New Europe, Old Economy
Poland is America's new best friend. But the country is also in deep distress
Bucking the Trend
One polish community thinks prosperity is the real thing
This Land Is Your Land
Wild West City. America in Europe, or the new economic frontier?

End of the Affair?
How attractive is E.U. expansion?
[10/21/02]
Cashing In
Out With The Old and in With the Euro [1/14/2002]

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CZAREK SOKOLOWSKI/AP
PROTEST: Poles need more jobs

Posted Sunday, May 25, 2003; 17.12BST
At the Tadeusz Sendzimir Steelworks in Nowa Huta, a suburb of Krakow, even drastic measures have yet to produce results. The payroll is down to 8,500, from 29,000 in 1989, but the company is still in the red. At the Bar Bistro at 20 Solidarity Avenue, Franciszek Donarski, 45, just off his shift at the plant, feels the strain. He can afford one beer a day: "Two or three and you go in debt," he says. A cartoon chalked on a wall at his plant depicts a rotund worker with a bulbous nose holding a shot of vodka. "Welcome if you are bringing money," it reads in Polish. "Goodbye if you are coming to get it."

"Sometimes I have the feeling we can't accomplish all we need to do at the same time," muses Jacek Piechota, Secretary of State for the Ministry of Economy, Labor and Social Policy. But critics say the government, which plans to cut corporate income tax from 27% to 19% while abolishing most tax breaks and exemptions, is not doing enough — especially to cut social spending and invest in infrastructure like roads.

The biggest loser in all this may be Prime Minister Miller. His party came to power promising professionalism and transparency, but failed to deliver. He is also embroiled in a high-profile bribery scandal in which a leading film producer is accused of soliciting bribes from Michnik and others on the government's behalf. Though unproved, the so-called Rywingate affair has soured Poles on their leaders; approval of the parliament is less than 15%.

Joining the E.U. may preserve Miller from defeat in early elections, but the economy still requires a systematic overhaul, says Witold Orlowski, head of President Kwasniewski's team of economic advisers. The benefits of E.U. accession have, for the most part, already been factored in by the markets, he says. "It's no magic bullet. It will not help with labor-market reform, public-sector reform, creating a good business climate for Western investors. That is all up to us." Nor can Poles rely too heavily on their recent $3.5 billion purchase of 48 F-16 fighter jets from the U.S. aircraft manufacturer Lockheed Martin, the biggest defense contract in post-communist history. The deal is expected to bring in up to $12 billion in offsetting investments, purchases and other contributions to the Polish economy, though actual direct investment will be closer to $1.5 billion. Its impact on a $180 billion economy, says Orlowski, is little more than symbolic.

Symbolism can hurt sometimes. Poland chose Lockheed over two European competitors, the French Mirage and the British-Swedish Gripen. That led unnamed French officials to complain that Poland was not acting in the proper "European spirit" — and that was before the Iraq imbroglio. German Foreign Minister Joschka Fischer recently wondered aloud whether Washington was using Poland to divide and weaken the E.U., echoing German press comments that Warsaw was Washington's Trojan horse on the Continent, or as one columnist put it, "Trojan donkey."

Poles reject the slur. "U.S. diplomacy was heavy-handed and arrogant, but not more so than the French," says Michnik. "We had two arrogances to choose from." National Security Adviser Siwiec says Poland would have loved to follow European foreign policy, if it could have detected one. He said Poland's contribution to the E.U. will be as a player, not a follower, suggesting it has special expertise on the former Soviet Empire. "We know 10 times more than they do about these places," he says. "We can be the bridge."

For many Poles, Europe vs. America is a false choice. In one poll, 60% said that the best hope for Poland's development is as an integral part of Europe, not as a distant commercial ally of the U.S. (10%). Even ardent supporters of the war in Iraq like Michnik dismiss the idea of a Europe divided into "old" and "new" as "absurd." Beata Roguska, a pollster in Warsaw, explains the complexity of Polish feelings for Europe and America another way: "It's like asking, 'Do you love Mom or Dad?'" Poles have had two centuries of being forced into choices they did not like: defeated, occupied, subjugated by their bigger neighbors. Now they want to make their own choices, including not to have to choose one friend at the expense of another — and to walk their own path to membership in the world of the prosperous and free.

With reporting by James Graff/Paris, Tadeusz Kucharski/Warsaw, Ian McGullam/Washington and Jan Stojaspal/Nowa Huta

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FROM THE MAY 12, 2003 ISSUE OF TIME MAGAZINE; POSTED SUNDAY, MAY 4, 2003

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