the Polish-born genius of Frederic Chopin and Marie Skłodowska-Curie, whom both France and Poland claim as their own. Here are a few more pieces to the French-Polish puzzle…

Napoleon Bonaparte

Napoleon took a personal interest in the question of Polish independence

– especially when it promised to sup-ply him with new recruits. Napolean’s entourage included a number of Poles, not least his beautiful Polish mistress, maria Walewska. The Poles who flocked to Napoleon’s Polish Legions were seduced by the banners of “Libérté, Egalité and Fraternité.” The Polish legionaries counted as many as 25,000 men, all marching under the French tricolour but wearing distinctly Polish uniforms. They fought for the French, so that they could win freedom for the Poles. as historian Norman Davies pointed out, Napoleon’s Poles ended up dying in their thousands from swamp fever in Haiti, where they were sent to crush a slave rebellion. Poland’s brush with Napoleon was not a happy one.

Jerzy Giedroyć

The Paris-based émigré editor, and founder, of the journal Kultura, was widely credited with keeping Polish culture alive during Communist rule. From its base in France, Kultura became the most influential Polish newspaper in the world, with circulation in 50 countries. Having moved to Paris shortly after the Second World War and known for his dapper clothes and trademark neckerchief, Jerzy Giedroyć achieved legendary status in Poland by smuggling banned publications into the Soviet Eastern Bloc. His accom-plices in subversion included foreign diplomats, travelling sports teams and even the visiting Bolshoi Ballet, which would hide books in their stage decorations before flying back to moscow. Giedroyć died in Paris in 2002 at the age of 94.

Krzysztof Kieślowski

The talented Polish film director is best known for shooting The Decalogue and the Polish-French co-production of The Double Life of Véronique and the trilogy Three Colours (Blue, White, Red), which explores the virtues sym-bolised by the French flag. Blue stars famous French actress Juliette Binoche, who has Polish roots. Kieślowski received numerous awards throughout his career, including the Cannes Film Festival Jury Prize in 1988. He died of a heart attack aged 54. Speaking at Kieślowski’s funeral, the high-profile Hollywood producer Harvey Weinstein started his eulogy with the words:

“He drank too much and smoked too much, he was proud, arrogant, enter-tainingly cynical - in other words, my kind of guy. He was also one of the world’s great directors.”

Vive la France, vive la Pologne!

Polish-French relations: key individuals

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Greece, which overspent on social issues or Spain, which overinvested on infrastructure projects and now has four airports that are under-used. “among Central and Eastern European countries we can definitely label ourselves as the leader of cohesion policy and the use we are making of it in terms of economic efficiency and improving the quality of life and the environment in this country,” Professor Grzegorz Gorzelak, Director of the Centre for European regional and Local Studies at Warsaw University told Poland Today. Prof. Gorzelak, who advises the government on cohesion policy, said EU funds have made a considerable

Cohesion policy budget distribu-tion for 2014-2020:

- €164.279 billion for less developed regions

- €31.677 billion for transition regions

- €49.492 billion for more developed regions

44.2% of the European Union funds go towards competitiveness and cohesion

“I am deeply con-vinced that there is no better way to create jobs in Poland than investing European funds in development efforts. European funds are the best guarantee for develop-ment and they cannot be wasted. They should be invested in development to a maximum degree.” Prime Minister Tusk in Brussels, after Poland secured 72.9 bn zł for cohe-sion policy.

The “Berlin algorithm” is used by the European Commission to allocate the money from the cohesion funds. It takes into consid-eration the number of a region’s residents, the difference between the average EU GDP per capita and that of the regions and the level of unemployment. The bigger the region’s popula-tion, the more money it can potentially receive. The lower its unemployment, the smaller its chances to get significant funds.

Cohesion policy objectives:- cohesion or

convergence of poorer regions

- regional and job competitiveness

- territorial cooperation

impact on the Polish economy but it’s still too early to tell how durable their impact will be. ryszard Petru says basic infrastructure projects are badly needed in Poland so it’s dif-ficult to misspend in this area. “In mature economies growth comes mainly from innovation. In emerging markets it’s from investments and innovation. If you build a road from Warsaw to Berlin you have a higher rate of return than if you build another Heathrow,” he said.

Looking aheadOnce again, the largest share of the money in 2014–2020, around 40%, will be spent on infrastructure and environ-ment programmes with an added emphasis on green trans-port, Piotr Popa, spokesman for the ministry of regional Development, which manages the disbursement of EU money, told Poland Today. apart from completing rail, motorway and highway projects, that means more money for public trans-port, bus, tram and metro systems.

Poland is one of Europe’s big polluters; it produces more than 90% of its electricity from coal-fired power plants. The government has been resisting attempts to increase European emissions targets further but it still wants to boost renewable energy production. That means subsi-

dies for  on-shore and off-shore wind farms, solar, biomass and biogas plants. many of the country’s existing wind farms are being built in the north of the country where the power grid infrastructure is weak and badly needs expansion in order to connect this new capacity and avoid overloads. The country can also reduce its greenhouse gas emissions by being less wasteful so the government will likely continue its campaign to promote energy efficiency.

after devastating flooding in 2010 that killed at least 25 and led to the evacuation of around 23,000 people, the gov-ernment plans to spend some of the cohesion funds on flood prevention measures. Strengthening links between science and business is another priority. If a university wants to carry out an EU-funded project in future it will have to do so with a business partner or it will not get the grant. The reason for this is because the European Commission is imposing stricter conditions on issuing funds in the upcoming budget-ary period. “It will not be enough to build a new road, or levee; local authorities must be able to show that it will improve energy efficiency or lower emissions, Katarzyna Dziamara-rzucidło”, public sector director at PwC, told Poland Today.

another potential problem they will face is arranging financing for future projects. Local authorities may have to finance 50% of a project’s costs by themselves, rather than as little as 15% in the current period, and the money from Brussels may no longer be in the form of a grant but as a loan. mr Popa acknowledges that implementing cohesion policy is going to get much tougher. Local and city authorities will have to adjust to these changes when preparing projects and planning spending or face a “wake up call” when Brussels denies them, mrs Dziamara-rzucidlo said. “If we assume it is just a lot of talk coming from the European Commission and that it will never happen, then we are mistaken,” she said.

many of the details are yet to be finalized but some lessons have already been learned, Piotr Popa, said. One is to have a more decentralized budget because local governments have better knowledge about their own needs. There’s a need to think about long-term development and to emphasise qual-ity rather than quantity, Prof. Gorzelak said. “It’s not enough to build a motorway. It has to be in the proper place and at the proper time. It’s not just about having the money to spend, we need to be more efficient in the way we spend it and develop a coherent policy,” he said. Projects need to be better targeted, he adds. money should go to scientific teams and institutions that are innovative and be spent on training schemes that actually help get the long-term unemployed back to work. by Adam Easton

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cohesion fundsDefinition: according to the European Union – cohesion, or convergence, is the support of the development of infrastructure as well as the human and economic capacities of the poorest regions of the European Union. It makes up almost 82% of the EU's Structural Funds. funduszeeuropejskie.gov.pl

European Union money is changing Poland’s landscape. Since it joined the EU almost nine years ago Europe has become increasingly relevant to Poles. They can see it helping to build new roads, sewage plants, museums, modernise city trans-port systems, and re-train thousands of unemployed peo-ple. a visitor to the capital Warsaw can see the world-class Copernicus Science Centre or the Chopin museum, both co-funded by Brussels. Construction of the 3 billion zloty ($959 million) east-west line of the Warsaw underground is underway. ring roads are being built and finally, it’s pos-sible to drive from Warsaw to Berlin on a motorway rather than a pot-holed single-lane road.

as the biggest poor nation in the 27-member bloc, Poland was the largest beneficiary of EU cohesion funds between 2007–2013, and was allocated €69 billion. That money funded an infrastructure boom that helped Poland become the only EU nation to avoid recession following the start of the crisis in 2008. In 2009, EU funds accounted for almost half of the country’s 2% growth in GDP. “During the crisis we had a very serious drop in private investment that was offset by public spending on infrastructure,” ryszard Petru, an economist and partner for PwC, a consultancy, told Poland Today.

Good deal for PolandIn such a climate of austerity EU leaders agreed in February to the first-ever net reduction in the multi-annual budget for 2014–2020. So the fact Prime minister Donald Tusk was able to secure more money for Poland in those negotiations, €72.9 billion, was widely seen as a success. “This is one of the happiest days of my life. I don’t believe I will be able to do something like this for Poland (ever again),” mr Tusk, said after the deal was done. Poland has been receiving EU money since before it joined in 2004 and in that time the funds have helped build more than 10,000 km of new roads, created 270,000 jobs, including 150,000 for the unemployed, built 3,600 new pre-schools and connected 112,000 households to the internet. In the current budgetary period Poland has signed contracts for 85% of its total allocation of cohesion funds.

Learning from mistakesmistakes have been made spending such a large amount of money; much attention here has focused on the building of unnecessary aqua parks, for example. Poor organisation has meant road building has proceeded slowly and the new Warsaw metro line has suffered delays. However, Poland has largely managed to avoid fraud and corruption. as a rela-tive latecomer it’s also learned from past mistakes made by

shAkING ThE EU PIGGy BANk as EU coffers start to run dry, Donald Tusk manages to squeeze out more money for Poland

Adam Easton has been the BBC corre-spondent in Warsaw since 2003. Previ-ously he was the BBC correspondent in Venezuela covering events such as the at-tempted coup against President Hugo Chavez in 2002. Prior to that Adam was the Manila correspondent for The Guardian news-paper. Adam has been a journalist for almost two decades working for newspapers, radio and television in the UK, Europe, Asia, and the Americas.

econoMy

Poland has managed to avoid fraud and corruption. It’s also learned from past mistakes made by Greece, which overspent on social issues or spain, which overinvested on infrastructure projects.

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is growing in Poland together with mentoring and network-ing events, co-working spaces, competitions and initiatives. The President of Poland in his recent letter to Silicon Valley entrepreneurs highlighted several aspects of Poland’s inno-vative and entrepreneurial potential.

 Needs and barriers But Poland should not become complacent. Local entrepre-neurs lack communication and cooperation skills, an ambi-tious global market sales orientation and have a relatively weak understanding of innovation. Data from a 2012 sur-vey study by the Polish Confederation of Private Employers Lewiatan (PKPP Lewiatan) pointed this out. It seems that our tech talent dominates our business skills and our large domestic market hinders our ‘go global’ business strategy. Israel, for instance, does not face this obstacle. Poland’s r&D investment stood at just 0.9% of GDP in 2011, as firms invest little in r&D due to weak tax incentives and a focus on price competition. Embracing risk as individuals and inside larger companies, is essential to selling outside the EU or innovating on products and processes. What is also interesting, is that Polish is quite a formal language full of courtesy and honor-ifics. This is relevant, as research shows how this formalises

informal communications and cooperation – creating barri-ers to being straightforward, which is key to business and cooperation. added to this is the fact that public universities with their cushion-comfort public financing, regulatory bur-den and rules protecting the professorial gerontocracy are a major obstacle to innovation. Lack of an innovative adminis-tration (not an oxymoron) is another handicap.

Think Estonia. Think Singapore. Think of the Nordics. Improving on trust and cooperation, the ‘go global’ attitude and a culture of innovation requires a change in our mindset plus deep structural reforms. Opening up to foreign cultures, project-oriented teamwork at school and gaining proficiency in English (as most Nordic countries have in all cases) is a good long-term tactic towards straightforward communi-cations and better cooperation. The 2012 World Economic Forum Global Competitiveness report lists tax regulations, restrictive labour regulations, inefficient government bureau-cracy, and tax rates as the most problematic factors for doing business in Poland. Over the 2007–2013 period €10bn of EU funds are devoted to innovation and entrepreneurship allo-cated through government agencies. meanwhile, Poland has fallen in the EU Innovation Union Scoreboard ranking from 23rd place (out of 27 EU countries) in 2008 to 24th in

Poland is at the heart of an entrepreneurial revolution. For many decades of the 20th century, people would have laughed out loud at the idea. The country was stifled by communist central planning, the deadweight of bureau-cracy. Thanks to the country’s openness, powerful Polish diaspora and the high level of education – especially in the technical fields – Poland has the potential to be an economy driven by entrepreneurial innovation.

Poland could do better and one of the great challenges lies in realising the country's great entrepreneurial potential. What is the source of Poland's entrepreneurial spirit? What can it learn from other economies in the region? To get an idea of Polish resilience, look at the unspoken competition with Spain. While in 1920 Poland and Spain were practically on the same development level in GDP per capita terms, by 1990 Spain’s GDP per capita was nearly 2.5 times that of Poland. But as of 2011 Spain’s GDP per capita was just  1.5 times larger. Over the 1990–2011 period Poland increased its GDP by 121% - more than any other Central Eastern European (CEE) economy, or Spain’s which grew by approximately 62%.

This is quite an accomplishment for a country that lost one-sixth of its population in WW2 and which has gone through five economic systems in the past 200 years:  19th century feu-dalism and liberal capitalism, national eco-nomic policy in the interwar period, central planning under communism and today’s liberal capitalism with its bureaucratic con-straints and large state-controlled corpora-tions. Perhaps it is exactly these obstacles that spurred the surge in private business ownership after 1989.

 Poles never lost their sense of enter-prise. The liberal economic reforms of Leszek Balcerowicz after the collapse of communist rule made a bazaar out of the whole country: street corner trad-ing, importing and exporting, setting up shops and businesses.  Cutting govern-ment spending and introducing market rules by relaxing regulations on enter-prises, trade, money and travel activated informal networks and street-smart skills. Through extraordinary politics something spectacularly straightforward happened – supply met demand. From empty shops and empty food shelves all of a sudden farmers’ produce came to the streets. International trade in all basic and elec-tronic goods imaginable back then grew dramatically in the 1990s, with great fortunes amassed and consumption grow-ing. many who had emigrated earlier to the West came back and brought capital, business contacts and skills to build cap-italism here. Economic freedom let people exploit opportuni-ties and build wealth, while creeping bureaucracy increased the burden of regulation slowly with time.

In 1995 Poland had around one million active firms. Today it boasts over 1.7m active companies, with small and medium enterprises (SmEs) representing 99.8% of all firms, and 96% of all SmEs being micro-enterprises with below nine people

employed. This is because of specific labour and tax regula-tions that make it popular to ‘stay small’ or self-employed rather than grow your business into a gargantuan organisa-tion with complex regulations and taxes. Part of the cause also lies in a sufficient level of income. Still, enterprises gen-erate about 72% of Poland’s GDP, with SmEs accounting for over 50% of GDP and employing over 70% of the entire workforce. Entrepreneurial attitudes put Poland among the top in Europe. according to a 2012 study by GfK for amway, about 84% of young Poles aged 15–29 have a positive atti-tude towards entrepreneurship and 62% imagine themselves running their own business.

 Success stories and the local start-up eco-system Poland’s EU entry in 2004 was followed by a large migra-tion wave to the  West, into the UK especially. Emigrant Poles  showed they are dynamic, hard-working, capable of successfully setting up their own businesses and rising in the ranks of local society. This is not surprising to those who know that over the past several decades companies like apple, PayPal, Warner Brothers, metro Goldwyn mayer, Fashion TV, 23andme, Silkroad Technology and Haagen-

Dazs were founded or co-founded by Polish migrants, many of whom where of Polish-Jewish background. Since the 1980s local entrepreneurs in Poland have built great innovative firms from scratch: asseco, alior Bank, CD Projekt rED, Getin Bank, Inglot, Fakro, Solaris Bus &Coach, VOX, HTL Strefa, adamEd, Selvita, InPost, VIGO Systems and dozens more.

Poland today is not just a major BPO centre, but also the programming centre for hundreds if not thousands of firms and corporations from Silicon Valley and elswhere. The road ahead is to do business independently instead of mak-ing commissions on work for other peo-ple. Interesting up-and-coming firms include Inteliwise, Baltic Ceramics, Ivona Software, Showroom or Vivid Games. moreover, the shale gas boom ahead will create a large tech service industry around the core business.

Poles rank third in the prestigious com-puter programming TopCoder world rank-ing. Entrepreneurship in ICT and ‘new tech’

represents the country’s greatest global key competitive strength, with leading international firms already invested in IT r&D here. Poland’s start-up eco-system is growing with VC funds like Innovation Nest, HardGamma, GPV, Warsaw Equity Holding, Satus, Intel Capital, SpeedUp Group and HCmG plus initiatives like Startup School and Huge Thing running start-up accelerators and actively investing. The US-Poland Innovation Hub in Silicon Valley offers high-tech ventures a route into the US and global market via its incubator pro-gramme and strong network of Valley tech executives, inves-tors and entrepreneurs. a small but real start-up community

sTART UP NATION What must Poland do to unleash its entrepreneurial potential?

Over the past decades

companies like Apple, PayPal, Warner Bros,

metro Goldwyn mayer and

haagen-Dazs were founded or co-founded by

Polish migrants.

Robert Kowalski works at the Chancel-lery of the President of the Republic of Poland. He has experience working in Poland’s SME and start-up sectors. His previous jobs include stints at the Ministry of Treasury and Bank Gospodarstwa Krajowego (BGK). Robert is a graduate of the London School of Economics and Stanford University.

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The views and opinions in this article represent the author’s own and not those of the people, institu-tions or organisations he is affiliated with.

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2011. Similarly Poland has fallen in the WEF GCr Innovation pillar rank from 44th in 2006 to 63rd place in 2012 in the world. EU funds have distorted markets and most likely crowded out private capital. Data show that innovative prod-ucts and processes have fallen as a proportion of company investments and revenues.

Experts have pointed out that subsidies have propped up thousands of weak firms, led to inflating costs, creative invoicing, and fiddling with simple metrics aimed to meas-ure quantity instead of value added. For instance, most of the over three dozen tech parks built using EU money stand pretty much empty. Easy money has eroded the healthy bootstrapping start-up drive of many young entrepreneurs. It would make sense if such funds were spent on attract-ing global investors via equity-matching VC/PE programs (like Singapore does), reforming universities (like Finland has), high-tech government procurement (like in the US), or creating ‘brain drain’ programmes (like Chile does). It is still an extremely hard task to design and implement smart industrial policy.

Former deputy Pm Jerzy Hausner noted in a 2012 report (“Kurs na Innowacje”) how Poland's great growth poten-tial is hindered by the weakness of the state. Institutional barriers and a poor business environment are blocking growth. Institutional leadership is lacking where centrali-sation and bureaucratic management, via administrative silos, dominates policymaking. Subsidies weaken inno-vation and destroy competition due to bureaucratic non-managerial control, risk-averse assurance, absurd reporting requirements, inferior project choice processes, and the dispersion of funds with no targets that would be evaluated using useful metrics.

 road ahead Poland has a vibrant and dynamic private sector, a back-ward public sector, and faces a ‘developmental drift’ sce-nario if nothing is changed fundamentally. Structural reforms that would create a free labour market, lean tax system, and remove red tape are essential. Legal institutional reforms are crucial to improving contract enforcement. Fundamental uni-versity reform can strengthen business-science collaboration and open up universities to innovation.

International collaboration with investors, corporations and universities in the US, China, Singapore, Israel and Switzerland is key to igniting entrepreneurial innovation, and they have to be attracted to cooperating with local players

– VC funds, universities, research institutions and companies. This also requires privatising and opening up to competi-tion as many sectors of the economy as possible: education, health care, rail transport, mining and energy.

What is also essential are tools that would enhance coop-eration between millions of Poles and foreigners with Polish roots who live abroad in the UK, US, Canada, Ireland, Brazil, Israel, argentina and practically all over the world. millions of entrepreneurs, engineers, corporate executives, lawyers, doctors, scientists and students can be attracted to coming to Poland and – even more importantly – engaging their time, skills and capital in all sorts of ventures.

a targeted migration policy is key for Poland to face the coming demographic challenges ahead. Easing visa restric-tions, enabling entrepreneurs with capital to re-locate their businesses and families here in exchange for residency, as well as creating ‘brain drain’ programmes with private sec-tor partners aimed at attracting tech talent from across the world are all ways of strengthening local entrepreneurship and growth. Entrepreneurial drive is ingrained in Polish DNa. For this reason alone Poland has the potential to be among the world’s most competitive nations, if only the necessary changes are implemented and Poles learn to communicate and cooperate more openly in today’s global business envi-ronment. by Robert Kowalski

world bank doing business Ranking for Poland

Overall rankStarting a BusinessProtecting InvestorsPaying TaxesEnforcing ContractsGetting Credit

world economic forum global competitiveness Report ranking for Poland

Overall rankInstitutions Labor market efficiency Goods market efficiency Business sophisticationInnovation

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Monday 10 June 2013intercontinental Hotel, Warsaw

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health mattersBuilding a sustainable healthcare system for Poland

Health Matters will discussthe current shape of the Polish healthcare sector and explore how both public and the privatesectors can best work together to build a more sustainable healthcare system.

Participants will include: private healthcare providers, insurance companies, hospital management, legal experts, healthcare consultants and hospital planners & designers.as well as private equity funds.

An excellent networking opportunity, expert panels will discuss:

• Healthcare legislation• Financing sources and structures for clinics & hospitals• Case studies of efficiently designed hospitals• Telemedicine: a major development in diagnostics• Healthy aging

Partners

40 41nazWa działusPoRt

west in search of more lucrative offers. Talented coaches such as Jerzy Engel and Henryk Kasperczak sought their luck in warmer climates, the former in Cyprus, the latter in africa. Unlike other former communist countries such as Croatia and the Czech republic which managed to compete with Europe’s best, Poland lacked the most basic sport infrastructure. Stripped of cash and mentors, Polish clubs neglected the development of young players. a lot of promising young players, such as Lukas Podolski and miroslav Klose, were denied the chance to train at a high level and ended up moving to countries where they could. Plagued by corruption and haunted by hooli-ganism Polish football reached a new low between 2000 and 2005 when no league matches, or even highlights, were shown on terrestrial television. Until recently, one of the most popu-lar songs bellowed at weekly league games by Polish football fans was a derogatory chant aimed at the Polish Football association.

New Dawn: 1:0 Boniek But things are now starting to change. Euro 2012 helped gel Polish national identity and restored, at least tempo-rarily, a sense of pride in Polish football and society that had long been absent. It also gave Poland’s football infrastruc-

was the start of my love affair with foot-ball. You can be proud of a team that fights hard and shows a rare flash of brilliance. In my British primary school all my friends had posters of Liverpool’s robbie Fowler or ronaldo (the original one) plastered on their lockers – I had marek Citko of Widzew Łódź.

Burkina Faso, Haiti… and PolandFor a while Poles had a lot to be proud of, such as finishing third at the 1974 and 1982 World Championships. But martial law, the crushing of Solidarity, and then the fall of com-munism derailed the Polish soccer machine. as Jerzy Engel, Poland’s for-mer national coach, told the BBC last year: “When you have such strong changes in a country it's very difficult to develop something like sport. Sport is always one of the last things because there are more important things to develop.” after being knocked out of the 1986 World Cup, Poland did not qualify for a major tournament until 2002. Today, Poland is 59th in the Fifa world rankings, below the likes of Burkina Faso, Haiti and Uzbekistan.

The fall of communism meant that Polish football lost the support of its main sponsor, the state. money became scarce. Stadiums were left to crumble and Polish players ventured

Football, as Pele said, is “the beauti-ful game.” anyone who has seen Pele play, or messi dribble, or Beckham bend it, will surely agree. and those of us who followed Euro2012 in Poland will recall some of the game's most spectacular and nail-biting moments. But football is also about big money and big temptations; the beautiful game has its ugly side. The promised renaissance of Polish football after Euro2012 has been overshadowed by the inefficient and often corrupt man-agement of the sport. What is at stake is more than the disapproval of loyal fans, but also Brand Polska.

Talking to a malayan cab driver in Kuala Lumpur I was stunned by how he effort-lessly rolled off the names of Poland's 1974 squad. Deyna, Domarski, Szarmach, Żmuda. and, of course, Grzegorz Lato, the symbol of that Golden Generation. They were often good working lads who had to choose between working down a pit and playing on a pitch; they were, it seemed at the time, a model of decency. Those were the good days and they are still cherished in Poland. Last year a TV commercial for a Polish bank showed three men, beer in hand, huddled together on a sofa watching a football game. It was set in modern-day Poland but the game they were watch-ing was from October 1973. Their large plasma television showed Jan Domarski, one of the Golden Boys, scoring a goal at Wembley which shattered England’s hopes of qualifying for the World Cup the following year.

Now Lato is concentrating on a dif-ferent aim – his leadership of the Polish Football association (PZPN), with its cronyism and back scratching. It is dif-ficult to underestimate how depressed Poles are by the decline in football. Football is about identity and that's why Poland has to clean it up. It is part of the Polish historical lot to fight bat-tles, lose them honourably and then for centuries to celebrate the heroism born out of failure. So the fact that the Polish team loses sometimes does not in itself send us into the doldrums. after all, my own first football experience, at the age of six, was of watching Poland lose. It was the 1992 Barcelona Olympics football final – Poland vs Spain – and I was allowed to stay up late to watch the game with my family. Poland lost, but it

Philip Boyes has written speeches, sometimes on the back of restaurant napkins, for presi-dents, prime minis-ters and congressmen. A former Reuters journalist, his work has been published in the New York Times, Wall Street Journal and Financial Times. Philip is a gradu-ate of the London School of Economics and King‘s College London.

Former Juventus Turin star Zbigniew

“Zibi” Boniek took the reins of the PZPN in October 2012.

The promised renaissance of Polish football after Euro2012 has been overshadowed by the inefficient and often corrupt management of the sport.

A New Dawn for Polish Football? after years of disappointment there might yet be hope for Polish fans.

42 43nazWa działusPoRt

ture a much needed facelift. Winning the bid to host Euro2012 led the Polish gov-ernment to construct over 60 stadiums and more than 2,000 artificial pitches in communities across the country.

