But at home in Germany, Merkel has been surprisingly timid on many key issues – especially when they involve her conservative Christian Democrats. Her tendency to avoid clear positions has driven her coalition partners mad. Merkel might be a lion when she’s on foreign stages but she tends to be a lamb at home. One of her favourite sayings is: “If you try to beat your head into a wall, the wall will usually win.”

Merkel’s latest evasive action centres on another woman in her party, Erika Steinbach. Ostensibly, it’s a relatively minor issue about a seat on the board of a new museum about the plight of German World War Two refugees. But in reality it is an issue that reverberates deeply in Merkel’s conservative party as well as across Germany’s eastern border in Poland. 

The League of Expellees, a powerful force in Merkel’s party, wants their leader Steinbach, who is a conservative member of parliament, on the museum’s board. Merkel’s past and present coalition partners have vetoed Steinbach (pictured above with Merkel) because of Poland’s objections to the woman with controversial views in the past on the German-Poland border and Poland’s membership in the European Union.    

So what does Merkel do?  She sits it all out and puts off any decision. That was her strategy when the issue came up earlier and this is now the sequel to the earlier round of the unfinished business.

Frank-Walter Steinmeier, a leader in the opposition Social Democrats who was Merkel’s foreign minister for the last four years, understands well her reluctance to take a stance on controversial issues at home. In a German TV interview on Thursday he put the finger in the wound and said: “Mrs. Merkel has to make up her mind.”

The situation is turning into a farce. Both Merkel and the League say it is the other side that has to make a decision.

There have been a number of other occasions where Merkel’s voice went oddly silent. She calls on other countries to cut greenhouse gas emissions but ducks questions about introducing a speed limit on Germany’s motorways that could cut emissions by 5-10 percent overnight. She first agreed to introduce a minimum wage in Germany with her Social Democrat coalition partners but did a quick U-turn when her party refused to go along.

 A year ago as the financial crisis was engulfing Europe and the world, Merkel faced withering criticism for her overly cautious response initially. Der Spiegel called her “Angela Mutlos” (Angela Faint-hearted) and acussed her of ”dangerous dithering”. It wrote: “Merkel has always been quiet, reticent, cautious. Merkel has failed to lead her country through a time of uncertainty.” At the time she also first refused to consider cutting taxes to stimulate growth but reversed course under pressure from powerful barons in her party with a series of small steps and was suddenly in favour of tax cuts a few weeks later.

Last month, in coalition talks for a new centre-right government, Merkel kept going out the back door to avoid journalists each evening and remained silent when a controversy erupted over her government’s short-lived proposal to create a shadow budget to borrow 50 billion euros. This week Der Spiegel published a story on her powerful Finance Minister Wolfgang Schaeuble, who said that Merkel’s weakness is she likes to surround herself with yes men.

So is Merkel really the world’s most powerful woman?

After just six weeks as NATO secretary-general, Anders Fogh Rasmussen has his first crisis. The alliance may be slowly bleeding in an intractable war in Afghanistan, but the immediate cause is the U.S. administration's decision to shelve a planned missile shield due to have been built in Poland and the Czech Republic.

The shield, energetically promoted by former President George W. Bush, was designed to intercept a small number of missiles fired by Iran or some other "rogue state". But Russia saw it as a threat to its own nuclear deterrent and NATO's new east European members saw it as a useful deterrent against Russian bullying, by putting U.S. strategic assets on their soil.

President Barack Obama's decision to drop plans to install it on Polish and Czech territory leaves those former Soviet satellites feeling betrayed -- because they expended political capital to win parliamentary support -- and more exposed to a resurgent Russia, especially after its use of force against Georgia last year.

Obama's move is clearly part of a warming of U.S. relations with Moscow from which Washington hopes to gain help in return on supply routes to Afghanistan, pressure on Iran to rein in its nuclear programme, and an agreement on radical cuts in nuclear arsenals. But this "reset" of U.S.-Russian relations has only exacerbated the rift within NATO over Russia.

The three Baltic states and Poland were particularly critical of NATO's low-key response to Moscow's military action in Georgia. Some said the refusal of west European allies led by Germany and France to agree at a NATO summit last year to putting Georgia and Ukraine on a path to NATO membership emboldened the Kremlin to act. President Dimitry Medvedev's harsh attack on Ukraine's leader in an open letter last month fanned their fears of Russian bullying of its neighbours.

