New working group to decide fate of PZU deal

A working group to be named next week will look to resolve the struggle for control of insurer Powszechny Zakład Ubezpieczeń (PZU), Treasury Ministry officials said last week. The ministry offered few details about the new group but said it was a product of Thursday's meeting between Treasury Minister Wiesław Kaczmarek and Eureko board member Ernst Jansen and the Netherlands-based insurer's chief executive officer Arnold Hoevenaars. The group is expected to contain representatives of both parties. Lorrie Morgan, spokeswoman for Eureko, refused to comment on the meeting, saying only that no new proposals were offered. Morgan said she couldn't confirm or deny agreement on formal talks next month. "We don't know who will be included but they're to be appointed at the beginning of April and start work by the 10th," said Beata Jarosz, spokeswoman for the Treasury Ministry.

Eureko, which is threatening to take its case against Poland to international arbitration courts failing a settlement in the next six months, negotiated control of PZU with the Solidarity Election Action (AWS) government last year - a pact that would have raised its 30% stake to 51% in Poland's dominant insurer. But Kaczmarek, installed after the Democratic Left Alliance's (SLD) victory last fall, refuses to cede control of the company on grounds the deal was flawed. At a meeting of Prime Minister Leszek Miller's cabinet this Tuesday, Kaczmarek could seek approval to dump the deal altogether. "We're told to expect a statement next week," Eureko's Morgan said. Miller, while telling reporters the cabinet would listen to Kaczmarek's arguments against the deal, refused to take a stand either way, Reuters reported. The comments came as the nation's dealings with foreign investors were raised at a news conference with Polish and European Commission (EC) representatives. Miller's government has been criticized for delaying numerous key privatizations, particularly its disregard for Eureko's acquisition of PZU. The EC told Poland it would probe the country's activities with foreign investors over the coming months, as EC Enlargement Commissioner Eneko Landaburu said the organization has received numerous complaints from EU-based businesses about dealings with Polish authorities.

"We will monitor Poland's commitment in relation to foreign direct investment and particularly the removal of any existing financial discrimination between Polish and foreign investors," said an EC official in Brussels who asked not to be named. The commission's Warsaw delegation will compile reports that will be forwarded to Brussels and ultimately to the Council of Ministers by the end of May, the official said last week. The official insists accession negotiations won't be harmed, claiming the EC's monitoring process isn't extraordinary for a candidate. The official declined comment when asked if Poland discriminates against foreign investors. "Poland has made certain commitments on this, and we're quite sure they're going to abide by them," the official said.