One of the main turning points how-ever, came after the Euro circus left town. In October 2012 former Juventus Turin legend Zbigniew Boniek defeated Grzegorz Lato to become the presi-dent of the Polish Football association. although they are both of the same generation – Lato is six years older than Boniek – in terms of mentality they are a world apart. This gulf becomes clear when looking at their different career paths after they hung up their boots. Lato tried his luck in Polish politics before climbing the ranks of the PZPN, helped along by his envelope-stuff-ing buddies: his official PZPN salary was 50,000 zł per month (1% of the PZPN’s total budget).

In contrast, Boniek went into busi-ness, setting up several successful com-panies in Italy, where he finished his playing career. He is wealthy but also media savvy: upon being voted presi-dent one of the first things Boniek did was to announce that he would not pay himself a salary for the duration of his term because, he said, he was doing the job to improve the situation of Polish football, not to earn money. 1–0 Boniek.

They mean business Boniek brought with him a different calibre of leadership. Under Lato’s reign the top jobs were given to fallen football stars of yesteryear with very little business experience. With Boniek the jobs are going to accom-plished managers, some of whom hap-pen to have been footballers. These include Bogusław Biszof, formerly a senior manager at Heineken and Polish Telecommunications. a Stanford

questionable given that the freshly con-structed national stadium – which cost Polish tax payers over €420 million – has 20,000 square metres of office and con-ference space.

Brand Polska The new PZPN leadership has helped bring the organisation into the 21st Century. It has also taken the first steps to improve the brand of Polish foot-ball, at home and abroad. Boniek has tried to woo back Polish fans, making sure that anti-PZPN chants at stadi-ums are a relic of the past. The former striker has had initial success in creating a dialogue with disgruntled Polish fans. at the very start of his term as PZPN chief, Boniek announced that as of 2014 Poland’s national team will only have the eagle, not the PZPN logo, on their shirts: a reversal of Lato’s original plans. Boniek’s announcement was a populist one, but it has helped claw back sup-port for the battered PZPN. He has also cut ticket prices. Boniek’s logic: better to have 50,000 fans in the stadium pay-ing 50 zł each, rather than 25,000 pay-ing 100 zł. another popular move has been to ensure that the Polish national team plays all their competitive games in the national stadium, which wasn’t the case under Lato.

These measures have, momentarily, bought Boniek good-will with Polish fans. They have helped improve the disastrous image of the Polish Football association. But if Poland wants to line-up a new Golden Generation of foot-balling talent then it must go much further. In order to convincingly boost the brand of Polish football, Boniek and his colleagues must weed out deep-rooted corruption within its own ranks and untie longstanding bureaucratic knots. and beat San marino this month. by Philip Boyes

and Wharton graduate with an mBa under his belt, Biszof is now in charge of running Poland’s premier league. Or roman Kosecki, a famous footballer in the 1990s and the founder of Kosa Konstancin, a successful youth acad-emy. Drawing on Kosecki’s experience, Boniek made him vice-president of the PZPN, responsible for youth develop-ment. Under Kosecki, the PZPN is now improving the structure of youth train-ing in Poland, including a much-needed centralisation of Poland’s youth leagues.

This will take time. achieving Western standards for youth training and sports academies will be a long and arduous task and the initial results will prob-ably only become evident in three to five years. But things are now moving in the right direction. Legia Warszawa understood the need to focus on the young earlier than most and is already starting to reap the benefits of its training academy set up 10 years ago. at the start of this season, Legia had three academy players in their starting line-up. Two of them got called up to the national team within four months. Polish clubs are beginning to under-stand that youth development makes sound financial sense. Investing in a player from a young age and poten-tially selling him on as a 20 year-old for €3 mln or €4 mln is a good investment.

Since taking charge Boniek has made it his priority to make Polish football more transparent and less corrupt. He has opened up PZPN’s books to the public, publishing details of all tenders, drivers’ salaries and licensed agents. In Western football organisations this has long been the norm, for Polish stand-ards this was a major coup. Boniek has also cancelled Lato’s pricey plans to build a new headquarters for the PZPN in the leafy Warsaw suburb of Wilanów. Lato’s motivation behind these plans is

Things are now starting to change. Euro 2012 helped gel Polish national identity and restored a sense of pride in Polish football and society

Golden Generation: UEFA President Platini (2nd L) with (from left) Polish football greats Szarmach, Lato and Boniek.

44 45nazWa działu

Tucked away in the north eastern pocket of Poland, brushing shoul-ders with both Lithuania and Belarus, Podlaskie is often perceived as a chilly, rural outpost. Proudly labelling itself as ‘The Green Lungs of Poland’, it is also the country’s coldest region – average win-ter temperatures here range between

-6 and -15°C. The region is also Poland’s most sparsely populated voivodship

– its 1.19 million inhabitants account for only 3.1% of the Polish population. and, according to PaIiIZ, as little as 1.6% of total foreign direct investment in the country is directed towards Podlaskie. However, despite its rural image (this works favourably when it comes to pro-moting the region’s tourism sector), the local government has recently worked with the help of EU funding, towards attracting greater foreign investment and supporting local entrepreneurs.

EU assistanceThe region’s economy focuses largely on food and timber processing, the building industry and the production of machinery. Indeed, its manufactur-ing and services industries account for 30.6% and 53% of jobs respectively while agriculture provides employment for 23.4% of the region’s work force

– a high figure which underscores the voivodship’s core rural roots. Labour costs are 82.3% of the national aver-age, which may entice more foreign companies to establish working opera-tions here. The prize catch to-date has been Ikea, whose manufacturing wing Swedspan last year opened a plant just outside Bielsk Podlaski. The project

– which will be worth €340m by the time of completion, and which received 145.7m zł from the EU’s Innovative Economy Programme – is being com-pleted in two phases, and will ultimately employ 2,000 people, producing high density fibre wood.

“Our region offers a number of invest-ment opportunities, both in terms of exports to the east and as an attrac-tive production location because of its quality of life,” says Podlasie marshall, Jarosław Dworzański. a lot of these investments have been made pos-sible by EU structural funds – since 2007, the region has received €2.03bn (topped up by a further €1.23bn by the Polish government). Certainly, for such a sparsely populated region, there is no shortage of business and technol-ogy parks geared towards fostering increased innovation and manufactur-ing: Białystok Scientific and Technology Park, Scientific and Technology Park Eastern Poland, Podlaskie Industrial Park in Czarna Białostocka and the Industrial Park in Zambrów. and, according to the region’s Office of the marshall, more than 500 regional SmEs and r&D projects have received grants – 326m zł in total – through the EU funded programmes.

Local innovationThe capital, Białystok offers very favourable tax exemptions of up to 70% to investors intent of creating jobs. american automotive electronic systems producer Standard motor Products, the global plastic proces-sor rosti, and British glass producer Pilkington are just some of the firms that represent foreign capital in the city (see box on Białystok). The state-of-the-art Białystok Science and Technology Park (BPN-T), an initiative of the City of Białystok and PaIZ (Polish agency for Enterprise Development), co-financed by the European regional Development Fund under the Operational Programme

“Development of Eastern Poland” is due to open in april. The park’s four-year construction cost 168.5m zł, of which 144.5m zł was sourced from EU co-financing. “So far 20 start-ups have

been granted permission to become an incubator member,” says BPN-T spokesperson Julita maciorowska, who outlines that many of the start-ups specialise in ICT, robotics, e-marketing, mobile applications, e-commerce and telecommunications. “Our role is also to stimulate the regional economy by helping companies introduce innova-tive products and by promoting entre-preneurship among young people and scientists,” adds ms maciorowska.

Local manufacturing firms are active too. PLUm, which produces high-tech industrial electronics (and employs 200 people) is working on two new invest-ments valued at €2.5m with support from French electricity supplier ErDF. Polbud Sa, a local wind farm produc-tion firm, also in Bielski Podlaski (not surprisingly, the town has the region’s second lowest jobless rate – 10.3%), is conducting research on the develop-ment of a new turbine design, ideal for small wind energy systems – the 20m zł investment, co-financed by state-owned bank BGK’s Technology Credit Fund, will cover the construction of three modern production facilities, But, the title of regional kingpin goes to Dobroplast. The maker of PVC win-dows is based in Zambrów and, hav-ing reported annual sales revenue last year of over 300m zł, was acquired by Swiss construction material group aFG

Liam Nolan covers Polish current affairs for the Irish press, RTÉ Radio and NPR news. From 2004 to 2011, Liam directed and produced televi-sion programmes for Irish broadcasters RTÉ, TG4 and Setan-ta. He holds a MA in Communication from Université Lumière Lyon II and a B.Sc in Film & Broadcasting from DIT, Ireland.

‘Our region offers a number of investment opportunities, both in terms of exports to the east and as an attractive production location because of its quality of life’

Poland’s green lungsHome to bison and small businesses, Podlaskie is shrugging off its image as a sleepy backwater

podlaskie statistics Capital: Białystok

Total population: 1.19 millionAv. Monthly salary: 3057,19 zł (GUS, Jan ’13)Total area: 20,187 km2Population density: 60 people/km2Unemployment: 15,5% (GUS, Jan ’13)Other principal cities/towns: Suwałki, Łomża Augustów, Bielsk Podlaski, GrajewoSpecial Economic Zones: Suwałki (116,19 ha), Bialystok (29,91 ha), Grajewo (10,93 ha)

VoiVodsHiP Focus

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nazWa działuVoiVodsHiP Focus

in February. For businesses thinking of investing in the region, the Suwałki Special Economic Zone (divided into three subzones: Suwałki, Białystok and Grajewo) offers enticing tax relief – cov-ering revenue from income tax – of up to 65% of the investment value. The three subzones have created over 2,500 jobs to-date and support 25 companies.

agriculture still strongDespite the emergence of this new wave of manufacturing and tech focused companies, the agricultural sector still holds its weight, particularly when it comes to dairy production. according to PaIiIZ, farmland makes up 55% of the region’s total landmass. In fact, Podlaskie produces 20% of the country’s milk quota. mlekpol, head-quartered in Grajewo, is the largest producer of dairy products in Poland (its ‘Łaciate’ milk brand is a household favourite), and one of Europe’s twenty largest dairy companies. The headquar-ters of mlekpol’s closest rival, mlekovita are situated a short distance away in Wysokie mazowieckie (Podlasie).

Tourism is identified by the Office of the marshall as a sector with strong potential growth. This is hardly surpris-ing – almost one third of Podlaskie con-sists of protected national park lands, including the Białowieża National Park, which straddles the border with Belarus and is home to over 450 bison. On the issue of trade with neighbouring non-EU Belarus, marshall Dworzański would like to develop greater cooperation. “In our revised strategy for development of the region we are talking about pro-moting cooperation (with Belarus), both economically and culturally,” says mr Dworzański. according to the Office of the marshall, last year, Belarusian nationals spent approximately 800m zł while visiting Podlaskie. Despite the

huge strides made at local level dur-ing the past decade to develop the region’s infrastructure and investment attractiveness, marshall Dworzański is pragmatic about Podlaskie’s economic future. “Podlaskie will never be a great industrial basin. and that's ok, because we should remain the green lungs of Poland,” he says. Indeed, no point in pretending to be a Goliath if being small and beautiful works. by Liam Nolan

łomżaPopulation: 63,357

Home to the eponymously named Łomża beer, the city’s local brewery is owned by Polish-German consortium Van Pur. In March, developer Echo Investment will open the city’s first large scale shopping mall – the rather chic looking Galeria Veneda will possess a retail area of over 15,000 sqm. Łomża’s local authorities have initiated a number of construction projects such as the revitalisation of the city’s old market hall, funded under public-private partnership deals. This small city possesses three public universities but unfortunately its jobless rate has risen steadily from 10.2% in 2008 to a current high of 17.7%. Last year, the city representatives signed a cooperation deal with PAIiIZ aimed at attracting further investment to the city.

białystokPopulation: 295,200

Located 50km from the border with Belarus, Białystok’s authorities have worked hard in recent years at establishing the city’s image as a dynamic gateway between East and West, adopting the term ‘Rising Białystok’ and instigating an ambition development strategy for 2011–2020. As the region’s economic hub, Białystok is home to many of Podlasie’s larger businesses – 45% of the region’s total urban population live in the capital, including 45,500 university students. The city also produces its fair share of alcohol. Polmos Białystok, the country’s largest producer of vodka, is here – its main brands Absolwent and Żubrówka sell well at home and abroad. On the other side of town, the Dojlidy brewery produces the famous Żubr beer brand. The soon to be opened Białystok Science and Technology Park will offer tech start-ups the highest standard of innovative IT facilities and laboratories – the 168.5m zł project was co-financed by the EU’s European Regional Development Fund.

suwałkiPopulation: 69,340

Best known for being the coldest city in Poland during winter months (night tempera-tures can often fall below -20°C in January), Suwałki is also the birthplace of legendary Polish filmmaker Andrzej Wajda. Home to a sub-division of the Suwałki Special Economic Zone, small to medium sized busi-nesses are predominant. The Science and Technology Park Poland-East, which first opened in 2004 and cost 67m zł to build (co-financed by the EU’s Operational Programme Development of Eastern Poland) houses a number of local tech and manufactur-ing firms. The city enjoys an annual budget of between 200–250m zł but endures an unemployment rate of 14.1%. Over 66% of Suwałki residents are of working age.

The newly built Science and Technol-ogy Park Poland-East in Suwałki.

Białystok’s market square and the city’s picturesque old town in the background.

A colourful row of houses in Łomża, the region’s third largest city.

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47table of

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warsaw stock exchange insider WIG20 continues its losing streakThe poor performance of several blue chips ushers in a period of caution. see page 50

sPeciaL FeatUreIPO market waiting to reclaim the spotlightThe number and value of IPOs at WSE has decreased considerably in the past year. see page 51

Banking & FinanceFans of Banking Stock Kept BusyThe government's decision to sell off 10% of PKO BP won applause from Moody's. see page 52

BPoEurope’s outsourcing king continues to win clients Why choose Poland and not the Philippines? see page 53

energYUtilities seek alternatives to coal-fired plants The Treasury Ministry is keen to see the construction commence on the Opole power plant. see page 54

transPort & inFrastrUstUreFavourable EU budget gives construction firms a lifeline Good news from Brussels gives road construction firms some hope. see page 55

oFFiceMore premium developments planned for the capitalWarsaw's western suburbs witness more class-A office space deals. see page 56

retaiLShopping malls continue to attract investor interest Warsaw’s Białołęka district will provides the capital’s eastern suburbs with a unique retail experience, see page 58

warehoUse & LogisticsMajor lease transactions characterise a buoyant marketGoodman’s Pomeranian Logistics Centre in Gdańsk is expected to be valued at more than €300m. see page 60

residentiaLHigh demand for family-sized apartment developments The capital’s demand for family unit developments remains high. see page 62

start UPCoding Fingers: from wine apps to websites Coding Fingers from Białystok discuss the art of building mobile applications. see page 64

adit hillaborem re iliqui quiae vernamet untium

BUSIneSS revIeW

As we move into March, we take a look at the key trends affecting all major business sectors. Life on the WSE is not as rosy as it was at the end of last year – many for-eign investors are taking a step back from purchasing shares and further consolida-tion looks likely for WIG20. This month’s special feature examines why the num-ber of IPOs on the WSE has decreased of late while the banking and finance review looks back at an eventful month when key stakes in both PKO BP and Bank Pekeo were offered to the market. Poland continues to attract outsourcing contracts despite increased competition from Ukraine and Romania and our exten-sive review of all the latest deals across real estate sectors shows that demand remains high for new developments. The construction of new family-sized apartment developments, particularly in the capital, suggests that increasing num-bers of young couples prefer to live close to their place of work. And, our feature on a mobile application start-up from Białystok underscores that city’s small, but vibrant tech start-up scene.

Lech Witecki, head of GDDKiA (national roads authority), recently remarked that the frail condi-tion of many con-struction companies was not caused by the low value of contracts, or the investment policy of the government, but by mistakes made by the management teams of contractors. see page 55.

“Teaming up was a no-brainer, as we both graduated with degrees in com-puter science from Białystok Technical University and we both worked well to-gether," says Daniel Dudek from Coding Fingers. He and busi-ness partner Marcin Łępicki discuss their approach to design-ing apps. see page 64.

“Not many years ago Poland was just one of many loca-tions for business services. Today it is a superpower,” claims Paweł Panczyj, operations director for ABSL. Poland's BPO sector continues to hold its weight against out-sourcing providers in Asian markets. see page 53.

"After less robust activity in 2012, we expect the value of initial public offerings to rise in 2013,” says Błażej Karwowski, the WSE Spokesman. Agata Nałęcz examines why the number and value of IPOs has decreased consider-ably during the past twelve months. see page 51.

poland in a nutshell48 49

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Higher educationrate: 88,7% of adult population(2010, Eurostat)

Gini coefficient: 31.1 12th in the EU (2010, Eurostat)

business review

generaL statistics

Poland in a nutshell

National parliament:460 members

Political parties: PO: 207 seats (45%)PiS: 157 seats (34,13%) RP: 40 seats (8,69%)PSL: 28 seats (6,08%)SLD: 27 seats (5,86%)(female deputies: 24%)

Number of Polish deputiesin the European Parliament: 51 seats(6,76% of total)

Political system: a parliamentary repre-sentative democratic republic, whereby the Prime Minister is the head of government of a multi-party system and the President is the head of state. Executive power is exercised by the Council of Ministers. Legislative power is vested in both the government and the two chambers of parliament, the Sejm and the Senate. The Judiciary is independent of the executive and the legislature.

Administrative order: Poland is a unitary state. After the 1999 administrative reform, it is now divided into 16 provinces (voivod-ships), 379 districts (powiat) and 2479 local government communities (gmina).

National defense: Army: 100,000 (professionals)Yearly defense budget: $10 bn (2013)Scheduled equipment purchases: $41 bnForeign deployment: Afghanistan (2900 pers.)

Law: the legal system has been developing since the first centuries of Polish history, over 1,000 years ago. In 1791 Poland became the first country in Europe (2nd in the world) to adopt a Constitution as supreme law on its territory. Constitutional Tribunal is the highest jurisdic-tion in today’s Poland. Court decisions can be appealed to the European Court of Justice in Strasbourg. The Republic of Poland recognizes also the International Court of Justice.

Memberships: UN, United Nations (1945)EU, European Union (2004)NATO, North Atlantic Treaty Organization (1999)WTO, World Trade Organization (1995)IMF, International Monetary Fund (1986)Schengen Agreement (2007)G6, Group of Six (2006)Council of Europe (1991)OECD, Organisation for Economic Co-operation and Development (1996)OSCE, Organization for Security and Co-operation in Europe (1994)Visegrád Group (1991)Weimar Triangle (1991)EEA, European Economic Area (2003)CBSS, Council of the Baltic Sea States (1992)IEA,International Energy Agency (2008)IAEA, International Atomic Energy Agency (1957)ESA, European Space Agency (2012)

President: Bronisław Komorowski

Next presidental election: 2015

Prime Minister: Donald Tusk (PO)

Ruling coalition: PO-PSL

Next parliamentary election: 2015

Geography: Poland, officially the Republic of Poland (Polish: Rzeczpospolita Polska), is a country in Central Europe, bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian enclave, to the north.

Official language: Polish

Key dates:Christianisation: Apr 14, 966 Kingdom of Poland: Apr 18, 1025 Polish-Lithuanian commonwealth: Jul 1, 1569 Partition of Poland: Oct 24, 1795 Duchy of Warsaw: Jul 22, 1807 Congress Poland: Jun 9, 1815 Independent Poland: Nov 11, 1918 Invasion of Poland, WWII: Sep 1, 1939 Communist Poland: Apr 8, 1945 Republic of Poland: Sep 13, 1989

History: The establishment of the Polish state is often identified with the adoption of Christianity by its ruler Mieszko I in 966, over territory similar in size to that of present-day Poland. The Kingdom of Poland was formed in 1025, and in 1569 it cemented a long as-sociation with the Grand Duchy of Lithuania by signing the Union of Lublin, forming the Polish–Lithuanian Commonwealth. The Com-monwealth ceased to exist in 1795 as Polish lands were partitioned between the Kingdom of Prussia, the Russian Empire and the Aus-trian Empire. Poland regained its independ-ence as the Second Polish Republic in 1918. Two decades later, in September 1939, World War II started with the Nazi Germany and So-viet Union invasion of Poland (Molotov–Rib-bentrop Pact). Over six million Polish citizens died in the war. The People’s Republic was declared in 1952 although Poland was a client state of the Soviet Union from 1944. During the Revolutions of 1989, the communist state was overthrown and democratic rule was re-established in the form of the “Third Polish Republic”.

Despite the vast destruction the country experienced in World War II, Poland managed to preserve much of its cultural wealth. There are currently 14 heritage sites inscribed on the UNESCO World Heritage list in Poland. Since the end of the communist period, Poland has achieved high rankings in terms of human development.

Sources: National Statistics Office (GUS), National Bank of Poland, Min. of Finance, Min. of Economy, Min. of Employment, 2011 national census, Warsaw Stock Exchange, Eurostat, World Bank, United Nations, OECD

Human Development Index: 0.81339th in the world (2011, United Nations)

GDP (PPP):Total: $814 bn19th in the world Per capita: $21,26145th in the world (2011, World Bank)

researchedand edited by Bartosz Stefaniak

Life expectancy at birth:men: 71,3 yearswomen: 79,8 years(2010, United Nations)

Fertility rate: 1,38%(2010, World Bank)

GDP (nominal):Total: $514 bn22nd in the world Per capita: $13,46351st in the world (2011, World Bank)

Ethnic groups: 98.1% Polish0.6% Ukrainian 0.2% German0.2% Belarusian0.1% Lithuanian1.8% Other(2011 national census)

Capital city: Warsaw (1,7 mn pop.)

Main cities: Kraków (0,76 mn)Łódź (0,74 mn)Wrocław (0,63 mn)Poznań (0,55 mn)Gdańsk (0,46 mn)Szczecin (0.4 mn)Katowice (0,3 mn)

Population:38,501,0006th in the EU34th in the world(2011 national census) Density: 123/km2 (320/mi2)83rd in the world(2011 national census)

Internet: .plPhone: +48Drives: on the right

Total area:312,685 km2 120,696.41 mi269th in the world

Time zone: CET (UTC+1)

Main river:Vistula (1047 km) Oder (854 km)

Coat of arms:The White Eagle symbol appeared for the first time on the coins made during the reign of Bolesław I (992-1025), initially as the coat of arms of the Piast dynasty. The eagle’s graphic form has changed throughout centu-ries. Its recent shape, accepted in 1927, was designed by professor Zygmunt Kamiński and was based on the eagle’s form from the times of Stefan Batory’s reign (1576-1586).

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Poland in a nutshell

International rating: Fitch: A- (stable)Moody’s: A2 (stable)S&P: A- (stable)(Jan 2013)

Foreign direct investment in Poland:1994-2011: €139.1 bn2011: €10.9 bn(National Bank of Poland)

Polish direct investment abroad: 2011: €5.1 bn(National Bank of Poland)

Imports dynamics: Developed countries: +10.7%Developing countries: +15.1% (2011/2010, Ministry of Economy)

Exports dynamics: Developed countries: +11.8% Developing countries: +18.3%(2011/2010, Ministry of Economy)

WIG20 stock index: 2012: +20% (2582 pt) 2011: -22% (2144 pt)2010: +15% (2744 pt)2009: +33% (2388 pt)2008: -48% (1789 pt)2007: +5% (3456 pt)2006: +24% (3285 pt)2005: +35% (2654 pt)2004: +25% (1960 pt)2003: +34% (1574 pt)

Balanced budget amendment: Poland’s constitution (adopted in 1997) caps public debt at 60% of GDP - the government cannot take on any financial obligations that would cause that limit to be exceeded. To ensure this level is never breached, Poland has a self-imposed debt threshold of 55% of GDP, and the government must take action to balance the budget once this level is exceeded.

Warsaw Stock Exchange: listed companies: 438 (43 foreign)capitalization of Polish companies: €129 bncapitalization of foreign companies: €52 bnnumber of IPOs: 34 (2010), 38 (2011), 19 (2012)number of investment accounts: 1.5 mn2012 total stock sales: €49.6 bn 20120 average stock sale per session: €200 mn (Jan 2013, Warsaw Stock Exchange)

National bank governor: prof. Marek Belka

Inflation (y/y): Dec 2012: 2.4% Nov 2012: 2.8% Oct 2012: 3.4% Sept 2012: 3.8% Aug 2012: 3.8% Jul 2012: 4.0% Jun 2012: 4.3% (National Statistics Office)

Public debt:2011: 56.4% GDP2010: 54.8% GDP2009: 50.9% GDP2008: 47.1% GDP2007: 45% GDP2006: 47.7% GDP2005: 47.1% GDP2004: 45.7% GDP2003: 47.1% GDP(Eurostat)

Budget deficit:2011: 5% GDP2010: 7.9% GDP2009: 7.4% GDP2008: 3.7% GDP2007: 1.9% GDP2006: 3.6% GDP2005: 4.1% GDP2004: 5.4% GDP2003: 6.2% GDP(Eurostat)

Working time: av. 1937 hours per year7th place in OECD3rd place in EU(2011, OECD)

Workforce productivity: $26.2/hour (2011, OECD)

Total employment:16 035 000(2011, OECD)

Unemployment:Oct 2012: 10.1%Sept 2012: 10%Aug 2012: 9.9%Jul 2012: 9.8%(Eurostat)

Average salary:3780 zł gross(y/y +2.7%)(Nov 2012, National Statistics Office)

Minimal salary:1600 zł gross(Jan 2013, Ministry of Employment)

Main tax rates:PIT, personal income:18% (below zł 85k/y) 32% (above zł 85k/y)CIT, corporate income:19% (flat tax)VAT, value added: 5%, 8%, 23% (Ministry of Finance)

GDP per capita in relation to EU average:51% (2004, EU accession), 51% (2005)52% (2006), 54% (2007), 56% (2008), 61% (2009), 63% (2010), 64% (2011) (Eurostat)

Currency exchange rates: EUR: 4.14 (y/y+0.75%)USD: 3.17 (y/y 2.40%)GBP: 4.77 (y/y -3.48%)CHF: 3.38 (y/y -2.50%)JPY: 3.42 (y/y -9.95%)(Mar 1, 2013, National Bank of Poland)

Economical overview: after 20 years of constant economic growth, Poland with a nominal GDP per capita of $13,463 is rec-ognized as a high income economy. It is the biggest economy in Central Europe, the sixth largest in the EU and, according to different sources, 19th to 21st in the world. It is also one of the most dynamic economies on the globe. According to the United Nations Statistics Di-vision, Polish nominal GDP rose from $64,5 bn in 1990 to $514 bn in 2011. After China and Vietnam, it gives Poland 3rd place worldwide in long term development rate. During the ongoing crisis, Poland was the only mem-ber country of the European Union to have avoided a decline in GDP, meaning that in 2009 Poland created the largest GDP growth in the EU. Poland is also home for the biggest and most dynamic stock exchange in Central Europe. According to Deloitte’s CE TOP 500 survey, four of the 10 biggest companies in Central Europe are from Poland.

