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Is Polexit imminent?

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Poland’s conflict with Germany and Brussels is a manifestation of the war that Brexit Britain has waged against Europe, in a bigger picture.

Considering the magnitude of the crimes committed on the territory of Nazi-occupied Poland, The memory of World War II is still so vivid for Poland. After the war, Polish-German relations took shape in the shadow of the debates about the war era, as well as the changes that occurred in the early years after the end of the war.

The border issue was controversial in the last century. Originally based on Oder and Nysa Łużycka, the border was the construction of the Soviet Union. The German Democratic Republic (East Germany) guaranteed the immunity of Poland’s western border until 1950, but this was maintained until 1991.

The issue came up again after the fall of the Berlin Wall. In December 1991, the German parliament adopted regulations affirming the permanence and immunity of the border between the two countries.

The issue of war compensation to be paid by Germany to the Soviet Union and indirectly to Poland has been brought up again in recent years. Given the magnitude of the damage, the sum of the compensation was much lower than the estimated damage to Poland during the war and occupation.

As a matter of fact, Poland was the country that suffered the most from the destruction policy of the Nazis. Between 1939 and 1945, about 6 million Polish citizens died, and many cities were almost completely destroyed, especially Warsaw, the capital that was destroyed by the Nazis.

Today’s claims against Germany stand out as a manifestation of the unpaid costs.

The Compensation Issue

In recent months, Polish Prime Minister Mateusz Morawiecki and the ruling Law and Justice Party (PiS) have been seeking compensation from Germany for the Second War.

In an interview with Der Spiegel on 10 September, Morawiecki elaborated on the rationale: “6.2 trillion zlotys is not a fantastic amount. The budget of the entire Federal Republic of Germany, that is, the budget of the federal government, is almost the same amount as the budget of the states. Poland is the only country in the Second World War that suffered the most, but was not compensated. First, we address the Berlin government with a diplomatic note. […] We also believe that the analysis of the Germans that Poland withdrew from the claim for compensation in its 1953 agreement with East Germany was wrong. It was the Soviet Union that once forced Poland to do this. The Poles could not claim compensation from the socialists. Moscow forced its confidant in Warsaw, Bolesław Bierut, to reconcile, and the issue was never brought up to the Polish parliament. No instruments of ratification were submitted to the United Nations (UN). We do not recognize the agreement. Since half of the victims in Poland are citizens of Jewish origin, we would like to conduct the interviews in Berlin and invite Israeli representatives as well. At a later stage, it is possible to bring our claims to international courts.”

In July, Polish Deputy Prime Minister and PiS leader Jaroslaw Kaczynski said that many people in Poland suffer from “Stockholm syndrome” against Germany. Kaczynski, who met with voters in Gruetz, said: “Many Poles suffer from what is called Stockholm syndrome, the victim’s love for the murderer. We need to get rid of this. We have a lesson to learn. ”

Pointing out that Germany has not settled accounts with Warsaw, Kaczynski said the issue is not only about receiving compensation for crimes committed during the Second World War. Stating that hundreds of thousands of war criminals were not convicted in Germany after the war and many of them even held office, Kaczynski said, “We are also talking about moral compensation here.”

Reminding that Berlin paid compensation to 70 different countries after the war, the deputy prime minister said: “Mexico is an example. Even such countries which were not harmed at all, received a small amount of compensation. Italy got compensation, but we didn’t. This is not going to end this way. ”

Warsaw, or the right-wing PiS government, uses the issue of compensation as a trump in its geopolitical conflict with Germany. As a matter of fact, Germany recently appointed Bernd Freytag von Loringhoven’s son Arndt von Loringhoven, one of Adolf Hitler’s deputies, as ambassador to Poland.

What about Polexit?

The European Union, led by Germany, accuses Poland of “undermining the rule of law” on the grounds that it has had too much influence in the process of electing the judges of the Constitutional Court, and therefore the decisions taken by the court are not based on the law but on the political will of the government.

On 7 October 2021, the Polish Constitutional Court issued a ruling that displeased Brussels. The court ruled that some of the EU’s laws contradict the Polish Constitution and said in the justified decision that the country’s EU membership and the agreements signed no longer mean that the highest legal power should be transferred to the EU courts.

Didier Reynders, EU Commissioner for Justice, said on the same day, “Brussels will use all means to ensure that EU law is respected in Poland. The principle that EU law comes before national law and the binding nature of the decisions taken by the EU judiciary are at the heart of the confederation of states. “

Warsaw, which does not want to lose EU funds at the moment, and Brussels, which witnessed Brexit, do not want Poland to leave the EU. However, Berlin and Brussels support former EU Commission President Donald Tusk in next year’s general elections to turn the situation in their favour.

In the months that followed, on the other hand, both the European Parliament and Warsaw pledged that payments would be made first, and that this was a process that is independent of judicial reform.

