Poland: let Papa Bear pay
Poland's Western creditors have been meeting in Paris to deal with the fact that they're not going to be paid as the loans come due. This presents the United States and its NATO allies with a particularly difficult choice between two courses of action, either of which arguably would advance American and Western interests.
One course would be to bail out the Poles and therefore their creditors, mainly private banks. It would also, to a degree, bail out the Soviet Union, at least in the short term.
The other would be to let the Poles grapple as best they can with the consequences of their own past follies and mismanagement. This course would also let the creditors, including American banks, deal with the consequences of their past mistakes in lending to a poor credit risk.
The first course would lessen the pressures on the beleaguered Polish government. On the one hand, that government is faced with massive popular demands for structural changes which threaten the dominant role of the communist party and which therefore range from distasteful to unacceptable to the Soviet Union. On the other hand, Poland has a dismal economic problem which is compounded by the impossibility of servicing its foreign debt. This, in turn, makes it more difficult to allay popular unrest.
If successful, the first course would enable Polish workers and farmers to consolidate the remarkable gains they have made over the past year (and which add up to the most profound change in Eastern Europe since World War II). It would encourage a process of general liberation in Poland. This might become contagious in the other Soviet dominions of Eastern Europe and even in the Soviet Union itself, a prospect which is bound to be unsettling to the Kremlin.
There is a question of whether such a policy would be successful. It makes no sense to roll over and add to the Polish debt simply to support a continuation of the policies which made the mess to begin with. There has to be a plan and a timetable for the implementation of new policies. This is the kind of thing the International Monetary Fund does so well, but Poland (in keeping with Soviet policy) is not a member of the fund. It is doubtful that the Soviets would permit Poland to become a member.
The alternative to bailing out the Poles amounts to doing nothing. The consequences of such a policy would be two. First, a Polish default would send strong shock waves through the international monetary system. But second, the Soviets would be left to deal with the Polish distress.
Soviet-bloc states have always prided themselves so much on punctual compliance with their international financial obligations that the Soviets, at the cost of great effort, might even advance the necessary credits. Beyond this , popular unrest in Poland would almost surely increase, and Soviet military intervention would become more likely.
It is not amiss to question the conventional wisdom that this would necessarily be bad. It would indisputably be bad for the already long-suffering Poles, and it would agitate their several million ethnic cousins in the US. But it would also be bad for the Soviet Union, and this might be good for the US and the West in general.
The Soviet Union already has a heaping plateful of troubles. It is worried about China. It has a long tunnel to go through in Afghanistan before reaching the light at the end. It feeds its people only with difficulty and then not very well, and its people are restless over this and over shortages generally.
Furthermore, the Soviets, who have already invested the equivalent of the Marshall Plan in Poland, tend to view the Poles as a bunch of ingrates -- not unlike the way many Americans view the recipients of foreign aid who behave independently of, or even contrary to, the wishes of Washington.
Thus, the prospect of further sacrifices in Poland has to be unappealing in Moscow. These would entail not only the economic and military costs; the Soviets would also pay a high political price worldwide and perhaps nowhere more than in their already tenuous relations with the communist parties of Western Europe.
The Soviets have shown in the past, notably in Czechoslovakia and Afghanistan , that they are prepared to pay these costs when they think their vital interests are at stake. But the question ought to be asked, why should the West spare them those sacrifices?
The more the Soviets are engaged with such distractions, the less capacity and appetite they will have to make troubles else where and the more trouble they are likely to have at home.