EUROPEAN COMMISSION PRESSES FOR END TO PZU ROW

The European Commission (EC) has urged the recently installed Polish government to resolve its dispute with a consortium led by pan-European group Eureko over the future ownership of the country’s leading insurer, PZU. Poland is seeking to join the European Union by 2004 but is currently struggling with an economic downturn and rising unemployment. EC representative Jean-Christophe Filori said that in the circumstances the terms of the ultimate resolution of the dispute had wider significance. “Foreign investors are keenly watching developments. They want to know what the outcome will be. That is why we hope this conflict will be resolved as soon as possible”, he noted. The Dutch government recently agreed to intervene to try and break the deadlock between Amsterdam-registered Eureko and the Polish authorities over the stalled plan for a Eureko-led consortium to buy a further 21% holding in PZU. The Dutch authorities are now in talks with Poland’s new government on the basis of a bilateral investment-protection agreement between the two countries. However, under the terms of the treaty, the conflict will be referred to a European court of arbitration in Stockholm if the current stalemate is not resolved within six months. The Polish state and the consortium resumed talks in early January in a bid to push through the deal, which would raise Eureko’s interest in PZU to 51% and take the insurer out of state control for the first time. The agreement had originally been scheduled for completion last year, but was blocked by Poland’s new left-wing government and looked to have collapsed entirely before discussions restarted in the new year. The Eureko-led consortium originally agreed terms in early October with the outgoing right-wing government to pay 2.8bn zlotys — or $666m — for the holding.