However, it was later confirmed that negotiations on cohesion funds between Warsaw and Brussels are ongoing. Poland’s Permanent Representative to the EU, Andrzej Sadoś, told the PAP agency: “I can confirm that the Minister of Funds and Regional Policies, Grzegorz Puda, has promised that further programmes have been adopted and that Warsaw will ensure proper progress for the next programmes in accordance with the regulations. The negotiations are expected to be concluded within a few months.”

In addition, President Andrzej Duda was more cautious. In an interview with TVP Info, Duda said: “If these media reports are confirmed, it will be revealed that EU institutions are interfering with Polish politics and forcing Polish society to remove the country’s officials from their seats.”

Polish Chief Prosecutor Zbigniew Ziobro said more clearly,“Those responsible for blocking EU funds are the German politicians who gave them great support, including Obywatelska [Civil Platform] and Donald Tusk and European Commission President Ursula von der Leyen.”

Both the opposition and the European Commission are hinting that the funds will be awarded as soon as Donald Tusk and his team win the elections. In addition, the unofficial election campaign is already underway in the country, and Donald Tusk, supported by Berlin and Brussels, seems to have a strong hand for now.

Brexit Britain and Poland

Poland’s conflict with Germany and Brussels is a manifestation of the war that Brexit Britain has waged against Europe, in a bigger picture.

Poland is currently leading the Three Seas Initiatives, which include Lithuania, Latvia and Estonia. Vladimir Kozin, an academician at the Russian think-tank institute’s Strategic Research Institute and also linked to intelligence, emphasizes that the United States and Great Britain are the main sponsors of the Three Seas project.

Since its departure from the EU, Britain has been offering a new political, economic and military alliance to include both Poland and Ukraine and to form an alternative to the EU.

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German defense minister clears way for Scholz to lead SPD into elections

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Defense Minister Boris Pistorius has officially withdrawn as the Social Democratic Party’s (SPD) top candidate for the upcoming election, ending weeks of speculation about his potential to replace Chancellor Olaf Scholz.

In a video message released by the SPD on Thursday evening, Pistorius stated that the ongoing public debate had harmed the party’s unity. He informed the party leadership that he was unsuitable for the chancellorship.

“Olaf Scholz is a strong chancellor and the right candidate for the chancellorship,” Pistorius said, emphasizing that the party leader embodies “reason and common sense.” He further urged, “We now have a joint responsibility to bring this debate to an end because there is a lot at stake.”

When Scholz triggered early elections two weeks ago, many assumed he would automatically serve as the SPD’s candidate, given his role as the incumbent chancellor. However, polls revealed that Pistorius, who has been defense minister since early 2023, had become Germany’s most popular politician, sparking a de facto leadership race.

Scholz faces declining approval ratings

In contrast to Pistorius’ popularity, Scholz suffered from one of the lowest approval ratings among German politicians. Voters blamed him for months of political infighting that crippled the three-way “traffic light” coalition, which ultimately collapsed earlier this month.

Despite this, the SPD central leadership continued to back Scholz. Meanwhile, Pistorius faced increasing criticism for failing to address the leadership speculation. In his video message, Pistorius denied initiating the controversy but acknowledged that it had caused “growing uncertainty” within the party and “resentment” among voters.

He emphasized that the decision to step aside was his own and pledged his full support to Scholz, whom he described as an “extraordinary” chancellor. Pistorius also affirmed his commitment to campaigning for the SPD’s re-election.

Supporters react with disappointment

Pistorius’ withdrawal left many of his supporters disheartened. “I regret this development. The aim now must be to work together and achieve the best possible election result for the SPD,” said Joe Weingarten, an SPD member of parliament, in an interview with Der Spiegel.

Another MP, Johannes Arlt, remarked, “I would have preferred a different decision, but now we have one. It is good for the party and the country. We will now go into the federal election campaign united.”

A two-way race for the chancellorship

With Pistorius stepping down, the race for the chancellorship is now expected to be between Olaf Scholz and Friedrich Merz, leader of the opposition Christian Democrats (CDU). Merz, a millionaire and former BlackRock Germany executive, has been polling ahead of Scholz since taking over the CDU leadership in 2022. Scholz’s supporters, however, remain optimistic that he can close the gap and outperform Merz in the upcoming election.

Pistorius: A proponent of German remilitarization

Known for his pragmatic approach to military affairs, Pistorius, 64, earned respect for his tough stance on Russia and advocacy for Germany’s rearmament. Following his appointment as defense minister in 2023, he made clear his opposition to the SPD’s historical reluctance to increase military spending.

Describing Vladimir Putin as “the despot in the Kremlin,” Pistorius warned that Germany must boost defense investments and ensure it is “combat ready.” His hardline approach on security and defense issues distinguished him within the SPD and cemented his popularity among voters.

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Poland urges EU to increase spending on eastern defence

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Poland, NATO’s largest defence spender, has urged its EU partners to bolster border defences with Russia and Belarus. The move aims to demonstrate a firm commitment to European security, particularly in light of Donald Trump’s influence on global defence policies.

