Red menace

By Mirko Kaupat

When it comes to the country's role in the enlarged European Union, officials in Warsaw often say that we will be a bridge to eastern Europe, and above all Russia.

Poland's economic relations with the former superpower are said to be of vital importance. If this is true, then last week was a clear setback for both partners. Defense minister Jerzy Szmajdziński traveled to Moscow to try to secure a €455 million ($500 million) contract to modernize the 100 Russian Mi-24 military helicopters belonging to the Visegrad group (Poland, the Czech Republic, Hungary and Slovakia).

But Russian defense minister Siergiej Iwanow rebuffed Szmajdziński with a clear and simple "niet" since Poland only wanted to buy engines from the Russians and carry out the rest of the work on its own. Iwanow, however, stated that such projects must not be completed without the participation of Russian designers and producers, as they "also guarantee the quality of the modernized units."

After only signing a very general agreement on military and technical cooperation, Szmajdziński retreated without sealing a deal.

But this matter is not the only current obstacle in Polish-Russian relations. While trade between the two countries is growing from year to year, the gap is closing slowly. In 2002, Poland exported goods worth €1.2 billion ($1.3 billion), while its imports from Russia stood at €4 billion ($4.4 billion).

And new problems are about to come with reports that Russia wants to "punish" Poland for limiting Russian exports of coal by increasing customs duties on Polish goods, such as cheese, sugar, tea and furniture. Moscow is expected to make a final decision with the exact figures within two weeks. It may not be an all-out "trade war," but it will be a serious conflict for sure.

Another troubled spot in the countries' relations is Russian investment here. Russian companies, such as Lukoil, are often rejected by domestic authorities on account of their bad reputations and images. The oil giant had wanted to start huge investments, but pulled back after encountering too many obstacles. Another company, Jukos, recently withdrew from bidding for the purchase of Rafineria Gdańska.

There was one piece of good news from the meeting in Moscow, albeit a rather symbolic one: the Russian finance minister told his Polish counterpart, Grzegorz Kołodko, that Poland's membership in the European Union could be advantageous for Russia in terms of foreign investment and trade. There was also talk of creating a joint currency zone in some of the states belonging to the Commonwealth of Independent States.