Roman Giertych
The League of Polish Families (LPR) surprised observers during last September's general elections when the four-month-old party won 39 seats in the 460-seat Sejm. With its conservative Catholic views, its anti-European and anti-German rhetoric, it has carved out a place in Poland's political arena - a recent public opinion poll gives LPR 10% popular support. Roman Giertych, a 31-year-old lawyer from Poznań, joined the LPR's well-known right-wing leaders to become one of LPR's key figures, seizing public attention through his controversial and brusque media statements. The WBJ's Robert Wylot talked to Giertych about his concept of allying with the United States and Central European countries rather than the EU and about LPR's remedies for Poland's economic slowdown, including clamping down on foreign banks, smothering transfer pricing and imposing tariffs on Western European goods. The following is an edited and translated version of their conversation.
Q: Why shouldn't Poland join the European Union? A: There are many reasons. I want to refute the government's propaganda argument that EU accession is based on economic considerations. The consequence of our association agreement (with the EU) is a trade imbalance in the amount of $63 billion over the past nine years. It is a negative trend that causes financial problems here in Poland. Take the example of agriculture. There is to be no free market. Instead, one country will subsidize its products and the other will or will not subsidize them to a small extent. So we're now told to agree that, for 10 years, countries with enormous potential in agriculture will dump their products in Poland, which in turn will have no protective instruments. So we are now agreeing to wipe out high-product agriculture in Poland, because nobody will survive except the petty farmers, who just need to buy salt and that's it. While all these who have been investing in agriculture in Poland will go down. And it's not just the agriculture. Take the fisheries. Take the already ongoing process of Polish shop owners being muscled out by big foreign hypermarkets. In the end, only some companies will manage to adapt to new conditions and continue production. But 90% of Polish firms, those small- and medium-sized, will incur losses.
Q: The negotiations on fisheries should be closed over the next few days. Why should Polish fishermen be hurt? A: Poland has already agreed in the negotiations that there will be no transition period here. As a result, big EU companies, huge trawlers, will fish in Polish waters. Considering the structure of the Polish fishing industry, it will de facto mean a liquidation of Polish fisheries.
Q: What about other industries? You've mentioned just a few. Seventy percent of our exports flow to the European Union. What will happen to Polish exporters if Poland doesn't join the bloc? A: We don't want to stop trading with the EU. We just want to arrange a better way. If you look at our trade balance, you'll see that it's the EU that earns in this trade.
Q: But do you know how to change this? A: It is feasible. Take agriculture. The EU has a $10 billion surplus (in trade with Poland). Why? Because they use so-called direct payments. The World Trade Organization defines such payments as dumping.
Q: Isn't it better to join the EU and receive those payments? A: But we won't receive them.
Q: Polish farmers aren't receiving anything now. A: Correct, we're not getting anything. But now we have duties that protect us. But there will be no duties if we join the EU.
Q: But doesn't the issue of direct payments affect agriculture only? A: Agriculture is very important to us because 38% of the population lives off it and we cannot treat it like other sectors. But let's make it clear: Poland needs a good trade agreement with the EU and the EU needs one even more. Nobody wants to close frontiers but we should rearrange our trade relation to reduce the deficit to some $4 billion annually from the current $10 billion.
Q: Agriculture is the only sector in which Poland still has duties on EU products. Would you impose duties in other sectors as well? A: Certainly. In each sector where a reduction of our deficit would be possible.
Q: The key argument of Euro-enthusiasts is that there is no alternative to the accession. So if Poland doesn't join the EU, what is your alternative proposal? Should Poland ally with other countries? A: From a political standpoint, we're facing a question whether to join a bloc in which Germany is the dominant power. Our answer is that it's better to ally with the United States. It is now the world's strongest political and military power. And the United States has a tradition of involvement in many regions of the world. It defends Taiwan, Israel, Chile and has allies in various parts of the world that it supports. This U.S. policy could be applied to Poland as well. Economically, the United States' power exceeds that of the European Union and the economic growth of the United States is faster than that of the EU. Therefore, gearing the Polish economy to the U.S. economy would bring about faster growth than within the EU.
