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Jul 10, 2018 | 09:00 GMT

10 mins read

Stuck Between the U.S. and the EU, Poland Explores Its Options

In this photograph, demonstrators carry Polish and European Union flags during a 2016 rally in Gdansk, Poland.
(ADAM WASILEWSKI/Shutterstock)
Highlights
  • Friction between the United States and the European Union will force Poland to find a balance between its main security ally and its main economic partners.
  • Poland will seek to preserve its alliance with the United States on issues varying from  energy to security.
  • While Poland will remain skeptical of European integration, it will not do anything to jeopardize its membership in the Continental union.

These are turbulent times for U.S.-EU relations. In recent weeks, the White House and the European Union have clashed over various issues, including the Iran nuclear deal, defense and trade, and have produced friction that could disrupt the political, economic and security institutions that the United States and Europe created after World War II. The developments give most European countries cause for concern, but the issues represent a particularly significant challenge for Poland, because its main security ally — the United States — is at odds with its main economic partner — the European Union. The disputes threaten Poland's interests, but this period of difficulty also presents Warsaw with a variety of options and opportunities.

Poland's geopolitical relevance cannot be overstated. The largest country on the European Union's eastern flank has one of the fastest-growing economies in the bloc and is an important part of Germany's supply chain. It is also the only member of the European Union that shares a land border with both Russia (in Kaliningrad, one of the most heavily militarized areas on the Continent) and Ukraine (which has been in a military conflict with Russia since 2014). In addition, Poland, once the poster child for European integration, is now governed by a nationalist party that questions the benefits of European federalization and seeks alliances with like-minded countries in the region. Given that state of affairs, events in Poland have an impact that travels well beyond its borders.

The Big Picture

In its 2018 Third-Quarter Forecast, Stratfor noted that the United States' many battles over the economy and foreign policy have polarized a number of its security allies. The European Union is one such ally, and the White House's policies are creating significant challenges for many of the bloc's countries. Poland, the largest country on the bloc's eastern border, is facing difficult choices because of the ongoing friction between the European Union and the United States.

Trans-Atlantic Tension

Relations between the European Union and the United States have seen better days. In early May, U.S. President Donald Trump pulled out of the Iran nuclear deal, against the advice of Germany, France and the United Kingdom, which are also signatories to the agreement. This put the European Union in a bind, and the bloc is trying to salvage the deal while seeking ways to protect European companies with ties to Iran from U.S. sanctions. Then in late May, the United States imposed tariffs on steel and aluminum imports from the European Union, inciting Brussels to introduce countermeasures against various American imports. And if the United States hikes tariffs for EU cars — something it has threatened to do — the bloc would likely retaliate once more. Finally, the United States is pressuring its NATO partners in Europe to increase their military spending to meet the alliance's target.

EU-U.S. relations are worsening while Poland's own relations with the European Union are also experiencing strain. Its governing Law and Justice party (PiS) is skeptical of European integration, which it sees as a threat to Poland's sovereignty and national identity. PiS supports the idea of a leaner European bloc in which individual members would be responsible for most policy decisions. But Warsaw's disputes with the European Union are not only ideological; the European Commission is investigating whether PiS domestic policies undermine the rule of law in Poland, and that inquiry could lead to sanctions. In the meantime, France and other EU member states have said the distribution of EU funds and subsidies, of which Poland is a net receiver, should be linked to respect for the bloc's rules and principles.

A chart shows the net contributors and receivers of European Union funds.

Warsaw has many reasons for concern about the state of play between the United States and Europe. Poland is a mostly flat country with no clear borders, and it is surrounded by powerful neighbors, especially Germany in the west and Russia in the east. Its fear of invasion has traditionally prompted Warsaw to pursue international alliances to prevent aggression. Since the end of the Cold War, its foreign policy strategy has been based on membership in two key institutions: the European Union, which provides strong economic and political ties with Germany, and NATO, which links Poland to the United States and offers guarantees against potential Russian aggression. 

This strategy has worked well for Poland. Membership in the European Union made it a net recipient of European structural funds and agricultural subsidies, and trade with Germany has increased dramatically over the past three decades. Poland has had one of Europe's fastest growing economies since the 1990s and was the only EU member to avoid recession during the financial crisis of the late 2000s. In the meantime, NATO membership has offered it protection. Not only is Poland one of the few members of the trans-Atlantic alliance that meets the target of spending at least 2 percent of gross domestic product on defense, but Warsaw also has persuaded NATO to increase its presence in the country over time. However, it has yet to achieve its primary goal of a permanent NATO base in the country.

The Dangers for Warsaw

But current geopolitical trends on the Continent and abroad could impose some radical changes. An escalation in the trade disputes between the United States and the European Union would result in each side introducing additional tariffs that would undermine bilateral commerce. Poland has a lot to lose in such a tit-for-tat scenario. Although the United States is its eighth largest trade partner, a decline in U.S. trade would hurt Warsaw's interests since trade is a critical component in a bilateral relationship. Regardless of the health of bilateral trade, the United States will likely retain its interest in protecting Poland due to its strategic position. EU trade policy, however, could undermine Warsaw's pursuit of the closest possible ties with Washington. 

