A LETTER arrived from Warsaw this week. At least, it was a belated Christmas card that had somehow grown into something bigger, an epistle of six pages jotted down between times by my old friend Stas, running from one card on to another and then on to writing paper.

Some readers may remember the story of Stas. When a young man he was smuggled out of Poland with the help of visitors from Britain. He went to Paris, studied in Edinburgh where he was befriended by my father and, after various adventures, became one of Montreal’s leading restaurateurs.

In the eighties he came back to Paris. After the end (or suspension) of the cold war, he began to make frequent trips to Poland to visit his parents-in-law. He and his wife found that there were no restaurants offering really good food and service and resolved to fill the gap.

After much wasted time, they took over a rundown cafe, ”or rather a cockroach farm”, and after 10 weeks of renovations reopened the Cafe Eulat. It owes its Israeli name to the fact that it is a sub-tenancy of the Polish-Israeli Friendship Society.

In no time at all Stas found he was being denounced by the neighbours as a Jew from Paris who did not even speak good Polish. Letters sent to the health authorities, the police and the health authorities complained that the restaurant was frying herrings, cooking garlic and onions, and playing the piano 24 hours a day.

It so happens the Eulat does not serve herring. Nor does it have a piano. But denunciations have been taken seriously in Warsaw ever since 1939, and a strong xenophobia has developed since the communist days. The unions and the workforce remain deeply suspicious of privatisation and economic reform. They claim that their industries are being given away for peanuts; in fact, says Stas, it is suprising that anyone wants to take them over at all.

The infrastructure is in a mess and work attitudes are still those of the communism’s classic old conspiracy: they pretend to give us a job and we pretend to work. In the restaurant Stas uses only students uninfected by the old habits and finds that they are at least as good as any he employed in Montreal, where at the peak he had three restaurants.

The Eulat is in embassy row, and it quickly found favour. It did not need to advertise and it did not bother to replace its sign after it was ripped down by vandals. The next problem was that, observing its success, the landlords proposed to increase the rent (set in hard currency) by 140%. Stas threw a spectacular tantrum and threatened to take his business elsewhere.

The landlords thought he was bluffing. But within a week he had reached agreement with the Actors’ Club next door, once a fairly exclusive club for actors, writers, journalists and artists but now a ”disastrous” restaurant. The landlords dropped their demands; but Stas found himself stuck with two establishments, one seating 70, the other about 120.

Like most restaurants in Poland, the club had been a ”bugs’ paradise”. They found ”unbelievable” dirt. But as the health authorities got regular bribes it remained in business. Stas completed the renovations and reopened the restaurant. The bribes stopped; he sensed that the authorities might have taken the reprisal of closing it down had it not been for the popularity it quickly gained with Ministers, generals, famous writers and leading journalists.

At the time of writing Stas was organising a New Year’s Eve ball at the club. He also hoped to do the food for 500 guests at a new American-owned disco which will cater mainly for the many young foreign executives now based in Warsaw.

Stas and his growing family are renting an apartment. The rent is four times the average wage but is regarded as a good deal. In France, he reckons, you could have a mansion on the outskirts of Paris for the same price.

As ever, Stas is unquenchably cheerful. Yet between the lines of his letter you sense the difficulties that have led to the political defeat of the economic reformers in Yeltsin’s Government. The new economy deals in hard currency and its light bathes only a few; in the darkness beyond remains a sullen population disenchanted by what the reforms have meant for it.

Here is the breeding ground of xenophobic nationalism and fascism. The illusion, irresponsibly peddled by some western politicians, that democracy is synonymous with prosperity, is long gone. The Chinese are demonstrating that economic success, for the moment at least, is not incompatible with totalitarian socialism. Democracy’s merits are as much ethical as economic; better to live, as my mother used to say, in a poor country and a free one.

The reforms are going to take much longer than anyone thought; as with Stas’s waiters, a generational shift of attitudes is needed. The leadership has changed but old communists are still everywhere in the administration. They watch, and wait