Eastern approaches

Ex-communist Europe

Poland's appeal to Germany

Sikorski: German inaction scarier than Germans in action

Nov 29th 2011, 13:04 by E.L.

POLAND'S foreign-policy course over the past five years has been marked by two features: caution, and improving relations with Germany. But in a remarkable speech in Berlin yesterday Radek Sikorski, Poland's foreign minister, threw caution aside and made a dramatic appeal (couched more as a demand) to Germany. The speech made front-page news in the Financial Times, which also ran extracts as an op-ed.

The speech starts with a reference to the break-up of Yugoslavia, which Mr Sikorski (disclosure: a close friend of this author) witnessed as a journalist in 1991. The decision by Serbia to print its own dinars marked the end of the federal republic, and the path to a series of wars that killed 140,000 people, ruined the lives of millions more, and turned places that had once been among the most advanced bits of the "communist" world into impoverished backwaters.

Mr Sikorski (who studied philosophy, politics and economics at Oxford) then paid a nice tribute to the German philosopher Immanuel Kant, who highlighted the moral importance of money. Kant, he noted, had argued that:

the entire practice of lending money presupposed at least the honest intention to repay. If this condition were universally ignored, the very idea of lending and sharing wealth would be undermined. For Kant, honesty and responsibility were categorical imperatives: the foundation of any moral order. For the European Union, likewise, these are the cornerstones. I would point to the two fundamental values: Responsibility and Solidarity. Our responsibility for decisions and processes. And Solidarity when it comes to bearing the burdens.

Mr Sikorski then skewered the argument that enlargement is to blame for the euro zone's problems. (That was raised in an FT op-ed a few weeks ago, and attacked in my European Voice column a few days later). Poland and Slovakia have been the two fastest-growing economies in the European Union in the past four years. Trade between the ten "new" EU members and the 15 "old" ones had risen from €51 billion* in 1995 to €222 billion now. That trade boom, he argued, had if anything cushioned the "West European welfare states" from facing reality.

The real cause of the crisis, Mr Sikorski said, was confidence. In a pointed dig at his German hosts, he continued:

Let us be honest with ourselves and admit that markets have every right to doubt the credibility of the euro zone. After all, the Stability and Growth Pact has been broken 60 times! And not just by smaller countries in difficulty, but by its founders in the very core of the euro zone. 

That, of course, includes Germany.

Mr Sikorski went on to highlight the fragility of the EU's institutions and procedures: they work "tolerably well" when times are good, but depend on "goodwill and a sense of propriety" that frays quickly in a crisis. The collapse of the euro zone would be just such a crisis, but far worse than any experienced in the EU in its history.  

The break-up would be a crisis of apocalyptic proportions beyond our financial system. Once the logic of "each man for himself" takes hold, can we really trust everyone to act communitarian and resist the temptation to settle scores in other areas, such as trade? Would you really bet the house on the proposition that if the euro zone breaks up, the single market, the cornerstone of the European Union, will definitely survive? After all, messy divorces are more frequent than amicable ones.

The choice, he said, was either deeper integration or collapse. Mr Sikorski outlined a fiscal federation, with tough rules ("almost impossible" to block by political means) for backsliders, in return for the European Central Bank becoming a real central bank, and acting as a lender of last resort. That should happen, he argued, even before the necessary laws are fully in place.

He also supported dramatic changes in the political governance of the EU, including pan-European candidates lists for the European Parliament, fewer commissioners and perhaps a directly elected EU president. In return, the EU would stay out of

everything to do with national identity, culture, religion, lifestyle, public morals, and rates of income, corporate and VAT.

Next came a warning to Britain:

If you can’t join, please allow us to forge ahead. And please start explaining to your people that European decisions are not Brussels's diktats but results of agreements in which you freely participate

Mr Sikorski thanked (in German) his hosts for German generosity and support in past years. He also noted that Germany trades more with Poland than it does with Russia, adding, in a barbed aside, "although you would not always know it from the German political discourse".

Then came the crunch, headlined "What does Poland ask of Germany?". First came six points Mr Sikorski wanted Germany to acknowledge.

