The neighbor
By : Alexander Stocks
Whether it stems from modern, economic-minded pragmatism or the healing effects of time, relations between Poland and Germany appear to be on the mend, at least when it comes to business.
It's a sensitive topic and not everyone agrees, but that's what Polish businesspeople and members of Parliament are saying. And the success of German companies in Poland, combined with ongoing investment from that country, seem to bear it out.
Though whispered suspicions and furtive glances abound whenever the topic of German corporate takeovers hits the papers and though the phrase "anti-German sentiment" has made the rounds in Deutsche Bank's attempted takeover of BIG Bank Gdanski (BIG BG) most Poles are welcoming Germans and their deutschemarks with open arms.
This attitude represents a severe shift from the antagonism that marked the relationship for most of the decades since the end of World War II, during which Germany terrorized Poland for six years. At the same time, Germans, at least in business, have recognized Poland's economic potential and are turning their back on the idea that their Eastern neighbor is a backwater nation.
"The greatest revolution in thinking is the image of Germans in Poland," said Longin Pastusiak, an MP with the opposition Democratic Left Alliance (SLD) and deputy chairman of the Sejm's Foreign Affairs Committee. "Germany is perceived as an important Polish partner, as an ally."
Issues do exist, however. One of the most grating is the sale of Polish land, a sticking point in European Union (EU) integration talks as many Poles fear that Germans will return to buy up their former homelands around Wroclaw and Gdansk. Farmers are also concerned about possible competition from German and American companies in the agriculture sector. As a result many are pushing to keep the area closed to foreign participation.
But history, attitudes and ever-present concerns haven't dissuaded German direct investment, which has mounted to more than $16 billion since 1993, according to the Polish Agency for Foreign Investment (PAIZ). That makes the country the No. 1 investor in Poland. Direct investment from Germany weighed in at just over $6 billion in 1999 and has increased an average of 88% annually for the last five years, according to calculations based on PAIZ statistics. As a result, the country is now present in almost every sector of Polish business, from banking and insurance to telecom and automobiles.
Animosity fades
Pastusiak said hatred of Germans began fading about a decade after Worid War II and today's younger Poles respect Germany's openness, pluralism and economic success and actually strive to create a Poland "based on the image of contemporary Germany."
Janusz Lewandowski, former privatization minister and current Freedom Union (UW) deputy in the Sejm, said he sees and hears very little prejudice against Germans in Parliament. "However, there is a way of thinking that it's good to have diversified investments," he said.
The MP describes Germans as "difficult, but reliable," a reputation that stems from the nation's tough negotiating tactics. He said that Germans are always well-prepared and have excellent legal staff. The nation learned how to invest in former Soviet countries, before stepping into Poland, through experiences in the former East Germany during the early 1990s, he said.
"For sure this is going to be our No. 1 partner in capital flow I don't think the U.S. will take that lead again," said Lewandowski.
And has Poland absolved Germany of the past? "We do appreciate the very serious effort to deal with the past in Germany," Lewandowski said.
More than 60 years have passed since Hitler sent Wehrmacht troops hurtling unannounced across Germany's eastern borders, ensnaring Poles in a war of aggression that would eventually cost six million their lives and mean years of suffering, forced labor and family separation for others. The war also meant the destruction of the nation's Jewish community.
Though time heals, it also leaves scars. Executives and politicians interviewed for this article said that animosity toward Germany still lingers in Poland on an emotional level and is sometimes used in populist politics, but doesn't fly in a global business community in which partnerships and profitability take precedence.
Those partnerships have made Germany Poland's most important trading and investment partner. In 1999, Germany invested $6.08 billion in Poland, compared to $5.15 billion coming from the United States and $3.85 billion from France, according to recent figures released by PAIZ. Total foreign investment in Poland by 1999 was $38.912 billion, according to PAIZ.
Those interviewed estimate that trade with Germany accounts for about 30% of Poland's foreign trade, both imports and exports.
In the banking sector, Germany invested about $1.5 billion as of the end of September 1999, in comparison to the United States' $944.9 million, according to data provided by the National Bank of Poland (NBP). Those investments gave Germany 19.98% of shareholding capital in commercial banks in Poland, while the United States claimed 12.62%.