East European officials cite Moscow's playing with the gas taps and trade disputes, and its apparent determination to keep its Black Sea fleet in the Crimean port of Odessa Sevastopol beyond a 2017 deadline agreed with Ukraine as part of a strategy of tension intended to reverse the "colour revolutions" in Kiev and Tbilisi, and bring other former Soviet republics to heel.

All that makes it a particularly awkward moment for Rasmussen to deliver his inaugural keynote speech on NATO-Russia relations on Friday in Brussels. The former Danish prime minister has put a few noses out of joint in his first weeks by making clear he intends to run NATO in a more results-oriented way, leaving less room and time for ambassadors in the North Atlantic Council to debate any idea to a standstill. He has set strict time-limits on council meetings, streamlined flabby agendas and outsourced the drafting of a new Strategic Concept to a group of 12 experts led by former U.S. Secretary of State Madeleine Albright, on which not all allies are represented.

His personal management style and high media profile (monthly news conferences, a blog and Twitter chatter) has sharpened the traditional Kabuki dance in which a new boss and the old board flex their muscles at each other in mutual suspicion, insiders say. It is the first time a former prime minister, used to running a government and to talking to fellow national leaders, has been picked for the job. Previous secretaries-general were former defence or foreign ministers, more accustomed to being servants of the member nations.

Both camps within NATO (which privately brand each other the "Friends of Russia", and the "Cold Warriors") will be watching every word of Rasmussen's Russia speech to ensure he does not depart from alliance policy. The fact is that NATO has been unable to agree on an overall policy towards Russia since the 1990s, when it declared that Moscow was no longer an adversary.

Rasmussen hopes to launch NATO's own modest "reset" of ties with Russia, offering closer cooperation on Afghanistan, a joint threat assessment and work on non-proliferation of nuclear weapons. NATO officials have received assurances that Moscow will respond positively and breathe new life into the NATO-Russia Council.

None of that will assuage NATO's east European members, who are likely to press harder now for practical steps to give credibility to the alliance's Article V mutual defence commitment. That could involve drafting military plans to reinforce the Baltic republics and Poland, and holding joint military exercises on those countries' territory. The French and Germans have resisted such ideas in the past as unnecessarily provocative to Moscow. If NATO cannot agree to such moves, the United States may have to do more on its own to compensate its jilted friends.

(note: corrects Odessa to Sevastopol in 6th paragraph)

    Unlike millions of Poles who have flocked to Western Europe in the past few years in search of jobs, Jan Malachowski came to Norway in 1986 seeking political asylum and safety from Poland’s communist regime.

    But like many of his compatriots, Malachowski will not celebrate the 20th anniversary of Poland’s June 4, 1989 election, which ushered in democracy in the Soviet Union’s backyard and helped pave the way for the collapse of the Berlin Wall five months later.

    Now a computer engineer who has settled near Oslo with his family, Malachowski says he was a “mere foot-soldier” in the Solidarity freedom movement in the 1980s. But he nonetheless suffered repeated interrogations and beatings from communist security forces. The mass-movement survived a communist crackdown and by the end of the 1980s brokered and won the first free elections held behind the Iron Curtain.

    “We had hope and faith and faced huge uncertainty,” said Malachowski, 55, of his days in Solidarity. ”In those times it seemed we were floating half a metre above the ground.”

    Malachowski says the “Solidarity ethos”, complete with the charismatic leadership of Lech Walesa and blessing of late Polish-born Pope John Paul, has all but vanished.

    Former activists, once united on the “right side” of street barricades, now stand divided and bicker over issues large and small. Even the 1989 anniversary celebrations had to be staged in two different cities because of infighting, leaving a sour aftertaste for many on what should have been a reminder of their moment of glory – a turning point in Europe’s post-war history.

    But the fact the anniversary appears to have inspired only scant dewy-eyed nostalgia among Poles in Poland and abroad, even those who once manning the front lines of the democratic revolution, can also be seen as a sign of normalcy.