1) it is the biggest beneficiary of the current arrangements and therefore under the biggest obligation to sustain them
2) it is not the "innocent victim of others' profligacy...You, who should have known better, have also broken the Growth and Stability Pact...your banks...recklessly bought risky bonds"
3) the crisis has lowered Germany's borrowing costs
4) if its neighbours' economies implode, it will suffer
5) the danger of collapse is greater than the danger of inflation
6) "your size and your history" mean a "special responsibility to preserve peace and democracy on the continent". 

The biggest threat to Poland's security and prosperity, Mr Sikorski said, was not terrorism or the Taliban (and certainly not German tanks). It was not even the Russian missiles that the Kremlin is threatening to deploy on Poland's border. A far greater threat would be the collapse of the euro zone.

Mr Sikorski concluded:

I demand of Germany that, for your sake and for ours, you help [the euro zone] survive and prosper. You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity. 

Germany, he said, was Europe's "indispensable nation".

You may not fail to lead. Not dominate, but to lead in reform. Provided that you include us in decision-making, Poland will support you.

Mr Sikorski concluded by highlighting the danger of belated reform, which had doomed the old Polish-Lithuanian joint state, founded in 1385 and finally extinguished four centuries later. Like the EU, it raised the standards of its time, pioneering the rule of law, participatory politics and regional security. Political paralysis led to its demise. Reform (such as the abolition of a crippling unanimity rule and the introduction of a permanent government) came in 1791, but too late. Poland was wiped from the map four years later.

Mr Sikorski ended his speech with these words:

We are standing on the edge of a precipice. This is the scariest moment of my ministerial life but therefore also the most sublime. Future generations will judge us by what we do, or fail to do. Whether we lay the foundations for decades of greatness, or shirk our responsibility and acquiesce in decline.

The speech deserves the attention it has brought. Whether or not it makes Germany change (or accelerate) course remains to be seen. But the historic moment is clear: to see a Polish foreign minister addressing a Berlin audience as a political heavyweight, with serious ideas and serious demands, is a huge change from the days when Poland was seen as a difficult and needy recipient of Western largesse.

*an editing error on our part in the first version of this piece mistakenly gave the foreign trade statistics as trillions of euros, not billions. Sorry.

** A follow-up blog post looks at the reaction to Mr Sikorski's speech

Readers' comments

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WDGZVDcYTX

Dear Mr. Sirorski,

It is not the British who have created the Euro problem and nor will vitriol and vengence against them solve any problems.

While Mr Cameron gave the wrong reason to veto what was appalling policy and process, someone had to say "no - this is only going to make matters worse". Markets to date would tend to agree with that conclusion.

And by the way, it is not true that "European decisions are not Brussels's diktats but results of agreements in which you freely participate", which is exactly why trying to persuade the British people that their voice is ever listened to will be greated with: "don't lie". The use of the word "freely" is what gives deceit to your suggestion.

WDGZVDcYTX

Dear Mr. Sirorski,

It is not the British who have created the Euro problem and nor will vitriol and vengence against them solve any problems.

While Mr Cameron gave the wrong reason to veto what was appalling policy and process, someone had to say "no - this is only going to make matters worse". Markets to date would tend to agree with that conclusion.

And by the way, it is not true that "European decisions are not Brussels's diktats but results of agreements in which you freely participate", which is exactly why trying to persuade the British people that their voice is ever listened to will be greated with: "not true". The use of the word "freely" is what gives deceit to your suggestion.

sherryblack

Some interesting notes, Germany took 27 billion marks in loans from the USA which it never repaid back. It simply defaulted on them in 1932. Germany took loans from American investors to pay for the reparations than later simply defaulted on its loans to Americans and in this way shifted the costs of its reparations burden to Americans.

Hello Greece - are you listening?

http://en.wikipedia.org/wiki/World_War_I_reparations

"Historian Marks calculates that between 1921 and 1931, Germany paid a total of 20 billion marks in reparations, most of which came from American loans that the Germans repudiated in 1932. In this way, the Germans largely escaped paying for World War I, and instead shifted the costs onto American investors

"The American historian Stephen Schuker has argued that the Germans received in much in American loans which they never repaid as Germany paid in reparations. Schuker has noted that between 1921 and 1931, Germany paid 19.1 billion marks in reparations, and in the same time, took in 27 billion marks in loans from the United States, which Germany defaulted on in 1932.