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GDP growth rate: Poland’s GDP figures since the mid-90’s have varied greatly but, crucially, they have never gone into negative growth. In 2009 the country, was the only EU economy not to. While serious challenges remain, the figures are a testament to those who set the course of the economy during and immediately after the transition from communism to a free-market economy.

Minister of finance: Jacek Rostowski, awarded ‘Best Euro-pean Finance Minister 2009’ by The Banker magazine.

10 year bonds interest rate: 3.72% (Dec 2012)

Currency: Polish Złoty (zł)

Interest rate: Feb 2013: 3.75% Jan 2013: 4.00%Dec 2012: 4.25%Nov 2012: 4.5%(National Bank of Poland)

National bank reserve: Jan 2013: €82.5 bn Jan 2012: €75,7 bnJan 2011: €70.2 bnJan 2010: €60.9 bnJan 2009: €46 bnMar 2008: €63.4 bn(National Bank of Poland)

Exports by destination: Developed countries: €114.2 bn (84.2% of total)Developing countries: €21.4 bn (15.8%)European Union: €105.6 bn (77.8%) Eurozone: €73.3 bn (54.1%)Germany: €35.4 bn (26.1%)United Kingdom: €8.7 bn (6.4%)Czech Republic: €8.4 bn (6.2%) France: €8.3 bn (6.1%)Italy: €7.3 bn (5.4%)(2011, National Statistics Office)

Exports by sector: Automotive: €19.1 bn (14.1% of total)Chemical industry: €18.7 bn (13.4%)Mechanical equipment: €16.7 bn (12.3%)Consumer electronics: €15.3 bn (11.3%)Metalurgy: €16 bn (11.2%)Food products: €15.1 bn (11.1%)Furniture: €6.5 bn (4.6%)Clothing and textiles: €4.9 bn (3.6%)Shipbuilding: €3.6 bn (2.6%) (2011, National Statistics Office)

Imports by origin:Developed countries: €99.8 bn (66.4% of total)Developing countries: €50.6 bn (33.6%)European Union: €89.1 bn (59.3%) Eurozone: €69.5 bn (46.2%)Germany: €33.5 bn (22.3%)Russia: €18.3 bn (12.2%)China: €13,2 bn (8.8%) Italy: €7.9 bn (5.3%)France: €6.3 bn (4.2%)(2011, National Statistics Office)

Imports by sector:Chemical industry: €26.4 bn (17.5%)Fossil fuels: €19.2 bn (12.7%) Mechanical equipment: €18 bn (12%)Metalurgy: €16.3 bn (10.8%) Consumer electronics: €15 bn (10%) Automotive: €12.1 bn (8.6%)Food products: €12.5 bn (8.3%)Clothing and textiles: €7.4 bn (4.9%) Medical & scientific devices: €7.4 bn (4.9%)(2011, National Statistics Office)

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Foreign trade balance: Poland’s economy plays an important role in the chain of sup-ply of many global companies. A significant part of imports are capital goods needed for industrial retooling and for manufacturing inputs, rather than imports for consumption. Poland is also highly dependable on external fossil fuel suppliers. The current economic slowdown in Europe combined with the free float of Polish currency is exerting a major influence on Poland’s foreign trade.

Nominal GDP growth: free float of the na-tional currency helped the country maintain development even in the middle of the global crisis. (National Statistics Office)

wse ipo50 51

nazWa działunazWa działu50 warsaw stock exchange insider

WIG20 continues its losing streakbusiness review

Divestment at WSE continued in February. Several blue chips have disappointed market players with poor financial results from Q4 2012. Analysts believe that there are no strong arguments that could foster a re-covery of the WSE’s indexes at the moment.

Mariusz Musiał, a broker at Trigon DM recalls that Q4 2012 was a time when market players were buying blue chips aggressively in anticipation of divi-dend payouts. Since the new year the situation at WSE has changed significantly.

The blue chip index of the Warsaw Stock Exchange (WSE), which since the end of November has risen by 10%, to reach 2634 points, has already dropped back to its original level. Among the guilty par-ties are several blue chips, which sur-prised investors negatively. Furthermore, the market players have restrained from buying shares, instead waiting for possi-ble placements of shares by the Ministry of Treasury. “The market became disap-pointed with Polska Grupa Energetyc-zna (PGE) and Telekomunikacja Polska (TPSA). Now it turns out that the dividend of TPSA is going to be smaller than pre-viously expected and that the cash flow of the telecommunication giant is weak. Moreover, the upcoming IPO of Energa and the last share placements, of Pekao and PKO BP, drained equity funds and left not much capital that could be injected into the blue chips,” says Mariusz Musiał, broker at Trigon DM.

The share price of the Polish telecommu-nication giant TPSA, which has been con-sidered a  defensive stock, unexpectedly hit an all-time low in the middle of Febru-ary, losing 30% in one single day. Since the

beginning of the year its value decreased by about 40%. The company’s financial results for Q4 2012 were much worse than the market had predicted. A decrease of profits to 51m zł from 358m zł a year previously, came as an unexpected sur-prise. The reasons for such bad results were lower mobile transfer rates and price wars among mobile network opera-tors. Investors were further disappointed by the announcement that TPSA plans to pay out a dividend of 0.5zł per share in comparison with the 1.5zł paid out in 2011 and previous years. Shareholders of PGE, the state owned energy company, are also frustrated. On 20 February the price of its shares plunged 6% and similarly, as in the case of the TPSA, they reached a historical low. Behind this sell-off is news of PGE’s non-cash factors that may cost the com-pany about 1.5bn zł. This amount is going to be budgeted for the results of Q4 of 2012 and will sentence PGE to a loss of about 300m zł, analyst point out.

Another company undergoing problems is the automotive group Boryszew whose shares are down by about one-fifth since January as the company decided to can-cel its forecasts for 2012. On some occa-sions in February the group was losing at once over 12% and hit its lowest level since autumn 2011. Publications of finan-cial results for the fourth quarter have not all been released and some negative sur-prises may arise especially because the recovery of the Polish economy may not be considerable and lasting, some analysts point out. “I’m afraid that there can still

be some surprises of this kind, as results of some stock-listed companies resem-ble the present weakness of the Polish economy,” says Błażej Bogdziewicz, CEO and Investment Director at Caspar Asset Management. But there are still some optimists who believe that WIG20 can defend its psychological level of 2400 points – at which the last year-end rally started. “There is a chance that the loss of WIG20 will stop at 2400 points, but it doesn’t necessarily mean that suddenly it will rally again. The activity of foreign investors, who buy mainly blue chips, is rather scarce and the most probable sce-nario for WIG20 is   further consolida-tion,” says Musiał from Trigon DM.

WIG, the index of medium and small com-panies, defends better than WIG20. Since January it has lost 5%, which is not much considering the hostile environment. Domestic investors, disappointed with some of the blue chips, are searching for bargains in the wider market. The merit of small and mid-cap firms is that they adjust faster to the market’s negative changes. They are also prone to take advantage of the economic upturn, which is expected in the second half of 2013.

There is still hope that the WSE will ben-efit from a  low interest rate monetary policy. At the beginning of February the Monetary Policy Council (MPC) decided to continue the easing cycle and cut interest rates, again, by 25 basis points. The reference rate is now at 3.75%. “Pres-ently the activities of central banks have a  key influence on the capital markets. They send a message that the loose fiscal policy may be continued and provide hope that cheap money will flow into the equity markets,” says Bogdziewicz from Caspar AM. In any case, this scenario won’t hap-pen immediately. Even though investors have an opportunity to gain money at low cost, they are currently focused more on defending their capital rather than look-ing for profits. The market was convinced that the eurozone had overcome its worst moment but the WSE’s indexes keep on struggling with the problems of the euro-zone’s economy. In addition, the unsta-ble outcome of parliamentary elections in Italy has fuelled further downturn at the Warsaw bourse as investors fled from risky assets and decided to stick with the safety of the US dollar. “The political sit-uation in Italy after the parliamentary elections is unclear and doesn’t give an answer to the question of whether the new government is going to buy back the governmental bonds,” says Bogdzie-wicz. “To see further growth of the WSE’s indexes the political situation in Italy has to stabilise first and the situation in other European markets needs to calm down,” adds Musiał. by Agata Nałęcz

Agata Nałęcz is an investor relations specialist. She was previously a Reuters correspondent for four years, cover-ing equity markets, the Warsaw Stock Exchange and Initial Public Offerings of domestic and foreign companies.

51

market players to gain some confidence again. For many, it is a  ‘must’ to par-ticipate in these offers,” says Rekowski. To avoid a clash with privatisation offers, many companies prefer to postpone their debuts. However, at present, even offers from the Ministry of Treasury are not raising as much interest and confidence as they did in previous years. Investors have become more cautious as not every single IPO was a success, enabling them to make money. “Companies willing to enter the bourse are still waiting for a sign that money is being moved into equity funds from funds invested in bonds,” adds Rekowski.

Taking into account recent announce-ments made by companies, there is still a chance for a small number of IPO trans-actions in Q2 2013. The majority are likely to occur in September, if domestic data confirms the recovery of the Polish economy in the second half of the year. “The invasion of debutants on the WSE in the second quarter is rather doubtful. The market is facing a downturn at the moment. If the WSE’s indexes manage to recover then, after the summer, we may see a rebound in the number of IPOs,” says Andrzej Szurek, Head of New Markets at investor relations firm Inner Value.

Specialists believe that there is no pre-dominant sector for IPO’s right now. Both construction and real estate are rather unpopular, due to their difficulties last year in Poland. “When it comes to the ori-gin of the debutants, there are many Baltic countries and significantly less compa-nies from the south of Europe. There are more and more domestic companies and the number of IPOs from abroad is visibly decreasing,” adds Szurek.

In recent years, under the stewardship of Ludwik Sobolewski, the WSE man-aged to promote itself on an international scale and, in doing so, gained a reputation as a good place to look for capital. At the same time a series of privatisation trans-actions attracted new investors, which caused money to flow into the Polish mar-ket from abroad. In 2011, the leadership of the Warsaw bourse in terms of the num-ber of new market entrants was cemented. Last year the WSE was again ranked first in terms of the number of IPOs – the 105 IPOs that took place in Warsaw repre-sented 40% of all IPOs in Europe in 2012.

However many specialists point out that IPOs on the NewConnect inflate these sta-tistics and that they should not be counted in the same way as IPOs in the main market, due to their small value and the character of the NewConnect itself. The Main List is a  regulated market super-vised by the Polish Financial Supervision

sPeciaL FeatUre

IPO market waiting to reclaim the spotlight

Błażej Karwowski started working with WSE in 2011. Since January he has held the position of Spokesperson and PR Director for the Warsaw bourse.

The statistics presented in IPO Watch Europe’s quarterly reports by PriceWater-houseCoopers are impressive. In terms of Initial Public Offerings (IPO) the Warsaw Stock Exchange (WSE) has been among the top European Exchanges for a number of years and became a hub for new market entrants in Central and Eastern Europe. However, specialists have rebuffed any subsequent enthusiasm, as the spectacu-lar number of IPOs on the Warsaw bourse has not been followed by value. Moreover, the slowdown in the Polish economy and increased volatility in the equity mar-ket do not favour primary listings. Apart from that, debutants need to compete for capital with the Ministry of Treasury’s placements of shares. Błażej Karwowski, Spokesperson and PR Director at WSE, is pleased with the latest prize offerings. “We had two significant initial public offerings – Zespół Elektrowni Pątnów-Adamów-Konin (ZE PAK) and Alior Bank, which, with an offer of over €0.5bn was the biggest offering in the European bank-ing sector in 2012 and among the top five offerings on European exchanges in the fourth quarter of 2012,” he says.

The IPO market is fairly stable but it is still a long way from an evident recovery after the turmoil of the global financial crisis, analysts point out. Companies are trying to choose the right moment for enter-ing the WSE. Many uphold their plans. They work on a prospectus, but they nei-ther specify a potential date nor start with preparations for their selling strategy. “Presently the market doesn’t get crazy about IPOs. It seems that the last offers and placements of shares (ZE PAK, Alior, PHN, Pekao and PKO BP) have spoiled investors so much that they are no longer interested in offers of under 100m  zł. They became much more cautious and selective, and are waiting for big and safe offers which are few,” says Jan Rekowski, IPO Director at BZ WBK Brokerage. Since the beginning of the year there has been only one big offer, of state-owned prop-erty management group PHN. The Min-istry of Treasury sold a 25% stake worth almost 240m zł. However, giants such as utility Energa, PKP Cargo and some of the companies from PGNiG Group are join-ing the IPO queue. The market players are also looking forward to the possible stake sells of already listed companies where the state holds majority assets, such as insurance company PZU and chemical producer Grupa Azoty. The Ministry of Treasury plans to raise 5bn zł from state asset sells in 2013.

“Everybody is saving money for the big offers that attract foreign investors. The offers from the Ministry of Treasury like PKO BP, and IPOs like the one of Alior Bank, which was a great success, helped

Authority. NewConnect is the WSE’s alternative trading platform for dynamic start-ups, operating mainly in the sector of new technologies and is easier to access for debutants.

The other concern is the value of primary offers that take place in Warsaw. “If some years ago an offer of 300m zł was consid-ered decent, right now this value is seen as quite big, because of the market’s lim-ited receptiveness. An offer of about 150-200m zł is maybe not big enough to catch the attention of foreign investors but from the point of view of domestic institutional players, it is definitely worth considering,” says Szurek from Inner Value. In the past year, in terms of the value of IPOs, the WSE was ranked number five in Europe. “When it comes to the forecasts, after less robust activity in 2012, we expect the value of initial public offerings to rise in 2013. In our efforts to attract new list-ings we will double the focus on larger companies, which provide the necessary liquidity and are revenue-generating for the Exchange and our members,” says Błażej Karwowski, the WSE Spokesman. by Agata Nałęcz

business review

banking & finance

bpo52 53

nazWa działunazWa działu52

Zbigniew Jagiełło, CEO of PKO BP, saw the value of the bank's shares drop after the government announced it was selling 10% of the state's largest lender. Then, high demand saw all shares sell for 5.25bn zł.

Luigi Lovaglio, CEO of Bank Pekeo and Senior Executive Vice President and Country Chairman of UniCredit in Poland surprised share watchers when the Italian bank re-leased 9.1% of the Polish bank's shares on the market.

business review

Banking & Finance sector

Fans of Banking Stock Kept Busy

Monika Rozlał is a freelance journalist covering the Polish economy and stock market. She previously worked for 12 years as an economy reporter for Bloomberg News in Poland.

The Polish banking sector’s two leaders, PKO BP and Bank Pekao have frequently occupied news headlines in recent weeks. Investors were thrilled in mid-January by the revival of the government’s plan to sell a stake in the former, put on hold for a long time due to the lacklustre situation on the stock market. The state and its only fully owned bank BGK jointly offered over 10% of the country’s biggest lender by assets to both domestic and foreign finan-cial institutions. More than 150 inves-tors from 20 countries declared demand for PKO BP stock, including the world’s top international institutions, accord-ing to the Treasury Ministry. Such huge interest encouraged the government to increase the offering. All shares were sold for a total of 5.25bn zł, fuelling the state budget with 856.3m zł, which prompted Moody’s to praise the transaction. The rat-ing agency found it positive for Poland’s credit profile as it diminished the coun-try’s borrowing needs. Moody’s estimate that proceeds from the PKO BP stake sale accounted for 3.6% of this year’s gross borrowing needs. Since nearly all shares offered had belonged to BGK, the deal reduced the state holding only slightly to 31.37% of PKO BP from an earlier owned share of 33.39%, which still makes it the biggest single shareholder. The Ministry does not plan to sell more shares in the near future.

However, investors keen on Polish bank stocks did not get much respite. Italian giant UniCredit unexpectedly offered 9.1% of Bank Pekao to the market, taking fund managers aback as their pockets had been emptied just a  few days earlier by pur-chasing its bigger rival’s shares. Still, Uni-Credit sold all 23.9 million shares, each at 156 zł, trimming its own stake to 50.1%. The financial group has no plans of with-drawing from Poland, which it considers as one of its strategic markets, but needs the added capital to expand into other Central and Eastern European countries.

unfavourable regulations and rising risk costs will push their net interest margins down. The credit portfolio of the Polish banking sector is likely to grow only by 1%, with a share of bad loans rising to 9.4% from a current figure of 8.8%, according to them. An opinion poll conducted by TNS NIPO for ING Bank Śląski also indicates that lenders cannot count on demand for loans as Poles plan to increase their sav-ings at the cost of consumption in the next two to three quarters. Only a third of respondents declared satisfaction with the level of their cash reserves – a sharp 19% drop from last year. “After a few quarters of spending savings on maintaining con-sumption amid shrinking incomes, Polish households have changed their approach,” says Rafał Benecki, chief economist at ING Bank Śląski, adding, “the time of sav-ing has come.”

At the same time, banks are not willing to make potential borrowers’ lives any eas-ier. The lenders polled by the National Bank of Poland plan to restrict policy on mortgages, as well as long-term credit for companies and consumer financing in Q1. The mortgage business has started losing momentum already. Total sales were fall-ing from quarter to quarter in 2012 and the value of mortgage agreements signed last year by banks equalled 39.1bn zł, failing to meet the forecast of 42bn zł, according to the Polish Banking Association. More-over, it declined considerably from 2011, when banks lent 49.2bn zł in mortgages. It did not affect banking profits that much, though. The Financial Supervision Com-mission (KNF) reported that Polish banks generated record ever profits last year of 16.14bn zł, up 3.86% from 2011. This sur-prising result was achieved in spite of the worsening economic situation. However, the value of non-performing loans grew by 8.6% to 71.7bn zł. On the other hand, the sector’s solvency ratio increased to 14.74 from 13.1 in 2011. Deposits rose 3.6% to 724bn zł. Still, the biggest profit in the banking sector’s history was largely obtained thanks to successful investments in Treasury bonds.

Banks have started 2013 actively on the bond market, but this time it was them seeking capital from investors. The Basel III regulations are prompting them to look for long-term financing more often. The KNF expects at least 20% of their mortgage portfolios will be financed with bonds of long maturity. As a result, lend-ers sold 331.5m zł notes in January, over ten times more than a year earlier. Among issuers were BGŻ with a 155m zł offering and Santander Consumer Bank with 78m zł securities. Banks are likely to dominate on the corporate debt market for the rest of this year as BOŚ sold 100m zł bonds in early February. by Monika Rozlał

Within the space of only one week, the owners of these two blue chips drained almost 9bn zł from the Warsaw Stock Exchange. Just a month earlier, investors were offered shares of Alior Bank in the largest IPO of a private company on the Warsaw bourse. And there are more deals in the pipeline. Spain’s Santander pledged to boost Bank Zachodni WBK’s free float to at least 25% by 1 April from a current value of 8.64% after winning approval for merging Poland’s fifth largest lender with Kredyt Bank, which it bought from KBC. As a result, at least a 4bn zł stake may be put on sale. The domestic financial mar-ket watchdog KNF, which requests from owners of publicly listed banks to secure an adequate amount of shares available for public trading, expects a similar move from BNP Paribas, which needs to enlarge its Polish unit’s free float no less than 15% from current 0.11%.

Santander and BNP Paribas might want to hurry up and follow the Treasury Min-istry and UniCredit, which surely did not choose the timing of their opera-tions by accident. This was probably the last moment for selling banking shares at a  decent price, as the financial sec-tor is facing a difficult year: waning eco-nomic growth, rising unemployment and falling interest rates are likely to impair its earnings. Analysts at Espirito Santo Investment Bank estimate the banking sector’s profit will slump by 12% this year, as they forecast a  mere 1.8% GDP growth for Poland and further reductions of interest rates, which combined with

53BPo sector

Europe’s outsourcing king continues to win clients

Infosys recently invested in a new outsourcing centre in Łódź. The company plans to hire 500 more staff before the end of this year.

Those that can, do. Those that can't… send to Poland. Admittedly, this might be oversimplifying the situation just a little, but there's no doubt that when it comes to Business Process Outsourcing (BPO), Poland continues to grow from strength to strength. Once considered a business backwater, far behind some of its Euro-pean counterparts, Poland has subse-quently shaken off this negative image and gone on to become the undisputed Central and Eastern European (CEE) market leader in outsourcing. By the end of last year Poland's BPO sector had seen annual growth of 20% every year since 2008, with some 100,000 people now working in BPO, Shared Services Centres (SSC) and Research and Development (R&D) centres, according to a 2012 report by the Association of Business Leaders (ABSL). The value of the Polish BPO sec-tor exceeded 13bn zł at the end of 2011, according to the Polish Agency of Foreign Investment (Paiz), with some 337 out of 847 Polish outsourcing centres receiv-ing some level of foreign capital invest-ments. At the same time, the employment levels in the sector have grown by 46%. “Not many years ago Poland was just one of many locations for business services. Today it is a superpower,” claims Paweł Panczyj, operations director for ABSL.

Poland's outsourcing services are mostly focussed on finance & accounting, IT services and R&D, with customer ser-vices (excluding IT support), HR ser-vices, financial services, decision support and knowledge process outsourcing also among the services that companies are looking to Poland to provide. Among the leading firms with a major presence in Poland are Infosys BPO, which opened it's new service centre in Łódź in Decem-ber 2012; French multi-national Capgem-ini which employs approximately 4,600 people at IT service centres in Katowice, Kraków, Warsaw, Wrocław and Opole; Hewlett Packard which has offices across Poland and which also opened a new ser-vice centre in Łódź in 2012, and IBM which established a new outsourcing service centre in Wrocław in autumn 2012. The Hackett Group’s 2011 ranking of the best global service centre destinations illus-trated the country's strengths by rating Poland third behind global powerhouses India and China. But while Poland will never be able to compete with these two nations in terms of the size of its work-force and the cost of labour, Przemysław Berendt, vice president for global market-ing at Luxoft, and vice president of inves-tor support at ABSL says that the Polish BPO sector benefits from “the complex-ity of services it offers”, adding that this places the country ahead of its eastern rivals. “In the beginning it was mainly simple tasks but now Polish centres are

comfortable with providing much more advanced solutions,” adds Berendt. Poland currently has around two million highly qualified students finishing their education each year, providing a poten-tial influx of highly talented workers each year. As Anna Kot, Regional Director at commercial real estate company Jones Lang LaSalle says, “The [Polish] labour market is well equipped to meet the sec-tor’s requirements, with a large number of highly educated, skilled workers, and (who possess) a wide knowledge of foreign languages.” According to figures from the Ministry of Treasury, competitive labour costs are between 30-60% lower than in western and northern Europe. This, com-bined with a highly skilled workforce and a central European location, has kept the Polish BPO sector in sustained growth mode. Poland's real estate sector has also benefited immensely from an increased need for new office space. In Kraków for example, 40% of the entire office space leased in the city is connected to the business service sector, while more than one million sqm of office space had been rented by BPO companies at the end of 2012, says Jones Lang La-Salle’s Anna Kot.

According to the ‘2012 Top 100 Out-sourcing Destinations’, a list drafted by consultancy firm Tholons, Kraków was ranked as the world’s 11th most success-ful destination for attracting outsourcing contracts and took first place in CEE – the sector employs between 16,000 and 18,000 in the city. In February, Colliers International opened a new real estate advisory office in Poznań. Monika Rajs-ka-Wolińska, managing partner at Col-liers, directly links the move to growth in the outsourcing market. “It is another step in the expansion strategy of Colliers into regional cities, which are ever more popular destinations among interna-tional companies, mainly from the BPO and SSC sector,” said Rajska-Wolińska in a statement at the opening event.

Peter Chatfield, Commercial Director at SwedeCenter Poland takes a similar viewpoint. "In terms of the major cities outside the capital, the BPO sector is very significant, providing probably 70-80% of occupiers," he says, adding that while the company’s main focus is on the cap-ital away from the outsourcing market, he expects that SwedeCenter "will also achieve some 70% of occupiers for our Poznań and Wrocław projects from the BPO/SSC sector." Last month also saw the inaugural Poland Outsourcing and Shared Services Awards, which took place at the Intercontinental Hotel in Warsaw. Among the biggest winners were State Street Services centre in Kraków, which picked up the award for Best Shared Ser-vices Centre. Last year alone, the State Street centre created nearly 500 new jobs in the city, with a similar level expected this year. State Street's Scott Newman also took home business centre manager of the year, while Alexander Mann Solu-tions won the award for best employer of the year in BPO/Outsourcing category.

