Firing of PZU chief threatens relations with Eureko

Treasury Minister Wieslaw Kaczmarek yesterday dismissed the head of Poland's largest insurance company, PZU. The firing of Zygmunt Kostkiewicz and his replacement with Zdzislaw Montkiewicz, a political ally of Kaczmarek's, is the latest in a series of reshuffles in the top management of state-owned firms. The move is likely to worsen the already difficult relationship between the Treasury, which owns 55% of shares in PZU, and strategic investor Eureko. The Dutch company and its ally BIG Bank Gdanski together hold a 30% stake in the insurer, which controls nearly 60% of the domestic market. The Treasury is currently holding back the privatization of PZU, postponing its planned flotation beyond 2002 and breaking a promise made by the previous government to allow the Eureko-led group to increase its stake to above 50%. Last Friday Eureko sent an official letter to the prime ministers of Poland and the Netherlands, requesting government-level talks foreseen under investor protection agreements. If the conflict is not resolved, Eureko may refer the case to the European Commission (EC). (Rzeczpospolita, p. B1; Gazeta Wyborcza, p. 14; Reuters) A.K.