Of course, any mention of banking in Poland begs discussion of the Deutsche Bank-BIG BG saga. Some, like Deutsche Bank Polska's president, Rainer Muller, said that anti-German sentiment seemed to be an emotional element in a regional court's recent rejection of Deutsche Bank's bid for the 6% stake state insurer Powszechny Zaklad Ubezpieczen (PZU) holds in BIG BG.
Others said the takeover tangle has less to do with Deutsche Bank being a symbol of German banking prowess than it does with shady and unsavory behind-the-scenes deals, such as Deutsche Bank's perceived buying of PZU president Wladyslaw Jamrozy's allegiance. Jamrozy signed a secret agreement with Deutsche Bank promising to sell PZU's shares in BIG BG.
Pastusiak also said he believes Deutsche Bank's troubles have little to do with anti-German sentiment, but rather the fear that foreign companies are becoming too prevalent in Poland. Roughly 70% of the capital currently at work in Poland stems from foreign investment, Pastusiak said.
But Deutsche Bank's Muller said his view of reluctance to sell to Germans is supported by the fact that Polish politicians had no problem selling Bank Handlowy, one of the largest commercial banks in Poland, to the U.S.' Citigroup. "(Handlowy) is Polish history. This represents the Polish banking tradition," Muller said, noting that BIG BG is not nearly so dear to Poland. "There are fears with regard to German influence, but there are no fears with regard to American influence."
Aside from Deutsche Bank's current stalemate, which is expected to end soon with the German bank taking over BIG BG, Muller said business relationships in Poland have been positive. "As far as our business partners are concerned, there's not the slightest problem," he said. "They act rationally."
Living in Poland has never presented any problems either. "I've never felt any animosity because I'm a German," he said.
As for fears and historical mistrust that sometimes "just get mixed up" in public discussion, Muller said he understands why some of the older generation feel the way they do. "(History) is very much still on the minds of the people," he said. "As time goes by it will fade, but it will never disappear These are emotions and you can't argue against this."
Mixed perceptions
Not everyone is ready to let bygones be bygones, however. Some Poles interviewed for this article said that there will forever be a shadow of initial mistrust when doing business with Germans. In view of the past, "It's always on the back of your mind," said one 27-year-old professional Warsaw woman who asked not to be identified. "It's still alive (Poles and Germans) do business together because they want to get money. That's it."
The same woman said she has several "good" German friends, but also remembers being raised on tales in which Germans were often the villains.
Others said they make no distinctions between Germans and other foreigners. "There may be some reserve against the Germans," said Jerzy Becz, development director of AmRest, which manages the Pizza Hut and Kentucky Fried Chicken restaurant chains in Poland and the Czech Republic. "I personally don't feel anything and I doubt that young people have anything against Germans."
Still others, such as the owner of a Warsaw real estate firm, said they wish more Poles possessed the trademark organizational skills, efficiency and work ethic often attributed to Germans.
Studies conducted in 1997 by the Pentor Institute in Warsaw recorded Poles' opinions on a variety of issues relating to Germany. Of those surveyed from various professions and age groups, 24% of men and 18% of women said that "reconciliation" between Poland and Germany is "definitely possible" while 48% and 50% said it was possible "in principle."
According to the same study, 10% of Polish men and 11% of Polish women believe World War II impacted Poles' attitudes about Germans "a lot," while 26% and 31% believe it had "quite a bit" to do with attitudes. A considerable 51% of men and 43% of women felt the war had only "a bit" of an effect on present thinking.
When asked if they like Germans, 1% of men and 2% of women said they "really like" their neighbors. A larger portion, 32% of men and 36% of women said they "rather like" them, and 63% and 57% said they "rather dislike" them. A small 4% of men and 5% of women said they "really dislike" Germans.
Reconciliation
Anybody who has spent time in Germany knows the distance the humbled nation has traveled to redress the Nazi deeds and passive non-deeds of parents, grandparents and fellow countrymen. After decades of denial following its World War II defeat, Germany has explored its bitter history over the past decades, the executives and politicians interviewed for this article said.
People like Muller and Matthias Klause, press spokesman for the German Embassy in Warsaw, spoke with candor about their nation's past and the responsibility Germans feel to make amends. Most Germans have watched without protest as taxes and government monies have gone toward reparations, special funds and aid to poorer nations.