However, while the Polish sector is unquestionably healthy, there is now increased pressure from its European neighbours Ukraine and Romania, whose own outsourcing industries have contin-ued to expand in recent years. Ukraine's IT outsourcing sector was worth $1bn at the end of 2011 and Romania, which until quite recently had focussed almost exclu-sively on call centre type services, has expanded its offers to include complex IT solutions. “Most major [outsourcing] players have opened at least one centre in Romania,” reads a 2012 report by Jones Lang LaSalle said, with major firms such as Adobe and Intel already setting up R&D centres in the country. Increased compe-tition from Romania and Ukraine neigh-bours suggests that Poland will have to offer competitive rates if it is to hang on to its BPO crown in the coming years. by David Ingham

business review

David Ingham is a full-time journalist who covers a wide range of topics for both the Warsaw Business Journal and Warsaw Insider. He previously wrote the successful 'English Man in Warsaw' column for the daily Metro newspaper.

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energy transport& infrastruc-ture

54 55nazWa działunazWa działu

54 energY sector

Utilities seek alternatives to coal-fired plantsbusiness review

Maciej Szczepaniuk covers energy sector news including mining, privatisation and transport for Dzien-nik Gazeta Prawna. He also appears as a commentator on TV Biznes, the first Polish-language television channel on economic issues. He worked previously as a city-reporter for Rzeczpospolita for five years.

Polish state controled utilities plan to spend between 150-200bn zł by 2020 to replace aging facilities as the majority of coal-fired plants in the country are more then thirty years old. But only a few pro-jects have already started. One coal-fired unit in Kozienice (Enea, Poland’s third-biggest utility) and one gas-fired unit in Stalowa Wola (a joint venture between Tau-ron and PGNiG, Poland's largest domes-tic gas producer and supplier) are under construction. Last year’s announcement by PGE, Poland’s largest utility, to con-struct a power plant in Opole – valued at 9.4bn zł – was vital for both the energy and construction sectors. The Opole pro-ject – viewed as a crucial investment by Polish construction companies who had been hit by a slowing economy and last year’s underpriced motorway contracts – was temporarily delayed after protests from ClientEarth, an environmental legal organisation. A Warsaw administrative court dissmised the complaint on Feb-ruary. Poland’s baseload of electricity for this year has dropped by nearly 20% from 2012, the highest among all EU member states, and has lost a further few percent since January.

According to Krzysztof Kilian, CEO of PGE, the sheer scale of the costs of the Opole power plant triggers ques-tions about the project’s profitability. By making such comments, the former vice-president of Polkomtel (Poland’s second-largest mobile-phone company) is skating on thin ice. Two struggling Pol-ish construction companies, Polimex-Mostostal and Rafako, owned by PBG have been contracted to build the project. Both fell into financial troubles after their involvement in motorway infrastruc-ture projects leading up to Euro 2012. Treasury Minister Mikołaj Budzanow-ski, who participated in talks with banks involved in financing Polimex-Mostostal, wants the Opole project to get under way as soon as possible. “The Treasury was

obliged to offer an appropriate response to the deteriorating condition of the com-pany. An expression of this reaction was the decision to sign a letter of intent on a conditional acquisition of new issues of Polimex shares by Agencja Rozwoju Przemysłu (ARP – Industrial Develop-ment Agency),” explained Budzanowski. The Treasury Minister maintained that Polimex is involved in strategic energy projects, employing several thousand people, not including subcontractors. “No response would mean job cuts, weaken-ing the country's energy security, and a broader perspective of the whole econ-omy”, added Budzanowski.

However, poor economic indicators such as low electricity prices have placed the energy sector in a difficult situation. Many coal-fired power plants in Poland are fail-ing to return a profit, a factor which has led PGE to make an asset writedown, much to the delight of investors. Write-offs could potentially threaten the dividend payout from 2012 after regulatory filling shares fell below 16zl to reach the low-est intraday (within the day) level since its debut on the Warsaw Stock Exchange in November 2009. Only in January, the economic downturn forced French energy giant EDF (the largest foreign investor and energy producer in Poland) to sus-pend its Ruda project in southern Poland. The French company had intended to build a 900 MW supercritical coal-fired power plant on the Rybnik site for around 7.3bn zł. However, EDF has since con-sidered the project too risky and has dis-tanced itself from the project.

A first step in the liberalisation of the gas market took place in late February. “Any company that imports gas from abroad or acquires it from PGNiG for resale, may be exempt from tariff approval,” says Marek Woszczyk, head of Urząd Regu-lacji Energetyki (URE - Energy Regulatory Office). The decision is important for all

97 companies that have licences to trade gas in Poland, especially those from the electricity market. In future, when com-panies purchase gas on the bourse, they will have an opportunity to offer their clients one bill: both for electricity and gas. Following this, URE would release domestic gas prices, meaning that utili-ties will no longer be obliged to discuss prices with the regulatory body. Accord-ing to many energy sector analysts, this is not something that will happen in the near future. But all agree that it’s high time to put an end to the monopoly of the PGNiG. However, the manner in which the giant is to be dismantled is a bone of contention. If the group is deregulated and deprived of its sumptuous earnings, it will not be able to fulfill its pipe dream of making shale gas commercially exploitable.

In other energy news, the market is happy to welcome Energa’s (the small-est state controlled utility) IPO at the end of June. The Ministry of Tresury has just selected advisors for selling a minor-ity stake. This privatisation deal is set to be the biggest in Poland this year and is going to heat up the market. Energa has a 17% share in the Polish regulated distribu-tion market, compared with a 3% share in the power generartion market. After the IPO, the government is planning to select an industry investor for the utility group. The search will be the ministry’s second attempt after Urząd Ochrony Konkurencji i Konsumentów (Office of Competition and Consumer Protection) blocked Ener-ga’s sale to PGE in 2010 – a deal worth 7.5bn zł. Looking towards March, the market will be awaiting concrete news on the nuclear energy agreement between PGE, Tauron, KGHM (blue-chip copper and silver producer) and Enea (Polish third utility). The companies will pur-chase shares in SPV founded by PGE EJ1, which is directly responsible for the pro-cess of building and operating the first Polish nuclear power plant. A letter of intent on nuclear power SPV was pro-longed until the end of March due to lack of agreement.

For Spanish utility Iberdrola and Den-mark’s Dong, February was their last month on the Polish green energy mar-ket. Their Polish wind assets were bought by PGE and Energa for 1.8bn  zł. Iberdrola announced in December that it would sell wind-power units in France, Germany and Poland as part of a plan to divest €2bn of assets before 2015 in an effort to curb debt. For Dong, the divesment of onshore projects will help in offshore wind expansion while cut-ing costs. Both PGE and Energa need to acquire non-coal plants in order to meet EU 2020 climate and energy package rules. by Maciej Szczepaniuk

Testing times ahead for the big five as the clock ticks on existing coal-fired plants. From left to right: Dariusz Lubera (CEO, Tauron Polska Energia), Dorota Wloch (Vice President, KGHM), Grazyna Piotrowska Oliwa (CEO, PGNiG), Krzysztof Kilian (CEO, PGE) and Ma-ciej Owczarek (CEO, Enea).

55transPort & inFrastrUctUre sector

Favourable EU budget gives road construction firms a lifeline

An incomplete section of the A4 Tarnów-Dębica motorway. Contractual agreements between Irish contractor SIAC and the GD-DKiA broke down in August 2012 after the roads authority refused to pay for additional work performed by the contractor. GDDKiA is currently appointing a new contractor to fin-ish the road by late 2014. Source: GDDKiA.

In February, the General Directorate for National Roads and Motorways (GDDKiA) revealed that the cost of building one kil-ometre of motorway in Poland is €9.6m while the EU average is €10m per kilome-tre. According to these statistics, building motorways in Germany, Spain, Denmark, Czech Republic and Lithuania is cheaper than in Poland. Only mountainous coun-tries such as Austria and Norway spend more money per kilometre of new motor-way, as their countries’ road construction projects are much more difficult than in a flat country such as Poland. For this rea-son it is surprising that 273 construction companies went bankrupt in Poland in 2012 – almost twice as many as 2011 and seven times more than five years ago. Para-doxically, the road sector is in crisis partly due to the excess money in the GDDKiA’s budget. Since 2009, GDDKiA have signed 145 road construction contracts worth a total value of nearly 75bn zł. Since then Poland has built more new roads than any other EU member state.

Lech Witecki, head of GDDKiA, argues that the frail condition of many construc-tion companies has not been caused by the low value of contracts, or the invest-ment policy of the government, but by mistakes made by the management teams of contractors. According to GDDKiA, the costs of improving construction mis-takes reduced the profits of most compa-nies. For instance, before the opening of the A2 Łódź-Warsaw motorway, Eurovia had to tear up an already completed 10 km section of asphalted road and re-build it. GDDKiA says that in the last three years it has invested 100m zł in ‘road laborato-ries’, which have detected errors worth over 1bn zł. This is an additional cost that is not included in average prices, which partly explains the frail condition of the Polish building sector, says GDDKiA. Who is right: GDDKIA or the contractors? The truth is probably somewhere between each side of the dispute. One thing is cer-tain: Polish companies have not repeated the successes of Spanish, Portuguese and Irish contractors which have developed themselves through EU investments in their countries and now are engaged in contracts abroad.

In the world of transport investments, last month ushered in both good and bad news. Final negotiations in Brussels regarding the EU budget for 2014-2020 provided Poland with great hope for the continuation of the investment pro-gramme. It turned out that Poland will receive €106bn over the next seven years, including €73bn for the cohesion policy, which is the source of financing infra-structure projects. GDDKiA is preparing huge bids, such as the A1 motorway that will connect Łódź and Katowice and the

modernisation of the S7 route from War-saw to Gdańsk. The first road tenders from the EU budget for 2014-2020 are expected to be announced by the middle of this year, which would mean that construc-tion work could start as early as mid-2014. This time GDDKiA is planning to start 10 to 15 projects each year to avoid accumu-lating costs at the same time. To the disap-pointment of construction companies the lowest bid will remain the most important criteria during the tender process.

The country’s largest rail investor – PKP Polish Railway Lines (PKP Polskie Linie Kolejowe) – will do the opposite. PKP are only too aware that adopting a ‘lowest price policy’ could bring problems such as a wave of bankruptcies among contractors. Clearly, the rail investor wants to avoid a case of so-called “motorway virus”. That is why PKP PLK is planning to give extra points to bids that emphasise innovative technology and propose shorter periods of railway closure. However, PKP PLK will start spending EU money no sooner

than 2016 because, in contrast to GDD-KiA, the investor has not yet spent all of its funding from the previous EU budget for 2007-2013. Over the next three years, PKP PLK is going to prepare project docu-mentation and construction permits, and in 2016 plans to start trans-European rail route investments, such as Rail Baltica, which will connect Poland and Lithuania. Another project is the modernisation of railways from Germany to Szczecin and Poznań, and from Wrocław to the border with the Czech Republic.

Bad news? The public opinion was shocked, when 'Forbes’ revealed secret audio recordings made by Agencja Bezpieczeństwa Wewnętrznego (ABW – the Internal Security Agency) from 2009, which recorded chiefs from some of the largest construction companies trying to establish a set price for three large ten-ders: the A4 motorway in the south of Poland and two sections of the S8 express-way (from Piotrków Trybunalski to Rawa Mazowiecka and between Białystok and Jeżewo). The public prosecutor pursued a bid-rigging charge in 2010. At the end of January, the European Commission sud-denly suspended a payment of 3.5bn zł until the case is resolved.

The Minister of Transport Sławomir Nowak is in a spot of trouble – it is not clear whether GDDKiA will be able to fulfil its plan of spending 18bn zł on roads in 2013. The second problem associated with EU funds is that the European Com-mission has started an audit on GDDKiA. This is the result of intervention in Brus-sels by Irish contractors SRB and SIAC, who terminated their contracts for the construction of the A1 and A4 motorways due to a conflict with GDDKiA. Both com-panies have now gone the legal route and are fighting for hundreds of millions of zł in compensation. If the audit proves that GDDKiA made mistakes during invest-ment process, the EU could feasibly with-draw more money from planned road projects.

In another road related story, many driv-ers in Poland were angered by the gov-ernment’s plans to introduce more speed cameras on roads. Minister of Transport Sławomir Nowak is planning to increase the number of speed cameras from 315 to almost 500 by the end of this year. Prime Minister Donald Tusk says that this is part of the government’s battle with dangerous drivers and is an attempt to increase road safety. He did not mention that it could also be a way of increasing government revenues. A draft state budget from the Ministry of Finance estimates that reve-nues from speed cameras could be worth 1.5bn zł. In 2012, they were worth less than 30m zł. by Konrad Majszyk

business review

Konrad Majszyk writes about trans-port, infrastructure, roads and railways for Dziennik Gazeta Prawna daily news-paper, and also appears as a com-mentator on the TV Biznes channel. He was previously infra-structure, transport and EU investment correspondent for Rzeczpospolita daily newspaper for nine years.

office56 57

nazWa działunazWa działu56 oFFice sector

More premium developments planned for the capital

business review

Adam Zdrodowski previously worked for five years at the Warsaw Business Journal, first as a journalist and then as the editor of the paper’s real estate section and real estate newsletter.

Real estate investor and developer Golub GetHouse has obtained a building permit for its previously announced high-rise office project in Warsaw. Construction on the scheme is set to launch in mid-2013 and is expected to finish after 22 months. The 23-floor development will be located on ul. Grzybowska in the Polish capi-tal’s Wola district, near the existing Hil-ton hotel skyscraper, and will deliver over 20,100 sqm of class-A office space. Tomasz Buras, director and head of office agency at Savills, which is the exclusive leasing agent for the investment, says that the quickly developing western part of Warsaw city centre is attracting greater tenant interest. Epstein studio, in cooper-ation with Chicago-based Solomon Cord-well Buenz architects, has designed the planned tower. Warsaw Stock Exchange-listed developer BBI Development NFI has received a final planning decision and will soon apply for a building permit for its Nowy Sezam office project in Warsaw. The company also recently signed an agree-ment with the Warsaw subway authority which will allow the planned scheme to become the first office development in the city with a direct connection to a subway station. The investment will be built on the site of the existing Sezam retail facil-ity, located at the intersection of Warsaw’s ul. Marszałkowska and ul. Świętokrzyska, and will comprise between 12,500 sqm and 13,000 sqm of leasable office and retail space. Rafał Szczepański, vice president of BBI Development NFI, notes that the project, with its location at the intersec-tion of two subway lines, will offer some of the most expensive office and retail areas in Warsaw.

Warsaw Stock Exchange-listed property developer and investor Warimpex and the IVG investment fund have signed a pre-liminary agreement concerning the sale of the Le Palais office project located in downtown Warsaw. The transaction – the value of which has not been dis-closed – is expected to be finalised in the summer. Franz Jurkowitsch, manage-ment board president at Warimpex, says that the deal shows that investments in the Polish property market are contin-uing to pay off. The Le Palais scheme opened for business earlier this year and offers approximately 5,300 sqm of leas-able space. The office areas in the devel-opment have already been leased out in more than 75%, with Jones Lang LaSalle acting as the leasing agent. Meanwhile, a fund managed by real estate investor Grif-fin Group has bought the Philips House and the Batory Office Building I in War-saw’s Włochy district for approximately 80m zł. The facilities were acquired fol-lowing a court bankruptcy procedure. Their former owner, Eindhoven Proper-ties, a real estate company managed by

Guardian Managers, was declared insol-vent last year. Philips House comprises more than 5,570 sqm of office space and is fully leased out by the Polish subsidi-ary of Royal Philips Electronics on a long-term basis.

The MARS FIZ investment fund has secured a  building permit for the planned CBF Nowy Świat office pro-ject in central Warsaw. Construction on the scheme is scheduled to commence in Q2 this year. Designed by architect Andrzej M. Chołdzyński, the develop-ment will be located on ul. Nowy Świat, close to the prestigious Trzech Krzyży Square. The investment, which is set to be delivered in Q2 2015, will comprise more than 4,000 sqm of office space and almost 2,000 sqm of retail and service areas. Meanwhile, Cushman & Wakefield has announced it is advising Volkswa-gen Bank Polska on finding office space for the company’s new headquarters in Warsaw. The firm is currently one of the tenants at the Rondo 1 office tower in the capital’s Central Business District. Cushman & Wakefield has said that Volk-swagen Bank Polska is looking for an office area sized between 5,000 sqm and 7,000 sqm. Asked whether Volkswagen Bank Polska is planning to remain in downtown Warsaw, Artur Sutor, asso-ciate, office department, Cushman & Wakefield, says that various locations across the city are being considered.

Colliers International has been appointed as the leasing agent for office and retail space in the Times II mixed-use project in downtown Wrocław whose construc-tion UBM Polska plans to launch at the turn of Q2 and Q3 this year. The scheme will consist of two buildings offering a  total of approximately 18,000 sqm of office space and more than 1,500 sqm of retail areas. A parking lot with spaces for around 400 cars will also be part of the development. The investment will be developed on two pieces of land totalling 0.5 hectares which UBM Polska bought in October last year and is expected to be delivered 20 months after the launch of construction. Marcin Sabowicz, senior associate, office agency, landlord repre-sentation, at Colliers International, says that Times II is now in talks with a num-ber international and local companies interested in space in the scheme. Times

II will be the first commercial project of UBM Polska in Wrocław. Peter Obern-huber, member of the company’s man-agement board, has recently told Poland Today that the firm is now looking for more investment opportunities in the Wrocław office market.

Warsaw Stock Exchange-listed devel-oper Echo Investment has signed Sch-neider Electric as the first tenant for its Park Rozwoju office project in the Polish capital. Following a  lease deal brokered by Colliers International, the com-pany took up 7,000 sqm of space in the scheme. Designed by the renowned JEMS Architekci architectural studio, the Park Rozwoju development is being built on ul. Konstruktorska in Warsaw’s Mokotów district and will consist of two class-A buildings offering a total of 32,000 sqm of office space. The investment is being developed in two phases, with the first scheduled for completion in Q1 2014 and and the second in Q2 2015. Echo Invest-ment is planning another office project in the same neighbourhood that will be developed on Warsaw’s ul. Taśmowa. The company is now also preparing an office tower in the capital’s downtown which will be built on the site of the for-mer Mercure hotel. Wojciech Gepner, public relations manager at the company, says that work is now underway on the final design of the building. “We are in the process of obtaining a building per-mit and expect construction to launch at the beginning of the second half of this year,” he added. by Adam Zdrodowski

Another sign that Warsaw’s Wola district is fast becoming home to more high-rise office developments was seen when developer Golub GetHouse obtained a building permit for this 23-storey development. Construc-tion work will commence in mid-2013 and is scheduled to be complete by mid-2015

retail58 59

nazWa działunazWa działu58 retaiL sector

Shopping centre developments continue to attract investors

business review

Warsaw Stock Exchange-listed developer Echo Investment is expected to open its Galeria Veneda shopping centre project in Łomża in eastern Poland on 7 March. The largest retail scheme in the city, Gale-ria Veneda offers 16,000 sqm of leasable space, nearly 95% of which has already been commercialised. The largest ten-ants at the mall include a  Tesco Extra hypermarket and a RTV Euro AGD store. Another major retail developer, Neinver Poland, has announced that its under-construction Factory Warszawa Annopol outlet centre project in Warsaw will open for business on 13 March. The scheme will be the second facility of this kind to have been built by the company in the Polish capital. The Factory Warszawa Annopol development is located in the Białołęka district of Warsaw. With its almost 20,000 sqm of space, the investment will be the largest outlet centre project in the region. Agata Brzezińska, country manager at Neinver Poland, noted that the scheme will provide new shopping opportunities for the inhabitants of the eastern Warsaw and the city’s quickly developing suburbs. According to the company, approximately three million potential buyers live within the catchment area of Factory Warszawa Annopol, which was the first retail pro-ject in Poland to have been BREEAM-cer-tified (Building Research Establishment’s Environmental Assessment Method at the design stage.

Meanwhile, work on expanding the Gem-ini Park Bielsko-Biała shopping centre in Bielsko-Biała in southern Poland is

proceeding according to schedule, with the new part of the mall scheduled for opening in November this year. Opened for business in May 2009 and anchored by a Real hypermarket, the Gemini Park Bielsko-Biała development currently offers 27,500 sqm of leasable space that is expected to grow from 55,000 sqm to 59,000 sqm after the expansion. Approxi-mately 70 new fashion stores, as well as a  number of new restaurant and enter-tainment facilities, are expected to join the shopping centre once its new sec-tion, which will be integrated with the existing building, has been opened. The Gemini Park Bielsko-Biała investment is owned by Kraków-based developer Gem-ini Holdings. The company’s portfolio also includes the Gemini Park Tarnów shop-ping centre in Tarnów in southern Poland which opened for business in August 2010. GREM Gemini Real Estate Management is, in cooperation with BOIG Property Con-sulting and Cushman & Wakefield, respon-sible for the leasing out of Gemini Park Bielsko-Biała. The company is also the manager of the centre.

A new zoning plan that has recently come into force in Turek in western Poland allows for the development of the Karu-zela Turek retail park project which BOZA Inwestycje wants to build in the city. Construction on the scheme, which will be the first modern retail develop-ment in Turek, is scheduled to launch at the turn of the first and second quar-ters of 2013 and finish by the end of the year. The Karuzela Turek investment will comprise over 5,200 sqm of leasable retail space and house 15 retail and ser-vice outlets. The visitors of the facility will have approximately 200 parking spaces at their disposal. Marceli Maćkiewicz, leas-ing manager at Retail Concept which is responsible for the leasing out of the space in the Karuzela Turek scheme, said that there is a lot of tenant interest in the planned retail park. He added that the company is currently in talks with a num-ber of major retail chains and os finalising an agreement with a food retailer that is expected to lease 1,000 sqm of space in the development.

CBRE has announced it has become the exclusive leasing agent of a  new out-let centre development, which ADV POR Property Investment is planning to build in Białystok in eastern Poland. The project will be developed next to an exist-ing Castorama supermarket and will com-prise approximately 14,000 sqm of GLA housing and more than 100 stores. It is expected to cater for the needs of local buyers, as well as Belarusian and Russian visitors. Scheduled to open in Q3 2014, the Białystok outlet centre is the second retail scheme of this kind to have been launched

by ADV POR Property Investment in recent months. In Q1 2014, the company is expected to open an outlet centre devel-opment in Lublin in south eastern Poland. That investment – the construction of which is set to commence in March – is also being leased out by CBRE.

Meanwhile, CBRE and RegioPlan Con-sulting have released what they claim is the first publication in Central and East-ern Europe aimed at supporting retail developers in their decision making pro-cess. The companies’ Retail Developer’s Guide is targeted at both experienced and future retail developers and focuses on issues including location analysis, market potential assessment and shop-ping centre design and layout. Karina Kreja, associate director, development consultancy department, at CBRE, says that as the Polish retail market matures and becomes more and more competi-tive, an in-depth knowledge and under-standing of the complex shopping centre planning process is essential. Meanwhile, many retail developers are still mak-ing relatively simple mistakes including incorrect assessments of their planned project’s catchment area, Kreja adds. The guidebook is meant to help developers avoid those mistakes.

Real estate investors Liebrecht & Wood Poland and BBI Development NFI have secured a number of new tenants for the retail part of their Plac Unii mixed-use complex in downtown Warsaw. Thir-teen new lease agreements for a  total of over 1,000 sqm of retail space were signed, which means 75% of the retail part of the Plac Unii project is cur-rently leased out. The Plac Unii scheme will consist of three buildings offering 56,800 sqm of leasable space, including 41,300 sqm of class-A+ office space and 15,500 sqm of retail areas on three levels. The BREEAM-certified investment was designed by the renowned Warsaw-based APA Kuryłowicz & Associates architec-tural studio. It is scheduled for comple-tion in autumn this year. Finally, clothing retailer Peek & Cloppenburg has leased a total of 3,800 sqm of space on three lev-els at the Galeria Katowicka shopping centre project, which developer Neinver Poland is building in Katowice (Silesia), thus becoming the largest tenant at the mall. This is one of the largest lease trans-actions in the Polish market involving a clothing retailer, says Marek Noetzel, partner at Cushman & Wakefield which is the exclusive leasing agent for the Galeria Katowicka scheme. Construction on the development has been underway since December 2010, with Neinver planning to announce its completion date in spring. The investment is currently leased out by more than 80%. by Adam Zdrodowski

Gemini Park in southern Poland is expanding to in-clude 70 new fashion stores, another sign of the continued high demand from Polish consumers for more varied retail units.

Adam Zdrodowski's professional profile on page xx

warehouse60 61

nazWa działunazWa działu60 warehoUse & Logistics sector

Major lease transactions characterise a buoyant market

business review

Industrial space developer Panattoni Europe has sold two portfolios of logistics assets located in Poland, totaling 402,000 sqm of space to affiliates of LogiCor, a pan-European logistics platform established by real estate funds from investment company Blackstone Group. Panattoni has revealed that one of the transactions closed in October 2012 and involved the sale of four projects offering a combined 218,000 sqm of space. The schemes were previously co-owned by Panattoni and another investor. Renata Osiecka, man-aging partner at commercial real estate advisory Axi Immo, says that investors have increasingly been showing interest in prime logistics assets in Poland in recent months. She pointed out that a number of other major real estate investment firms, including Hines, RREEF Real Estate and CBRE Global Investors, also acquired siz-able warehouse schemes in the country last year.

In other news, Panattoni has announced it has finished construction on a  new phase of its Panattoni Park Mysłowice distribution centre in Silesia, one of the largest projects of this kind in Poland. The seventh facility within the complex comprises 28,000 sqm of space which will be occupied by logistics company CEVA Logistics, hydraulic industry firm Manuli Hydraulics and automotive com-ponents producer manufacturer Valeo. When fully developed, the Panattoni Park Mysłowice investment is expected to con-sist of eight buildings offering 200,000 sqm of space. The park is located close to the A4 motorway and Katowice Interna-tional Airport. Panattoni Europe’s strat-egy for 2013 envisions focusing on new projects, locations and challenges, says Robert Dobrzycki, managing partner for Central and Eastern Europe at the com-pany. He added that Panattoni Europe will this year continue to focus on the development of built-to-suit warehouse and industrial investments in locations including Poland’s special economic zones. At the same time, the company will continue to develop its existing dis-tribution parks in Łódź, Mysłowice and Poznań and diversify its activities, offer-ing not only buildings, but also services such as property management and leas-ing, adds Dobrzycki.

