Wood Fair
Finnish saunas and hot-tubs, children's beds in the shape of racing cars and a computer keyboard and bicycle made entirely of wood (the bicycle even had a wooden chain) were exhibited at this year's DREMA Furniture, Kitchen and Domexpo fair held May 11-14 in Poznań. An interesting exhibit was a 12-meter-long and nearly three-meter-wide Viking boat (see photo). The boat, constructed in the traditional medieval method, without the use of nails, decorated a stand presenting woodworking machines. That extraordinary construction was exhibited as part of the jubilee, 20th edition of DREMA-the International Woodworking Machine and Tool Salon.

The first edition of the fair held after Poland's accession to the European Union abounded in exhibits presenting everything that is necessary for furnishing a trendy and functional house or apartment. The exhibitors addressed their offer to all types of customers and state-of-the-art designs were presented next to more traditional solutions. A suggestion addressed to young consumers was the "mini" kitchen-prototype designs created by students of the Poznań Fine Arts Academy for maximum use of small spaces for studios, kitchens and offices.

A special part of the fair was devoted to the presentation of lighting and interior decor articles as well as fabric designs and samples.

A number of very modern furniture sets made of glass and aluminum were presented, yet amateurs of more traditional-style furniture could also choose from a wide selection of designs. Owners of antique furniture had an opportunity to become familiar with restoration methods.

The fair also constituted a perfect occasion for people who are furnishing and decorating their houses and apartments to get advice from experts in the field and contact directly with the producers.


Flying More Expensive
Travel agencies are now charging additional fees for air trips. They say this is due to higher fees introduced by the carriers. LOT Polish Airlines increased its prices as of May 1. The additional fee per passenger is 6 euros on short routes and 10 euros on long-distance flights (lasting more than 3 hours). LOT Spokesman Leszek Chorzewski said the increases were moderate and would not compensate for the higher costs of fuel anyway. A month earlier Air Polonia introduced additional fees, ranging from $6 to $15.

Travel agencies add a "fuel fee" of zl.25-40 to the prices of trips sold.


PKP Cargo to Buy German Rail?
PKP Cargo wants to buy the rail transport division of Germany's Ruhr-Kohle corporation whose core business is in the extraction and distribution of coal. The offer involves the transport of 50 million tonnes of coal and other cargo.

Domestically, PKP Cargo's transports for the needs of the energy sector, especially coal, approached 70 million tonnes last year, making the company number one in Europe.


Taking a Wizz
As of July 1, the Hungarian budget airline WizzAir will be able to fly from Poland to Venice (three times a week) and Budapest (four times a week). WizzAir planes will take off from the Katowice-Pyrzowice airport. WizzAir began its operations in Poland May 19 with flights from Katowice to London, Berlin, Milan and Rome.


Skytruck to the USA
At the PZL Mielec plant, work is in progress to assemble the first M-28 Skytruck transport plane to be sold in the United States under the offset package linked with the purchase of U.S. jets for the Polish air force. Lockheed Martin has undertaken to help sell at least 100 Skytrucks and 100 M-18 Dromader crop-dusting planes in the Americas. The Skytruck has just obtained an FAA certificate, paving its way to American markets. Distribution of the Polish transport planes in the United States will be handled by the Florida-based company LLC Skytruck recommended by Lockheed Martin.

Market research has confirmed that planes made in Mielec stand a good chance on the U.S. market where there is demand for small transport planes with a capacity of up to 2.5 tonnes. A service center will be opened in Florida that will also prepare pilots to service the Polish planes.


LG Plans Seafood Processing
The South Korean corporation LG, the well-known producer of electronics and household appliances, plans to expand its range of activities in Poland to cover a new market segment. It is looking for land near Szczecin to build a seafood processing plant.

Experts from the Maritime Fishing Institute in Gdynia say the choice of the location near Szczecin for the investment project is justified because about 80 percent of fish and seafood product imports reach Poland through local ports. The location is also favored by the proximity of the German market. The Korean plant would hire a staff of 400.


Restructuring Employment
Under a government program for turning around the coal sector, the sector is in for a major reduction of employment, and the national budget will pick up the tab.

Calculations by the Ministry of the Economy indicate that the costs of restructuring employment in 2004-06 will approach zl.2.6 billion with the current demand for coal. If demand falls, expenditure may rise to zl.3.6 billion. By 2006, employment will fall by 19,000-22,000 on average. The government has incurred a loan from the World Bank to help carry out these plans.

