Hysterical Poles
Poland's entry into the EU was meant to draw a line under Polish-German enmity, much as the early moves towards European integration in the 1950s marked a fresh start for France and Germany. But it has not worked out. In early September, the Polish parliament passed a unanimous resolution demanding that Germany pay billions in reparations to Poland for the destruction of Warsaw in 1944. Why is this happening now? Partly because memories have been stirred by the 60th anniversary of the Warsaw uprising; partly because now that their country is safely inside the EU, Polish politicians feel better able to give voice to old grievances; but above all because some of the descendants of the up to 8m Germans expelled from Poland after the war are trying to use the courts to win financial compensation from Poland. The resulting uproar is embarrassing and exasperating for Berlin. In a long meeting with foreign journalists this month, Joschka Fischer, German foreign minister, maintained his good humour while the conversation stuck to safe topics like Iraq, terrorism and Turkey - but when the subject turned to Polish reparations he became agitated. As the Germans see it, the Poles are being needlessly hysterical. The German deportees and their descendants have received no official encouragement from Berlin, quite the opposite. Moreover, government lawyers think that they have little chance of winning their cases before the European courts. So the Poles should relax. Unfortunately, a relaxed approach to their country's history is not common among Polish politicians.
Historical Germans
In official Berlin, it also feels that there is no getting away from 1939-45. On a visit to the defence ministry, you are reminded that it was in this very building that the ringleaders of the Stauffenberg1944 bomb plot were executed. And while defence ministries in countries that are comfortable with their own martial pasts are decorated with paintings of battles and regimental standards, the only art that seems to be on display in the German defence ministry is a massive carpet in the central hall - which is made up of a superimposed photo of Berlin reduced to rubble in 1945. Then there is the finance ministry, which was the office building used as headquarters by Herman Göring. Norman Foster's Reichstag famously preserves the graffiti left behind by the Russian soldiers who sacked the building in 1945, ranging from the banal - "Ivan was here" - to the chilling - "we have paid you back in full." The chancellor's office is, by contrast, a temple of modernism, with big picture windows and the black leather sofas which are compulsory issue for German officialdom.
"Tax-dumping" out east
Schröder himself seems a little worn down these days. And it is not surprising. The weekly demonstrations in eastern Germany against welfare reform are dispiriting; even worse is the steady drip of disastrous election results for the SPD. And while the German economy struggles, there is the uncomfortable knowledge that just 100 miles from Berlin, on the other side of the Polish border, a huge economic boom is getting under way. Economic growth in western Poland this year is likely to be around 10 per cent. The contrast with the depression in eastern Germany is all too marked. So it is unsurprising that German politicians are sympathetic to the call by France's Nicolas Sarkozy to try to force the Poles and others to raise their corporation tax rates to something closer to Franco-German levels - or face being denied structural funds. Schröder is inclined to play the issue down. But one of his senior colleagues argues: "You cannot tell German taxpayers that the Poles are attracting manufacturing jobs from Germany because they have low tax rates, and they can afford these low tax rates because they are getting EU structural funds, and that these structural funds are paid for by German taxpayers." Actually, the economics are a lot more complicated than that. The real attractions of countries like Poland, Slovakia and the Baltic states are not low taxes, but low wages, combined with an educated and eager workforce and a growing consumer market. And, of course, rapidly growing economies to the east should provide a stimulus for Germany itself. But as a political slogan, the demand that the central Europeans stop "tax-dumping" is beguiling. It will make the next European budget round exceptionally difficult. As a sign that the Germans intend to fight their corner, Schröder has even postponed his country's six-month presidency of the EU, which was due in the second half of 2006. He has no intention of allowing Germany to be hamstrung by the traditional requirement for the presidency to stay neutral.
EU budget rebates
Aware that their tax demands will make them unpopular, the Germans and the French are trying to focus central European resentment on the British budget rebate. Why, they ask, should impoverished countries in central Europe have to write a cheque to Gordon Brown every year? Good question. But it is not one that the central Europeans find that compelling. The reason is that the French and Germans want to replace the British rebate with a "general rebate," in which all net contributors to the EU budget get some of their money back. So the Poles and others know that rather than writing a single large cheque to the British, they will simply end up writing several smaller ones.