Meanwhile, owner-manager and devel-oper of industrial property SEGRO is now looking for an opportunity to develop its second small business units (SBU) invest-ment in Poland, which would be situated in Warsaw, says Magdalena Szulc, busi-ness unit director, Central Europe, at the company. The development would con-sist of one or two buildings with a  total size of approximately 20,000 sqm, com-prising warehouse and office space.

Construction on the project is sched-uled to launch before the end of this year. SEGRO is also looking to develop an SBU scheme in Katowice in Silesia, says Szulc.

The last few weeks have seen a number of major lease transactions in the Pol-ish warehouse market. Industrial space developer Goodman, for one, has signed logistics companies Kuehne + Nagel and Terramar as the inaugural tenants of the first warehouse within its Pomeranian Logistics Centre in Gdańsk. The logis-tics operators will respectively occupy 3,870 sqm and 3,970 sqm of space at the 14,000-sqm facility, construction on which launched in September last year and is scheduled to finish at the end of Q1 2013. On completion, Goodman’s flagship investment in Poland is expected to com-prise up to 500,000 sqm of warehouse, logistics and production space and be val-ued at a  total of more than €300m. The developer is touting the location of the complex which will be constructed adja-cent to the Gdańsk Deepwater Container Terminal and only 23 kilometres from the city’s international Lech Wałęsa airport.

Commercial real estate advisory firm Axi Immo has brokered a lease transaction in which logistics company Dirks Consumer Logistics took up 20,000 sqm of ware-house and office space at Grupa Skalski’s Skalski-Logistic Park near Wrocław. The tenant is going to service an e-com-merce company at the facility. Renata Osi-ecka, managing partner at Axi Immo, notes that the development of e-commerce in

Poland has become an important factor in the development of the country’s ware-house market. The Skalski-Logistic Park is a warehouse and production park located near the A4 motorway. It currently com-prises 34,000 sqm of space and is expected to comprise up to around 200,000 sqm when fully developed.

Meanwhile, industrial space developer Prologis has announced it leased over 1.16 million sqm of distribution areas in Cen-tral and Eastern Europe in 2012, with Poland having accounted for 60% of the volume. According to CBRE data, the company held a  38% share of the CEE industrial space leasing market last year. Vacancy at Prologis parks in the region decreased from 16% in 2010 to 8% in 2012. The largest new deals signed by Prologis in Poland in 2012 included the lease to DHL and Solid Logistics of 48,259 sqm and 27,058 sqm at Prologis Park Dąbrowa and Prologis Park Teresin, respectively. The vacancy rate at the company’s dis-tribution parks in the country currently stands at 9.2%, compared to 19% in 2010. Across CEE, Prologis aims to lease 95% of its portfolio by the end of this year (now the figure is 90.8%). Bartosz Mierzwiak, vice president and market office Poland at Prol-ogis, says that the e-commerce, FMCG and logistics sectors are currently among the industries that generate the most demand for distribution space.

According to a  recent report by Colliers International, almost 1.7 million sqm of space was leased in the Polish warehouse property market last year, with new deals having accounted for more than a half of the total transactions volume. The major-ity of lease agreements were signed in the Warsaw area and in central Poland. According to the study, the vacancy rate dropped from 11.4% at the end of 2011 to 9.2% at the end of December 2012. Over 430,000 sqm of new space was supplied last year, predominantly in pre-let and built-to-suit schemes. This represents an increase of almost 10% in comparison to 2011. Last year proved relatively suc-cessful for the industrial and warehouse market despite the demanding economic situation, says Tomasz Kasperowicz, part-ner, industrial and logistics agency, at Col-liers International. He added that many new transactions, including a  number of large ones involving 50,000-60,000 sqm of space each, are now being negoti-ated. “We forecast that this year will not be worse than the previous one,” notes Kasperowicz. In 2013, pre-let and built-to-suit agreements will continue to dominate the market. The largest volume of activ-ity is expected to take place in the Poznań and Wrocław areas and in Silesia, accord-ing to the Colliers International  report. by Adam Zdrodowski

Panattoni Park Mysłowice distribution centre in Silesia, southern Poland comprises 28,000 sqm of space. The facility – one of the largest in Poland – will be occupied by logis-tics company CEVA Logistics, hydraulic in-dustry firm Manuli Hydraulics and automotive components producer manufacturer Valeo.

Adam Zdrodowski's professional profile on page xx

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nazWa działunazWa działu62 residentiaL sector

High demand fuels more family-sized apartments

business review

Construction has started on the Nowy Mokotów multifamily residen-tial project. The Echo Investment develop-ment, located on ul. Konstruktorska in Warsaw’s Służewiec Przemysłowy business district, will deliver 700 apartments and retail services over the next six years. The project's first 200 housing units are due for comple-tion in mid-2014.

Warsaw Stock Exchange-listed developer Echo Investment has begun construction on its Nowy Mokotów multifamily resi-dential project in the Polish capital. 700 apartments will be developed within the next six years. The investment is being built on ul. Konstruktorska in Warsaw’s popular Służewiec Przemysłowy busi-ness district and will neighbour the Park Rozwoju offices that the company is now also developing in the same location. The Nowy Mokotów complex, which will also include retail, service and recrea-tion areas, will be developed in several phases, the first of which is expected to deliver 200 housing units by July 2014. Renowned architectural studio APA Kuryłowicz & Associates has designed the scheme. Sylwia Pajdo-Pasek, a sales manager at Echo Investment, says that the project is largely targeted at the employ-ees of the many office buildings that already exist or are planned for Mokotów. The Nowy Mokotów homes are priced from around 6,800 zł to approximately 10,000 zł per sqm.

The Grupa Waryński capital group has signed investment agreements with devel-opers Polnord and Dantex as future part-ners in the development of two large-scale mixed-use projects in Warsaw’s Wola district within the next few years. The schemes will be built on seven hectares of land which Grupa Waryński owns on Warsaw’s ul. Jana Kazimierza and will deliver a combined 100,000 sqm of usable residential and office areas, with the latter set to account for around 20% of the total volume. The developments are currently at the planning stage and their detailed schedules are to be prepared within the next few months. Construction on the investments is expected to launch towards the end of 2013. Jarosław Jankowski, pres-ident of the management board of Grupa Waryński, says that the company is plan-ning to complete all phases of both devel-opments within the next six to eight years.

Also in the Wola, developer Yareal Polska has launched sales of apartments and will soon commence construction on a new residential project which will be located at the intersection of ul. Brylowska and ul. Prądzyńskiego. Eric Dapoigny, presi-dent of the management board of Yar-eal Polska, says that the scheme, called Brylowska 2 and which will comprise 74 apartments, will meet the expectations of buyers currently looking for homes in the Polish market. The majority of the hous-ing units in the development, construction on which is expected to take less than two years, will be two-room apartments sized approximately 44 sqm. Yareal Polska has recently completed its Rezydencja Biała apartments in Warsaw and is now build-ing a residential investment called Hoża 55 in the city. The developer is also active in the Polish office market.

Meanwhile, Warsaw Stock Exchange-listed developer Robyg has secured almost 15m zł in bank financing from Bank Millennium which it will use for its current operations and, in particular, for the development of its planned Osiedle Królewskie project in the Polish capi-tal. The Osiedle Królewskie scheme will be the company’s third development in the Wilanów district of Warsaw where the developer is now also selling apart-ments in its Osiedle Zdrowa and Nowa Rezydencja Królowej Marysieńki invest-ments. Robyg has to date developed or is currently developing more than 2,000 housing units in Warsaw’s Miasteczko Wilanów neighbourhood. Over 1,500 of these have already been turned over to buyers. The Osiedle Królewskie scheme will be developed on land that the com-pany acquired in the Wilanów district in December 2012. The project is expected to deliver approximately 600 apartments. Robyg is now doing preparatory work per-taining to launching the investment and expects to commence construction in Q2 of this year, notes Zbigniew Wojciech

Okoński, president of the company’s man-agement board.

Another listed developer, Ronson Devel-opment, has announced it has already sold almost half of the apartments in its Espresso multifamily housing project in the Polish capital whose construction has just recently reached ground level. Ron-son has managed to offload 100 homes in the 202-apartment development which is located in the Wola district of Warsaw. The company views the achieved sales level as very good considering the fact that construction is now only one third complete. The investment is scheduled for completion in Q1 2014. Due to consid-erable buyer interest, Ronson is consider-ing launching its second phase with 152 apartments before the end of this year. The Espresso project is located on War-saw’s ul. Jana Kazimierza, close to the city’s Fort Wola shopping mall. When fully developed, the estate is expected to consist of four buildings and comprise a total of 650 housing units.

In Kraków, real estate developer and investor Angel Wawel, part of the Angel Poland Group, is now in the process of selecting a general contractor for its epon-ymously named upmarket residential pro-ject in the city centre. The Angel Wawel scheme will be located close to Kraków’s historic Wawel Castle and will involve the revitalisation of a former nunnery build-ing along with the adjacent premises and the development of a complex with 235 apartments on the site. The development, which is valued at approximately 200m zł and financed by BRE Bank, is scheduled for completion in mid-2015. Pre-sales of the homes in the investment have already begun. The Angel Poland Group was estab-lished in 2003 and its portfolio comprises residential developments including OVO Apartments, Angel Wings in Wrocław and Wilanów One in Warsaw. Shachar Samuel, president and main shareholder at Angel Wawel, says that the company is currently in the process of negotiating the acquisition of another significant resi-dential site in a prime location in Kraków. In the same city, real estate developer and investor Hines has appointed Sun & Snow as the exclusive operator respon-sible for the renting of apartments in its Apartamenty Novum upmarket housing project. The scheme is being built on the city’s ul. Rakowicka, and will offer more than 400 apartments which are sched-uled for completion by Q1 2014 and can be delivered in a turn-key standard. Sun & Snow is one of the largest short-term apartment rental management firms in Poland. The company is currently oper-ating a total of more than 500 apartments in 21 Polish resorts and agglomerations. by Adam Zdrodowski

Adam Zdrodowski's professional profile on page xx

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nazWa działunazWa działu64 start UP

Coding Fingers: from wine Apps to websites

Poland Today profiles a new Polish start up every month, as well as giving them space for an advert opposite the article for free, as part of our commitment to supporting entrepre-neurship in Poland. If you would like us to consider your company for a profile, or you know of a company you think should be considered, please contact us through www.poland-today.pl

Ever since the launch of the smart phone in the late 20th century, talented applica-tion developers have witnessed growing success. For those who remember Snake, Pong, or Tetris, the earliest mobile phone games were no more than a few wiggly, unattractive lines drawing inspiration from popular arcade games of the 1970s and 1980s. At around the same time, multi-media applications were also being devel-oped, with personalised ring tones and calendars gaining widespread popular-ity. Fast-forward to 2004 with the launch of Facebook as well as the ultimate smart phone – the original iPhone in 2007 – and the future of mobile apps exploded. Like the rest of the mobile application world, two software developers from Białystok owe much of their success to Mark Zuck-erberg as well as to the late Steve Jobbs for their contributions to social media, and smart phones, respectively. Indeed, Mar-cin Łępicki and Daniel Dudek, both 27, are at the forefront of a growing trend of mobile application developers in Poland. What makes their company – Coding Fin-gers – different is their commitment to being “complete solution providers.”

Marcin and Daniel met in 2009. Both worked at the time for Maxto, a mid-sized Polish systems integrator that has been active in Poland since 2003. The two met on an IT project for the public ser-vice sector, and since then, shared aspi-rations of one day starting a company. In 2012, after nearly two and half years for Marcin, and nearly four years for Daniel at Maxto, Marcin decided to strike out on

his own. It did not take much convincing and Daniel soon followed. “Teaming up was a no-brainer, as we both graduated with degrees in computer science from Białystok Technical University and we both worked well together at Maxto,” says Daniel. Timing also played a key role. With the boom in mobile applications showing no signs of slowing down, the two knew it was the right time and the perfect place to start their business. Coding Fingers – unlike thousands of other companies that focus solely on the development of mobile applications – seeks to be a one-stop shop for anyone with a clever idea. “Our work doesn’t end with the creation of a mobile application,” says Daniel. The company also works on the backend integration that is needed to support the applica-tion as it gets its feet off the ground, often for months even after the creation of the application.

Late in 2012, the duo teamed up with another Białystok-based company called AmberBit. Unlike Coding Fingers, which specialises on the mobile development side, AmberBit focuses on web develop-ment. By doing so, the two companies pro-vide complete solutions for clients from creating websites to linking them with specific money-making applications. “It’s not enough to just create a mobile applica-tion; we want to grow our client’s ideas by running with them across different tech-nologies,” says Marcin. Indeed, one of their biggest success stories was the creation of an application for wine-lovers. Inspired by a wine-connoisseur who dreamed of

popularising cheap-to-medium priced wine in Poland, the company developed “DoTrzechDych,” a mobile application that allows users to review hundreds of wines priced under 30 zł. The web appli-cation cross-checks online wine reviews, so that customers can find their perfect bottle in real-time.

“It was a success, especially as more and more Poles turn to wine rather than beer (with their) dinner,” says Marcin. Despite the application becoming a success in Poland, spurred on by the inspiration of one Polish wine-connoisseur, most of the company’s clients are located abroad. “About 70% of our clients are located abroad, mainly in the United Kingdom, Germany, Ireland and the United States,” explains Marcin. Indeed, less than 30% of the company’s clients are Polish com-panies or inspired individuals. “These projects are fascinating as it’s the devel-opment of a single idea into something that we can touch and have fun with”, says Daniel. The company has already employed two programmers, and plans to hire an additional two to three developers as well as a graphics designer by the end of 2013. Sales too have seen an increase in recent months, with both expecting to double their sales this year to nearly 500,000 zł. “We are excited to grow our business from Białystok, a city that we love, and a city that delivers great com-puter science graduates each year,” says Daniel. Indeed, the potential of this com-pany rests only with the imagination of its clients. by Andrew Nawrocki

Andrew Nawrocki works as a freelance strategic consultant and financial journal-ist in Warsaw. He has worked in London for a major invest-ment bank, and has made Warsaw his home for the past 3 years. Originally born in Canada, he has spent much time in both North America and Europe.

Confident duo: Marcin Łępicki and Daniel Dudek, owners of Coding Fingers

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The expulsion of two students from the University of Warsaw 45 years ago was a trigger for a number of politi-cal, social and intellectual processes in communist-era Poland. Things got hairy when adam michnik and Henryk Szlajfer, members of “The Commandos,” an anti-regime student group, were expelled from the university after talking to a foreign reporter about a demonstration staged in protest of the cancelling of “Dziady,” a play per-formed at Warsaw’s National Theatre. The play, written by famous Polish poet adam mickiewicz in the 19th cen-tury, was banned by the regime on the grounds that it projected “anti-russian” and “anti-socialist” sentiments.

These events sparked a huge wave of student demonstrations, wide-spread repression and, eventually, tumultuous social change. The pro-tests, which started on march 8th in Warsaw, and spread throughout other Polish cities, were brutally suppressed by billyclub and baton-bearing police-men and so-called “worker squads” (OrmO). a total of 2700 people were arrested. Curtailing the hopes for lib-eral reform after the leadership change in 1956, the communist party led by Władysław Gomułka started to sys-tematically clamp down on freedom of speech and press, increasing their anti-Church efforts and intensifying the

crackdown on the opposition. Similar social rumblings were taking place in neighbouring Czechoslovakia, a fellow Soviet satellite, where top-down liber-alising reforms raised Polish expecta-tions for change.

It was no coincidence that michnik and Szlajfer, the two expelled stu-dents, were of Jewish descent. When Poland cut all diplomatic relations with Israel after the Six Days War in 1967, the authorities launched a widespread

“anti-Zionist” campaign, a thinly veiled effort to politically purge the country's elites of Jews. as scapegoats for eve-rything that was wrong with the coun-try – economically, socially, politically

– people of Jewish origin were dismissed from their positions in government, police, military, at universities and vari-ous other organisations. This purge was instigated by General mieczysław moczar and his group within the com-munist party who wanted to get rid of his political opponents. It is estimated that more than 13,000 people left the country as a result of the anti-Semitic campaign. While the events of march 1968 had deeply tragic consequences, they also helped shape the democratic ideals of the leaders who would later build the foundations of the “Solidarity” movement. In a way, the events of 1968 led to those of 1980, 1981, and eventu-ally, 1989.   by Hanna Kozłowska

It happened in... March

Warsaw, march 1968: the student riots that formed a generation of freedom fighters

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Below: Roman Polański directing Ed Stoppard (l), Frank Finlay (the fa-ther, back to camera) and Adrian Brody (r), in a scene at the Umschlagplatz

I have many memories: the Umschlagplatz filled with 2000 extras, the stifling conditions in the cattle trucks even for one minute.

on foot – getting lost is the best way to discover a foreign city. Despite the destruction suffered in the war and the prevalence of post-war architecture, I still found Warsaw very beautiful. But there was also a certain sadness, as if one could feel the trials and tribulations inflicted on the city and its people. We were staying in the marriott hotel, which provided an amazing view of ‘Stalin’s present.’ It felt like an extraordinary win-dow into the mind of a megalomaniac.

Polanski’s genius Because he couldn’t travel to London, none of us had met roman Polanski since being cast, so we all travelled to Paris for a few days of rehearsals at the beginning of 2001 and I think we were all pretty nervous. I knew his films quite well and admired them. I knew his power as a film-maker and also that the subject matter of ‘The Pianist’ meant that this would be the most important film he had made to date. It’s a cliché, but he was – certainly up until that time

– the best director I had worked with. He was nearly 70 years old but man-aged to do the job of all the different departments on the film set. He would set the shot – always looking through the lens not the monitor - adjust the costumes, check the hair, check the props, alter the set and the décor, all while insisting on getting exactly what he wanted from the actors.

On one scene in the film, where my character comes home from the book market to find the Jewish policeman in the apartment, I had to play part of it reclining on a bed, chatting sarcasti-cally to the policeman. after the first, slightly hesitant, take Polanski came up to me and said very quietly and consid-erately: “It's just Ed and roy (the other actor) chatting to each other, that's all.” It was one short sentence. But it sud-denly helped me channel the energy and attitude that I needed. I think part of Polanski’s genius lies in his instinctual understanding of what an actor needs at any given moment.

I have many memories: the Umschlagplatz filled with 2000 extras, the stifling conditions in the cattle trucks even for one minute, and the moments of his genius. It might sound a bit vain, but I remember shooting a scene which required 13 takes because

two actors weren’t giving him what Polanski wanted. When he came to me Polanski shot two takes and said,

“You see, with Ed, I only need two takes.” I know he really said it to antagonise the two actors rather than praise me, but it still felt pretty good.

OscarsIn the evenings I’d go out with adrien Brody to the bars and restaurants. I ate pike perch a couple of times and very much enjoyed it. I’m still not quite sure exactly what it is. and pierogi of course. I learnt that bad pierogi are not a deli-cacy, as cooked by our on-set caterers. When my wife visited we went down to Krakow, a beautiful city which we loved, and we also went to auschwitz. I don’t need to add anything more to what has been written about that place, except to say that the more peo-ple who visit the better.

Later, when Polanski won the Oscar for Best Director and adrien Brody won for Best actor I was truly happy for them, as I was for ronnie Harwood who won Best adapted Screenplay. I was immensely proud to be a part of that film and of cinema history. The mem-ory of seeing the entire audience of the Palais Cinema at Cannes rising to its feet and giving us a two-minute standing ovation will live with me for a long time. interview by Richard Stephens

ideal man to direct it. The images, the people, the emotions and the experi-ence were so vivid which is exactly what, as an actor, you wish for from the source material. In other words, if the film hadn’t worked, it wouldn’t have been Szpilman’s fault but ours! I was excited about spending a length of time in a former communist coun-try. I knew that Poland had undergone a rapid development and was the great success story of Eastern Europe, but I was hoping not to find a country that exactly mirrored the West. I would have been disappointed if Poland had not retained its essential core, its character and culture.

Warsaw, sad but beautiful On my first day in Warsaw I walked to the Old Town and then to a preserved part of the old Ghetto wall. When I visit a new place I like to explore it alone

Before being offered a role in ‘The Pianist,’ I had never been to Poland. I knew a certain amount about Warsaw

– as much, I suppose, as anyone who is interested in history and global events. my understanding was framed by the revelation that a lot of my father’s fam-ily from Czechoslovakia had been killed in World War II, probably in auschwitz. I learnt this only a few years before we made the film, so the subject matter was very resonant. I knew Warsaw had essentially been razed to the ground by the Nazis and I was aware of the signifi-cance of the Ghetto, although I didn’t know about the Ghetto Uprising. I also understood that Poland had found itself simultaneously crushed and pulled between the Nazis on one side and the Soviets on the other.

a powerful bookI think I had some idea of the impact this might have had on the Polish psy-che. as soon as I got the part I started reading books about the war years and, in 2001, I also spoke to a couple of Polish survivors who were living in London. They depicted, very vividly, their day-to-day life in the Ghetto: the daily sight of death, the desperate clinging to life through any means possible.

When I read the book I immediately knew that it would make a very power-ful film. I knew roman Polanski was the

Eye-Witness: Filming Roman Polański’s ‘The Pianist’ in Warsaw

Ed Stoppard, a renowned British actor, played the role of Henryk Szpilman, the abrasive younger brother to Adrien Brody’s Władysław Szpilman, in the film version of The Pianist, directed by Roman Polanski. The book bears witness to the degradation and destruction of Polish Jews in Warsaw during the war and tells the story of Władysław Szpilman’s incredible survival in the city.

Ed Stoppard, an actor who starred in the Oscar-winning film, ‘The Pianist’, talks about working with the legendary director

The images, the people, the emotions and the experience were so vivid.

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People react minutes after a car bomb exploded outside the Cilvegözü customs gate at Turkey-Syria border near Reyhanli, Hatay, Turkey, Monday, 11 Feb. 2013.

Note: the photographer and correspond-ent were present during the explosion and reported on the events immediately after.

Photos by Gaia Anderson

The syrians were looking for a safe haven and they did not find it even here.

ing a Chanel scarf, high heels and had blond, curly hair. The family sounded like government supporters. “No, it is not bad. On the contrary, we are happy when the regime is present,” the girl said. Her mother came by and added,

“The place we are living in is very safe. You hear voices around you. But thank God there is nothing.” Their denial struck me. “There is normal life, there is traffic. Only in areas where there was a bit of problem, they left their homes.” But she acknowledged unfamiliar sounds: “around us you can hear shell-ing, but our neighbourhood is all right.”

Death and Destruction Suddenly I heard a loud explosion. Pieces of car parts were falling from the sky. at the first moment of an explo-sion, the worst thing is that you don’t know if it is a mortar, a shell, or a plane. You just start running. and this is what everyone present at the border cross-ing did. a state of panic and chaos. 13 people killed, 10 Syrians and three Turks, 28 wounded. a few minutes after the explosion it became clear that it was a car bomb very close to the Turkish gate. We were there just 10 minutes before the explosion. We were thinking that the moment we crossed the Turkish gate we were in a safe place. The Syrians were looking for a safe haven and they did not find it even here. I glimpsed at

the girl in the Chanel scarf running fran-tically, and other people who we had just interviewed. after 30 minutes, on the border crossing, I cried a bit when I finally realized what had happened. my colleagues and I exchanged hugs, happy to be alive. I asked one of them,

“Why aren’t you crying?” “I’m wearing mascara,” she said. I looked at her and we both laughed. Laughter may be the only way to manage. “I’m hungry,” was my response. Food helps too.

The border was sealed. I started walking to our car, about five kilome-ters away. In the car I took my laptop, plugged it into the car charger and started writing. I had two hours to file an article for al-modon, the first online arabic newspaper that for me and many others, represents new media in the arab world and a new generation of people contributing it. Later, I arrived at the hotel where I always stay in antakya. I think I was never so happy to see their staff, who I have known for the past year. I filed and went to eat. The food in antakya never tasted so good. by Rima Marrouch

tion. at some point I started shouting. What he said was untrue. accusing people of bribery should not be taken lightly. The men apologised and let us go. after such a warm welcome we decided to return to Turkey. It wasn’t a pleasant incident.

While waiting for our passports, we conducted final interviews with Syrians who had crossed. Families from the Hama countryside escaping another government offensive. When asked why she waited so long to leave, one woman said, “We were hoping that it will be better and better but it got worse.” Her relative on the crossing added, “They just shell, they don’t warn anyone. We are like flies to the regime. We don’t have value as human beings.” There was another family from a class of wealthy aleppans leaving Syria, from an area in aleppo still under govern-ment control. The young girl was wear-

It was supposed to be what I call an “easy-access” story. a 6:20 a.m. morn-ing flight to antakya from Istanbul, then a drive to rihanli. a Syrian friend, who left a well-paid job in Saudi arabia to work in a little town in Turkey to pro-vide support for refugees and operate mini projects, like a workshop for Syrian refugee women to produce handicrafts for fundraising, was there. Istanbul-antakya flights have become familiar. Early morning plane to antakya is full of weird passengers. You meet col-leagues from other media outlets, you spot Syrian opposition politicians, rebel commanders, foreign fighters, religious people from across the arab world, NGO workers, and a minority of local antakya residents.

Sometimes I think that big a part of a producer’s job is to find the right driver. after hours and hours on the road, you become a family. You watch their backs and they watch yours. They are often more than just drivers; they help you come up with story ideas when they describe what has been happening while you were away, and sometimes act almost like security consultants. They know the ground better than any-one else. ahmed, the driver we often work with, was waiting for us. We drove quickly to rihanli to see the offices of Watan, an organisation that is focus-ing on Syria’s development, media, and providing assistance for refugees.

