Poland: Background and Current Issues
Released: 2005-06-21T00:00:00

Introduction

Geographically and by population, Poland is the largest of the countries recently admittedinto the European Union (EU) and NATO; with 38 million citizens, Poland is now the 6th mostpopulous country in the EU. And with strong growth rates and a GDP exceeding $200 billion, it isa major player economically, especially in Central and Eastern Europe. Some foreign policy analystsargue that, if it continues on its current path, Poland may well emerge as a leading nation in Europe-- particularly within the EU and NATO. This report provides background information on recentU.S.-Polish relations, a summary of Poland's political situation and economic conditions, and adescription of Poland's major foreign policy initiatives, mainly with neighboring states.

Poland and the United States

Poland and the United States have enjoyed close relations over the years. The Reagan andGeorge H. W. Bush administrations actively supported Poland's efforts to shake off communism. The Clinton Administration strongly advocated Poland's candidacy for NATO membership,beginning with Clinton's speech before the Polish parliament in 1994 and ending with his signatureon the instruments of ratification on May 21, 1998. President George W. Bush visited Poland duringhis first official trip to Europe in June 2001; then-National Security Advisor Condoleezza Rice hascharacterized Poland as a "strategic partner" to the United States. (1)

Warsaw has been a particularly reliable supporter and ally since the terrorist attacks ofSeptember 11; it has aided U.S. efforts in the global war on terrorism, and has contributed troops tothe U.S.-led coalitions in both Afghanistan and Iraq. Over the past year, however, many Poles haveconcluded that their country's involvement in Iraq has increasingly become a political liability,particularly on the domestic front. With elections likely in 2005, the government announced inDecember 2004 that it would maintain a presence in Iraq, but that troop levels would be drawn downafter the January 30 Iraqi elections. Some Poles are of the view that their loyalty to the United Stateshas gone unrewarded, and hope that the Bush Administration still might respond favorably to Polishrequests for increased military assistance, Iraq reconstruction contracts to Polish firms, and changesto in U.S. visa policy.

The Global War on Terrorism

Poland has been a staunch supporter, both diplomatically and militarily, of the U.S.-led waron terrorism. In a March 2002 address, Polish President Kwasniewski pressed the internationalcommunity to restrain its criticisms of the United States; he reminded his audience that "Americansoldiers ... were the first to stand up to the evil" of terrorism. In December 2004, after visitingPoland to assess its efforts in the war on terrorism, a team of EU officials announced that they hadfound the counter-terrorism services to be "professional and enthusiastic." (2) Poland has also supported EUefforts to improve law enforcement cooperation against terrorism.

Poland has contributed military engineers, logistics personnel, and commandos to theInternational Security Assistance Force (ISAF) in Afghanistan, where Poles are assisting in mineremoval. Currently, 200 Polish troops -- chiefly combat engineers -- serve in Bagram. During aJuly 2004 visit to Kabul, Polish Prime Minister Marek Belka urged other NATO members toincrease their troop commitments to ISAF; he mentioned Germany by name. (3)

Most observers believe that the Poles' determination to cooperate with the United States inthe global war on terrorism spans political parties, and that this resolve will remain unchanged,regardless of who might win the next elections.

Iraq

When Poland joined the U.S.-led coalition in the war to topple Saddam Hussein in early2003, it was acting with historical consistency. During the 1991 Gulf War, Warsaw joined themultinational coalition that pushed Iraq out of Kuwait, providing rescue ships and medical staff. After the conflict, Poland served as the United States' diplomatic go-between, and represented U.S.interests in Baghdad for the next decade. It was the first time the United States had called upon aformer communist country to play such a role. (4)

Unconfirmed reports have indicated that, in 2003, approximately 200 Polish special forcestroops participated in Operation Iraqi Freedom -- the initial combat portion of the Iraq conflict. Itis said that the commandos were already present in Iraq before hostilities were launched, and thatthey worked in close cooperation with U.S. Navy SEALs and other special operations units.

