Standard of Polish Living

April 7, 2014
No Fat Cats in Poland

No Fat Cats in Poland

Polish people have difficulty making ends meet, according to a report by Poland’s Central Statistical Office (GUS) on the income and standard of living. The ability to make ends meet, among other factors, determines the quality of family life. There is a large proportion of Polish people who claim that they do not have the possibility to realise these basic needs due to financial difficulties. Polish families save by reducing spending on recreation or renovation. Despite the fact that, compared with figures in 2005, the number of Poles forced to tighten their belts has decreased, more than 50% believe that a week-long holiday or new furniture is a luxury.
biznes.onet.pl

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Euro for Poland

April 1, 2014
Euro Soon for Poland?

Euro Soon for Poland?

Janusz Palikot’s party, Your Movement (TR), wants to change the Constitution and introduce the Euro in Poland as fast as possible. Palikot wants the amendment to be a joint initiative of Civic Platform (PO), the Democratic Left Alliance (SLD) and TR. He said that the proposed amendment was prepared in 2008 by the former Speaker of the Lower House and current President Bronisław Komorowski, so it has already been consulted within PO. The head of TR has proposed holding a referendum to convince Jarosław Kaczyński, the head of Law and Justice (PiS). “Changing the Constitution without a referendum is not possible,” said Palikot. He added that by introducing the Euro, Donald Tusk and the fast-imploding PO will at least leave a legacy behind after they are gone. TR MP Wincenty Elsner claims that the main change they want to introduce concerns the National Bank of Poland (NBP). The Constitution would read: “The central state bank of Poland is the National Bank of Poland which is part of the European system of central banks.” In order to change the constitution a two-thirds majority vote is needed. The ruling coalition would not have a majority even with the backing of SLD and Twój Ruch.
Gazeta Prawna

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PM Tusk Faces PR Disaster

March 31, 2014
Promises, Promises

Promises, Promises

The Polish government is looking for money so it can keep its own promises but the budget cannot afford any more unexpected costs. Last year the government cut funds for the renovation of local roads in order to save money. The government did this at the last moment when local governments had already made preparations for their investments. What is more, the cuts were high and amounted to PLN 750 million. The PLN 250 million that remained is not enough for the most important investments. So, the government has started looking for money and found additional funds in the State Forests National Holding, which will boost the budget coffers by several million zlotys. Thanks to this financial boost, the funding for the renovation of local roads will increase. However, the Polish government is now planning to transfer these funds to finance an increase in benefits for the parents of disabled children. This is necessary but why should it take place at the expense of public roads? Why did the Prime Minister not look for the money as part of the reform of miner pensions or social insurance for farmers? Is he afraid of them? At present, the parents of handicapped children are causing a PR disaster for PM Tusk in their quest for higher benefits. These parents have only been shouting, screaming and crying to fight for their rights. On the other hand, miners and farmers have more effective weaponry in their arsenal: burning tyres, blocking roads and going on strike.
Gazeta Prawna

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Euro Good for Security

March 28, 2014
Makes Sense?

Makes Sense?

“Integration with eurozone countries will increase Poland’s security,” according to economist Piotr Bielski. However, he highlights that in order to say ‘farewell’ to the Polish złoty, the economy has to be ready for the change. Marek Belka, chairman of the National Bank of Poland (NBP), recently claimed that the Ukrainian crisis demonstrates how important it is to invest in the European Union and it may be worth taking another look at joining the eurozone. However, Piotr Bujak, chief economist at Nordea Bank Poland, believes that, as opposed to tight integration with eurozone countries, accepting the Euro will not increase Poland’s security per se. Bujak claims that in order to benefit from the Euro, it is important to prepare the economy first. In his opinion, Poland will not resign from the złoty until at least 2020. To compare, as far as security is concerned, Latvia relies more on NATO than on membership in the eurozone, according to Latvia’s former president, who introduced the Euro in Latvia at the beginning of the year. Valdis Dombrovskis highlights the fact that the eurozone is chiefly an economic structure.
biznes.onet.pl

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Polish Class System

March 17, 2014
Is Poland Similar?

Is Poland Similar?

The employment and vocations of Polish people has changed in recent times. Increasingly more people find employment outside agriculture; for instance in trade and services. Data from the beginning of the 21st century shows that 54% of the workforce was employed in services, 29% in industry and 16% in agriculture. Such a decrease is an indicator of changes in society. In 2000, the percentage of people who were economically active was 44% of the whole population. In comparison, this was 51% in the USA. What is more, the structure of Poland’s social strata has changed since 1989. There has been a noticeable decrease in the number of ‘working class’ people and members of the ‘intelligentsia’, while the ‘economic elites’ connected with the business and political classes have grown. Currently, the following classes can be identified in Poland: upper class – highly qualified specialists, owners of large companies, senior government officials, politicians, artists, scientists; middle class – the owners of small- and medium-sized enterprises, skilled workers, merchants and craftsmen, academics; lower class – the owners of small farms, workers, the unemployed, unskilled workers; underclass – people permanently living on unemployment benefit.
wosna5.pl

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No Russian Gas Problems

March 15, 2014
Should Tusk Be Worried?

Should Tusk Be Worried?

Poland will be ready for Qatari gas by the end of this year. The Polish Prime Minister Donald Tusk discussed Polish gas plans during a meeting with gas industry officials in Gustorzyn near Włocławek, where there is a gas distribution point. PM Tusk highlighted the fact that the new gas centre in Świnoujście should be fully-functional by 2015. He hopes that the Polish Parliament will embrace new legislation as soon as possible, which will enable the speedy construction of gas pipelines. Tusk has also ensured everyone that there will be no problems with gas supplies from Russia, regardless of Russian aggression towards Ukraine. The Prime Minister stresses that even if gas does stop flowing through the gas pipelines in Ukraine, Poland is still safe. “We have had confirmation from our Russian partners about the safety of supplies, although the situation is constantly changing,” said Tusk. According to initial plans, the LNG terminal in Świnoujście would begin operations by mid-2014 with the first Qatargas gas supplies reaching Poland this year. The Polish Oil and Gas Company (PGNiG) has already declared that they will be renegotiating the contract with Qatar.
Gazeta Prawna

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Ukraine Bankruptcy and Poland

March 9, 2014
Economic Death?