   Driven to leave Poland by his ”refusal to die under communism”, Malachowski now says his motivation has “normalised” and revolves around his family. Many Poles, including Malachowski, have proved remarkably adaptable abroad, building new lives in great numbers after European Union membership in 2004 opened job markets in Britain, Scandinavia and many other western states.

   Perhaps knowing that Poland’s future appears secure inside the EU and NATO, Poles are simply too busy getting on with their lives. That would only be normal.

Poles and Czechs, their economies still relatively robust  despite global recession, are up in arms about what they see as international investors’ tendency to tar them with the same brush as their more troubled neighbours such as Hungary, Ukraine and Latvia.

But if history is any guide, investors are unlikely to be impressed, at least in the shorter term.

Poland’s zloty has fallen more than debt-ridden Hungary’s forint since last summer, even though Budapest had to negotiate an emergency IMF-led bailout, while the Czech crown is also down
some 16 percent from its 2008 highs.

But at an EU summit last weekend, Polish and Czech leaders refused to back a Hungarian appeal for a 180-billion-euro region-wide bailout, saying they did not need such help.

The European Commission and German Chancellor Angela Merkel have endorsed the Polish and Czech pleas to be judged on their own merits rather than by their geographical location.

“Not all the countries are in the same situation. You cannot compare the situation of the Latvian economy to the situation of the Czech economy,” European Economic and Monetary Affairs
Commissioner Joaquin Almunia said in Prague this week.

However, in his book “The Return of Depression Economics”, Nobel economics laureate Paul Krugman describes how countries as diverse as mainly agrarian Indonesia and industrial powerhouse South Korea were swept up by the 1997 Asian crisis.

“The appetite of investors for the region had been fed by the perception of a shared “Asian miracle”. When one country’s economy turned out not to be all that miraculous after all, it shook faith in all the others,” he wrote.

Krugman also analyses how quickly contagion, in an age of huge cross-border cash flows, struck Latin America in a similarly indiscriminate way, and on several occasions.

Fast forward to 2009, and emerging Europe’s ‘miracle’ is rapidly dissolving. Policymakers will point out that the Czech Republic has higher GDP per capita and far less debt than some older EU member states, but such virtue is not an automatic defence in turbulent times.

And while there are obvious differences — many, though not all, states in central and eastern Europe are EU members which can draw on help from the Union’s institutions, including the European Central Bank — there are some parallels too.

Back in 1997, then-Malaysian leader Mahathir Mohamad accused speculators such as international financier George Soros of being responsible for Southeast Asia’s economic woes and called
for a ban on currency trading.

In a joint statement on Wednesday, eastern European bank supervisors hit out at negative Western press over their financial sectors following commentators’ suggestions that the region may prove to be “the sub-prime of Europe”.

And Polish central bank governor Slawomir Skrzypek called for talks with the European Central Bank and the European Commission on ways to prevent “speculators” who profit from steep falls in currencies such as the zloty from receiving public funds in bailouts being organised by Western governments.

Polish tabloid Fakt was more succinct, comparing foreign bankers speculating against the zloty to “vampires”.

(Poland’s Prime Minister Donald Tusk (L) leaves after shaking hands with Czech Republic’s Prime Minister Mirek Topolanek, whose country currently holds the rotating presidency of EU, at the start of an emergency European Union leaders summit in Brussels March 1, 2009. EU leaders meeting in Brussels on Sunday will discuss possible action on the financial crisis amid concern Eastern European countries may need more help. REUTERS/Sebastien Pirlet (BELGIUM))

Polish Foreign Minister Radoslaw Sikorski would appreciate it if Russia would stop threatening his country with nuclear annihilation — or at least limit its threats to once a month.

“It is not a friendly thing to do, and we have asked them to do it no more than once a month. But as the Atlantic alliance we have nukes too,” Sikorski told an audience at Columbia University this week.

He said there is a great need for NATO to get back to basics so that it can provide a bigger check against a resurgent Russia. NATO should hold more war games and make its “traditional security guarantees credible again. NATO needs to recover its role, not just as an alliance but as a military organization,” Sikorski said.