Since the end of declared hostilities, Poland has also contributed substantially to post-warpeacekeeping efforts. Its military contingent of 2,500 troops made it the third largest in themultinational stability force. On August 25, 2003, Poland assumed command of one of threemilitary sectors. At its peak, the command consisted of more than 9,000 troops, from Europe, Asia,and Latin America; the Polish-led division has also received intelligence, communications, andlogistics support from NATO. Because some countries have reduced or withdrawn their troops, totalstrength of the Polish-led contingent as of June 2005 was estimated at around 4,000.

Several incidents related to Iraq captured the attention of Poles at home. In July 2004, agroup calling itself the Al Qaeda Organization in Europe posted on its website a warning that Polandand Bulgaria would suffer terrorist attacks similar to the March 2004 bombings in Madrid unlessthey pulled their troops out of Iraq. The Polish deputy defense minister said the government wouldnot cave in to such demands, but the Madrid bombings may have increased Poland's sense ofvulnerability to such attacks. In October, armed insurgents in Iraq kidnaped a Polish citizen; she wasreleased unharmed the following month. Finally, Poland has suffered several casualties in Iraq; todate, it has lost 17 military troops and 4 civilians, including a well-known television reporter. Over100 Poles have been wounded.

In May 2004, following revelations of prisoner abuse at Abu Ghraib, a poll found that Polishopposition to the troop deployment had surged from 60% to 74%. Later that month, shortly beforea parliamentary confidence vote, Defense Minister Szmajdzinski said that the Poland wanted to"significantly reduce our presence" after Iraq's January 2005 elections. In a series of subsequentpronouncements -- some contradictory -- government officials continued to affirm that their country'stroop levels would be reduced. Finally, in December, dates and numbers were provided: Polandwould withdraw up to 700 troops after the Iraqi elections, and that a decision on the remainder ofits contingent would be made after the vote. In early February, during a joint press conference withSecretary of State Rice, Polish Foreign Minister Rotfeld stated that the Iraqi elections had "totallychanged our optics on Iraq." This new perspective does not appear to have affected the pulloutdecision, however; the government has since announced that as many as 300 additional troops wouldreturn to Poland by August, and that all Polish soldiers would exit Iraq when the UN multinationalforces mandate expires in December 2005. Warsaw will likely continue to support NATO trainingof the Iraq officer corps. (5)

Although the reaction to the March 11, 2004 Madrid bombing and the inmate mistreatmentat Abu Ghraib were the main reasons cited by the media for Poland's downsizing of its militarycontingent in Iraq, other factors also played a role. For example, the stabilization mission in Iraq hasbeen a difficult one for Poland in terms of both scope and location. Iraq has been the country'sbiggest combat deployment, and the country's climate has presented special challenges. In addition,the cost of the Iraq mission has been burdensome to Poland. In an April 2005 announcementdetailing further troop cutbacks, Defense Minister Szmajdzinski stated that the deployment had costPoland $210 million. (6) Polish officials also note that the cost of the Iraq mission has necessitated a postponement ofPoland's defense modernization.

Bilateral Irritants

Observers point out that, despite the human casualties and financial costs their country hasborne, Poland has not reaped significant, tangible benefits for its presence in Iraq. In particular,Polish officials and others note three sensitive areas related to the United States: Iraq reconstructioncontracts, military assistance, and a waiver from U.S. visa requirements. (7)

Iraq Reconstruction Contracts. In an October2004 interview, former Polish Foreign Minister Cimoszewicz was asked to comment on Poland'sexpectations of being awarded "lucrative" contracts to help rebuild Iraq; he replied that "[i]t is truethat many Polish companies expected to become involved in the economic reconstruction of Iraq,and that has not happened." (8) The Economist Intelligence Unit (EIU) noted that "Washington'sdecision to reward the biggest [Iraq reconstruction] contracts to a few US companies has stokedresentment in Poland." (9) U.S. officials were aware of this disappointment and tried to correct the situation. In December2004, for example, it was announced that Iraq had agreed to purchase military materiel from Poland,including helicopters and ground transportation vehicles, and in late January another Polish defensecompany landed a large contract. Other contracts reportedly were under negotiation. Someobservers suggest that perhaps Poland's expectations for offsetting contracts were too high.

