Eureko demands EUR 10 billion from state

Dutch insurance firm Eureko is seeking zł.35.6 (R9.8) billion in compensation from Poland for what it says is the government's failure to live up to a 1999 agreement that was to lead to the flotation on the bourse of state-owned insurance giant PZU, Treasury Minister Aleksander Grad revealed last week.

"The claim sought by Eureko during the arbitrage stands at zł.35.6 billion," Grad told a parliamentary treasury committee. The sum is 26 percent more than Poland's estimated budget deficit this year, at zł.27.1 billion.

The Treasury Ministry is looking to resolve the long-running dispute out of court, and had met with Eureko representatives earlier in January. Previously, unofficial reports estimated Eureko's claims at around EUR 2 (zł.7.24) billion. The current calculation differs from previous estimates in that it takes into account the fact that privatization of the insurer will not be concluded, Eureko's president said.

Eureko controls around 33 percent of PZU, while the Polish state controls 55 percent of the company.

The State Treasury has until the end of February to send its opinion to the arbitration authorities and present its own calculations.

"Last year we lost hope in the privatization of PZU and presented calculations with the arbitration tribunal. We want to be an investor in PZU and we believe the best solution would be to reach a conciliatory agreement," said Michał Nastula, president of Eureko Polska.

Since 1999 several Polish governments from both the left and right have attempted to stymie Eureko's bid to take over PZU. The protracted legal battle has ended up in European courts, which have consistently found for Eureko. Poland has continued to appeal these rulings, saying it is Polish courts, not European ones, which have jurisdiction in the case. (Reuters)