Magdalena Sobkowiak-Czarnecka, the deputy minister responsible for preparations for Poland’s EU presidency, set to begin in January, told The Financial Times (FT) that the EU should invest in strengthening border fortifications and air surveillance systems under the Eastern Shield initiative.

“I think solidarity on the Eastern Shield could help show Trump that, as the EU, we understand what needs to be done for defence. If Trump says he will only work with countries that invest in defence, that’s fine for Poland, because we already spend 4% of GDP on defence. But what about the others? Funding the Eastern Shield would demonstrate the shared commitment of European countries,” Sobkowiak-Czarnecka explained.

The Eastern Shield, announced in May, comprises advanced fortifications and air surveillance systems along Poland’s borders with Belarus and the Russian exclave of Kaliningrad. This initiative is central to Polish Prime Minister Donald Tusk’s strategy to counter what he describes as “Russian aggression”, including the “hybrid war” linked to facilitating illegal migration from Belarus into Poland.

The Tusk government has allocated PLN 10 billion (€2.3 billion) for the Eastern Shield as part of broader defence expenditures. These investments will increase Poland’s defence spending from 4.1% of GDP in 2023 to 4.7% by 2025, the highest in NATO and more than double the alliance’s 2% GDP target. In contrast, some EU nations, such as Italy and Spain, have yet to meet this benchmark.

“All our partners must understand that the Eastern Shield is not solely about Poland but also about safeguarding the EU’s borders,” said Sobkowiak-Czarnecka.

Trump’s potential return to the presidency has heightened concerns across EU capitals, given his promises to impose tariffs on the bloc and signals of a potential resolution to the Ukraine conflict that could favor Russia.

Sobkowiak-Czarnecka underscored Poland’s commitment to enhancing EU security on multiple fronts, from increasing military equipment production to countering disinformation and securing energy supplies.

“This Polish presidency comes at a critical juncture. As an expert on Ukraine and one of the strongest U.S. allies in Europe, Poland will be a guiding light in these challenging times,” she concluded.

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European energy market in turmoil: Gas prices reach one-year high

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The European energy market faces significant challenges as natural gas prices soar to their highest levels in a year. A combination of escalating tensions between Russia and Ukraine, Gazprom’s suspension of natural gas supplies to Austria, and colder-than-expected weather has placed substantial pressure on the market.

Industry representatives acknowledge that while sufficient gas supplies exist, the supply-demand balance remains fragile. Negative developments or geopolitical news could quickly trigger additional price surges.

On Thursday, Dutch TTF futures—a key European natural gas benchmark—rose to €48.8 per megawatt-hour (MWh) (equivalent to $538 per 1,000 cubic meters), a level last observed in November 2023. Since the end of the heating season on 31 March, prices have climbed by more than 150%.

The price surge accelerated on Wednesday after Ukraine targeted Russian territory using British-made Storm Shadow missiles. By the close of the trading day, prices had increased by 2.5%, reaching €46.8/MWh.

On the same day, the United States issued a warning based on intelligence reports, predicting a major air strike in the region. Following this warning, many Western countries evacuated their embassies in Kyiv.

Adding to the tensions, the Ukrainian Air Force reported that Russia test-fired an intercontinental ballistic missile (ICBM) capable of carrying nuclear payloads. This event aligns with speculation about changes in Russia’s nuclear doctrine and the US’s authorization for Ukraine to target Russian territory with long-range missiles.

While liquefied natural gas (LNG) demand in Asia remains low, traders are turning their focus to Europe to capitalize on surging prices, according to Bloomberg.

Despite the increased volatility, Gas Infrastructure Europe reports that gas storage facilities across Europe are 90% full. However, the heating season, combined with freezing temperatures in Northern Europe, has amplified concerns about market stability.

Torgrim Reitan, Equinor’s Chief Financial Officer, emphasized that the market’s fragile balance increases the influence of external factors on pricing dynamics.

The state of pipeline gas supplies from Russia is another major concern. On 16 November, Gazprom halted deliveries to Austria’s OMV, citing unresolved payment issues. The company is attempting to recover part of a €230 million arbitration judgment through this suspension.

Despite this, Gazprom continues to supply 42.4 million cubic meters of gas daily to Europe via Ukraine. However, OMV cannot access these supplies and must turn to other sources, such as Slovakia, to meet Austria’s energy needs. According to OMV officials, Austria’s energy requirements are fully covered by alternative suppliers.

Jon Treacy, editor of the investment newsletter Fuller Treacy Money, noted that although Austria maintains official neutrality, most of OMV’s customers are NATO members. Treacy added that Russia’s “long, cold winter” strategy aims to exert pressure on regions beyond Ukraine over the long term.

Market analysts warn that transit through Ukraine—a minor contributor to the European Union’s total gas imports—could be entirely cut off by January 2024. Such a development would further strain an already delicate market, potentially driving prices even higher.

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