Military Aid. On defense-related assistance,Polish officials note that their army is still in transition, and that Iraq has put a severe strain on itsresources; Deputy Defense Minister Janus Zemke commented that "[w]e simply will not be able tosqueeze more of our own budget for military procurement. At the same time, these huge outlays forIraq are delaying the final transformation of our armed forces. It is a fundamental problem." Polesalso have complained that their country received U.S. military aid packages similar in size tocountries that had sent far smaller contingents to Iraq. Some Polish policymakers hoped that theUnited States would help offset the steep costs by stepping up its military assistance to Warsaw. InFebruary 2005, President Bush pledged to seek $100 million in such aid to Poland. The funds weresubsequently requested, as part of a supplemental appropriations bill. Congress approved a $200million "Solidarity Fund" intended to help countries that had contributed troops to Iraq. However,because the contingency fund covers several countries, it is uncertain whether Poland will receivethe full amount that President Bush sought to provide. Poland will also likely receive $32 millionin regular military assistance requested by the Administration for FY2006. (10)

Visa Waiver. Finally, Warsaw has hoped for awaiver of the U.S. government requirement that Poles traveling to the United States for three monthsor less carry a visa; currently applicants pay a $100 non-refundable fee, and then submit to aninterview at a U.S. embassy or consulate. U.S. policy is grounded in the belief that if somecountries, including Poland, received a waiver of the visa requirement, too many of their citizenswould travel to the United States and remain illegally. Analysts note that Poland has failed to meetthe qualifications for the visa waiver program. The Polish government argues, however, that Polandis no longer under Communism, and is no longer desperately poor -- two major incentives in the pastto leave the country. They also point out that millions of illegal immigrants are already living in theUnited States. Polish leaders have raised the issue with their U.S. counterparts. At the conclusionof the latest Bush/Kwasniewski meeting, the two sides announced that they had agreed upon a"roadmap" of steps aimed at helping resolve the issue. Although details of the plan have not yet beenmade public, it would reportedly eliminate certain outdated information requirements. Also,Members of Congress have submitted legislation on this issue; in the 109th Congress, SenatorsSantorum and Mikulski introduced S. 635 , which would add Poland to the list of 27countries on the visa waiver program. Representative Jackson-Lee's bill, H.R. 634 ,would do the same thing, with certain conditions. (11) Other Members of Congress, however, generally oppose theexpansion of the visa waiver program because of security concerns.

Domestic Developments

Political Situation

Poland has had an eventful political scene in recent years. Since 2001, two prime ministershave fallen; analysts believe that both turnovers may be attributed to what the Financial Times (FT) called "the constant drip of scandals and sleaze in the Polish body politic." (12) And although it hassteered the nation into the EU, nurtured a strong economy, and weathered two confidence votes, thecurrent government's days are numbered, in the eyes of many.

In their last parliamentary elections, held in October 2001, Poles ejected the incumbentcenter-right parties. Leszek Miller, head of the Democratic Left Alliance (SLD) became the newprime minister, replacing Jerzy Buzek of Solidarity Electoral Action (AWS). The SLD joined incoalition with the Union of Labor (UP), and the Polish Peasants' Party (PSL); together, theycommanded a majority of the seats in the lower house of parliament, the Sejm . The centrist,pro-market Civic Platform (PO) party became the main opposition; the remainder of the seats wasdivided among the radical nationalist Self-Defense party, and the League of Polish Families (LPR),an ultra-conservative party aligned with the Catholic church. AWS failed to pass the thresholdrequired to be seated in parliament. (13)

In the meantime, Poland has been rocked by several high-profile scandals. In March 2004,as a result of one of the incidents, more than two dozen MPs left the SLD. The defectionsprecipitated Miller's resignation and left his successor, former Finance Minister Marek Belka, in aweak position.

