After Brexit, Here Comes Polexit

The Polish nationalist government wants to get the country out of the European Union again, and the likelihood stands at more than 50%. With this, the ruling Party for Law and Justice (PiS) wants to follow the example of Great Britain. The arbitrary EU’s actions would only serve to push Poland further away from the bloc and increase the probability of a Polexit.

Remark: As a reminder, Poland became a member of the European Union some fifteen years ago but is no member of the eurozone. Poland has a population of 38 million people and its GDP amounts to $470 billion (September 2017) (nearly the same as the one of Belgium). Its public finances are healthy with only 54% of debt-to-GDP and 0.3% of current account deficit. In terms of contemporary politics, Poland was a satellite of the USSR from 1944 til 1990 and member of the Warsaw Pact from 1955 till 1991, after which it joined NATO (1999) and the EU (2004). The main historical enemies of Poland have always been the Germans on the West and the Russians on the East.

As such, the PiS (Prawo I Sprawiedliwosc) wants to organize a referendum in about 24 months. Thereby would the question of maintaining the Polish membership to the European Union be submitted to the Polish population. 

It is being suggested that financial motives are driving this attitude. Indeed, the context is that EU member states are soon to start discussions on a new budget for the European Union. And, the European Commission has already warned that all countries will have to make a more significant contribution due to the impact of the Brexit as Great-Britain would no longer contribute its share in the future.

At present, Poland is the most substantial net recipient of European funds. Every year the country receives the support of around 10 billion euros. However, if the EU contributions are increased, the European Union could eventually become a net cost for Warsaw. The country currently enjoys a thriving economy with annual GDP growth of nearly 5% p.a. The European contribution of the country may, therefore, be higher than the flow of funds the country was getting till now.

Eurocrats, amongst which the fellow Polish Donald Tusk, have repeatedly accused the PiS of voluntarily steering the stand-off with the EU to open conflict. The underlying reason being that the EU suspects the PiS to curtail the powers of the judiciary branch, but apparently, the situation is much more complicated than the EU is portraying. Additionally, Donald Tusk having been beaten at the last elections by the PiS - reason why he got the top job at the EU - is keen to regain the electoral vote, and hence his motives are not neutral either. The other underlying issue is that Poland, like many other Central European countries, does not want to have migrants flooding the streets of Warsaw or Krakow, but this against the will of the European Commission.

For these two reasons, at the end of last year, the European Commission started legal action against the Polish government threatening to withdraw the access to EU funds to Poland. The reason for this initiative was some reforms of Polish law which, according to the European Commission, were not consistent with democratic principles. And, the EU was pissed off that Warsaw refused to take-in migrants (cf. and this because Chancellor Merkel unilaterally without consulting the other EU member countries opened Germany's border to two million refugees, mostly from African and muslim countries).

Similar to Hungary, the Czech Republic, Croatia, Slovenia, and the three Baltic states, Poland is openly opposed to the refugee quotas of the European Union. And, all these countries have been unsuccessful with the European Court of Justice, mostly because the judges of the court are part of the EU establishment. 

All these Eastern European countries call themselves cultural counter-revolutionaries as they oppose the oppressing centralizing power of the European Commission. Also, the EU is mostly steered by the Western European countries (i.e., Germany and to some extent France) leaving the Eastern European nations primarily as observers. Granted, Donald Tusk, the fellow Polish, happens to be the President of the EU, and several EU Commissioners are from Eastern Europe (but that is the rule: each EU member country gets to appoint an EU Commissioner). 

However, an illustration of the quasi-monopoly in decision-making by the Western Europeans is the recent re-distribution of seats for the EU agencies that were in Great-Britain. As a result of the Brexit, these EU agencies had to be relocated outside of Great-Britain, and none came to be established in Eastern Europe (i.e., in fact they came to Paris and Amsterdam). 

This kind of nonstop arbitrary decision-making is fueling nationalist movements fed by growing resentment of Eastern Europeans vis-a-vis Western Europeans. Eastern Europeans feel that the West has quasi-colonized their economies. For example, France, Germany, and the Netherlands are the most significant investors in the Eastern European economies. In countries such as the Czech Republic and Poland, thirty percent of the workforce is on the payroll of foreign companies. In Poland, these same international corporations contribute to some 70% of all exports, while in the Czech Republic, they are responsible for some 40% of the value added. 

Brussels, the seat of the EU, has warned that the Polish population must give a clear signal if it wishes to continue to stand for further membership of the European Union. Apparently, the question is not about the association but more about the way power is exercised by the EU and their eurocrats. One needs to keep in mind that also in the Western European countries, such as in Italy, Austria, Germany, Franc, and the Netherlands, for example, there is growing left and right-wing backlash against the EU establishment. So, the phenomenon of rejection is not only typical of Eastern Europe.

Similar to Donald Trump, the establishment - that is embodied by the European Union and Donald Tusk - is playing the typical Russia scarecrow card by accusing PiS of working on a hidden agenda to the benefit of Moscow thereby "undermining free democracy and western values"; sounds familiar? Naturally, Donald Tusk is hoping to return to Polish national politics after the end of his European mandate at the end of this decade, and his political flutter should be analyzed within that context only. 

Already, so-called experts claim that if Poland were to leave the EU that it will result in the bankruptcy of the country. These are so-called experts that are part of the same Project 'Fear' who claimed that the U.S. economy would collapse with Trump once in power or that the British economy would enter into recession after the Brexit. However, both claims can be dismissed evidenced by the recent performances of the U.S. economy as well as the research conducted by the CEBR about the British economy.

And, apparently, if you read the Western media, such as the Financial Times, the New YorkTimes. Le Monde or listen to Deutsche Welle, BBC, or CNN, they will firstly all claim that a Polexit is anyway impossible, and secondly that if the Polexit were to take place, it would be disastrous for the country. Those journalistic papers should be taken lightly.

Instead of focussing on the likelihood of a Polexit and its impact, it would have been more interesting if these same news media would have tried to understand why Poland (as well as the other Eastern Europeans countries) is behaving like this. What causes Warsaw to have become so anti-EU? The answers to these questions would bring more added value to the debate instead of playing its master's voice. But, then again, that would be too much to ask from the western media establishment as it has been known for years that there are no longer journalists but merely messengers of the establishment.