[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 14 March 2006, 17:54 GMT
Poland raises heat over bank deal
Polish Prime Minister Kazimierz Marcinkiewicz
Poland's prime minister says the deal will hit jobs and competition
Poland's prime minister has raised the heat on financial regulators ahead of key meeting which could decide the fate of two of the country's biggest banks.

The centre-right government of Kazimierz Marcinkiewicz opposes plans by Italy's Unicredito to merge two Polish banking subsidiaries.

Mr Marcinkiewicz warned the move could lead to 6,000 job losses and hit services in rural areas.

Poland's Bank Monitoring Commission is due to rule on the merger on Wednesday.

However, the independent body has come under increasing pressure to stop Unicredito's plans, which would bring together Poland's Pekao and BPH banks.

The European Central Bank stepped into the controversy on Monday after ECB president Jean-Claude Trichet expressed support for the Polish central bank chief, who is resisting government pressure to block the merger.

Competition fears

Polish government objections come at a time of increasing fears of a move towards economic protectionism by a number of EU states.

Speaking on Polish radio, Mr Marcinkiewicz said the merger "could lead to the closure of many banking units and the loss of 3,000 to 6,000 jobs in Poland".

The cuts would be most sharply felt in "small cities, where the labour market is already very weak", Mr Marcinkiewicz said.

The planned merger of Pekao and BPH was brought about as part of Unicredito's 20bn-euro (11.5bn) takeover of German bank HVB.

Unicredito is acquiring BPH as part of the wider deal, and is keen to combine both of its Polish interests to create the country's biggest bank.

But Polish government ministers say such a move would break an agreement Unicredito made not to buy any other Polish banks when it took over Pekao in 1999.

The government fears that if Pekao and BPH are merged, it will stifle competition within the banking industry as well as lead to job losses.

However, Warsaw's views are not shared by the European Commission, which argues that Poland is breaking EU competition and free market rules by attempting to block the deal.

EU and Poland clash on bank deal
08 Mar 06 |  Business
Italian bank targets German rival
30 May 05 |  Business
Spanish bank makes bumper profits
27 Oct 04 |  Business
Commerzbank merger plan 'fails'
16 Jan 04 |  Business
Tough times for German banks
31 Jul 03 |  Business
Cash-call fears hit HVB shares
27 Feb 03 |  Business

The BBC is not responsible for the content of external internet sites


Americas Africa Europe Middle East South Asia Asia Pacific