The refugee Story I have been covering the influx of refu-gees on the Syrian-Turkish border since July 2011 (first was a story for Gazeta Wyborcza). I often think it has reached a peak, that there will be no more Syrians fleeing homes, that Turkey and neigh-boring countries cannot handle more. and every time, I’m proven wrong. I feel the story is important because

A Day in the Life of… Rima Marrouch

Born to a Polish mother and a Syrian father and brought up in Białystok, 28 year-old Rima Marrouch is making a career as a war cor-respondent. She has been reporting from the front line for Polish magazine Wprost as well as for the Los Angeles Times and National Public Radio (NPR). As she tells Poland Today, no day is quite the same....

Polish-Syrian war correspondent tells Poland Today about life in a troubled land.

At the first moment of an explosion, the worst thing is that you don’t know if it is a mortar, a shell, or a plane. you just start running.

liFestyle

people around the world aren’t realiz-ing the magnitude of the refugee crisis. refugee stories are draining, though. after few of them you start avoiding doing “the refugee story” because you feel like you are not able to change any-thing. The offices of Watan felt famil-iar, with flags of the Syrian revolution and posters from Kafarnabel on its wall. Kafarnabel, a small town in northern Syria, is often called “the conscience of the revolution” for its banners and slogans. In the small town, no one gets an easy ride, neither the government nor the rebels. Kafarnabel’s posters have even been critical of the opposi-tion and rebel forces.

It is sometimes difficult for me to cover Syria. Libya was easier person-ally. It isn’t a place of my past. Syria is something else. There are days when I lose hope, when I think that Syria is on its way to become a failed state. But thanks to people like activists in Kafarnabel, or the young people from organisations like Watan and maram, another organisation providing relief for Syrian refugees, I sometimes think there is hope. The Syrian government only recently officially allowed aid to be delivered to the north of Syria.

“Whatever is done, it is not enough. The aid community is failing Syria,” an aid worker told me in antakya, asking not to be named.  The UN aid is rarely seen on the ground. many Syrians are growing frustrated with the UN. Syrian organisations are trying to do whatever they can, but they lack the experience to conduct large-scale operations.

The Border to Hell From the maram offices we headed to the Syrian-Turkish crossing of Bab El Hawa, in rihanli, known in Turkey as Cilveqozu. The rebels seized the crossing in July 2012 from Syrian gov-ernment forces. It is one of the cross-ings that journalists use to get into Northern Syria. We crossed without major problems but shortly afterwards were stopped by a man dressed in civil-ian clothes claiming to be “the director of the crossing” and saying we needed to go to the Islamic sharia court. an armed man came to take us with him. They asked us a few questions and accused us of paying $500 as a bribe, saying that they were fighting corrup-

Rima Marrouch is a Beirut-based jour-nalist and producer for National Public Radio (NPR). She has reported extensively from war-torn Syria and Libya, where she covered the fall of Gaddafi for the Los Angeles Times. In 2012 Rima was awarded the Anna Lindh Mediterranean Journalist Award in recognition of her coverage of the situa-tion in Syria. She has a MA in Journalism and Near Eastern Studies from New York University.

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Do you know your anthem?“Dąbrowski's mazurek” just turned 216, but the lyrics don't get any easier

The Polish national anthem has had more than its fair share of cringe-worthy performances. Perhaps most memorable among them was singer Edyta Górniak’s version at the 2002 football World Cup in Korea.Trying to become the Polish mariah Carey, Górniak embellished her rendition with one trill too many.

But though most Poles rarely hit the right notes when singing Dąbrowski's mazurek, more blunders are caused not by the melody, but by the lyr-ics. according to a poll by Gazeta Wyborcza, 63% of Poles mix up the words in the first line of the anthem – instead of “kiedy” (“when”) belting out

“póki” (“until”). This subtle difference caused 50% of middle-schoolers to lose points on a state-wide exam which determines their high school entry. a common, and much worse mistake is in the line “From the Italian lands to

Poland,” switching “Italian” (“włoskiej”) and “Poland” (“Polski”) which sound vaguely similar in Polish.

Former Prime minister Jarosław Kaczyński showed his creative side by not only switching the lyrics, but cre-ating a new word - “wolski.” But can one blame someone who is taught the anthem in elementary school with no refresher afterwards? Young school-children have no historical context for the anthem's lyrics, saturated with facts. Even adults have limited knowledge of the fairly obscure events described in the anthem, such as a 1657 escapade to Poznań by ‘hetman’ Czarniecki.

Written in 1797 by Józef Wybicki, the piece was originally called the Song of the Polish Legions in Italy. It became popular among those very legions, fighting under Napoleon and the man who gave the anthem its later title, General Jan Henryk Dąbrowski. It

quickly went viral, to use today's jargon, with its words giving hope for freedom to a nation without a state. The lyrics, beginning with “Poland has not yet perished/So long as we still live” would remain very fitting for the next 121 years as Poland remained under foreign rule.

The mazurek became Poland's offi-cial anthem in 1927. Sounding more like the marseillaise than The Star Spangled Banner, the music is written to an upbeat folk dance melody, a combina-tion of “mazur” tunes. Both the lyrics and the melody became an inspira-tion for other authors, and in 1848 it was adapted as Hey Slavs, a Pan-Slavic anthem, and later as the anthems of Slovakia, Yugoslavia and Serbia and montenegro. Beyoncé is due to perform at Warsaw’s National Stadium in may. How great would it be to have her sing the Polish anthem? I'd even let her lip-synch. by Hanna Kozłowska

Preparing May 3rd state holiday celebra-tions. Employees of the Voivodship Office in Rzeszów set up the national emblem

Hanna Kozłowska is a Polish-American journalist, Associate Editor of Poland To-day. She occasionally helps the New York Times in Poland. She has also blogged for the Huffington Post UK and natemat.pl.Hanna graduated from Swarthmore College, Pennsylvania.

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This is my first trip to Tykocin. I had seen beautiful pictures of it and it is close-by so I decided it was worth a visit. I travel there by bus, it is an easy journey: I leave Białystok at 10:55 and I arrive forty minutes later. Sitting on the bus I chuckle to myself when I hear something about the elections in Italy on the driver’s portable radio. I realised that it is election day. It would have been my first time voting, but I am here in Poland which, given the current situa-tion in Italy, is maybe for the better.

after we drive through the small town of Złotoria the streets become icy and covered with snow, but luckily our driver is good and we get there safely. I have been to several villages in the area – michałowo, Supraśl and Białowieża – and as we enter Tykocin I think to myself that it looks just about like all other villages in Podlasie – cold, white, empty streets. I get off the bus and mutter to myself “Ok, I'm in the mid-dle of nowhere.” Just a few metres away from the bus stop I see an old house, which turns out to be a synagogue.

I walk inside and am instantly impressed. It feels like a very spe-cial place. I have seen a lot of ortho-dox churches, but this place is unique. In the synagogue a woman gives me a sheet of paper with the history of Jews in Tykocin. Before the war there were 2,500 Jews living in the village, com-

prising almost half of the total popula-tion. almost of all them were murdered in august 1941. They were rounded up in the main square, taken to the forests, forced to dig their own graves and then murdered by the Nazis.

I start to talk to the woman and another man in a mangled mix of English and Polish. They tell me that in a few hours they will be having an event celebrating Purim, one of the most joyous holidays in the Jewish cal-endar marking a time when the Jewish people were saved from extermination. On the synagogue’s walls there is writ-ing in Hebrew. I later find out that the writing was put there back in the days when people who could not afford prayer books were able to read along. Walking around the synagogue I come across information about Henryk, Sławik, a Polish politician and activist assassinated by the Nazis during World

War II. Sławik used his influence to help save over 5,000 Polish and Hungarian Jews during the war by issuing fake Polish passports which disguised their Jewish identities.

I then make my way towards the main square where I come across a statue of Stefan Czarniecki, who I later learn was a Polish–Lithuanian Commonwealth general and aristocrat. Next to the square is the Holy Trinity church. I peek inside and see a large congregation attending mass. From there I cross the bridge and am stunned by the view. Even in the depth of the Polish winter it is pretty so I imagine in spring and summer it must be amazing. after around 300 metres I reach the castle. It is relatively small and was rebuilt not too long ago. I grab a bite to eat at the restaurant: I order rosół, Polish chicken soup which I’ve come to like a lot, and a slice of delicious chocolate cake. The

restaurant is full of priests, which I find very encouraging. In Italy, if a priest eats at a restaurant then it is almost certain that their food is good. Perhaps this applies to Poland too?

In the afternoon I return to the syna-gogue and am reunited with my new friends. The atmosphere is very lively and it's full of people. an amateur theatre group perform a comedy skit. I don’t understand all of it because it is in Polish but I enjoy it a lot as it's very relaxed – the audience is invited to take part and no one seems to mind that the actors forget some of their lines. all of this set in this beautiful, old synagogue.

When the play finishes I strike up a conversation with a woman next to me, helped by a very friendly girl from Warsaw who helps translate. The woman tells me more about the Jewish holiday of Purim, for example that it is a mitzva, a blessing, to give to the poor and to have a big celebra-tory lunch. apparently you’re also encouraged to drink a lot of wine. I was also told that there are four major Jewish holidays celebrated in Tykocin synagogue.

By now it is time for me to head back. my return bus journey to Białystok is a loud affair as I am joined by a lot of my synagogue buddies, many of whom don’t have a place to sit. my trip to Tykocin was a lot of fun, filled with a lot of laughter – much in the spirit of the Purim holiday. To put it in the words of one of my acquaintances as we arrived in Białystok: “było miło.” by Costanza Tesei

Tykocin: Podlasie’s forgotten pearl

Costanza Tesei, from Forli (near Bologna) in Italy, is a 19-year-old European Voluntary Service vol-unteer with the Eleos Foundation, working in a children’s club in a small town near Białystok. She arrived in Poland in Septem-ber last year and will be staying until the summer.

Exploring Tykocin’s Jewish roots on the joyous holiday of Purim.

UEFA President Michel Platini (2nd L), Polish Soccer Federation Presi-dent Grzegorz Lato (2nd R) and EURO 2012 ambassadors Andrzej Szarmach and Zbigniew Boniek (R) laugh during the ceremony launching ticket sales for the EURO 2012 soccer championships in Warsaw March 1, 2011.

I start to talk to a woman at the synagogue in a mangled mix of English and Polish.

tykocinPopulation: 2000Established: 1425Jewish population: The first Jews arrived in Tykocin in 1522. At its peak, in 1857, the Jewish community made up 70% of the town's population. Before World War Two, 50% of Tykocin's residents were Jewish. In 1941 the Nazis murdered 1400 Tykocin Jews in a nearby forest. Others were transported to the Bialystok ghetto and the Treblinka extermination camp.

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Żętyca: drink made of sheep milk whey; a side product in the process of mak-ing sheep’s cheese

liFestyle

The culinary heritage of Poland’s communist era is bleak at best. many people in Poland still remember the endless meat queues, the rows of empty shelves which became short-hand for the country’s shortage econ-omy. The past few years however have seen Polish gastronomy experience a renaissance. Deeper pockets and evolving taste-buds have triggered a new food culture in Poland: Poles are becoming more and more conscious of what they eat and are putting a premium on the quality of food they consume. Compared to five years ago, Warsaw’s gastro scene is unrecog-nizable. Swanky organic eateries and honest foodie joints have mushroomed across Warsaw. The range of quality, fair-trade products has rocketed. Polish food may always remain a niche cuisine, but the Poland of today now offers a rich culinary palette.

Rediscovering Poland’s Culinary Heritage

Magdalena Ka-sprzyk-Chevriaux is an attorney and food blogger with a passion for cooking. She has worked at the European Court of Human Rights in Strasbourg and is a graduate of the Law Faculty of the Jagiel-lonian University in Kraków. Magdalena strives to promote Polish culinary tradi-tions abroad and to revive long-forgotten recipes, sometimes by organising special foodie events in Poland. She is the author of the culinary blog tastycolours.blogspot.com

Spoilt for choice, Polish taste-buds are becoming more adventurous but also more nostalgic.

In the past, Poland was a multi-ethnic country. Culinary traditions of various nations living within the territo-ries of the 1st and 2nd Polish republic rubbed off against each other. But this Old World is long gone. The Second World War and years of suffocating Communist rule eventually destroyed Old Polish haute and regional cui-sines. rich and diverse multinational and multi-regional culinary traditions were replaced by monotome, plebe-ian food. Everybody was supposed to eat the same. In short, Polish culinary heritage had been grated down to low quality, peasant cantina-style cooking such as pork chops (schabowy), dump-lings (pierogi), sauerkraut (kapusta kiszona), and potatoes (ziemniaki, kartofle). Today, few people are aware that the pork chop, nowadays seen as the poster-child of Polish cuisine, was hardly popular at all in the past.

all of this goes to show that ever more Poles are searching for their culi-nary identity. Poles are also increasingly buying into the idea that “you are what you eat.” many are eager to discover local and quality products, manufac-tured in respect of tradition and local culture. It appears that history has made a full-circle. Today, nobody denies that culinary traditions, including those of particular regions, represent an impor-tant part of our Polish cultural herit-age. This heritage should be nurtured, in the same fashion as French, Italian and Japanese cuisine.

Baroque cuisine: juicy capons and wild fowlmaking a culinary comeback recently is Polish baroque cuisine, common in the Polish territories three hundred years ago, before Poland was sliced up between the russian Empire, Prussia

Oscypek: cheese made of sheep’s milk, registered within the EU system as a regional product and protected under the EU’s Protected Designation of Origin geographical indica-tion. It may be grilled, served sliced with tartines, sandwiches and salads.

“Blue” sheep’s cheese made made in “Rancho Frontiera” in the Masuria region by Rusłan Kozynko. All types of cheeses that they produce are made of raw, non pasteurized sheep’s or cow’s milk, with traditional methods.

Fresh sheep’s cheese sserved in summer as a starter with fresh rasp-berries, hazelnuts, balsamic and honey dressing. When visit-ing provinces, try to find producers of lo-cal cheeses, raspber-ries and honeys.

Summer salad with farmer’s sheep’s cheese, baby spinach, arugula, Polish forest blueber-ries, walnuts and ber-ry-balsamic dressing. In the summertime, check out local food markets, buy fresh and aromatic forest fruits, for example blueberries.

Polish food may always remain a niche cuisine, but offers a rich culinary palette.

and austria. When analysing archaic Polish recipes, many people are sur-prised by the large quantity of recipes that use juicy capons, wild fowl, fresh-water fish, cereals, peas, spices, ginger and lime (some even call it “gingery cuisine”). Pork and potatoes were not popular back then. This sour, sweet and spicy cuisine had been described in detail at the end of the 17th cen-tury by Stanisław Czerniecki (a cook of the famous Lubomirski clan) in

“Compendium Ferculorum.” The publi-cation is nowadays acknowledged as the first Polish cookbook and it was recently reprinted.

Baroque cuisine was replaced in the 18th and 19th centuries by a more con-temporary one peppered with strong French influences, and soon became forgotten. Today, it is the subject of experiments made by various aficio-nados who meet and cook together to recreate archaic recipes and flavours, adjusting them to our more delicate and contemporary taste buds.

Quality, not quantity Poles are starting to go to greater lengths to get hold of quality produce. There are already hundreds of small family size companies which produce local food products in Podhale, masuria, Podlasie, Pomerania, Greater Poland (Wielkopolska), Silesia, Podkarpackie

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78 79rancho Frontiera, sery grądzkie (grądzkie cheeses) - often sold online, vacuum-packed and delivered to you. When in Warsaw, visit Le Targ – a food market in the Saska Kępa neighbor-hood, selling only homemade products.

Culinary road trip In the summer time, instead of visiting Tuscany or Provence, try to find a cou-ple of days to discover Polish provinces

– enjoy the forests, mountains and lakes, and sample local food. Venture out to the famous food festival in Gruczno, located in the picturesque area nearby the old town of Chełmno on the river Vistula in northern Poland. Producers from the entire country take part in the Gruczno festival. There, you will find delicious honey and cold-pressed colza oil from Św. Wawrzyniec mountain (called the ‘olive oil of the North’, rich in healthy omega non-saturated acids). Enjoy locally prepared pork, lamb, goat and venison sausages and hams. a real must in Gruczno is “półgęsek”, cold-smoked goose breast which has again become increasingly popular, although it is hard to buy in grocery stores. Get some rye bread. Serve it with organic preserve, savory pickles (exceptional Polish pickled mushrooms, cucumbers) or sweet preserves (best Polish plums, pears, strawberries and apples).

also not to be missed is the excel-lent smoked freshwater fish from the masurian lakes. In spring, pop over to the historical city of Sandomierz in south-east Poland, where cheese lovers meet to taste the best Polish cheeses. remember that November is goose season: 11 November is not only Polish Independence Day but also  Saint martin's Day. Traditionally, this day used to mark the beginning of goose season. Exceptionally delicious young Polish “oat goose” is a meaty variation of the bird which not only tastes great but is also healthy and rich in omega 3 non-saturated acids.

Goose was popular before WW2. after 1945, it almost disappeared from our tables, as was the case with other meat and fish. Today, Poland is the larg-est European producer and exporter of goose, so one could think that it should be easily available in the entire coun-try. Sadly, this is not the case. To find fresh goose in stores is a nightmare, but I am hopeful that soon this won’t be the case. The November St. martin’s goose event was supported by renowned Polish chefs such as Wojciech modest amaro (atelier amaro, Warsaw, rising michelin Star), adam Chrząstowski (ancora, Kraków), Karol Okrasa (Plater, Warsaw) and many others.  It goes to show that Polish chefs, and cuisine, are becoming more creative and adventur-ous, blending old and new influences. by Magdalena Kasprzyk-Chevriaux

nazWa działuliFestyle

Author’s version of a common noodle dish called “łazanki”: savoy cabbage, home-made square noodles, forest mushrooms, mountain cheese, namely bryndza podhalańska (sheep’s milk). The “proto-type” of this old pasta was probably brought to Poland in the 16th century.

and other regions. Some of them are members of Slow Food Polska, an asso-ciation promoting a healthy and slow idea of life. many regional and tradi-tional products have been registered as local specialties by the Polish ministry of agriculture and some of them are recognized by the European Union. But be careful: always check the origin; a lot of industrial and low quality prod-ucts misleadingly use terms like “local”,

“regional” and “ecological”. Despite the overbearing presence of

junk food, it is becoming easier to find, on the culinary map of Poland, loca-tions with good quality products and restaurants serving intriguing Polish dishes, both modern and traditional. If you want to buy a foodie gift from Poland, you are no longer restricted to vodka, kabanos or żubrówka. Try to get cheeses from the most famous Polish cheese maker Gienio miętkiewicz,

Today, Baroque cuisine is the subject of experiments made by various aficionados who meet and cook together to recreate archaic recipes and flavours.

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From Beethoven to Bieber and Beyoncea roundup of music, cultural and artistic events coming up soon in Poland, so there’s no excuse for sitting at home and twiddling your thumbs.

With Vivaldi’s spring on the hori-zon, bringing with it mood-lifting blos-soms of varying hues, stretching days and melting snow (again), both sides of Easter will see a feast of cultural events await us all - from the red army choir to the Spanish Cinema week, and Julian antonisz inspired art to a Vaya Con Dios farewell tour.

A rather unusual view from the Red Army Choir’s recent performance in Montbeliard, north eastern France, but a welcome break from the Soviet uniforms.

Chris Botti, the virtuoso trumpet player soon to be heard in Poznań, Gdańsk and Warsaw.

cultural round up

Classical with a modern twistCapella Cracoviensis have established themselves as a cultural icon of Kraków and a modern orchestra & choir which revives the Golden Age of Polish Classical, from Renaissance to pre-Romantic operas, Handel’s oratorios and operas, Polish baroque chamber music and stage opera performances. On 13/20/27 March they will be performing Mozart, Tartini, Dittersdorf, Boccherini and Vivaldi at Saint Marcin’s Church. Entrance is just 5 zł. A month later they will be performing Haydn’s ‘The Creation’ at the Kraków Philharmonia, on 28 April. The masterpiece was written in 1796, one year after the third partition of Poland. Tickets are peanuts at just 40 zł. www.capellacracoviensis.pl

Lolly sticks, robots and C majorsThe Copernicus Science Centre on Warsaw’s western Wistula riverbank never fails to strike awe with their exhibitions, and Everything plays! - an interactive exhibition of 19 unusual musical instruments – is no different. If you have ever wondered how would you sound as a robot and fantasized about playing a tune on an ice-cream lolly stick, you have until 17 March to catch this unique and fun exhibit. Tickets cost 13 - 22 zł and 57 zł for a family.www.kopernik.org.pl

An Easter Birthday Feast The XVII Ludwig von Beethoven Festival takes place from 17-29 March this year. Over 20 concerts are being held in Warsaw and several other Polish cities. Internationally-acclaimed chamber ensembles are due to partake, including the Belcea, Artis and Tokyo String Quartets, presenting works by Schubert, Verdi, Haydn and Bartók, alongside composi-tions by the patron. 2013 marks the 100th birth-day of Witold Lutosławski, the 200th birthday of Verdi and Wagner, and the 80th birthdays of Henryk Górecki and Krzysztof Penderecki. You can keep abreast of the concerts at www.beethoven.org.pl.

Red Army crosses Polish borders againThis time, however, their vocal rather than military presence makes them welcome guests. Colonel Alexander Pustovalov’s formidable direction of 60 singers, soloists and sym-phony musicians nostalgically recall Russian and Ukrainian national songs, folk ballads and much more. Having picked up honours worldwide over the years, their array of tunes - sung in fully-clad Soviet uniforms - is an epic occasion not to be missed. Their tour starts off in Opole on 13 March and ends in Kielce on 24 March, stopping off at Rzeszów, Białystok, Wrocław, Chorzów, Warsaw, Bydgoszcz, Kraków, Rybnik and Łódź along the way.

to Live One’s LifeInspired in large part by one of Julian Anton-isz’s inventions: a portable device for creating non-camera animations, this exhibition at the Zachęta National Art Gallery is open until 31 March. Admission is free and well worthwhile. Antonisz was the co-founder of the legendary Animated Film studio in Kraków, as well as a director of experimental animated films, musi-cian and inventor. Presented works include Rube Goldberg’s amazingly complex machines.

Big bucks for IndieThe International Festival of Independent Cinema in Krakow, sponsored by Plus, has established itself as a mandatory attendance event for indie-cinema buffs. Taking place from 12-21 April it will include the ‘Making Way’ competition which sees 12 top independent European films vying for the $100,000 Krakow Film Award. The winning director is chosen by an international jury of acclaimed filmmakers cinema experts. Tickets per film range from 15/25 zł while multi-day passes will set you back from 100 - 300 zł

‘Tis Botti timeCharismatic virtuoso trumpet player Chris Botti is well-known in Poland for his unique style that transcends jazz, pop and classical. He is widely-regarded as one of the world’s outstanding jazz musicians and has built up a loyal following here over the years. Every time my friend Ewelina hears his name or music she gets palpitations and almost faints. His latest album, ‘Impressions’, won the Gram-my award recently for Best Pop Instrumental Album while three of his albums have reached No. 1 on the Billboard jazz albums chart. So if your best mate or partner’s names day is coming up on 15, 16 or 17 March in Poznań, Gdynia or Warsaw, respectively, consider splashing out on a 120 - 210 zł ticket.

Big bucks for IndieThe International Festival of Independent Cinema in Kraków has established itself as a mandatory event for indie-cinema buffs. Taking place from 12-21 April it will include the ‘Mak-ing Way’ competition which sees 12 top inde-pendent European films vying for the $100,000 Krakow Film Award. The winning director is chosen by an international jury of acclaimed filmmakers and cinema experts. Tickets per film range from 15/25 zł while multi-day passes will set you back from 100 - 300 zł

Simply Red, simply American SoulMick Hucknall, the curly red-haired Manches-ter United supporter whose Simply Red songs are played from Praga to Timbuktu is hitting the capital to bellow out songs from his first solo album, ‘American Soul’. Tickets for the 26 March performance in the Sala Kongresowa of the Palace of Culture and Science are a handsome 209-275 zł, so you may want to start putting a few groszy aside.

Damien Moran is an Irish writer who has contributed to the Irish Times, The Sun and TheJour-nal.ie. His satirical travel book about Euro 2012 reached no. 1 in Ireland last year. Based in Warsaw since 2006, he speaks Polish. He is online editor of poland-today.pl.

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13th Spanish Cinema WeekIn cooperation with Instituto Cervantes, AP Mañana and the Spanish Embassy, Pod Baranami Cinema in Kraków are once again hosting Poland’s biggest ‘Spanish Cinema Week’, featuring films, documentaries and short films from one of Europe’s most creative film industries. From 10-16 March the festival will include such gems as ‘Three steps above heaven’, ‘Carmina’, and ‘18 meals’, with direc-tors such as Emilio Aragón, Andrea Esteban and Tom Fernández on the bill. Most films will include both Polish and English subtitles. Discount prices of 14 zł or regular fee of 17 zł applies. A week-long pass is 140zł.

Sto lat Giuseppe! - Verdi at 200The National Symphony Orchestra and Philharmonic Choir are holding a concert in honour of the 200th anniversary of Giuseppe Verdi’s birth (actually born on 10 October 1813). Learning to play the spinet (early piano) when he was just seven years old, Verdi was later told by the famous Milan Conservatory that he had no special talent. How wrong they were! Tickets are a steal at just 50-90 zł., so don’t miss this important event on 16 March at 18:00 at the National Concert Hall in Warsaw.