The SLD can boast of two years of robust economic growth, as well as the attainment ofPoland's long-sought entry into the European Union, but these achievements may not be enough forPolish voters. Indeed, many believe that in the next elections, the SLD, tainted by scandals andhobbled by the growing unpopularity of involvement in Iraq, will lose even more support and thatthe center-right parties will prevail. Some observers believe that two parties -- the PO and theconservative Law and Justice (PiS) -- may win enough votes to form a government, but may needthe support of LPR. Elections are scheduled for September 2005. (14)

In October 2000, Aleksander Kwasniewski of the SLD won a resounding electoral victoryand a second five-year term as President. For most of his tenure, Kwasniewski consistently toppedpublic opinion polls, and was usually voted the most popular politician in the country. However,because of a two-term limit, he will

be unable to run in the next presidential elections, which are set for October 2005.

Economic Conditions(15)

The Polish economy is among the most successful transition economies in east centralEurope; all of the post-1989 governments have generally supported free-market reforms. Today theprivate sector accounts for over two-thirds of economic activity. In recent years, Poland has for themost part enjoyed rapid economic development. After two years in the doldrums, Poland's GDPgrew by 3.8% in 2003, and is estimated to have reached 5.3% in 2004. Forecasters predict thatPoland's economy will continue to grow in the 4-5% range in 2005. Unemployment, however, stoodat 19.3% in April 2005 -- the highest in the European Union.

The Polish economy's rebound from its 2001-2002 slump was largely led by an increase inexport sales, a testament to the importance that trade -- which accounts for nearly half of GDP --plays in Poland's economy. Once reliant upon sales to the Soviet bloc, Poland today sends itsexports overwhelmingly to countries belonging to the EU, which Poland, along with 9 other mostlyeastern European countries, joined on May 1, 2004. In 2003, Germany alone purchased one-thirdof Poland's exports and supplied one-fourth of its imports.

Economic report cards issued by international organizations have given Poland mixedreviews. In a review measuring progress on reforms, the European Bank for Reconstruction andDevelopment ranked Poland fourth-highest among 27 former communist countries; while praisingPoland's price liberalization and business privatization, it recommended that the country improveits investment climate, reform its labor market, restructure its agricultural sector, and tighten its fiscalpolicy. Transparency International's 2004 Corruption Perceptions Index put Poland in 67th place outof 145 countries and last among EU members. The Organization for Cooperation and Developmentin Europe found Poland's labor market to be the "worst performing in all its 30 rich-countrymembers," faulting Poland's "high payroll tax, minimum wage, and firing restrictions [as]impediments to hiring new labor." Finally, in the World Economic Forum's 2004 GlobalCompetitiveness Index, Poland appeared in 60th place out of 105 countries, a decline from 45th placein 2003. (16)

For both commercial and political reasons, agriculture is an important part of Poland'seconomy. The farming sector is highly inefficient by U.S. and west European standards: althoughagriculture is responsible for about one-fifth of all employment, it accounts for only 3% of GDP. Nonetheless, Poland is the largest food producer of the ten countries that recently joined the EU, andagriculture was a major sticking point in Warsaw's accession negotiations. Poland's farmers largelyopposed membership, fearing that competition with western European producers, who are moreefficient and receive higher subsidies, would drive many Poles out of business. These sentimentswere exploited by Andrzej Lepper, populist leader of the Self Defense party. Lepper sought to attractsupport by various -- often illegal -- means, including destroying railcar loads of imported grain,blockading highways, and occupying the agricultural ministry building.

Despite their misgivings, nearly all Polish farmers applied for EU subsidies. After Polandbecame an EU member, agricultural exports and commodity prices rose steeply, and producers --including Mr. Lepper -- began to receive checks from Brussels. In addition, the EU has pledged tofund half of the cost of modernizing Polish farms. The rather sudden economic advantages of beingin the EU have impressed rural Poland, and have already dampened support for anti-EU politicalprotest parties. (17)

Corruption is a common theme that runs through discussions of Poland's political andeconomic scene. Although most observers deplore what they characterize as widespread graft, somecontrarians have argued that, because Poland now has free and active media, this issue may be akind of reverse iceberg. According to this view, instances of corruption are being revealed in alltheir detail today, rather than being swept under the carpet, as they were in the past. Not only havethese recent cases been reported in newspapers, commission investigations have been aired onnational telecasts. The fact that one hears so much about corruption may actually be a good thing,they argue, as it could result in more active pursuit of such crimes by law enforcement authoritiesand in lower societal tolerance of corruption, especially at higher levels of business andgovernment. (18)

