In an interview with Reuters, in response to a letter sent by the EU Commission (seeking clarifications on the Polish treasury's position on the merger of Bank Pekao and Bank BPH and requiring a response by 23 January), Wojciech Jasinski, chairman of parliament's finance committee and a candidate for the post of treasury minister, stated that 'this letter doesn't change anything.' 'What the Commission thinks, and what it thinks should happen in terms of competition in the European Union, should not have any impact on the approach of our government.' It appears that the Polish government remains obstinate in the face of pressure from Brussels. Meanwhile, a spokesman for the EU Commission has reiterated its position that it has exclusive competence over the issue of competition and is waiting for Poland's reply. Based on Article 21 of the EU ordinance on concentration control, national regulators could only stop the merger for solvency reasons (ie. financial instability, unclear sources of funding). Whilst the public response of the Polish government can't be viewed positively, its incalcitrant stance was not unexpected and so there has been little trading impact from the latest development. We continue to view the increased involvement of the EU Commission positively and reiterate our ratings of Buy on Bank Pekao and Hold on Bank BPH.