It was also just pure coincidence, Sikorski assured the audience, that very soon after Russia invaded Georgia, Warsaw and Washington signed an agreement to allow the United States to place parts of its controversial missile shield inside Poland. The missile shield drew  a salvo of furious threats from Moscow.  Poland, Sikorski said, does not want a confrontation with Russia, and asked Moscow to tone it down a bit.

Click here [Play]
to listen to Sikorski’s comments.

Photo: Polish Foreign Minister Radoslaw Sikorski (R) shakes hands with his Russian counterpart Sergei Lavrov at the Foreign Ministry in Warsaw September 11, 2008.

It is hard not to view Poland’s decision to accept the U.S. missile shield in the context of tensions over Georgia - a point Russia, which loathes the project, was quick to make.

And although Warsaw and Washington dismiss the idea and diplomats say a compromise on the long-negotiated deal was hammered out before Russia’s intervention in the Caucasus, there is no smoke without fire.

The fact is that most Poles and other central Europeans reacted with alarm to the Russian invasion of Georgia because it revived often bitter memories of the iron-fisted Soviet rule of the region after World War Two.

Since the events in Georgia, polls clearly show a turnaround in public opinion in Poland from apprehension to enthusiasm for the shield.

But contrary to Moscow’s rhetoric that the 10 interceptors are seen here as a weapon against Russia, the swing in opinion reflects a shattering of a sense of security Poles enjoyed since joining the European Union and NATO in the past decade.

Suddenly close ties with the world’s largest superpower have gained in value and agreeing to host U.S. missile installations on Polish soil has become like buying an extra insurance policy in uncertain times.

Whether the rockets can indeed fly and intercept future Iranian missiles, as many experts doubt, seems to be of secondary importance to the Poles.

“I think Poland needs the shield - common sense dictates Poland needs to be closely linked with the United States,” said Jerzy Peszek, 61, an IT worker in Warsaw.

“The shield is a good decision in the context of the current global political situation, where Russia attacks Georgia,” echoed Emilia Pichta, 22, a student. “It can happen to us, too.”

For the Polish government such a mood is a godsend, admittedly with “made in Russia” printed all over it.

The government had bargained hard with the Americans and raised expectations that Poland would receive billions in return for hosting the shield.

The events in Georgia allowed Prime Minister Tusk to quietly abandon this approach and go back to the big-picture strategic view that finds favour with a majority of his countrymen.

      Why has Poland not managed to deal with its loss-making shipyards despite years of European Union warnings over billions of euros in illegal state aid?

    The answer lies largely in the enduring power of historic symbols in Poland nearly 20 years after the independent Solidarity trade union led by shipyard electrician Lech Walesa helped topple the communist regime and usher in democracy.

Announcing her decision to grant Poland a temporary but final reprieve, EU ompetition Commissioner Neelie Kroes said on Wednesday: “We have now entered the second half of extra time.”

   Poland must now present new plans by September to overhaul
the shipyards and avoid a huge repayment of state aid totalling
2.3 billion euros that would force them into bankruptcy.

    In a wave of protests at the ports of Gdansk, Gdynia and
Szczecin, workers have been busily pressing key emotional
buttons of the Polish psyche with their Solidarity flags, Roman
Catholic prayers and a clever blend of chivalrous charm and
patriotic defiance — handing out roses to passers-by while
letting off firecrackers and vowing to fight to the end.

    “We have earned a special place in history because we fought
for the freedom of all,” Jan Guminski, a senior labour union
official, told protesters at Gdynia shipyard on Wednesday.

    But analysts say the shipyards are in their sorry state –
they have not made a profit on a single ship built there since
at least 2004 — precisely because successive governments and
managements have been too awed by their iconic status.

    “The historic angle is hard for people outside Poland to
understand. But the shipyards are the cradle of the Solidarity
movement. Successive governments have preferred to pretend the
problem is not there rather than take on 15,000 angry shipyard
workers with all they symbolise,” one Polish diplomat said.

    In its heyday, Solidarity boasted almost 10 million people and was far more than just a trade union.

    British historian Norman Davies, author of numerous books on Poland,  says  Solidarity was seen as “heir to all the nation’s freedom fighters” down the centuries in its brave struggle gainst a totalitarian regime and its paymasters in Moscow.        