At the moment, the coal sector has a work force of 136,500, including 31,000 (or 23 percent) working above ground. The Ministry of the Economy has created a social package for those laid off, in particular administrative personnel. Some of these people have received offers to work in coal processing plants, among other options.


itch Keeps Poland's Rating
Fitch, an international rating agency, has sustained Poland's long-term rating of liabilities in foreign currencies at the level of BBB+, but changed the rating's prospect from positive to stable. The short-term ranking also remains the same, at F2. The prospect of the long-term ranking in the local currency is stable.

Fitch has lowered its rating of liabilities in the local currency to A, from A+. The change is a consequence of growing political uncertainty which has impaired prospects for the situation of public finances and is likely to delay the adoption of the euro.

Fitch's fundamental assumption is that Poland will gradually tighten its budget policy in the medium term, but the resulting risk has grown. The Hausner plan would be a good step in this direction, but its influence on the condition of public finances is unclear. Moreover, increased political uncertainty has aggravated the risk that the plan may become watered down. Early parliamentary elections and formation of a government that might pay less attention to reforms is also possible.

Despite those political and financial developments, economic revival is on the right track and is becoming well-balanced. Fitch expects GDP growth of 5 percent in 2004 and 2005.


Oracle Mobile Software Production Center
Oracle Polska opened the new headquarters of the Oracle Mobile Software Production Center in May in the building of the Radio-Electronics Department of the Warsaw University of Technology. The center was first opened in September 2003 by a team of 12 programmers who created solutions for the purposes of wireless communication. From the very beginning, the center's task has been to create software enabling the combination of mobile appliances with business applications used in computer systems at enterprises and offices. Following Oracle's announcements, the center has doubled the number of engineers it employs.

The center in Warsaw deals with the preparation of software which makes it possible to adjust business computer systems to communication with wireless devices. "Apart from specialist projects, we also complete assignments for our other mobile software centers, including those in California and in Bangalore, India," said Carlo Tarantola, head of the Oracle Mobile Software Production Center.

Wireless Center of Expertise is Oracle's first investment related to software design in Central and Eastern Europe. The center in Warsaw is the second establishment of this type in this area (the other one is in Reading, Great Britain). "We are proud that it was Poland that won in a competition involving as many as eight countries from Western and Eastern Europe. We managed to prove our country was characterized by the best labor quality of computer programmers," said Paweł Piwowar, president of the board of Oracle Polska.


Money for Parks
Poland's industrial and technological parks and technology incubators are eligible for almost 170 million euros in support handled by the Industrial Development Agency (ARP). The agency will accept applications until 2006.

At the initiative of the ARP, 15 industrial and technological parks have either been established or are currently under formation, chiefly in southern Poland. An industrial park is an area separate from a restructured or closed enterprise that is meant to be developed for the purpose of attracting investors. In a technological park, cooperation additionally involves a scientific institution, for example a university.

Unlike in special economic zones, park investors are not eligible for tax breaks, because this is treated as public assistance.

Since May 1, Poland has been eligible for support from the European Union budget as part of structural instruments. One of the purposes for which structural funds are intended is support for domestic parks and incubators. By the end of 2006, institutions managing parks can apply for 169 million euros. Assistance may range from 1 to 10 million euros. The money is made available after the completion of the project.


Poland vs. "the 25"
Poland doesn't look too bad in comparison with the other nine countries which became European Union members on May 1 in term of macroeconomic indexes. The picture is far less optimistic, though, when it is compared to "old" EU members. The most flagrant difference is in GDP per capita. According to different reports, in Poland it accounts for only 41-43 percent of the former "15" level. Lithuania and Estonia represent a similar level, Latvia is slightly weaker while the other countries are ahead of Poland. The index for Slovenia is 70 percent. Bridging the gap between Polish and EU living standards may take between 20 and 30 years.

But Poland is an asolute leader, also against the background of the whole enlarged European Union, in terms of growth rate. Analysts believe that accession will step up annual GDP growth by at least 1 percent.

Poland's weak point is the situation on the labor market; no other EU state has a 20-percent unemployment rate. The efficiency of Polish employees is satisfactory; even though the average value added per an employee was over 50,000 euros in the former EU in 2002 and only 17,000 euros in Poland, productivity in Poland grows fast, at a rate of 20 percent a year.

In terms of macroeconomic equilibrium Poland does well compared to the EU and its new members. In 2003 average inflation rate in Poland accounted for 0.8 percent while it was 2 percent for the EU and for the candidate countries. The EU's problems with budget deficits indicate that Poland does not lag in this area either. According to Eurostat, Polish public finance deficit in 2003 was 4.1 percent.

This is much better than in many countries of the expanded EU . Poland even meets some Maastricht criteria for the adoption of the euro and there is a chance it will adopt the common currency in 2010.