In addition, the poorer U.S.-EU ties are leading Germany and France to push for deeper European integration. In a time of uncertainty about the future of the international order, Berlin and Paris want to increase the bloc's strategic autonomy in various areas, including defense and the economy. That trend could isolate Poland for two reasons: First, most Franco-German proposals involve the eurozone, of which Poland is not a member. Second, France and other EU members are becoming increasingly receptive to the idea of permitting small groups of states to take action without involving the rest of the bloc. For example, in late June, nine EU members supported a French proposal to create a European military force for rapid deployment, but Poland was not involved. Though the Polish government may be critical of the European Union, it cannot afford to see its economic, political and security ties with Western Europe weaken.

The decline of Polish influence on EU affairs could also lead to an improvement in ties between Germany and Russia. Since the start of the crisis in Ukraine in 2014, Germany has displayed an ambivalent stance on Russia. Berlin supports the economic sanctions against Moscow, yet it continues to pursue energy cooperation with Russia, as evidenced by Germany's endorsement of the controversial Nord Stream 2 pipeline, which will carry Russian natural gas to Germany via the Baltic Sea, bypassing Ukraine. Poland is not the only EU member that wishes the bloc would reduce its dependence on Russian energy or that is wary of Russian aggression. But its position on the bloc's eastern border means it is key to shaping EU-Russian relations, and a Warsaw with less influence might not find much of a platform in Brussels.

Poland Mulls Its Strategy

Facing these problems, its foreign policy in the coming years will rest on three pillars. The first, and greatest, priority focuses on deepening the alliance with the United States. Brexit will rob Poland of one of its most hawkish allies on Russia, yet the United Kingdom's departure from the union will also create an opportunity for it to position itself as the  main U.S. partner in the bloc. It doesn't currently have the weight to fully replace the United Kingdom, and other countries such as France are also competing for the position. Nonetheless, it will have opportunities for deeper cooperation with United States on issues varying from energy to security.

Warsaw, which is modernizing its military, views the United States as a key provider of arms and technology. In March, it signed the largest arms procurement deal in its history with a $4.75 billion agreement to buy a Patriot missile defense system from the United States. It is also interested in reducing its dependence on Russian energy and in becoming a hub capable of re-exporting natural gas. U.S. liquefied natural gas (LNG) could help Poland achieve both goals. In November, its state-controlled oil and gas company, PGNiG, signed its first five-year deal for U.S. liquefied natural gas. To a large extent, such LNG exports will depend on economic factors (most U.S. liquefied natural gas currently goes to Asian markets where prices are higher than in Europe), but political factors will also be involved. Poland can also count on the United States for diplomatic pressure against Russia. In May, for example, the White House said the Nord Stream 2 project could draw U.S. sanctions.

The second pillar depends on maintaining a pragmatic relationship with the European Union, since Poland cannot rely on the United States alone. Ultimately, Warsaw is worried that developments such as the upcoming meeting between Trump and Russian President Vladimir Putin could usher in rapprochement with Moscow. In its relations with the European Union, the PiS will not apply for eurozone membership or support ambitious plans to reform the bloc. Warsaw will be willing to clash with Berlin to protect its national interest on issues such as Nord Stream 2; it will also be prepared to disagree with Brussels over its domestic policies. However, Warsaw will not do anything to jeopardize its membership in the European Union or to sever its strong economic ties with Germany, the destination of roughly a third of its exports. Two events over the next 18 months will help determine the course of its relations with the European Union. The first is the country's next general election, which will occur by November 2019. The re-election of PiS would consolidate the country's Euroskeptic tendencies, but an opposition victory could bring the country closer to the European Union. The second test — especially if PiS secures a new term — will be the Franco-German effort to deepen European integration, because a more tightly woven Continent could make the PiS Euroskeptic agenda harder to sustain. 

Finally, Poland will keep its options open by fostering as many international alliances as possible. It is already a member of the Visegrad Group, which includes Hungary, the Czech Republic and Slovakia. The alliance is of great value to Poland when it comes to fighting political battles within the bloc, but it does not address all of Poland's interests, because not all Visegrad countries share Warsaw's urgency on Russia. Accordingly, Poland will seek other partners. It will strive to retain close ties with Romania, a country that shares many of its views on issues such as NATO or Russia, while supporting entities such as the Three Seas Initiative, a cooperation forum on a variety of issues for countries on the Baltic, Adriatic and Black seas. None of these alliances can replace the European Union or NATO, but they do help Poland protect its national interests.

An EU member with close ties to the United States, Poland finds itself in a difficult position as Brussels and Washington quarrel over trade and other issues. As this trans-Atlantic friction continues — while Poland's nationalist government finds itself at odds with the European Union as a whole — Warsaw will work to hedge its bets to retain the best relations possible with Washington, Brussels and others. Doing so might offer the only way for Poland to weather the storm winds currently buffeting the Continent.

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