21st Oct 2016

Poland warns of war 'in 10 years' as EU leaders scramble to contain panic

Germany, France and the European Commission are scrambling to contain panic and "quash rumours" about a eurozone break-up amid repeated off-piste messages from other senior EU politicians.

But even amid their desperate efforts, the finance minister of Poland, the country that currently represents the EU to the world as holder of the bloc’s rotating presidency, warned of war on the continent within 10 years if the eurozone collapses.

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Speaking to MEPs in Strasbourg on Wednesday morning (14 September) he warned of the need to act rapidly to prevent grave danger for the EU. Making reference to a recent report entitled 'Euro Break Up - The Consequences' by Swiss financial giant UBS, he declared: "There is no doubt we are in danger. Europe is in danger".

The paper by UBS, normally known for its highly sober analysis, warned that historically, monetary unions do not break up without civil war or some other form of authoritarian reaction. "The risk of civil disorder questions the rule of law, and as such basic issues such as property rights. Even those countries that avoid internal strife and divisions will likely have to use administrative controls to avoid extreme positions in their markets", it said.

The Polish minister went on to warn of a doubling of unemployment within two years "even in the rich countries".

He concluded his comments by recollecting a recent conversation he had with an old friend who is now head of a major bank: "We were talking about the crisis in eurozone. He told me 'You know, after all these political shocks, economic shocks, it is very rare indeed that in the next 10 years we could avoid a war'. A war ladies and gentlemen. I am really thinking about obtaining a green card for my kids in the United States".

He went further in his comments to reporters after his speech to parliament, saying that he had chosen his words "in a very careful way". He said that the prospect of war is not likely "within a four-year legislative time frame ... Not in the months ahead, but maybe over a 10-year time frame, this could place us in a context that is almost unimaginable at the moment".

"It is up to all of us Europeans to take the lessons of an anecdote of that kind to ensure the errors of the past do not come back to haunt us."

For their part, French President Nicolas Sarkozy and German Chancellor Angela Merkel are to hold an evening conference call with Greek Prime Minister George Papandreou where they will discuss the crisis.

No new political or economic measures are expected to be unveiled, said one EU official. Instead the two European powerhouses will offer a robust backing to the efforts of Papandreou. "There will be a strong political message to quash rumours and speculation", the EU contact said.

The aim is to draw a line under comments from a variety of sources suggesting finance ministries are bracing themselves for a Greek default.

German vice chancellor and economy minister Philipp Roesler this week talked publicly about the scenario of an "orderly insolvency" for the Hellenic Republic. Merkel quickly hit back at Roesler, also the head of the free-market-liberal junior partner in the chancellor’s coalition, demanding: "Everyone should weigh their words very carefully."

But even as she was trying to corral her ministers behind a more optimistic line, on Wednesday, transport minister Peter Ramsauer told Die Zeit it would "not be the end of the world" if Greece were kicked out of the single currency.

On Tuesday, Dutch finance minister Jan Kees de Jager said that his ministry is exploring "all scenarios" including a possible default within the single currency. He told broadcaster RTL Z he could not comment on whether eurozone officials were preparing for a Greek default. "I can't do that in public,” he said. "I'm not denying it, but I can't confirm it either".

On Wednesday, the Dutch finance ministry stepped back from the comments, saying that default is only "a scenario".

European Commission chief Jose Manuel Barroso on Wednesday also demanded an end to the "cacaphony" of proposals and rumours coming from various European quarters.

"In the cacophony of criticisms, counter-criticisms, magic bullets and miracle panaceas that are proposed on a daily basis, the truth has been drowned out that they [anti-crisis measures] have been agreed upon. But they have taken too long and have not yet been fully delivered", he told the European Parliament.

He went on to say that both borrowers and lenders involved in the new measures must now deliver on their promises.

"All these states [making economic reforms] must now demonstrate in a convincing way that they are serious. It is not enough to make plans. It is action that counts", he said.

"And those euro area member states that are providing the assistance so crucial for the survival and the stability of the euro must show even more clearly that they are determined to deliver support to countries that implement their programmes, as they have agreed", he said, in a veiled reference to Germany, the Netherlands and Finland.

“Supporting the euro is not just an act of solidarity towards others. It is an act of self-interest".


Cyprus seeks EU support on reunification

EU states should be "more vocal" with Turkey and play a more political role on reunification, Cyprus' EU ambassador told EUobserver.

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