The American historian Gerhard Weinberg commented about the way the Germans used reparations to avoid paying the costs of World War I that "The shifting of the burden of reparations from her shoulders to those of her enemies served to accentuate this disparity" in the economic strength of the Allies, which struggled to pay their heavy World War I debts and the other costs of the war and Germany, which paid neither reparations nor its World War I debts

Terence_I_Hale@hotmail.com

Hi,
"Shadows of shadows passing. It is now” 2011.
Löcknitz a small German village on the German/Polish border says everything. Since Poland entered into the Schengen area , the village experienced an influx of migrants, which provides prosperity and irritation. They experience of influx of the German right-wing politics (NDP) and voted such. strange.
Regards Terence Hale

jyjun92

This baroque tirade typifies the common sense (none) of Europe's ruling elite. The 17 countries have too many fundamental differences for a one size fits all currency. Forty years ago the US dollar traded for 4 DM now it is at .75. The longer this Euro peg goes on the worse it will be in the end. Other commentors have outlined this much better the economies vary in too many ways.

dclink

Well.... thats a little heavy.

...if you need a laugh after reading this, check out www.debtcock.com
-its a funny site about the debt crisis, a little crude, but absolutely hilarious! Check out the Wall of Shame - everyone's favourite clown Berlusconi is in there.

Publius_Hamilton_1776

Impressive, to say the least. How many times in history could calamity have been avoided by action, as opposed to inaction? I am heartened to see the political courage exhibited by Poland via Mr. Sikorski.
Bravo indeed!

youngboy

Dear Author
I do not expect a reply to what i am going to write but i will try to speak what i think freely.

First of all i consider Mr Sikorski a failure and a misunderstanding appearing in international political scene reflecting the true state of Polish politics, the degeneration of which the Polish voters can not be aware of due to real heavy capitalistic and social problems ongoing in that country (speaking from own experience)

Second and what i wanted to talk about the real situation of the EU economics with Merkel and Sarkozy scaring the goats, telling incredible stories about the consequences of the default of the 3% of EU market which is Greece. I do believe rational and experienced people do not expect Italy to fail, the main producer of high end products with the biggest market ever open in China where literally hundreds of millions of 18 pocketed single youngsters waiting for their first Armani jeans, the problem of Italy was simply Mr Berlusconi and he is gone, nor does anybody expect Spain to fail, the main fruit and vegetable furniture of all north east Europe, Spain has only problems with its youth adapting to an agrarian/touristic new reality even if they got a real estate bubble, and so Merkel and Sarkozy keep scaring the world at the point when they even managed to lower the value of the Euro, and if you did notice the same value keeps rising and falling after each their single word. And then at the resque comes Mr Sikorski with its tragedic performance begging the Germans to save the World. At this point there is a small proposal from Ms Merkel on the fiscal union. Yes! The fiscal union so if until now the Euro was remotely recognised as the old deutsch mark now the safe in which the money is kept and the person who holds the key will be GERMAN. In all my due respect to the German hardworkship i do not believe in totalitarian/communist/central commanded economies and nor does the rest of the educated people of this world. So the truth behind all this move is we are experiencing at least a German invasion of the continent and the funny thing being nobody notices it or in the contrary all beg for it.

Dear Author, we will enter the 2012 in a few days, and i think it is out of point to experience a return of the Roman Empire when in fact the Germans do not even belong to the subculture left behind by that Empire. It is very hard to predict but i do believe that the culture clash between two types of society, the German and the rest of Europe especially in case when forced into, will drive to a bad overall situation, as Germans have no calculators for long distance runs, thing which they showed in the second world war and which is usual for a nation of technocrats. I think it is time to get out of fear and ignorance and act as civilized citizens of this continent and say our no.

My Best Regards for all the Economist staff
K.G.

enriquecost

Sorry, I "recommended" SylwiaS, but I actually wanted to recommend Prowler13 (the first paragraph from SylwiaS post)

Poland, placed between Germany and Russia, is the best logistics place for international Trade. No wonder it is growing over 4% a year. Being between the two main markets of Europe, and between the largest energy and technological hubs of Europe, makes Poland the indispensable partner.

The combined population of "GerPolRuss" is 263 million people, with a combined GDP of $6 Tr. That can be compared to the Franco-German Axis of 147 milion people, with a combined GDP of $6 Tr.