One recipient of German government funding is the Foundation for Polish-German Reconciliation in Warsaw, which opened its doors in 1992. In addition to other activities, it is a foundation for former World War II slave laborers and those seeking compensation from German companies and government. It has received more than 700,000 requests from Poles seeking restitution and was active during the landmark compensation deal reached by U.S. and German negotiators in December 1999 in Germany. Now thousands of people forced to work for the Nazis and German companies will be compensated through a slave labor restitution fund worth $5.2 billion.
Muller said conscientious Germans feel a heightened need to act fairly and cautiously and to "behave as good, competent citizens (and) not to try to achieve something through pure strength."
Still healing
Witold Orlowski, an economist with the Independent Institute of Market Research (NOBE), said that trust relationships take time. "People don't just forget overnight Obviously there is anti-German sentiment," he said.
On the other hand, he said, "Direct comparisons to history do not work in the modern world."
"There is a mix of rational and irrational fears," he said. "I think the majority of them are irrational."
Explaining the rational fears, Orlowski said citizens of any country would prefer to keep wealth in the hands of its nationals. When rich neighbors from Germany begin buying everything, people get concerned-and justifiably so, he said. He compared the situation to those seen sporadically in the United States over the last several decades when the business community became "hysterical" over the prospect of the Japanese buying-out America.
And some history is relevant, Orlowski said, bringing up Gdynia and Poznan. In Gdynia during the 1920s, he said, people were taught in school to "build Gdynia" as a way of defeating Germany economically. During those years, the proud, industrious port city was in the midst of the German Reich and the only city on the Baltic Sea belonging to Poland. Poznan similarly managed to keep Otto von Bismarck and the Prussian government from buying all of its land by establishing cooperative banks and successful businesses, Orlowski said, thus winning another round against the Germans.
It's not difficult to decipher why land issues are sensitive and Poland is requesting the EU to grant it a transition period for land sales to foreigners, he said.
In terms of general investment, however, the economist said that Poland needs investors and that "it's better to have a Germany investing than no investors at all."
No purchasing bias
And if Opel Polska's success is any indication, Polish consumers harbor no qualms when given the chance to buy German engineering and quality. The automaker saw record sales in Poland of 60,100 vehicles in 1999, said Zbigniew Lazar, public relations manager for Opel Polska and GM Poland. That put Opel in a distant third place in car sales as compared to Fiat, which sold 180,200 cars, and Daewoo, which moved 179,414 cars, according to Opel figures.
Lazar said that even though GM-owned Opel may have an advantage "We are perceived both as German and as American" the reputation of German engineering as one of the best in the world has only helped.
"We haven't encountered any resentment," Lazar said.
In fact, when Opel built a new manufacturing plant in Gliwice, an area of Silesia once known as Gleiwitz under German occupation, and provided employment for 2,500 people, many of whom were unemployed miners, nobody complained. The plant opened in October 1998 and will boost Opel's production in Poland to 150,000 next year, Lazar said.
"It's not that we came and bought out a plant and sacked half the workforce," he said. "We showed the way and we encouraged."
Since Opel's arrival, a number of other firms, including auto supplier VAB, GM-owned Isuzu and Spanish porcelain and household accessory company Roca have set up shop in Gliwice.
Volkswagen, one of the world's most familiar German car companies, has a plant in Poznan and sold 16,919 cars in 1999. VW received considerable press coverage in the past year relating to its use of slave labor during World War II. That may have affected sales, but then again VWs are more expensive than Opels. No VW spokesperson was available for comment.
Globalization
Klause, a German embassy spokesman, said he believes that nationality will be increasingly irrelevant as the global economy creates conglomerates hungry for new foreign markets.
Multinational corporations are not interested in history or in people's feelings, he said, adding that "their figures speak a different language."
Germany invests in Poland on a large scale, he said, because, "The best basis for a partnership is common interests and there are these common interests."
Klause said he believes the business world has the best chance of overcoming stereotypes and political differences. He emphasized, however, that Germany goes to great lengths to explain its policies and reasons for promoting global business. The once-militant country has proven in numerous ways it has no intentions of ever again attempting to dominate the continent, he said.
If Germany did have ulterior motives, he said, it wouldn't have shown support for an integrated Europe by joining the EU. Also, he said, it would have held on to the potent deutschemark and not traded it in for the euro.
Klause, who is about to end his three-year stint in Warsaw, said he's never had a hostile encounter in Poland because he's German. And with half the Polish population under 30, he said, a "common future" for Europe, though perhaps a cliche, is not too far off.