Q: But Poland can join the European Union and still develop very good relations with the United States. A: Yes, but to begin with, we cannot establish bilateral relations without Brussels' approval. And the EU is currently experiencing conflicts with the United States in many areas. Secondly, joining the EU means merging our economy with Germany's and then you cannot sit on a fence. So in conflicts between the EU and the United States we'll (have to) side with the EU. When the United States imposed restrictions on steel trade, we were not affected because we're not in the EU yet. But if we join, such a war will affect us directly.
Q: So you're against allying with Germany? A: Yes, allying with the EU means allying with Germany. It's the most powerful region and the strongest economy in the European Union. The German economy is the engine that drives the entire European economy.
Q: Isn't it better to ally with this engine? A: Economically, the proposed conditions, as I've told you, are detrimental. And from the political standpoint, I'm afraid that the Germans may use their economic power to achieve their political goals here in Poland, which may not be convergent with our goals.
Q: What kind of goals do you mean? A: For instance, to gradually take over our northern and western territories. We know that old sentiments exist in Germany.
Q: You've started your own project along with the government's EU information campaign. What is this about? A: We've distributed a substantial amount of brochures, leaflets and other materials. The action will be gradually intensified. There will marches in the 49 largest Polish cities on June 22. Marches in all powiats (counties) in the fall, and in all gminas (boroughs) next spring.
Q: If you were to be named prime minister today, what key changes would you make in Poland over the next four years? A: I would try to negotiate a better trade agreement with the EU. I would try to develop very good trade relations with the United States and pursue a stronger influx of American capital to Poland. I would engage in any available opportunities involving the United States, including U.S. military technology. I would try to tie Poland economically with other Central European countries. I would strive to develop cooperation within the CEFTA (Central European Free Trade Agreement) and to include Ukraine in it. And internally we would assist Polish entrepreneurs in their development. That would require banks, because now we know that foreign banks (in Poland) are instructed not to give loans to Polish companies. These instructions come from the banks' head offices down to their Polish subsidiaries. And this blocks the development of Polish industry. Therefore, we would establish several state-owned banks.
Q: But you need a great deal of capital to establish big banks. A: The National Bank of Poland has this capital and we would definitely try to activate at least some of its currency reserves to launch these kinds of institutions. At least one big bank can be injected with additional capital, for instance, PKO BP (Powszechna Kasa Oszczędności Bank Polski) or BGK (Bank Gospodarstwa Krajowego), and turned into an engine (for the economy). Furthermore, we would base our strategy on the construction sector, as there is a substantial demand here and therefore it can become a driving force that will kick-start the entire economy. In one sentence, we would make Poland a country that trades with the entire world, that is politically, militarily and economically allied with the United States, that trades with the European Union on the best possible terms. However, we would introduce anti-dumping duties on Western food to counter-balance the direct payments. This alone would take some $1 billion off our trade deficit. We would introduce very strict supervision and severe fines for transfer pricing, which are now applied by companies with EU capital that operate here. We would also start the motorway construction plan, which is always a driver for a country's economic growth.
Q: How would you find the funding for it? A: Studies show that there is a strong demand in Poland for motorways, which makes that investment profitable, even if the investor has to wait 20 years. Therefore, it is the government that should invest and there is no reason to give this good business away to private hands. To do that, the state should activate its foreign currency reserves. Obviously, Poland must have foreign currency reserves, but we don't have to locate the entire amount in foreign bonds. We keep, for instance, billions of dollars in German government bonds. So rather than supporting foreign economies, we could instead keep this money in a Polish bank that would monitor and finance construction projects including the construction of motorways. These two elements would rapidly stimulate economic growth.
Q: You want to ally Poland with the United States and Central European CEFTA countries instead of joining the EU. But most of these countries will be in the European Union. Who would you have left to ally with? A: Whether they join is becoming less certain, when you look at trends in individual countries such as for instance, Slovakia or the Czech Republic. And Ukraine will not join anyway. The combined territory of all these countries is inhabited by more than 100 million people and is economically comparable to Russia. So it's not an area that can be disregarded or doomed to join some other bloc.