Nevertheless, some worry that Poland's most recent high-profile political scandals may beinflating its reputation for graft and contributing to the creation of an anti-business atmosphere. Butin spite of its poor recent showing in surveys that attempt to measure corruption andcompetitiveness, Poland has continued to attract foreign funding. To encourage continuedinvestment, Poland maintains a low corporate tax rate -- about one-half that of Germany. Over thepast year, there have been reports of several U.S.-based firms entering or expanding their activitiesin the Polish market, including Boeing, Smithfield Foods, Wrigley, and General Motors.

Foreign and Security Policy

Security Issues

Like most of the former Warsaw Pact countries, Poland was quick to shift its security orientation to the West after the collapse of Communism. It signed up for NATO's Partnership forPeace program in 1994, and began the process of defense modernization. In 1999, along withHungary and the Czech Republic, Poland became a full-fledged member of NATO.

Modernization. Modernization has been high onthe list of defense priorities. In 2003, Poland signed a $3.5 billion contract with U.S. aircraftmanufacturer Lockheed Martin for 48 new F-16 fighters. Poland is using U.S. Foreign MilitaryFinancing to purchase communications equipment, navigational aids for airfields, Humvees, and C130 cargo aircraft. (19) Polish officials maintain that the assistance is being spent well and has benefits for the United States,as much of the funds are being re-invested in U.S. industries on items that are interoperable withU.S. equipment. Poland has set a goal of having 60% of its military be professional by 2006. Observers note that the Iraq deployment is providing the Polish military with invaluable experience,not the least of which includes commanding a multinational division. (20)

NATO. Since beginning accession negotiations,Poland has sought to meet its NATO obligations. Between 1999 and 2002, the government spentaround 2.0% of GDP on defense, equal to or slightly above the non-U.S., alliance-wide average. ThePoles have also sought to comply with NATO's Prague Capabilities Commitment, the most recentof the alliance's initiatives to enable members collectively to respond better to out-of-area missions. Warsaw has done so by developing so-called "niche capabilities;" for example, as noted above,Poland already is able to deploy experienced special forces units, and is acquiring tactical airlift. Inaddition, Poland will be developing units trained in counter-nuclear, biological, and chemicalwarfare.

Poland has also negotiated over the use of its territory for NATO and U.S. military facilities. In June 2004, the alliance opened a Joint Force Training Center in Bydgoszcz for high-rankingofficers. Poland has been modernizing its airfields. Airstrips are being rebuilt according to NATOspecifications, but will also be able to meet U.S. standards; for example, they will be able toaccommodate C-17 transport aircraft. Poland can offer large field training areas where allies couldconduct live-fire exercises with, for example, tanks or attack helicopters, and Poland also has areasthat would be suitable for Stryker armored combat vehicle training maneuvers.

Missile Defense. Poland has taken a differentpath than some European countries on the issue of the U.S. missile defense system; Warsaw maybecome a participant in the program. Both sides reportedly are interested and have established aJoint Missile Defense Working Group. In July 2004, Washington and Warsaw announced that theyhad begun "preliminary" discussions on basing interceptor missiles on Polish soil (the CzechRepublic is also said to be under consideration).

Foreign Policy Issues

Poland's foreign policy ranges energetically in all directions of the compass, but it is to theeast and west that Poland's major initiatives have been directed. To the east, Poland has been achampion of democracy in Ukraine and has had an active diplomacy toward Belarus and Russia. And to the west, Poland strenuously worked to integrate with pan-European institutions -- the EUand NATO -- the cornerstone of its post-communist period foreign policy.

Ostpolitik. Poland has sought to encouragedemocratization of Belarus and Ukraine not only on principle, but also for the practical reason thatdoing so should improve Poland's security by establishing a buffer zone between itself and Russia.