For Poland the more intense the trade and human relationship between Germany and Russia, the better.

SylwiaS in reply to enriquecost

"For Poland the more intense the trade and human relationship between Germany and Russia, the better."

What a dreamy theory! Wonder why it has never worked in practice. Even now, when Polish relations with Germany are excellent, and German relations with Russia are good, Russia often imposes embargo on goods from Poland.

guest-wnoiejj

"the old Polish-Lithuanian joint state, founded in 1385"
- wrong, the state was founded almost 200 years later. "The Economist" is quite careless in details when talking about other states than these in G-8.

SylwiaS in reply to guest-wnoiejj

Actually it's not necessarily wrong. A personal union, via the person of the king (Władysław Jagiełło and his sons) started in 1385. In 1569, because of the nearing death of the last of them, it was transformed into a union of nations.

Travellinman

This was a really good speech! We need to be more pragmatic about the roles different countries play in the survival of the eurozone or further the EU. In opposition to the political approach we have in the division between 1 - careless spenders 2 - eu dept cleaners 3 - eurozone outsiders...

enriquecost

Something curious to me is the case of SAP AG. Leo Apotheker, former CEO, and Shai Agassi, are Israeli citizens...and the present CEO Bill McDemmott has received the Ytzahk Rabin Award from Israel for its transfer of technology to that country, accordingt to Wikipedia. Curious...Probably that happens with many German companies, who are under Israeli control and pay a "contribution" every year to the state of Israel.

enriquecost

The U.S. didn´t give a single $ to Germany for the Marshall Plan. All that is propaganda. The U.S. just returned Germany a fraction of what had stolen with the Morgenthau Plan.

In fact, the truth is America´s post-War expansion took place thanks to the technology, patents, factories and brain drain relocated to the U.S. from Germany during the Morgenthau Plan.

enriquecost in reply to sherryblack

I am from Spain, and here we don´t have that party, which anyway I would never vote. Being Spanish I cannot be a German Nationalist. That is ridiculous.

What is evident is that you are a Communist thinking about the old days before the fall of the USSR.

sherryblack in reply to enriquecost

"the truth is America´s post-War expansion took place thanks to the technology, patents, factories and brain drain relocated to the U.S. from Germany."

Before the war even ended the USA produced 50% of the world's GDP so obviously it didn't need any help from Germany to became an economic superpower.

And prior to that by the early 20th century the USA was the greatest manufacturing power in the world.

And the USA didn't relocate any German "factories" to the USA so don't go around telling lies and trying to taint the USA with the actions of the Soviet Union.

The brain drain occured long before the USA even entered the war thanks to the great policies of the nazi regime which sent many European Jews (intellectuals, scientists, Artists, writers) fleeing to America.

If they had not fled some of mankinds greatest minds such as Einstein may have perished in concentration camps.

enriquecost in reply to sherryblack

Over half of Germany´s Aerospace, Chemical, Energy indistries was expropriated by the U.S., including the technology for the Apollo XI Project which took an American to the Moon, led by Von Braun. The other half was relocated to the USSR.

Fortunately, Germany had enough engeneers to rebuild part of its industry little by little. Even its Defense industry is being slowly rebuilt, and now is the third largest exporter after the U.S. and Russia. But it took over 30 years to Germany to recover, and based on new grounds.

greg_not_so

it will take more than one speech to have Europe more united, but having it discussed in an internet forum feels better than deciding about it in the battle field.

Rolland Norman

Very significant, political set of thoughts aiming at wellbeing
of the whole Europe, profound, and excellently placed in the
historical background.

It was the time when Poland was the largest country in Europe
under one king and one of the most advanced countries
of the time.
The Liberum Veto, the ultimate symbol of an individualistic
democracy destroyed the country. A communitarian, social
needs were then not properly addressed and the great country
eventually stopped to exist.

This is a memento to the European Union.
This is a lesson learned…

Rolland Norman

About Eastern approaches

Eastern approaches deals with the economic, political, security and cultural aspects of the eastern half of the European continent. It incorporates the long-running "Europe.view" weekly column. The blog is named after the wartime memoirs of the British soldier Sir Fitzroy Maclean.

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