VZCZCXRO5169
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHWR #0218/01 0581605
ZNY CCCCC ZZH
O 271605Z FEB 09
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7890
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 WARSAW 000218 
 
SIPDIS 
 
NSC FOR K. KVIEN 
EUR FOR DAS GARBER 
TREASURY FOR STEPHEN WINN 
COMMERCE FOR H. SMITH 
 
E.O. 12958: DECL: 02/26/2014 
TAGS: KFIN ECON PL
SUBJECT: POLAND ON THE G-20 PROCESS 
 
Classified By: CDA Quanrud for reasons 1.4 (b,d). 
 
¶1.  (C) Summary.  The Poles are concerned about the evolving 
composition of the G-20.  While they like the G-20 as a forum 
for coordinating, they are worried that the current 
composition does not reflect the variety of perspectives 
needed to comprehensively meet the challenge.  They have also 
not fully developed a position on what shape a new global 
financial architecture should take, but are working on a 
paper to that effect.  In general terms, the Poles envision a 
strong IMF with more structured coordination with the 
Financial Stability Forum and the OECD.  The GoP has no plans 
to publicly complain about being left out of G-20 meetings, 
but will continue to privately lobby for their inclusion.  We 
should give consideration to whether it is in our interest to 
have the Poles at the table.  End Summary. 
 
G-20 Expansion: Spain - OK; but why the Netherlands? 
--------------------------------------------- ------- 
 
¶2.  (C) Finance Ministry contacts over the past month have 
reiterated to EconOff the message they are sharing through 
their Embassies in Washington, London, and elsewhere.  They 
are concerned with the composition of the G-20 meetings 
convened to respond to the global financial crisis.  They are 
emphatic that their complaint is not about their own 
exclusion or inclusion, rather the logic of G-20 expansion in 
general, arguing that expansion should aim to include the 
various regional and economic perspectives around the globe. 
They understand why earlier meetings, called in great haste, 
could not be as deliberate in their inclusiveness.  However, 
they are frustrated by what they characterize as the UK's 
inexplicable invitation to the Netherlands for the April 
summit. 
 
¶3.  (C) The Poles support Spain's inclusion with the idea 
that it brings an under-represented perspective to the table 
given Spain's historic links with Latin America.  The GoP is 
against inclusion of the Netherlands as it simply adds 
another Western European voice to an already crowded 
"Western" room.  Poland, as a country that has successfully 
developed a conservative financial infrastructure from 
scratch in 1989, could bring a useful perspective to the 
discussions.  There are a variety of Central and Eastern 
European economic conditions - including a predominance of 
subsidiaries in the banking sector - they argue, that make 
Poland (or presumably one of Poland's neighbors) a necessary 
voice.  They appreciate the Czech role as representing the EU 
Presidency but do not have confidence in the Czech ability to 
represent the regional perspective. 
 
Position on Global Reform of Financial Infrastructure 
--------------------------------------------- -------- 
 
¶4.  (C) The Poles do not yet have a formal position on the 
shape reform should take.  However, they have internally 
agreed on some basic principles.  They like the G-20 as the 
venue for negotiating reforms, as it avoids the petty details 
that would bog down a more inclusive forum.  They are not in 
favor of creating new institutions or dramatically broadening 
participation in existing ones.  Overall, they would like to 
see a stronger International Monetary Fund (IMF) formally 
coordinating with the Financial Stability Forum (FSF) and the 
Organization for Economic Cooperation and Development (OECD). 
 
 
¶5.  (C) The Poles support a strong IMF as the appropriate 
forum for government and Central Bank coordination. 
Specifically, they think the Fund's resources should be 
increased while its governance structure should remain more 
or less as it is.  They do not see the utility in expanding 
developing countries' voice or share in the Fund, as this 
would make it less, rather than more able to decisively 
respond to global crises.  They see a strong role for the FSF 
as well in coordinating national-level financial supervisors 
in cooperation with the IMF (note: the Poles also feel they 
have a strong voice in the FSF and can protect their 
interests there). 
 
Immediate Concerns: Ukraine/Latvia/Hungary 
------------------------------------------ 
 
¶6.  (C) The Poles have an immediate need for a strong IMF. 
While they feel good about the response of Hungary to its IMF 
program and are comfortable with progress in Latvia, they are 
 
WARSAW 00000218  002 OF 002 
 
 
extremely worried about what they characterize as a 
consistently deteriorating situation in Ukraine.  From a 
financial standpoint, the Poles are also constantly 
frustrated by global markets lumping them in with their 
neighbors.  They know that bad news in Ukraine increases both 
costs to service Polish debt and pressure on the Polish 
currency.  From a political point of view, they fear that 
economic collapse in Ukraine means, among other things, an 
open door for pro-Russian political parties, generally 
combustible social conditions, and potential political or 
economic refugees.  While Poland may draw on its own existing 
IMF facilities to keep down costs of financing public sector 
debt, they are wary of using IMF support, fearing negative 
public and financial market reactions. 
 
Comment: Poland Seeking a Larger Role 
------------------------------------- 
 
¶7.  (C) The GoP plans to be patient as it quietly advocates 
for inclusion in global financial reform initiatives.  The 
Tusk government is sensitive to being labeled obstructionist, 
and seeks to distance itself from its predecessor.  However, 
there is a strengthening undertone to our discussions - lax 
US and Western European financial management delivered this 
crisis to Poland as markets continue to lump them together 
with their less responsible neighbors.  The EU, they 
complain, has again proven itself incapable of a strong 
regional crisis response, and the bigger members are looking 
after their own interests in global fora.  The Poles view 
their conservative financial supervision and fiscal 
management as a model for smaller economies, and increasingly 
see themselves as a leader in Central Europe and a protector 
of their sometimes unpredictable neighbors to the East 
(Ukraine, Belarus, Georgia).  They will likely continue to 
push for inclusion in G-20 meetings and a stronger voice in 
global financial reform -- we should at least consider 
whether it is also in our interests to see them at the table. 
QUANRUD