    But Poland has changed enormously over the past two decades, becoming a much richer, more open and more self-confident country firmly anchored in the European Union and NATO.  Solidarity today is a shadow of its former self and has little political clout.

    For all the emotionally charged rallies and the politicians’ fiery rhetoric, the fate of the yards is not a top concern for many Poles trying to cope with rising food and fuel prices.

    And Prime Minister Donald Tusk, pro-EU and pro-market may
yet find new investors by September. By winning the reprieve, he
can at least argue he has done more than his predecessors and
political rivals to salvage Poland’s shipbuilding heritage.
 
 
 

Russia’s angry response to an accord between Washington and Prague on building part of a U.S. missile defence shield in the Czech Republic is reminiscent of the rhetoric of the Cold War. Although Russian President Dmitry Medvedev says Moscow still wants talks on the missile shield, his Foreign Ministry has threatened a “military-technical” response if the shield is deployed.

That phrase could have come straight out of the Soviet lexicon and seems more at home in the second half of the last century than now. Russian military analyst Pavel Felgenhauer called it psychological pressure to try to encourage opposition to the missile system among Europeans, and described it as “the same sort that was used in the 1980s by the Soviet Union when the United States deployed cruise missiles in Europe.”

We are, of course, a long way from the tensions of the Cold War. But the dispute is reminiscent of the war of words between the Soviet Union and the United States in the 1980s over another missile defence system — the Strategic Defence Initiative proposed by Ronald Reagan. His dream of a partly space-based missile system, otherwise known as Star Wars after George Lucas’ 1977 film, never became a reality but the row over it plagued Soviet-U.S. relations for years.

The disagreement over the missile defence system that George W. Bush now wants to be partly based in Europe risks having a similar impact on U.S.-Russian relations. Perhaps fittingly, it has been referred to as Son of Star Wars.

I was a correspondent in Moscow in the 1980s when the dispute over Star Wars was at its height. The disagreements were clear. Reagan wanted to deploy a multi-billion-dollar land- and space-based shield to shoot down incoming missiles. Soviet leader Mikhail Gorbachev said the programme would disrupt the nuclear balance and fuel an arms race in space, and expressed  hope that Europe would not become “a testing-ground for the Pentagon’s doctrines of a limited nuclear war”. 

The disagreement led to the collapse of a 1986 superpower summit in Iceland.

When I was back in Moscow in the 1990s, Bill Clinton and Boris Yeltsin were at loggerheads over U.S. plans for a Star Wars-style missile defence umbrella, even though Clinton had pulled the plug on Star Wars in 1993. Moscow said plans to develop the new missile defence system would violate the 1972 Anti-Ballistic Missile Treaty, an agreement Moscow saw as a cornerstone of global security.

Similar issues hung over Vladimir Putin’s presidency and now threaten to strike a severe blow to hopes of an improvement in U.S.-Russian ties at the very start of Medvedev’s presidency.

Washington says it needs a missile defence system based partly in Europe to provide protection against any attack on  European or U.S. targets by rogue states such as Iran, which tested new long- and medium-range missiles on Wednesday. Russia says the missiles could threaten its own defences and might become a bigger threat over time it if the system expanded.

In the 1980s, Moscow was worried about a project that would have based missiles outside the former Soviet-led Warsaw Pact. It is now concerned about a system that would be even closer to home. A radar tracker is to be placed on Czech soil and, if a deal is reached with Warsaw, 10 interceptor missiles could be installed in Poland. Both Poland and what was then Czechoslovakia were members of the Warsaw Pact.

If Poland does not reach an agreement with the United States, Lithuania has been suggested an alternative site for the interceptors. That would be an even less welcome prospect for Moscow because the Baltic state was part of the Soviet Union. Little surprise, then, that Medvedev took a firm line on the issue in comments he made at the group of Eight summit in Japan.

But Moscow could risk shooting itself in the foot by reverting to rhetoric that harks back to the Cold War. Michal Kaminski, an aide to Polish President Lech Kaczynski said on Wednesday Russia’s reaction was unacceptable. He said it showed Poland should “strengthen our alliance with the United States because beyond our eastern border there are politicians who use a language we thought had vanished many years ago, the language of might and imperial ambitions.”