According to a statement from the European Commission, its competition director, Philip Lowe wrote to the Polish government last Friday, seeking clarifications on the Polish treasury's position on the merger of Bank Pekao and Bank BPH. The commission reminded the Polish authorities that, 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), not for reasons related to restricting competition. Poland was asked to respond within a week to the letter. EU commission is on a campaign to clear away national barriers to cross-border bank mergers and has already gone after Italy in a scandal that helped bring down the Italian central bank governor. We see the involvement of European Commission as a positive trigger for the merger. We believe the merger is largely priced-in but some positive trading impact could be visible today, due to improving sentiment on the back of the news.