Przemówienie Sikorskiego na forum Niemieckiego Towarzystwa Polityki Zagranicznej

“Poland and the future of the European Union”

Mr President, Minister – dear Guido, Ladies and Gentlemen,

Let me start with a story.

20 years ago, in 1991, I was a reporter, visiting what was then the Federal Republic of Yugoslavia. I was interviewing the chairman of the Republican Bank of Croatia when he received a phone call with an obscure piece of news. Namely, that the parliament of another Yugoslav republic, Serbia, had just voted to print unauthorized amounts of dinars, the common currency.

Putting down the phone the banker said: "This is the end of Yugoslavia."

He was right. Yugoslavia collapsed. So did the 'Dinar zone'. We know what followed. Issues of money can be issues of war and peace, the life and death of federations.

Today Croatia, Serbia and FYROM each have their own currency.

Montenegro and Kosovo are not in the Euro zone but simply use the Euro. Bosnia and Herzegovina even has the 'Convertible Mark', pegged to the Euro.

A striking story. Not of European integration. Of European disintegration.

Disintegration with appalling human cost.  Only now is the region slowly moving back to the European mainstream.

The fate of Yugoslavia reminds us that money, as well as being a technical device, a 'means of exchange', symbolises unity – or disunity.

Why is this? Money exists because communities exist. A community in which people live and trade – they exchange freely – creates value. Their money symbolises that value.

This moral significance of money intrigued Immanuel Kant, who wrote that the entire practice of lending money presupposed at least the honest intention to repay. If this condition were universally ignored, the very idea of lending and sharing wealth would be undermined.

For Kant, honesty and responsibility were categorical imperatives: the foundation of any moral order. For the European Union, likewise, these are the cornerstones. I would point to the two fundamental values: Responsibility and Solidarity. Our responsibility for decisions and processes. And Solidarity when it comes to bearing the burdens.

Today, as the first Polish Presidency is drawing to a close, I will tackle basic questions:

How did we get into this crisis?

Where do we go from here?

How to get there?

What does Poland bring?

What do we ask of Germany?

*  *

First question: how has the Euro zone got into its current difficulties?

Let me first say what this crisis is not about. It was not caused – as some have suggested – by enlargement.

Enlargement has created growth and wealth all over Europe.

The EU15 exports to the EU10 countries rose almost twofold in the last ten years. It's even more striking if you break it down by countries.  Britain's export to the 10 countries that joined after 2004 rose from €2.2 bln in 1993 to €10 bln last year; France's, from €2.7 bln to €16 bln, Germany's, wait for this – from €15bln to 95 billion Euros.  The total volume of trade between EU15 and EU10 amounted to €222 bln last year, up from €51 bln in 1995.  A tidy sum.  I guess it sustains a job or two in Old Europe.

So, enlargement – far from causing the crisis, has arguably delayed the economic turmoil. Thanks to the advantages of trading in an enlarged market, West European welfare states have been forced to face reality only now.

If the upheaval is not about enlargement, then perhaps it is a currency crisis?

Not exactly.  The Euro is doing fine versus the dollar and other currencies.

It is of course partly about debt, the need to deleverage our economies from the crazy heights caused by government overspending, accounting chicanery and irresponsible financial engineering.  And the deleveraging is occurring beyond the Euro zone: look at the UK with its debt of 80% of GDP and the US, with 100%.

But if it were only a question of debt, you would expect ratings and spreads to be affecting countries in proportion to their indebtedness. But, very strikingly, this is not the case.  Some countries, such as the UK and Japan, with high debt in proportion to GDP, pay low premiums.  Others, with lower debt – like Spain, pay high ones.