Urgent Need: An Economic Bailout

"Poland is like a company that is no longer capable of selling its stock on the free market," complains a senior banker in Duesseldorf. "The problem goes beyond the banks. Poland is in default already." More discreet financiers might find that view extreme, but none would deny the gravity of Poland's economic and financial crisis.

Warsaw's growing foreign debt, which already stands at $27 billion, is sending increasingly nervous tremors through the international financial community.

This year alone, the Poles must pay back $7.5 billion worth of loans to the West.

That is a heavy burden for a country whose hard currency reserves are dangerously low and whose industrial production has dropped by 10% just in the past year. Even the official Polish Press Agency last week admitted that because of the nation's economic turmoil, the first quarter of 1981 was the "grimmest" in Poland's postwar history. To complete the gloomy landscape, a critical food shortage, compounded by panic buying, has resulted in frustratingly long lines in front of near empty shops.

Even as a new emergency meat-rationing plan took effect last week, Warsaw's trade emissaries fanned out through Western capitals in a desperate campaign for food and credit. In London, officials from Warsaw's Bank Handlowy met representatives of 20 Western commercial banks to talk about rescheduling loan payments. In Brussels, the European Community agreed to sell Warsaw more meat, dairy products and grain at 15% below the market price. Polish Deputy Premier Mieczyslaw Jagielski flew to Paris and Washington. The veteran negotiator met with President Valery Giscard d'Estaing and won a pledge of $800 million in aid, plus shipments of surplus wheat. In Washington, Jagielski was received by Secretary of State Alexander Haig and Vice President George Bush; they promised to sell Warsaw 50,000 tons of surplus butter and dried milk and to consider cooperating on rescheduling Poland's $3 billion U.S. debt.

Any long-term economic recovery will ultimately depend on the Poles themselves. There can be little progress without fundamental reforms, severe austerity measures and an end to periodic work stoppages. Admonished one Austrian banker: "What the Poles need to do is to go back to work and then work some more." That idea is sure to be difficult to sell at a time when appetites have been whetted for more labor benefits, not sacrifices. If little else, however, Poles retain a reserve of good, if somewhat grim, humor. A joke making the rounds last week tells of a Warsaw resident who encounters a neighbor going to Katowice, about 165 miles away, to buy some meat. "Why not buy your meat in Warsaw?" he asks.

Answers the other: "I do, but the line starts in Katowice."

This file is automatically generated by a robot program, so viewer discretion is required.