Sages of Polish alternative rockKult continue to ooze coolness since first form-ing over three decades ago. Spearheaded by the indomitable vocalist and lyricist Kazik Stasze-wski, their music has roots in punk and new wave with wonderful tinklings of jazz, ska and psychedelic rock. If you are an ex-pat and have not listened intently and learned the meaning of Kult’s lyrics, it’s time to get down to work. Their treasure-trove of anti-communist and anti-system hymns are laden with intelligent insight. The positive liveliness to their melodies will have you hopping about regardless of age or taste, their endorphine-creating beats a joy for the soul. Pencil in the following as dates to hire a babysitter - 13 March at Klub Kwadrat in Kraków, 5 April in Lublin or 11 April in Warsaw. Tickets cost 60 zł. www.koncertomania.pl

A Few Practical Ways to Live One’s LifeInspired in large part by one of Julian Anton-isz’s inventions: a portable device for creating non-camera animations, this exhibition at the Zachęta National Art Gallery is open until 31 March. Admission is free and well worthwhile. Antonisz was the co-founder of the legendary Animated Film studio in Kraków, as well as a director of experimental animated films, musi-cian and inventor. Presented works include Rube Goldberg’s amazingly complex machines.

‘Hey-nah-na-nah’ Sing FarewellThe much-beloved upbeat jazzy Belgian group, Vaya Con Dios (Go with God), have included Poland on their farewell tour, hitting Poznań on 21 March, Zabrze on 23, and Warsaw on 25, much to the delight of their avid Polish follow-ing -which includes their greatest ever fan, my mum-in-law. Founded in 1986 and headed by Dani Klein, they have sold seven million albums and more than three million singles. Tickets range from 120 - 260 zł.www.vayacondios.info Bieber-timeThe Canadian teenage sensation’s Believe Tour will take him to the Atlas Arena in Łódz on 25 March. Rumour has it that Justin Bieber’s imminent arrival hasadults in a panic, aware that Bieber-mania is about to strike every Polish female aged 4-14. Tickets start from 170 zł and rise to a ludicrous 1,500 zł (no kidding!) to enter the Meet and Greet Diamond Circle. Let’s hope there’s a Champions League game on that night.

Lip-synchers and ClaptonThe big question on everybody’s lips this year is whether Beyonce will mime her performance at this year’s Orange Festival on 25/26 May at the National Stadium in Warsaw. If it was good enough for Obama, maybe it will trick even the most astute of her Polish fans. Meanwhile, Eric Clapton is on his way to Łódź. The only three-time inductee to the Rock and Roll Hall of Fame will show off his riffs on 7 June for great value, from just 198 - 308 zł (5 times less than the most expensive Bieber ticket!). And finally, the first time I heard Depeche Mode was in the early nineties. The next time will be on 25 July at the Warsaw’s National Stadium, though I might go for the 176 zł ticket rather than the steeper 825 zł option.

4 things to do in April in WarsawPolita is a live 3D Musical by Studio Buffo on 5 April, based on the biography of the most famous Polish silent cinema movie star, Pola Negri, who once famously quipped, ‘Born in Poland, made in Germany, stolen by Holly-wood.’ The production stars well-known singer Natasza Urbańska. The next day Teatr Syrena are commemorating the 100th anniverary of Jerzy Wasowski’s birthday on 6 April with their performance Śpiewnik Pana W., starring the majestically talented Justyna Steczkowska and Wojciech Malajkat. Today’s Art Makes Tomor-row’s Poland, an exhibition from the collection of the Museum of Modern Art in Warsaw, will be on display in the Presidential Palace until 21 April 2013. Admission is free. Finally, kabaret maestro Jan Pietrzak, founder and leader of two famous satirical cabarets, whose patriotic song ‘Żeby Polska była Polską’ became the Solidarność trade union anthem, will be crack-ing gags on 12 April for 50 zł.

Kult was formed in 1982. From the start, the group has had an instantly recognizable sound and is distinguished by the voice and provocative lyrics of lead singer Kazik Staszewski.

Giuseppe Verdi’s 200th anniversary to be celebrated by The National Sym-phony Orchestra and Philharmonic Choir. 16 March, Warsaw

The Voice of Poland coach Justyna Steczkowska looked her usual stunning self at a recent press confer-ence for the popular show. The singer has herself sold over 750,000 albums.

Spanish movie director Emilio Aragon will feature at this year’s Spanish Cinema Week. 10-16 March, Kraków.

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Building on Sure Founda-tions

Property in Poland, while facing a slow-down like the rest of the economy, still has a lot of growth potential before it catches up with western Europe. For MIPIM, the world's pre-eminent real estate fair in Cannes, Poland Today presents the 'Focus on real estate in Poland' special section.

Property in Poland 2013

3

Property in Poland 2013 —

Office

The Warsaw Spire complex, which developer Ghelamco Poland is building in the Wola district of Warsaw, includes the tallest office tower currently under construction in the Polish capital. The project, construction on which has been underway since mid-2011, will comprise a 220-metre high-rise and two accompanying 55-metre buildings and will deliver a total of 100,000 sqm of office space. No wonder the development has been closely watched by office developers and leasing agents in Warsaw, especially since its leasing process has so far been rather slow. Some have expressed doubts over whether it will be a success. The president of a major real estate company active in the Polish market, who wished to remain anonymous, said that in his opinion Warsaw Spire, as presented by its developer, will not be built. He stressed that the scheme is too large for its location and will be difficult to lease. He also claimed that Ghelamco Poland will eventually have

Zagórski, Commercial and business devel-opment director at Ghelamco Poland, stressed that office space absorbtion in the near future will depend on many fac-tors. Mergers and new market entries will generate demand but its exact level is very difficult to estimate. He points out that the commercial success of new skyscrapers will not only depend on the situation in the market, but also on factors including location, architecture, layout and leasing conditions. Mr Zagórski did not want to speculate on how many high-rise office projects could actually be launched and completed in Warsaw in the upcoming years. Others say there is now certainly room for several such schemes in the city.

Tomasz Buras, director and head of Office Agency at Savills, said that the lease-agreement cycle of large tenants, which are the natural target group in the case of high-rise office buildings, offers chances for towers under construction or planned in Warsaw. It is expected that a number of those tenants, which include banks and other financial institutions, as well as consultancies and some law firms, will relocate to new office areas in Warsaw in the upcoming years. “Several large com-panies are now starting or are already in the process of consolidating their space in Warsaw, or they are analysing the possibil-ity of relocating to a building which will be completed in 2015 or later,” Mr Buras said. He added that those companies are looking at buildings will be much more technologically advanced than the build-ings which they currently occupy. What is more, new towers in the Wola district could be an alternative to expensive office buildings in the centre. “This argument may convince tenants who would like to be in a project featuring a recognizable brand and architecture, but offering rea-sonable financial conditions,” Mr Buras said. He noted that large tenants are look-ing for between 10,000 sqm to 20,000 sqm of space so the potential relocation of even a few of them will be enough to create demand for two or three new office tow-ers in Warsaw.

Piotr Mirowski, director, CEE invest-ment services, at Colliers International, isn’t worried about too many new office towers entering the Warsaw market in the near future. He believes that the market itself is now verifying the plans of devel-opers planning to build such projects, and he expects new supply to enter the market gradually. There is a limited pool of devel-opers, he points out, who have equity on their hands and can afford to launch large office schemes without external financ-ing. Meanwhile, banks require certain pre-lease levels before they grant a loan for a particular office development. The same pertains to investment funds, some of which are certainly interested in for-ward-purchases of planned office towers in Warsaw. Only the best-located office skyscrapers with good leasing prospects and optimal capital value will find capital, Mr Mirowski said. • by Adam Zdrodowski

WarsaW spire – a litmus test?

to redesign it and make it smaller for it to be commercially successful.

However, Paweł Skałba, partner, Office Agency, at Colliers International, pointed out that while leasing an office tower the developer has to focus on signing a number of large tenants and such deals take a long time to negotiate. In his opinion, the Warsaw Spire scheme will slowly but surely move ahead. Once several large tenants have leased space at the complex, the investment should reach critical mass, Mr Skałba said. Indeed, Ghelamco Poland has recently secured the first tenant for the project, leasing approxi-mately 14,600 sqm of space to EU agency Frontex. The developer says talks are now underway with several potential tenants that could lease a further 50,000 sqm. Jarosław Zagórski, commercial and business develop-ment director at Ghelamco Poland, stressed that all three buildings in the complex will be completed by the end of 2014. Tenants will move into the tower a few months later, after time-consuming fit-out works.

2

Property in Poland 2013 —

Office

half of this year. Waldemar Lesiak, director of the Office Projects Department at Echo Investment, said that the company is opti-mistic about the prospects for that scheme. He added the biggest asset of the planned skyscraper is its location at the intersec-tion of Warsaw’s Al. Jana Pawła II and ul. Grzybowska which, when combined with the scale and architecture of the building, should, he believes, become one of the most prestigious places in the city.

Also in downtown Warsaw, on ul. Emilii Plater, another listed company, BBI Development NFI, is planning an office tower with approximately 55,000 sqm of usable space. On the same street, real estate investor Griffin Group wants to build its Nowa Emilia skyscraper project. The tower will be developed on the site of the

former Meble Emilia store building that is tucked between the InterContinental hotel and the Warsaw Financial Center skyscrapers, and should deliver up to 41,000 sqm of GLA. Przemysław Krych, CEO of Griffin Group, stressed that ul. Emilii Plater, located in the very heart of Warsaw, is the natural place in the city to build skyscrapers. For its part, develop-er Skanska Property Poland is currently preparing to start construction on a major new office complex located in the vicin-ity of Warsaw’s Daszyńskiego Roundabout, which will include high-rise buildings. Katarzyna Zawodna, regional director at the company, said that Skanska is not wor-ried about the leasing, adding that high-quality, energy-efficient buildings in good locations built by experienced develop-ers find tenants irrespective of the situ-ation in the market. “Skanska believes in the potential of the Polish office market and last year showed that there are good reasons for that belief,” Ms Zawodna said. The amount of office space leased out by the company in 2012 increased by 68% y/y.

Planned office tower projects in Warsaw which seem to be relatively advanced also include schemes prepared by Mennica Polska and PHN. Many oth-ers were announced in the last few years but do not appear to be close to realiza-tion. The announcement by developers of so many ambitious office developments in Warsaw has no doubt resulted from the continued high demand for space in the city in recent years. It is, however, diffi-cult to forecast to what extent this will be sustained in the upcoming years. Jarosław

A host of new office skyscrapers have been announced by developers in Warsaw in recent years. Demand for office space in the Polish capital has admittedly been high of late, but how many of the planned towers will actually be built? Developer Ghelamco Poland is already building an office complex called Warsaw Spire which will include a 220-metre skyscrap-er. Construction on several other office towers in the Polish capital is expected to begin within the next few years. Warsaw Stock Exchange-listed developer Echo Investment is now working on a high-rise office project, which it plans to develop on the site of the former Mercure Hotel in the Polish capital’s downtown, close to Rondo ONZ. Construction on the 50,000-sqm tower is expected to start in the second

Katarzyna Zawodna, regional director at Skanska Property Poland, is optimistic about the leasing prospects of a new office complex that the company is planning to de-velop near Warsaw’s Daszyńskiego Roundabout.

BBI Development NFI and Mennica Polska are both planning office towers (respectively pictured right and below) in downtown Warsaw.The former would be developed at the intersection of ul. Emilii Plater and ul. Nowogrodzkaand the latter at the intersection of ul. Żelazna and ul. Prosta.

Skyscraper (in)sanity?

5

Property in Poland 2013 —

Retail

Warsaw, which could yet absorb a number of new retail projects, continue to be the priority for investors,” said Magdalena Frątczak, director of the retail agency at CBRE. Ms Machus-Burek of Colliers International noted that Greater Warsaw still has a relatively low level of retail space saturation, featuring just 540 sqm of retail space per 1,000 inhabitants.

By way of comparison, the Wrocław agglomeration currently has 720 sqm of retail space per 1,000 inhabitants, the high-est saturation level among large urban cen-tres in Poland. In the Greater Poznań area the figure will be 730 sqm once Poznań City Center is built, she said. Ms Potera of Jones Lang LaSalle says that the loca-tion of new shopping malls in large cities largely depends on the availability of land in those cities, with both the downtowns and major residential districts being popu-lar choices. However, she added that there is certainly potential for the development of well-prepared retail projects on the outskirts of large cities, especially when those are located close to major road junc-tions. She pointed out that a good exam-ple of this is the Europa Centralna (Helical Poland, 67,000 sqm) retail investment in

Gliwice which combines a shopping gal-lery with a retail park and is located near the intersection of the A1 and A4 motor-ways. All of this is not to say that there is no longer any substantial retail space development potential in the small and medium-sized cities in Poland. A number of developers including Echo Investment continue to be active in such locations.

Krzysztof Giemza, shopping centre department director at the firm, said that there is still room for modern retail pro-jects in smaller cities and pointed to new schemes that Echo has recently built or is now building in Bełchatów, Kalisz and Łomża. Also small retail formats, including convenience centres which have seen a lot of growth of late, have very good prospects

in small and medium-sized Polish cities, stressed Ms Machus-Burek of Colliers International. “In cities with populations of between 50,000 and 100,000, the sup-ply of leasable space in small-format cen-tres is at the level of 173,000 sqm, which accounts for 15% of all retail space in those cities,” she said. Ms Machus-Burek added that the ongoing development of brands, including Czerwona Torebka, Dekada, Family Point, Multibox, Hop Stop, Stop Shop and Vis a Vis, shows that one can expect a significant increase in the supply of space in that retail segment. • by Adam Zdrodowski

TriGranit is now building its Poznań City Center project (pictured left). Inter IKEA Cen-tre Group Poland is planning a major retail development in Lublin (pictured above).

Galeria Katowicka, which is being built by Neinver, is one of the largest shopping cen-tres currently under construction in Poland.

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Property in Poland 2013 —

Retail

After several years of keen interest in the small and medium-sized cities in Poland, retail developers are again becoming increasingly focused on the largest urban centres in the country. In 2012, the Polish retail market saw delivery of 374,000 sqm of new space, with more than a half of the newly completed developments located in cities with populations of below 100,000, said Edyta Potera, associate director, Retail Department, at Jones Lang LaSalle. She added that none of the 16 new and eight expanded shopping centres delivered last year provided more than 50,000 sqm of GLA. This year is set to be different, both in terms of the location and of the scale of the investments which will be completed in the months ahead. According to Jones Lang LaSalle data, another 752,000 sqm of new retail space in 25 new and nine expanded schemes will be added to the market in 2013. Some 41% of that volume will be located in the main agglomerations, as compared to 22% last year, Ms Potera said. Marta Machus-Burek, director, retail strategies, Development Advisory Services, at Colliers International in Poland, noted that large cities were, until recently, regarded as saturated with retail space. It

was in these larger cities that many devel-opers started their investment activities in Poland more than a decade ago and, in the last few years, those same compa-nies started venturing outside the major urban centres in search of new develop-ment opportunities.

From 2006 to 2012 small cities (with populations below 100,000) and medium-sized cities (with populations between 100,000 and 200,000) saw a development boom and, as a result, few of them do not yet feature a modern retail facility, accord-ing to Ms Machus-Burek. Meanwhile, she points out, one major retail investment with about 30,000 – 40,000 sqm of space is often enough to meet the needs of the local market in such cities, and make it difficult to develop new retail projects in them. Large cities remain attractive due to factors including low unemploy-ment and substantial purchasing power and it is there that 45% of all retail space currently under construction is locat-ed, Ms Machus-Burek said. There is still room for large-scale shopping centres located in the major Polish cities, said Radosław Knap, development and market research manager at the Polish Council of

Shopping Centres. Admittedly, just four large malls featuring leasable areas of more than 40,000 sqm, were delivered in Poland within the last two years and three of those opened for business in 2011, Mr Knap said. The Galeria Rzeszów development in Rzeszów in south-east-ern Poland, which delivered 42,000 sqm of GLA, was the only large shopping cen-tre that was completed in the country last year. However, construction is now under-way on six large malls in major regional cities across Poland, which are expected to deliver a total of almost 350,000 sqm of GLA, Mr Knap stated.

These include Atrium Felicity in Lublin (Atrium Poland Real Estate Management, 75,000 sqm GLA), Poznań City Center in Poznań (TriGranit, 60,000 sqm), Galeria Bronowice in Kraków (Auchan, 60,000 sqm) and Galeria Katowicka in Katowice (Neinver, 53,000 sqm). By the end of 2015, malls including Łacina in Poznań (Apsys Polska, 98,000 sqm), a new Inter IKEA Centre Group project in Lublin (85,000 sqm) and Galeria Wilanów in Warsaw (GTC, first phase sized around 60,000 sqm) are all expected to be com-pleted. “Large cities, and particularly

small retail formats groWing in poland

Small retail formats are becoming increas-ingly popular with tenants looking to save on rent and developers seeking to diversify their activities, reduce capital expenditure on new investments and shorten leasing processes, according to a recent report by DTZ. Develop-ment activity in the sector, which includes convenience centres and strip malls sized to 5,000 sqm, is expected to intensify, with many of the planned projects located in cities with populations of between 50,000 and 100,000, the study said. According to DTZ, the devel-opment of the small retail format market is the result of the current situation in the finan-cial markets, as well as the maturing of the Polish retail property market. Retail chains and developers are quickly identifying new trends in the market and the changing shopping hab-its of buyers are one of those. While looking for basic commodities many buyers nowadays prefer to visit small facilities, rather than large shopping malls.

Anna Staniszewska, consulting and research department director at DTZ, points out that, thanks to small retail formats, retail chains and developers can be present in markets where large shopping centres already exist. Small retail formats do not compete with such schemes. Additionally, they can be developed in markets in which the development of large shopping malls is not economically feasible due to small populations or low purchasing power.

According to DTZ data, there are currently 67 small retail facilities in 32 cities with populations of between 50,000 and 100,000 across Poland, many of which were built by local developers. However, there are also several larger investors, such as RECE Poland and Czerwona Torebka, that specialize in such schemes, and in larger cities the group also includes Budrem, Caelum Development, CDI, Dekada Realty and NAP Invest, the report said.

Retail developers refocusing on large urban centres in Poland

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Property in Poland 2013 —

Residantial

for apartments sized to 50 sqm. He noted that young people and childless couples often buy homes which meet their cur-rent rather than future needs. Jarosław Szanajca, management board president at Dom Development, said that in 2007 the average size of apartments in one of its housing estates was approximate-ly 70 sqm. A similar estate built during the crisis already featured apartments sized around 50 sqm on average. Mr Szanajca added that currently approximately 25% of all apartments offered by his company are sized 50 sqm of less. Also Sławomir Horbaczewski, president of the manage-ment board of Marvipol, stressed that small and medium-sized apartments remain the most popular.  “Such apartments domi-nate in the current offers of most devel-opers as they guarantee quicker sales and an efficient completion of an invest-ment,” Mr Horbaczewski said. Apartments sized between 40 sqm and 50 sqm have a large share in the offer of Marvipol, he added.

Meanwhile, at the other end of the spec-trum, luxury residential property in Poland continues to sell relatively well. Real estate brokers point out that this segment of the

housing market is pretty much immune to the fluctuations in the economy at large. There is a group of very rich people who will not lower their high living standard and will continue to buy apartments, sell them and change for newer ones, irre-spective of the situation in the market, said Artur Wach, manager at premium real estate brokerage Lion’s House.Robert Barszcz, residential real estate department director at Ober-Haus, a real estate broker-age, said that there have been downward price corrections in the primary and sec-ondary luxury property markets alike so an increasing number of buyers are now

“going shopping.”The location, standard and surround-

ing of a given building are the most impor-tant for those buyers. In Warsaw, small apartment buildings located in the Stary Mokotów, Stary Żoliborz and Powiśle neighbourhoods remain the most popular, Barszcz added. In his opinion, large luxu-ry schemes including the under-construc-tion Złota 44 and Cosmopolitan Twarda 2/4 towers in downtown Warsaw are not fully meeting the expectations of buyers looking for upmarket residential property.Barszcz said that those buyers are rather

looking for homes which are not only in good locations, but also in cosy and green neighbourhoods, something that down-town Warsaw can hardly offer. Indeed, Lion’s House’s Wach stressed that there are new low-rise investments in Warsaw, in green neighbourhoods located close to but outside the downtown, in which all apartments are sold out and do not enter the secondary market at all. He added that the rising popularity of apartments in ren-ovated historical tenement houses is a new trend in the Polish luxury housing market.

“People are starting to appreciate the beau-ty of tenement houses which used to and will continue to look attractive,” Wach said. • by Adam Zdrodowski

neW residential toWers in WarsaWConstruction is now underway on two sig-nature residential towers in Warsaw which are expected to deliver some of the most prestigious and most expensive apartments in the Polish capital. At least one more hous-ing skyscraper could be built in the city in the near future.Warsaw Stock Exchange-listed property developer and investor Orco Property Group will soon start fitting out the interiors in its 192-metre Złota 44 luxury housing pro-ject which has recently become the tallest purely residential high-rise building in the European Union.The development is located next to the Złote Tarasy retail and office complex and was designed by the renowned Polish-American architect Daniel Libeskind. The investment will comprise 266 apartments which are valued at an average of 32,000 zł per sqm.Orco Property Group is not revealing the current sales level at the Złota 44 building. However, Alicja Kościesza, sales and marketing director for Poland at the company, stressed that sales in the most luxurious residential pro-jects tend to increase upon their completion.For its part, real estate developer and inves-tor Tacit Development Polska has recently topped out its Cosmopolitan Twarda 2/4 residential tower located near Warsaw’s Grzybowski Square which was designed by the renowned German-American architect Helmut Jahn.The 160-metre skyscraper will deliver 252 apartments whose average price is 24,000 zł per sqm. Also Tacit Development Polska is not, for the time being, revealing the number of units it has so far been able to sell in the scheme.Meanwhile, Warsaw Stock Exchange-listed developer Atlas Estates has recently an-nounced that it is planning a new residential tower in the Wola district of Warsaw which would be built next to the existing Platinum Towers and Hilton hotel buildings.The company wants to apply for a building permit for the skyscraper once the municipal authorities have enacted a zoning plan for the area, which it hopes will happen by the end of this year. Construction on the planned high-rise could then launch in 2014.

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Property in Poland 2013 —

Residantial

programme for first-home buyers, which was phased out at the end of last year.Its replacement, a new government pro-gramme called Home for the Young, is not expected to come into force before 2014 so the next few months could see devel-opers and buyers acting with caution.

This makes the number of new housing units which developers will start building in 2013 difficult to estimate. What is easier to predict is the type of homes companies will be constructing this year. This will often be relatively cheap mid-market units as the average buyer is now mostly looking at the price, said Bartosz Jankowski, pri-mary market manager at real estate bro-kerage firm Home Broker. He added that buyers continue to prefer small apart-ments with the largest possible number

of rooms that can be arranged on a given amount of space. Two-room homes sized around 40 sqm and three-room  homes sized around 55 sqm remain the most popular with Polish buyers. The current demand for smaller apartments has alrea-dy had an impact on the investment strat-egies of major home builders active in the Polish market, including  large develop-ment companies listed on the  Warsaw Stock Exchange. “We keep analysing market needs and tailoring our offer to the expectations and financial abilities of buyers,” said Piotr Wesołowski, president of the management board of Polnord. He admitted that his company is now seeing a growing interest in smaller apartments. Polnord has always focused on high-class apartments, but since 2011 it has consist-ently been increasing the number of mid-market homes in its offer, Mr Wesołowski said. The developer has been building mid-market apartments in the Tri-city and has recently announced its first scheme of this kind in the Warsaw market which will be built in Ząbki near the Polish capi-tal. Zbigniew Wojciech Okoński,  presi-dent of the management board of Robyg, said that there is now substantial demand

The cheapest and the most expensive homes tend to sell best in economically dif-ficult times and that tendency is what now seems to characterise the Polish housing property sector, which has not been doing as well as its commercial peer in recent months. The prospects for the residential market in Poland at large remain uncer-tain as demand for new apartments in the country is expected to be negatively impacted by the slowing economy and discontinued state support for first-home buyers. According to data published by residential market advisory Reas, in 2012 developers launched sales of a total of over 35,600 apartments in the six largest hous-ing markets in Poland – Warsaw, Kraków, Wrocław, Tri-city, Poznań and Łódź. This was just 5% less than in 2011 and over 15% more than in 2010, noted Paweł Sztejter, partner at the company. However, Reas expects this year to be challenging for developers due to factors including eco-nomic slowdown and changes in Polish law. Mr Sztejter pointed out that in the last quarter of 2012 developers and buy-ers alike were motivated into action by the nearing expiry of the popular Family on its Own state-subsidized mortgage

Jarosław Szanajca, president of the man-agement board of Dom Development, said that every fourth apartment offered by his company is now sized 50 sqm or less.

Experts are saying luxury apartments in renovated historical tenement houses are now increasingly in demand. Pictured is a project at ul. Mokotowska 8 in Warsaw.

Developers turning towards smaller apartments, selling luxury homes

9

Property in Poland 2013 —

Warehouse

Robert Dobrzycki, managing partner, Central and Eastern Europe, at Panattoni Europe, said that Gliwice in Silesia is one of the warehouse locations in Poland which have benefited from the development of new  motorways in the country.

motorway junction was completed last year, Jones Lang LaSalle’s Dziubińska stressed.

In a similar vein, many warehouse pro-jects near Warsaw are located close to recently completed and planned roads including the A2 motorway and the S8 and S7 expressways, Cushman & Wakefield’s Skrzydlak said.

“The Warsaw area may further gain in significance as a warehouse property loca-tion, especially since the Polish capital is in itself a huge trade area,” said Błażej Ciesielczak, regional director, Poland, at developer Goodman. According to Bartosz Mierzwiak, vice president and market officer Poland at developer Prologis, the completion of the A2 motorway in the Warsaw area has benefited locations including Błonie, Teresin and Sochaczew. In Silesia, Gliwice has become much more attractive due to the new intersection of the A1 and A4 motorways, said Robert Dobrzycki, managing partner, Central and Eastern Europe, at developer Panattoni Europe. In Lower Silesia the A8 motorway, also known as the motorway ring road of Wrocław and completed in 2011, has facilitated transportation at warehouse parks located around that city, Prologis’s Mierzwiak said.

