Orlen super-group will adhere to Poland’s ruling party

Significance

The European Commission accepted in June that anti-trust conditions had been met, allowing a company loyal to the current ruling party to proceed with consolidating Poland’s energy infrastructure. The consolidation helps ensure security of supply and rapid responses to sudden crises, but the new giant’s vague development plans and increased dependence on politics may have long-term disadvantages.

Impacts

• Polish banks are too small to meet the borrowing requirements of the expanded company after the merger with PGNiG.
• The Polish government will find it difficult to justify post-deal links to Russia through Hungary’s MOL.
• A significant step back in Poland’s ties to Hungary could bring Poland closer to the EU mainstream.