Economic Death?

“Polish companies have invested about $1m in Ukraine. If Kiev finds a way to avoid an economic breakdown we will continue our economic cooperation with Ukraine,” says Jacek Jan Piechota, the President of the Polish-Ukrainian Chamber of Commerce. Newsweek.pl: Why is the Ukrainian market so important for the Polish economy? Last year Poland was one of the leading exporters of goods and services to Ukraine as well as an important importer. Jacek Piechota: “Ukraine has a favourable investment climate for us and the following example proves it. For the last 25 years Polish businesses have invested about $900m in Ukraine, while only $600m in Russia. Ukraine is a large market with huge possibilities and natural resources, a favourable climate, raw materials and fertile soil. A breakdown of the Ukrainian economy would not be a heavy blow to the Polish economy, but it might lead to investment difficulties and the worsening of economic indicators in Poland. Close Polish-Ukrainian cooperation contributes to the strength of the Polish economy.” Newsweek.pl: Does this mean that Polish companies and their Ukrainian partners are waiting for the announcement of tough reforms from Kiev? Jacek Piechota: “Most certainly. In addition, more than 3,500 Polish business people sell something to Ukraine so Poland has enough experience in cooperation. There are still opportunities for development and Polish businesses are well-prepared for working in difficult conditions. We already experienced something similar after the Orange Revolution. There is an increasing number of questions related to the Ukrainian economic market. It is obvious that any reforms will not bring immediate results, especially with regards to corruption.”
biznes.newsweek.pl

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Tenders: Price Not Quality

March 9, 2014
Is Cheapest Best?

Is Cheapest Best?

During a conference on the public procurement market, organised by the BCC, Krzysztof Kwiatkowski, head of the Supreme Chamber of Control (NIK), acknowledged the fact that in recent years Poland has had one of the largest construction markets in Europe. “On the other hand, we are dealing with a spectacular collapse of Polish construction companies, which were unlucky enough to be subcontractors in large investments projects,” he stressed. He believes that it is not right that the single decisive criterion in more than 90% of public tenders is the lowest price. “The Supreme Chamber of Control (NIK) advocates the need to change the provisions of the Public Procurement Act,” he said. He added that it is all about “product life cycle and cost analysis.” He declared that NIK may engage in the development of a methodology for this analysis. NIK also wants contractors to be exempt from submitting documents if the ordering party can obtain information contained in those documents from existing databases and registers. “Surely such a solution will contribute to speeding up work in public procurement selection,” Kwiatkowski claimed. “We are advocates of more flexible public procurement procedures,” he stressed. As he explained, among other things, tender procedures should be based on negotiations and the shortening of deadlines.
finanse.wp.pl

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Auchan Buys Real

March 9, 2014
The Real Deal

The Real Deal

At the end of 2012, French Group Auchan S.A. signed an agreement with the German Metro Group to purchase ninety-one Real supermarkets in Poland, Romania, Russia and Ukraine, for the sum of €1.1bn. The final transactions are to take place in Poland due to delayed approval by the Office of Competition and Consumer Protection (UOKiK), granted only last January. Before the names are changed on all supermarkets, the new owner wants to significantly lower its store lease payments. “Lowering lease payments with the owners of the buildings where Real leases retail space is crucial,” admits Francois Colombie, head of the Auchan supervisory board for Poland, Russia and Ukraine. He emphasises that the leasing costs today amount up to 10% of the group’s revenue while the market average is 3% to 4% at the maximum. “Therefore, we are negotiating substantial cuts in lease payments. We have reached agreements with the first twelve locations and we would like to complete the process by June,” adds Colombie. Out of the first fifty-seven Real stores, seventeen own the buildings where the company leases retail space. The first Real stores to change the name signs to Auchan are located in Opole and Dąbrowa Górnicza, in the province of Upper Silesia and both belong to the BlackRock Fund. The name change will soon take place in Gdynia, at the Riviera shopping centre, owned by the Mayland Company, and in eight other Real stores in M1 centres around Poland. The whole consolidation process should take about two years. Auchan is set to spend over €30m on store rebranding alone.
rzeczpospolita.pl

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Euro Adoption Not for Years

March 8, 2014
Euro Time?

Euro Time?

Poland’s willingness to adopt the Euro could be greater than ever before because of the Ukrainian crisis. However, this is not an economic argument. The discussion on adopting a common European currency as a way of reinforcing the economy has been fired up following the Russian invasion of Crimea and destabilisation in the region. “This is a very distant vision, which would take years. By the time it happens, the Ukrainian crisis will be well over,” believes Daniel Gros, director of the think tank Centre for European Policy Studies. According to Gros, short-term turbulences in sovereign currencies are normal on the backdrop of such crises, but they are of secondary importance for the economy. Fabian Zuleeg, European Policy Centre director also feels Euro adoption has psychological overtones.” Euro zone membership is of psychological importance. The citizens of a country feel even more integrated with the EU as well as the support of Germany, the EU’s largest state,” says an expert. In the event of a crisis, the country in question also has the support instruments of the euro zone and the relief fund that Greece, Ireland, Portugal and Spain currently benefit from. “The euro zone can help members manage such risks. But I do not see any risk at the moment,” claims an economist.
rp.pl

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