Belarus. Recent relations between Warsaw and Minskhave been tense. Poland criticized the conduct of Belarus' October 2004 parliamentary elections andreferendum permitting strongman Alexander Lukashenko to serve a third presidential term. Warsawalso urged Belarus "to drop authoritarian practices that are inconsistent with the main Europeanvalues of all modern democratic countries." The official Belarusian press bureau accused the Polishmedia of "tendentiousness" in covering the October votes. Poland's recent approach to Belarus hasstressed maintaining some low-level ties as well as links to civil society, while shunning high-levelgovernment-to-government contacts. Key issues for Warsaw include border security and the statusof the ethnic Polish minority in Belarus. President Kwasniewski characterized Polish policy towardBelarus as one of "determination and delicacy." (21)

Ukraine. Poland has for years encouraged Ukraineto integrate with the West and thereby wean itself from Russian influence. Poland played a key rolein helping defuse Ukraine's 2004 political crisis. On October 31, Ukraine held presidential elections,and a runoff vote was held on November 21. Giant protests erupted after it became clear that thevotes had been far from free and fair. Poland -- including the parliament, the government, andprivate citizens -- became involved at the outset. In October, the Sejm passed a measure urging theUkrainian government to "respect democratic standards." (22) Later, thousands of Poles demonstrated throughout their countryin support of Ukraine's "orange revolution." After the first runoff, former Ukrainian PresidentKuchma contacted Kwasniewski and asked him to help negotiate a peaceful settlement. Kwasniewski served as a mediator, along with Lithuanian President Vladas Adamkus and by JavierSolana, head of the EU foreign policy office. These negotiations led to a new vote, in whichdemocratic reformer Viktor Yushchenko was elected. Some EU governments seeking good relationswith Moscow initially opposed the EU aiding Ukraine out of concern of offending Moscow; westernEuropean diplomats state that it was Poland that persuaded the EU to assist Ukraine.

Russia. During the current decade, Poland hasattempted to normalize its ties with Russia, which were strained after the expulsion in 2000 of nineRussian diplomats on charges of spying, among other issues. During his inaugural address inOctober 2001, Prime Minister Miller said that Poland would seek to carve out a role as the linkbetween the West and the countries of the former Soviet Union. The following month, PresidentKwasniewski indicated that Poland could act as a go-between for the West and Russia. (23) Poland has had severalconcerns with Russia over the past couple of years, however. First of all, it has had to contend withRussian resentment over its efforts to build ties with -- and inculcate democracy in -- Ukraine andBelarus. In addition, Russian President Putin was reportedly angry over the manner in which thePolish media covered the terrorist incident in Beslan, as well as the ongoing conflict in Chechnya. At the same time, Poland has tried to placate Russia for economic as well as geopolitical reasons:Russia is its chief supplier of oil and natural gas.

During a December interview with a journalist, Kwasniewski faulted Russia's interventionin the Ukrainian elections, concluding that "[e]very major international power would rather seeRussia without Ukraine." (24) The remark drew a sharp response from Russian President Putin,who attacked Kwasniewski's motives and essentially told him to mind his own business ("I thinkPoland has enough problems of its own that need solving.") The spat was quickly patched over, butit revealed a sensitivity over the opposing roles played by the former allies in the Ukrainian politicaldrama.

European Union. In May 2004, as noted above,Poland fulfilled a long-term foreign policy goal when it joined nine other countries in becoming amember of the European Union. Poland has reaped tangible economic benefits from membership,and has been an active political player in the EU. Warsaw was not reluctant to assert itself beforejoining the EU and will likely be even less hesitant to do so now that it is a member. On severalissues, Poland staked out positions intended to advance its interests and values:

EU Security Policy. Poland's initial skepticism aboutthe European Security and Defense Policy has changed to "cautious enthusiasm," according to oneobserver. Poland supports the development of an EU military capability, but not at the cost ofweakening NATO. In a February 2005 interview, Defense Minister Szmajdzinski was insistent thatany EU defense structure should "complement and not ... compete with NATO." This is in line withU.S. policy. Poland also announced that it would join the newly-created European military police,a 900-strong force intended for international deployment. (25)

