Privatization pressure

The ruling Civic Platform (PO) party launched an extensive privatization strategy after its own members criticized the government's inactivity in fulfilling its economic reform election promises. The privatization drive will see 740 state owned companies sold between 2008-2011 and is expected to raise zł.27 billion for the government, with some 40 percent being used to fund pensions.

Privatizing state-owned firms was part of Donald Tusk's "economic miracle" election promise last October, but reformers from within the party ranks have attacked Tusk for acting too slowly. Last month Deputy Finance Minister Stanisław Gomułka, who worked on public finance reforms, resigned. Gomułka slammed Tusk for not offering enough support for his efforts at economic reform.

"We have ambitious privatization plans," Prime Minister Donald Tusk told reporters. The government will begin privatization of the Warsaw Stock Exchange with the sale of a 47.8-percent stake. Treasury Minister Aleksander Grad said companies in the transportation, chemical and pharmaceutical, furniture and timber sectors would be fully privatized.

The privatization of the largest Polish bank, PKO BP, is still ongoing and the Treasury Ministry, which owns a 51.49-percent stake in it, wants to remain the largest shareholder. The government also has plans to privatize insurance giant PZU once a settlement has been reached in the long-standing legal battle with Dutch Eureko. Polish airlines LOT will begin its privatization next year.

The government also listed 25 companies of strategic importance in which it wants to keep a controlling stake. These include copper giant KGHM, Poland's two leading oil groups (PKN Orlen and Lotos), gas monopoly PGNiG, the infrastructure division of national railway company PKP, press agency PAP and broadcasters TVP and Polish Radio.