Poland

The main donor and the main recipient of European Union subsidies, Germany and Poland differ on the need to cut the bloc’s budget for 2014-2020, their leaders said Wednesday ahead of an EU summit next week, the Emerging Europe blog reported. The bloc’s 27 members will likely struggle at a summit on Nov. 22-23 to agree on a proposed budget of some €1 trillion ($1.3 trillion). Germany and other states that pay more into the bloc than they receive from it would like to cut their contributions, lowering farm subsidies and funds for the less-affluent members. U.K.

The Polish central bank expects the country’s commercial banks to tighten lending conditions further for consumers and businesses in the fourth quarter because of a deterioration in both the economic outlook and their portfolios, The Wall Street Journal Emerging Europe blog reported. Poland’s conservatively managed banks—with negligible exposure to toxic assets and a low bad-debt ratio—have proven resilient to the economic crisis that has roiled the euro zone.

Poland’s financial regulator will ease conditions for consumer and mortgage lending in order to stimulate borrowing amid an economic slowdown and to combat growth in the shadow banking sector, its head said Monday, the Real Time Emerging Europe blog reported. With the European Union’s largest emerging economy cooling rapidly this year, Warsaw has stepped up actions aimed at supporting growth and propping up sagging consumer demand.

Polish builder Polimex is likely to return to profit next year as it targets asset spin-offs and a new deal with creditors as ways to save the troubled company, its chief executive Robert Oppenheim was quoted as saying on Tuesday, Reuters reported. "Income from disinvestment and a share issue will ensure business resources, which together with operational restructuring will make Polimex a company again booking positive results and operating cash flows starting from 2013," the CEO told daily Parkiet in an interview.

Poland's state road operator has been hit with a 1.2 billion zloty ($385 million) compensation claim by Irish builder SRB Civil Engineering, the latest fallout from a troubled construction spree ahead of the Euro 2012 soccer tournament, Reuters reported. SRB said it was forced to walk away from a contract to build stretches of a key Polish highway because of failures by roads operator GDDKiA and wants to be compensated for losses it said it incurred. But GDDKiA said it was the contractor who was at fault and that it had to withdraw from the contract, not the other way round.

A Polish court on Tuesday delayed until Oct. 2 a ruling on whether to allow an 11.6-billion zloty ($3.7 billion) investment in new power units by Poland's top utility PGE, a decision keenly awaited by troubled local builders, Reuters reported. The utility has said that more delays in starting the project, the largest in the country's power sector, could hurt Polish construction firms, which are in financial difficulties, and deprive the slowing economy of an important cash stimulus.

Troubled Polish builder Polimex won a lifeline loan from state-owned development agency ARP, lifting the company's shares on Thursday. Polimex is the largest of dozens of Polish construction companies facing financial trouble after bidding for cut-price contracts to build roads for the Euro 2012 soccer championship Poland co-hosted with Ukraine. The contracts gave them razor-thin margins, which were eaten up by the rising cost of materials. As a result Polimex's rival PBG sought bankruptcy protection earlier this summer, also asking ARP for help.

Stricken Polish builder PBG is seeking a 200 million zlotys ($60 million) loan from state-controlled industry development agency ARP, its chief executive was quoted as saying on Tuesday, as the company battles to stay in business, Reuters reported. "We will amend our motion to ARP by the end of this week," state agency PAP quoted Wieslaw Rozacki as saying.

Creditors of beleaguered Polish builder Polimex agreed on Wednesday to waive interest on the group's 2.5 billion zlotys ($718 million) debt pile for four months to give it time to restructure debt and improve liquidity, Reuters reported. Polimex is the largest of dozens of construction companies facing financial trouble after a bidding war for contracts to build roads for the Euro 2012 soccer championship Poland co-hosted with Ukraine. The deals they signed gave them razor-thin margins, which were eaten up by the rising cost of materials, leaving the firms carrying a loss on the projects.

Polish builder Polimex, stretched by debt after cut-throat bidding on infrastructure projects for the Euro 2012 soccer tournament, hopes to offload its Energomontaz and Sefako units for at least 200 million zlotys ($58 million), Reuters reported. Chief executive Konrad Jaskola told broadcaster TVN CNBC on Monday the units had been offered to state restructuring agency ARP and other potential bidders. Polimex has 100 million zlotys in bonds maturing in July and a further 195 million due in October. It also has to repay a loan of 150 million zlotys by the end of July.