Christian Heritage. Poland, joined by Italy and severalother mostly Roman Catholic countries, called for the preamble of the EU "constitution" to refer tothe Christian heritage shared by a majority of EU citizens. The measure was voted down by otherEU members, but Pope John Paul II lauded Poland for its efforts. Some observers have commentedthat, like the United States but unlike many of its more secular fellow European countries, Polandexhibits a relatively strong concern for religious values. (26)

Turkey. Despite its call for EU recognition ofEurope's Christian heritage, Poland has "vigorously" supported Turkey's ambition to join the EU. Former Polish Foreign Minister Cimoszewicz argued that Turkey should belong because it "is proofthat the fundamental values of Western democracy can also be applied in Islamic countries." Analysts also argue that Poland's support is based on its belief that the inclusion of Turkey,traditionally a strong U.S. ally, would strengthen the transatlantic link. Finally, Warsaw reportedlybelieves that Turkish membership would improve the prospects of Ukraine being invited to join --a major Polish foreign policy goal. (27)

Taxes. Poland and other countries have objected toFrance's proposal to reduce EU structural funds to member states that maintain below-averagecorporate tax rates. Critics charge that the practice, known as "fiscal dumping," is used to attractforeign investment; they argue that countries that maintain low tax rates should not be compensatedby EU subsidies. Poland opposes France and Germany's proposal for a minimum, EU-widecorporate income tax, noting that, for example, its value-added tax is relatively high. (28)

Bilateral Issues. Poland also has crossed swords withindividual players within the EU; over the past year, Warsaw has had differences with Germany,France, and Spain on both EU and other matters. Polish-German relations were strained in 2004 byissues that harked back to World War II. The contretemps began when a German group (thePrussian Claims Society) demanded that the Polish government make compensatory payments to thefamilies of ethnic Germans who had been expelled from Polish territory in 1945-46. The claimcaused an uproar in Poland, and some members of the Sejm called for Germany to pay reparationsfor Poland's World War II losses. In November, the two governments agreed to dismiss such claims. Poland also has dueled with France (its biggest foreign investor) over Iraq, tax policy, and EU votingrights, and with Spain over the distribution of EU structural funds. (29)

Conclusion

Since the collapse of communism, Poland has conducted active and independent domesticand foreign policies. Successive governments have advanced economic reforms that generally haveresulted in a successful transformation to a market economy. Corruption remains a serious problem,but the print and broadcast media have increasingly put a spotlight on corruption cases, a practicethat some analysts believe should result in reduced public tolerance and an increase in legal prosecutions. Despite reports of graft, foreign investors have continued to enter Polish markets,helping fuel steady economic growth. Poland has had a dynamic political life as well, with each ofthe post-1989 elections resulting in a change in government from left to right or vice versa. Pollssuggest that this pattern may continue with the next parliamentary elections, scheduled for lateSeptember 2005.

Poland's external relations, deeply influenced by its history, have also been dynamic. Warsaw has integrated into the NATO and EU, and has proactively promoted its perceived nationalinterests in those institutions, as well as bilaterally with neighboring states. In addition to joiningthe alliance, Poland has looked to its security by modernizing its military; it has been acquiring newweapons systems and reorganizing and downsizing its armed forces. To the east, Poland has soughtto promote democracy in Ukraine and to normalize relations with Belarus and Russia. To the west,Poland has shown a willingness to confront its new EU partners on issues of national importance. Poland's relations with the United States have been positive, particularly since 9/11. Warsaw hassupported U.S. policies in the global war on terrorism, in Afghanistan and in Iraq -- where it assumeda leading role. But over the past year, Poles have increasingly expressed disillusionment with theIraq mission and disappointment that the United States has not rewarded their country's loyalty andsacrifices. The government has announced a phased troop withdrawal.

Some analysts argue that, if it continues on its current path, Poland may well emerge as aleading nation in Europe. Although most analysts do not anticipate major changes in Polish foreignpolicy in the near future, some believe that it is inevitable that Poland will draw closer to the EUover the long term.