Fugitive Leverage: Commercial Banks, Sovereign Debt, and Cold War Crisis in Poland, 1980–1982

This article examines a familiar Cold War event, the Polish Crisis of the early 1980s, but from an unfamiliar perspective: international financial history. Historians have yet to examine how the growing international activity of Western commercial banks and the Eastern Bloc’s heavy borrowing on international capital markets during the 1970s influenced the course of the late Cold War. This article covers the history of the Eastern Bloc’s largest borrower—Poland—and its road to sovereign default in 1981. It examines how financial diplomacy among banks, communist countries, and the U.S. government catalyzed the formation of the labor union Solidarność (Solidarity). Ultimately, this article speaks to an important theme in the history of U.S. capitalism since World War II; namely, how the construction of global finance influenced U.S. foreign policy. The end of the Cold War in the fall of 1989 was the result not only of communism’s loss of legitimacy among the peoples of Eastern Europe, but also its loss of creditworthiness on global financial markets.