Radoslaw Sikorski: I fear Germany’s power less than her inactivity
"The break up of the eurozone would be a crisis of apocalyptic proportions, going beyond our financial system", Financial Times quotes Sikorski's speech he gave in Berlin on Monday.
Once the logic of "each man for himself" takes hold, can we really trust everyone to act in a communitarian way and resist the temptation to settle scores in other areas, such as trade? Would you really bet the house on the proposition that if the eurozone breaks up, the single market, the cornerstone of the European Union, will definitely survive? After all, messy divorces are more frequent than amicable ones.
If we are not willing to risk a partial dismantling of the EU, then the choice becomes as stark as can be in the lives of federations: deeper integration, or collapse. Moves to bring greater discipline to member states’ finances are a step forward. When drawing up national budgets, finance ministers will have to show their books to their peers. Members of the eurozone who break the stability and growth pact will face sanctions that are almost impossible to block. Rules may be introduced not as directives but as regulations.
Also, as long as the European Council sets in stone tough new rules, the European Central Bank should become a proper central bank, a lender of last resort that underpins the credibility of the entire eurozone. But more is needed. It is crucial we maintain coherence between the eurozone and the EU as a whole. Instead of organising separate euro summits or exclusive meetings of finance ministers, we can continue the practice from other EU forums where all may attend, but only members vote.
A critical issue is whether Britain, such an important member of the EU, can support reform. The eurozone’s collapse would hugely harm Britain’s economy. The UK’s total sovereign, corporate and household debt exceeds 400 per cent of gross domestic product. Can London be sure markets will always favour it? We would prefer Britain in, but if it can’t join, please allow us to forge ahead. And please start explaining to the British public that European decisions are not Brussels’ diktats but results of agreements in which you freely participate.
Poland can play an important role in saving Europe. In the past four years, our accumulated growth of GDP amounted to 15.4 per cent. The second highest in the EU, with 8 per cent? Yes, a member of the eurozone – Slovakia. The EU average is minus 0.4 per cent. To those who would like to divide Europe, I say: how about a natural division into growth-Europe and non-growth Europe? But be forewarned. Their shapes would not conform to stereotypes. We were one of the first countries to introduce in our constitution a public debt anchor, and we are not resting on our laurels.
By the end of this parliament, Poland will fulfil the criteria of membership in the eurozone. That is because we want it to flourish. And we plan to be in it. But we have much to ask of Germany.
We ask Berlin to admit that it is the biggest beneficiary of current arrangements and that it therefore has the biggest obligation to make them sustainable. As Germany knows best, she is not an innocent victim of others’ profligacy. In addition, Germany, which should have known better, broke the stability and growth pact, and its banks recklessly bought risky bonds.
Because investors have been selling the bonds of exposed countries and flying to safety, Germany’s borrowing costs have been lower than they would have been in normal times. But if Germany’s neighbours’ economies stall or implode, it will suffer too. And despite Germany's understandable aversion to inflation, she has to appreciate that the danger of collapse is now a much bigger threat. Jurgen Habermas has wisely said that: "If the European project fails, then there is the question of how long it will take to reach the status quo again. Remember the German revolution of 1848: when it failed, it took us 100 years to regain the same level of democracy as before".
What, as Poland’s foreign minister, do I regard as the biggest threat to the security and prosperity of Poland in the last week of November 2011? It is not terrorism, and it is certainly not German tanks. It is not even Russian missiles, which President Dmitry Medvedev has just threatened to deploy on the EU’s border. The biggest threat to the security of Poland would be the collapse of the eurozone.
I demand of Germany that, for its own sake and for ours, it help the eurozone survive and prosper. Nobody else can do it. I will probably be the first Polish foreign minister in history to say this, but here it is: I fear German power less than I am beginning to fear its inactivity. You have become Europe’s indispensable nation. You may not fail to lead: not dominate, but to lead in reform.
There is nothing inevitable about Europe’s decline. But we are standing on the edge of a precipice. This is the scariest moment of my ministerial life. Future generations will judge us by what we do, or fail to do: whether we lay the foundations for a sound future, or shirk our responsibility and acquiesce in decline.