Last but not least, in the Poznań area the attractiveness of particular warehouse locations is now determined by their prox-imity to the A2 motorway, which serves as an easy connection with Germany. Marek Skrzydlak also believes that the S11 expressway is an important road in western Poland, with the Krzesiny, Komorniki and Swadzim junctions being some of the cru-cial locations in the region. “The Prologis Park Poznań I and II distribution parks, located on the E30 national road, gained in significance due to the connection of the E30 with the A2 motorway through the S11 expressway,” said Prologis’s Mierzwiak. Away from the largest warehouse property markets in Poland, the north of the country has been benefiting from the development

of new roads, as well as sea transport infra-structure, noted Cushman & Wakefield’s Skrzydlak. The Tri-city area is already ben-efiting from the DCT Gdańsk container ter-minal, and the planned completion of the A1 motorway and the S7 expressway is set to better connect it with the other regions in Poland.

The completion of the missing Toruń-Kowal stretch of the A1 motorway will make the Tri-city area easily accessible from central and southern Poland, as well as from Slovakia and the Czech Republic, said Jones Lang LaSalle’s Dziubińska. According to Skrzydlak, the planned road and railway trans-shipment terminal at Kundzin near Sokółka in eastern Poland, which will enable multi-modal transport in the area, could turn out to be as significant a scheme as DCT Gdańsk is for the north-ern region. Several other locations out-side Poland’s main logistics hubs, includ-ing Lublin and Rzeszów, could see the development of new warehouse projects in the years ahead, said Magdalena Szulc, business unit director, Central Europe, at developer SEGRO. Of a similar opinion is Panattoni Europe’s Dobrzycki, who said that, of the large cities in eastern Poland, Rzeszów is the closest to becoming a major warehouse property destination in a few years thanks to factors which include an improving transport infrastructure. He added that other major eastern Polish cit-ies, including Lublin and Białystok, are still far behind the country’s main logis-tics markets in terms of offering access to convenient transport connections. “Those cities will certainly be catching up but it is difficult to say when they could become significant warehouse property markets and how large those markets could be,” Dobrzycki said. He stressed that – for the time being at least – tenants and devel-opers alike remain cautious in choosing sites for their businesses and prefer well-established warehouse property location. • by Adam ZdrodowskiTo see a road map of Poland go to page

the groWing attractiveness of northern poland

The development of transport infrastructure in northern Poland is increasingly attracting warehouse space providers to the Tri-city area, as well as several other locations in the region. Beata Hryniewska, associate director and head of business development at CBRE, points out that the Tri-city, which offers access not only to roads and railways, but also an airport and a seaport, is a very good location for companies using inter- and multi-modal transport in their operations. A major asset of the area is the quickly developing container terminal DCT Gdańsk. The planned completion of a stretch of the A1 motorway which will connect the Tri-city with the A2 motorway at Stryków in central Poland is ex-pected to give the location a further boost.

Ms Hryniewska said that more and more developers are discovering the potential of the area. Goodman has even launched a speculative project there (Pomeranian Logistics Centre pictured right), a rare move

in the Polish warehouse market today. Agata Czarnecka, a senior consultant at the research department of CBRE, said that Szczecin is also an attractive warehouse location, mainly for German firms operating from Poland. For its part, the Toruń area is seeing the develop-ment of a large number of BTS schemes.

Demand for warehouse space in northern Poland has recently picked up. After several years of low tenant activity, 2012 saw a return to

pre-crisis take-up levels in the region, Ms Czar-necka said. According to CBRE data, almost 90,000 sqm was leased in northern Poland last year. This was more than in 2007, when the region saw the lease of nearly 70,000 sqm of warehouse space. “We expect this trend to continue in the years ahead,” Ms Czarnecka said, adding that more than 800,000 sqm of warehouse space located in northern Poland is currently at the planning stage.

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Property in Poland 2013 —

Warehouse

Silesia, as well as western and central Poland, has increased the significance of a number of locations within those markets.

The ongoing development of roads and other transport infrastructure has also improved the prospects for warehouse properties in several locations outside the already well-established logistics hubs, including in northern and south-eastern

Poland. “The intensive development of the motorway and expressway network which we have witnessed in Poland in recent years is considerably affecting the geog-raphy of the warehouse real estate mar-ket,” said Paulina Dziubińska, a consultant at Jones Lang LaSalle. Regions including western Poland, central Poland, Silesia and Lower Silesia have long enjoyed relatively good access to road infrastructure, but sev-eral recent investments have highlighted the significance of new locations within them. Central Poland, where the opening of the intersection of the A1 and A2 motor-ways at Stryków near Łódź has made the location a prime warehouse property des-tination, is a case in point. Indeed, demand for warehouse space in the Stryków area started to increase a long time before the

The rapid development of transport infra-structure in Poland in recent years has considerably affected the geographical distribution of warehouse property in the country and is expected to continue to do so in the near future. “The development of the warehouse property market is close-ly related with the development of road, rail, air and sea transport infrastructure,” noted Marek Skrzydlak, senior negotiator in the industrial department of Cushman & Wakefield. “The development of the trans-portation network in a given area increas-es its attractiveness and contributes to the emergence of new warehouse locations within it,” he added.

The completion of new stretches of motorway and expressway in regions including the Warsaw area, Silesia, Lower

The proliferation of new stretches of motorway is having a dramatic effect on the warehouse & logistics sector, opening up locations previously deemed too inaccessible.On photo below: the Kowal Junction on A1 motoroway

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Poland’s changing warehouse property map

11

Property in Poland 2013 —

Interview

The real estate map of Poland has changed dramatically in recent years. One thing hasn’t changed, however – there’s still not enough quality product to go roundVeteran commercial property investment consultant Neil Gregory-Eaves, interna-tional director, CEE Investment Services for Colliers Interna tional in Poland, talks to  Poland Today’s Richard Stephens about why he believes the country still has a lot of growth potential, despite the short-term blip.

Gregory-Eaves and his team has advised on a total volume of concluded transactions exceeding €2 billion. Reference transac-tions include Green Corner (€95m), Renoma (€120m), Warsaw Financial Center (€210m), Warsaw Trade Tower (€150m), Mayland Retail Portfolio (€190m), Jantar Shopping Center (€98m), Turawa Park (>€70m), Deloitte House (€117m), Marynarska Point (€71m), Grunwaldzki Center (€78m), Trinity III (€93m), Millennium Park Phase 1 (€56m), Medicover Hospital (€40m) and the Stratos Office Center (>€40m).

Colliers International is Partner of the Poland Today Special Focus on the Real Estate for MIPIM.

Is Poland still a greener island than other countries in terms of com-mercial property investment?Pre-crisis, in 2007 most investors were investing in CEE as a region and there wasn’t a lot of differentiation between countries. As a result, prime office yields in Bucharest, Budapest, Prague and Warsaw were all very similar. At the time, acquiring prop-erty was difficult given the competition and pricing became somewhat homoge-neous in terms of yield. Fundamentally, investors were just buying into the eco-nomic growth story of Central & Eastern Europe as well as yield convergence the-sis with Western Europe. Today the region is much more differentiated, with inves-tor interest almost exclusively focused on Poland and Prague.

And within Poland?We’ve seen tremendous investor interest in Polish regional retail assets and there has been considerable activity in logistics deals outside Warsaw. Office investment has been Warsaw centric since September 2008. For instance, over the past 24 months in Poland, there have been 38 office trans-actions and 36 were in Warsaw. Of the € 2.7 bln in 2012 investment volume in Poland, € 1.2. bln was retail, and the retail market has primarily been – in terms of the num-ber of transactions – outside of Warsaw.

Of the investors who rushed into Central Europe pre-crisis, and have come out of the crisis ok, was that luck or planning or a mix of both? Some companies sold just before Lehman. Was that purely luck? I think investors that acquired non-core assets in 2006 and 2007 at the peak of the market in Poland have been the least lucky in terms of valuation. Occupancy levels have generally stood up well so asset level cash flows have been well preserved and accordingly we’ve seen very little distress. Core assets have generally held their value or appreciated. The crisis largely took eve-ryone by surprise so yes, I would attribute significant amount of luck to being a seller in 2007.

In 2007, did you hear voices of cau tion, or was everyone piling in to CEE?We noticed a slowdown going into the summer of 2008 not in 2007. However, I do remember in 2007 reading about

HSBC’s Countrywide Financial business unit in the US and thinking to myself at the time, that seems strange, a major financial institution having all these resi-dential mortgages being written down – it didn’t add up at the time. In hindsight, that was my first glimpse of a major structural problem. In Q4 2008 we had € 500 mil-lion of deals in due diligence and without exception all of those transactions were suspended and eventually did not close given what became the period of great uncertainty in 2009. Uncertainty causes investor paralysis.

Real estate investors looking for product in Poland are not in short supply. What are they buying into?Investors remain largely focused on core office in Warsaw’s city centre and strong performing, well established shopping cen-tres across the country. Given the compe-tition for these types of properties, we are seeing yields contracting in both. Poland has a growth story and investors want to buy into growth. While we will  proba-bly undergo a short-term softening from a macro perspective, investors generally believe in the mid to long-term growth story in Poland

Why is it that people talk about a short-term blip? Why not a long-er-term slowdown in Poland?Poland has come off a very unique year. The country is likely only going to have one European football championship in a generation so we are only going to see football stadiums built once. Likewise the national highway network is nearing completion, most of the airports have been extended or modernized and many other major infrastructure projects are done – the deadline for all these were the UEFA Championship of 2012. While there is a lot more infrastructure work yet to undertake, the newly built infrastructure will allow for efficiencies and growth in the econo-my to occur.

So is EURO 2012 not over-hyped in its effects? I’m not an economist. My general opin-ion is that Poland offers ongoing growth opportunities and the country has many stabilizing factors that are not well recog-nized. The state is still a significant share-holder in the economy, which indirectly hes created some stability. While other EU

Buying into growth

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Property in Poland 2013 —

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market

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Property in Poland 2013 —

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Property in Poland 2013 —

Interview

we’re going to see assets outside the defi-nition of core start trading. The nature of a core buyer is that they are generally long-term owners of real estate so once they go in to that long-term ownership cycle, gen-erally speaking only a serious acceleration of pricing would allow them to be sold.

Is that frustrating for you as an investment consultant?I guess we’d like to see as much transaction activity as anyone, but I wouldn’t describe it as frustrating, we have no shortage of work. Pre-crisis there was more activity for certain because there was broad appeal for all assets – every asset had a price, but now it may be that a property goes to mar-ket and there is no bid.

Sometimes no bid? Correct. But if it’s core, are there always offers?At the moment, yes. Multiple offers.

If it’s not core there can be no bids?Correct but perhaps a more accurate state-ment would be ‘no acceptable bid’. This situation is not unique to Poland for non-core assets; one finds this situation across Europe. That said, I believe this dynamic creates a very interesting opportunity and there is substantial private equity across Europe looking to capitalize on this pric-ing imbalance.

In terms of the consultancy side, who should get the credit in terms of the consultancy – the buyer’s representa-tive or the seller’s representative? I believe all contributors to a transaction should be credited and recognized. We largely work for vendors and run sale pro-cesses. When one advises a buyer, while that’s a very important role, the scope of work is largely advisory through the due diligence process, more of a supporting role unless one has also originated a trans-action off-market. The selling agent is gen-erally the one making a deal.

There’s a lot of money potentially coming in from the Gulf States. It’s no accident that Qatar and Emirates airlines have come to Poland. Is this a realistic new source of money for investment in real estate?I would say not only are investors from

the Gulf States interested in investing in Poland, they’re already invested. It just happens that it’s not always a direct investment, but there are several sovereign wealth funds from the Middle East that are investors in closed-end funds which own buildings here. The capital behind part of the previous WFC ownership – some of it originated from the Middle East. We’re selling two buildings now where the ven-dors are ultimately from the Gulf States.

Are you surprised that Emirates has come into the Polish market?Not really – I think there’s great tourism potential and the airlines are interested in accessing Poland’s growing middle class. One cannot forget Poland has a population of almost 40 million.

You mean Poles going to the Gulf States? Yes. Dubai amongst other Gulf destinations offers a very interesting, relatively low cost holiday. With the trouble in many Middle Eastern countries right now – anyone traveling as a family wouldn’t mind spend-ing a little extra time on an airplane rather than to spend holiday time in Cairo. Not to change the topic but I was more pleas-antly surprised to see the Bank of China and ICBC establish offices in Warsaw. Both have substantial debt capital to deploy in Poland over the near term.

Is investment in real estate generally a good bellwether for global financial feeling about a particular country?

Generally, yes. I believe large investment houses work off a macro strategy first. When you talk to Blackstone or Oaktree Capital Management or other major glob-al investment managers, they’re invest-ing growing amounts of equity in Poland because they believe fundamentally in the future prospects of the country. We need to also put the Polish real estate market into context, though, which is that com-mercial real estate investment volumes in Poland still only amount to about 2% of the European volumes. Europe is a bit bi-polar right now and investors want to buy risk-adjusted returns in a growth economy. Where those dynamics exist, like in Poland, I expect the market to remain buoyant, and where those dynam-ics are absent at the moment, for instance

across southern Europe, I expect they’re still years from hitting bottom. There are several economies which will have to go through a renaissance of sorts, which will have to reinvent themselves. I believe that Poland has excellent prospects with the growth similar to an emerging economy and for all the other reasons I gave ear-lier in the interview. Think about Warsaw and Poland 15 years ago. Now think what Poland will be like in 15 years. Madrid, Milan and Lisbon are beautiful cities but I wouldn’t expect to see much change in their skylines in the coming decade.

Large  invest ment houses work off a macro strategy first. When you talk to Blackstone or Oaktree Capital Management or other major global investment managers, they’re investing growing amounts of equity in Poland because they believe fundamentally in the future prospects of the country.

AAA

AA+

AA

AA–

A+

A–

BBB+

BBBBB–CCC

Sovereign RatingsStandard & Poor’s

3%

2%

1%

0 – 1%

–2%

–3%

–4%

–5%

Norway

2012

rea

l gdp

gro

wth

Debt as a percentage of gdp

0% 50% 100% 170%150%

Danmark

Iceland

Poland

Ireland

Belgium

Italy

Portugal

Greece

Finland

Sweden

Austria Germany

France

Netherlands

Spain

U.K.

v

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Property in Poland 2013 —

Interview

countries are renationalizing banks and other businesses, Poland doesn’t need to

– it just slowed down the privatisation pro-cess. In addition, accession to the EU pro-vided tens of billions of capital to fund infrastructure projects and there are tens of billions left to invest. Poland was the beneficiary of a nation-building budget courtesy of EU accession at the right time. We also can’t forget that Poland still ben-efits from having its own currency and the ability to manage interest rates and infla-tion, I think part of the challenge that other European economies have is that they’ve lost that ability to control their economy to a certain extent. When these dynamics in Poland are combined with the constitutional requirement for the nation-al government not to exceed a 55% debt to GDP ratio, it means that Poland can’t over-extend itself, which is very positive. I don’t want to get too off topic but we may also be at the very beginnings of new industries

– it will be interesting to see what results from all the shale gas exploration under-way. We also cannot forget that Poland has a substantial young, educated, ambi-tious, hard-working workforce that is low-cost in comparison to Western peers, so when you combine the stable state influ-ence with an EU economic stimulus pack-age with a legal requirement to manage the economy in a fiscally responsible way, with a young ambitious educated work force – this provides a solid foundation for further growth. It was good to see Fitch’s credit rating outlook of Poland be adjusted from stable to positive at the end of February.

On a micro view how would you assess potential in Poland’s com-mercial real estate market? In the years since the crisis the inventory of core products has largely been picked over– this is a trend in real estate world wide – so total volumes in Poland may come down in 2013. There is good avail-ability of debt for Poland and we see tre-mendous value now in non-core office in Warsaw as well as core office and non-core retail in regional cities so I expect these markets to open up soon.

Core real estate meaning ...?Core office assets would have most of the following characteristics: relatively new construction, well leased to blue-chip ten-ants, well located and likely green certi-fied. These assets are not necessarily in the city centre – for example a lot of core office buildings in Mokotow have sold over the past 36 months. GLL Real Estate Partners acquired Marynarska  Point One and Two and then sold MP1 to SEB Asset Management. SEB also acquired Trinity 3. RREEF bought Nefryt & Topaz. Allianz acquired the Platinium Office Park in Mokotów and then teamed up with  Tristan Capital to purchase the Warsaw Financial Center in the CBD – these are all what I  would define as core assets. While core offices in both Mokotow and the CBD have seen a lot of activity post-crisis, the market has been largely picked over. The level of interest in real estate in Poland is higher now than it was two or three years ago, so we can expect movement in pricing in core, and

In the years since the crisis the inventory of core products has largely been picked over– this is a trend in real estate world wide – so total volumes in Poland may come down in 2013.

The Warsaw Financial Center is 50,000 sqm iconic Class A office tower located in the heart of Warsaw's CBD. Colliers and JLL ran a global tender and sold the property in 2012 for € 210m to a joint venture between Allianz Real Estate and Tristan Capital.

Renoma is a historical mixed use complex located in central Wroclaw. The property comprises a 30,000 sqm GLA shopping center and a fully leased 10,000 sqm office component. Colliers represented Griffin Real Estate in the € 120 million acquisition of Renoma in 2012.

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Property in Poland 2013 —

Warsaw

market

01 Atrium One al. Jana Pawła II 17 16,300 sqm, 2014 Skanska

02 Chmielna 25 ul. Chmielna 25 3,800 sqm, 2013 LHI

03 Eurocentrum Office Complex - Beta & Gamma Al. Jerozolimskie 124/138 38,700 sqm, 2014 Capital Park

04 Foksal 10a ul. Foksal 10a 2,500 sqm, 2014 PHN

05 Gdański Business Center – phase I ul. Inflancka 3 44,600 sqm, 2014 HB Reavis

06 GreenWings Offices ul. 17 Stycznia 48 10,850 sqm, 2014 OKRE Development

07 Jasna 26 ul. Jasna 26 4,300 sqm, 2014 Mermaid Properties

08 Karolkowa Business Park ul. Karolkowa 30 14,700 sqm, 2014 Ablon, Asbud

09 Konstruktorska Business Center ul. Konstruktorska 11 46,230 sqm, 2013 HB Reavis

10 Łopuszańska Business Park ul. Łopuszańska 38 16,000 sqm, 2013 Ghelamco

11 Łopuszańska Office Park – phase I ul. Równoległa 4 10,600 sqm, 2014 Real Management

12 Marynarska 12 ul. Marynarska 12 40,000 sqm, 2013 Ghelamco

13 Mazowiecka 2/4 ul. Mazowiecka 2/4 2,127 sqm, 2013 Hochtief / Kulczyk Silverstein Properties

14 New City II ul. Postępu 14a 4,000 sqm, 2013 ECI Group

15 Nimbus Al. Jerozolimskie 98 19,500 sqm, 2014 Immofinanz Group

16 Oxygen Park ul. Jutrzenki 137 17,700 sqm, 2013 Yareal

17 Park Rozwoju – phase I ul. Konstruktorska 10 15,842 sqm, 2014 Echo Investment

18 Plac Mała chowskiego Pl. Małachowskiego 2 12,500 sqm, 2014 Hochtief; Kulczyk Silverstein Properties

19 Plac Unii ul. Puławska 2 37,000 sqm, 2013 BBI Development, Liebrecht & wooD

20 Robyg Business Center – phase I al. Rzeczypospolitej 5,720 sqm, 2013 Robyg

21 Sky Office Center ul. Rzymowskiego 31 4,140 sqm, 2013 5th Avenue Holding

22 The Park Warsaw – phase I ul. Orzechowa / ul. Krakowiaków 21,822 sqm, 2013 AIG Lincoln

23 Warsaw Spire ul. Towarowa / ul. Łucka 100,000 sqm, 2015 Ghelamco

24 Wola Center ul. Przyokopowa 28,000 sqm, 2013 LC Corp

25 Żoliborz One ul. Szamocka 8 8,740 sqm, 2013 Apricot Capital Group

26 Amber Mokotów ul. Konstruktorska 7 20,000 sqm, 2015 NDI

27 Atlantic ul. Domaniewska 19,400 sqm, 2016 Kronos Real Estate

28 Atrium – phases II & III al. Jana Pawła II / ul. Pereca 53,000 sqm, planned Skanska

29 Balmoral Business Centre ul. Słomińskiego 34,000 sqm, planned Balmoral Properties

30 Beethoven Point ul. Bobrowiecka 1 6,500 sqm, planned Interestate

31 Business Garden – next phases ul. Żwirki i Wigury / ul. 1 Sierpnia 55,100 sqm, planned SwedeCenter

32 Carpathia Office House ul. Cicha 8 3,900 sqm, planned GD&K Group

33 CBF Nowy Świat ul. Nowy Świat 4,000 sqm, 2015 MARS FIZ

34 Chmielna 73 ul. Chmielna 73 94,000 sqm, planned HB Reavis

35 Copernicus Square ul. Elektryczna 2a 26,290 sqm, 2015 Hochtief

36 Corner House ul. Puławska 113 3,800 sqm, 2014 Universal Properties

37 Domaniewska 37c ul. Domaniewska 37c 23,850 sqm, 2015 PHN

38 Dworzec Zachodni Al. Jerozolimskie 144 54,000 sqm, 2016 HB Reavis

39 Eureka Office Building ul. Wynalazek 4 10,300 sqm, planned BPH TFI

40 Eurocentrum Office Complex – Delta, Al. Jerozolimskie, 124/138 25,840 sqm, 2016 Capital Park

41 Gdański Business Center – phase II ul. Inflancka 3 47,000 sqm, planned HB Reavis

42 Grójecka Offices ul. Grójecka 206/208 7,500 sqm, 2014 OKRE Development

43 Grzybowska Corporate Center ul. Grzybowska 78 20,100 sqm, 2015 Golub GetHouse

44 Hala Koszyki ul. Koszykowa 63 9,500 sqm, 2015 Griffin Group

45 iTower al. Jana Pawła II 15 58,000 sqm, 2017 UBS

46 Libra Business Center II Al. Jerozolimskie 178 10,830 sqm, planned Mermaid Properties

47 Mangalia 5 ul. Mangalia 5 7,345 sqm, 2014 Europlan Capital

48 Mokotów One ul. Domaniewska 49 30,700 sqm, 2015 Apricot Capital Group

49 New Horizon ul. Ostroroga 25 12,500 sqm, 2013 New Horizon

50 Office building Echo Investment ul. Jana Pawła II 22 45,000 sqm, 2016 Echo Investment

51 Okęcie Business Park Solano ul. 17 Stycznia 45 9,100 sqm, planned GTC

52 Pacific ul. Domaniewska 32 16,200 sqm, 2014 Kronos Real Estate

53 Park Rozwoju – phase II ul. Konstruktorska 10 14,307 sqm, 2015 Echo Investment

54 Pegaz ul. Żelazna 7,570 sqm, 2015 Europlan Capital

55 Platinium Business Park – phase VI ul. Konstruktorska 3b 13,040 sqm, planned GTC

56 Poleczki Business Park III ul. Poleczki 8,500 sqm, 2014 UBM / CA Immo

57 Presidente ul. Domaniewska 8,000 sqm, 2015 Kronos Real Estate

58 Royal Wilanów ul. Przyczółkowa / ul. Klimczaka 29,700 sqm, 2015 Capital Park

59 Sienna Towers ul. Sienna / ul. Towarowa 75,000 sqm, 2016 Ghelamco

60 Silver Tower ul. Okopowa 59 5,700 sqm, planned Advidi-Pol

61 South Park - phase I ul. 1 Sierpnia 10 32,410 sqm, 2015 Hochtief

62 The Tides ul. Wioślarska 6 10,825 sqm, 2014 POR Develop SA

63 Twarda Tower (redevelopment) ul. Twarda 18 28,000 sqm, 2014 Europa Capital

64 Wilanów Office Park B2 al. Rzeczypospolitej 3 7,200 sqm, 2014 Polnord

65 Wola House ul. Prymasa Tysiąclecia 79 22,370 sqm, 2015 Unidevelopment

66 Wolska Gate ul. Wolska / ul. Kasprzaka 13,800 sqm, 2014 Vinton Investments

67 X2 Boutique Office ul. Czerska 12 6,500 sqm, 2014 Facinelli 1 Sp. z o.o.

planned under construction

retail space

Spaces are in GLA sqm

a Factory Annopol Białołęcka 127/129 19,700 sqm, 2013 Neinver Polska

B Auchan Łomianki – phase II Łomianki, Brukowa 25 8500 sqm, 2013 Immochan

c Galeria Miejska Plac Unii ul. Puławska 2 15,500 sqm, 2013 BBI Development, Liebrecht & wooD

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Property in Poland 2013 —

Warsaw

market

Targówek

PragaPółnoc

Żoliborz

Bemowo

Ochota

Śród-mieście

UrsusWłochy

Wola

Bielany

Białołęka

Wawer

Wesoła

Ursynów

Mokotów

Rembertów

Praga południe

Wilanów

43

25

0541

29

60

180728

 0124

26 55

2737

30

47

67

31

51

5257

56

23 54

3235

36

39

3334

38

42

59

61

62

65

63

44

45

46

48

15

16

0340

02

06 58 64 20

21

22

66

08

13

1214

10 17 5309

19 c

a

B

11

04

49

50

Upcoming office and retail projects in Warsaw

Source: Colliers International

99nazWa działu

Warsaw

olsztyn

gdańsk

a2 a2

a1

a1

s7

s6

s7

s1

s17

s19

s19

a4

a4

s8

s8

s8

s3 s5

s11

s11

s10

s5

toruń

łódź

poznań

szczecin

Wrocław

expressways existing / under construction / planned

motorways existing / under construction / planned

Kraków

Katowicerzeszów

lublin

Białystok

Poland's motorway and expressway network

100