French president Nicolas Sarkozy’s election defeat this month robbed German chancellor Angela Merkel of one of her key allies. His successor, the socialist François Hollande, seeks to shift the emphasis from austerity to “growth” (fiscal stimulus) and has thrown his support behind the pooling of eurozone sovereign debt in the form of eurobonds. Policymakers in Berlin aren’t warming up to either proposal and need more allies.
Could help be underway from Warsaw? Kamil Tchorek makes a compelling case in The Wall Street Journal.
He points out that all of Europe’s large economies have grown wary of austerity. Italy and Spain, though led by conservative prime ministers, would like the European Central Bank to continue to finance their deficit spending. The Germans are critical. They fear that what effectively amounts to printing money will drive up inflation.
Mariano Rajoy and Mario Monti are also sympathetic of Hollande’s embrace of eurobonds. British prime minister David Cameron has wholeheartedly supported it although his country, outside of the euro, probably wouldn’t have to participate.
“The only remaining European nation that is big enough to matter is Poland,” writes Tchorek. It could bring other Central and Eastern European nations on board to form a bloc that is more powerful than the Franco-German axis.
Poland has the characteristics of a German partner. “Its stable, centrist government is undertaking painful reforms to control debt and deficit. It has a genuinely independent central bank whose focus is on fighting inflation.” Poland still hopes to join the euro though — “on the condition that Warsaw can influence the way the currency union is fixed.”
Neither the Poles nor the Germans are enthusiastic about the gargantuan dead weight of the Common Agricultural Policy (CAP). Warsaw can’t see why, in a time of such economic danger, the structural and cohesion funds should be cut in the name of austerity while any mention of the CAP is taboo. France has a proportionately smaller agricultural base than Poland but its relatively wealthy farmers get larger subsidies.
Indeed, Merkel should lean east and she does. Except too far for the Poles’ liking. Germany, in recent years, has revisited old friendships in Moscow rather than the capitals of its once satellite states. This has led to fears of a German-Russian alliance that is able to dominate Eastern Europe.
The construction of the Nord Stream pipeline is emblematic of the geopolitical reality that is emerging across the expanse of what used to be the Eastern Bloc. If Germany can import gas from Russia directly, it will balance its relations with Moscow at the expense of European Union member states in between.
The Poles especially remember all to well what happens when Germany and Russia get too close. On the eve of World War II, the two divided Eastern Europe into spheres of influence while pledging nonaggression toward one another. Germany invaded western Poland; the Soviets annexed the eastern part of the country and the Baltic states, Bessarabia and other territories in the east.
Poland sees the writing on the wall. Its foreign minister, Radoslaw Sikorski, warned in February that Germany would never be recognized as a European hegemon, “so you shouldn’t even try,” he told a largely German audience during a conference in Munich.
He added, “When Germany gets too big for its boots, we always automatically add allies.”
Besides the United States, which guarantees the security of former Soviet states through NATO, those allies include France. It has an interest, too, in preventing the emergence of a German-Russian partnership that is able to divide and conquer in the east. Paris should therefore welcome any form of rapprochement between Berlin and Warsaw except when it comes at the expense of its own preeminent position in the European Union.
The ball is in Hollande’s corner. As Tchorek puts it, “If Mr Hollande pushes for too much compromise on the fiscal pact or on the EU’s 2020 budget, Mrs Merkel may find reason to turn to her Polish counterpart sooner than expected.” But it will take more than Sarkozy’s loss to build a German-Polish alliance.