WARSAW — In a significant policy shift, Polish President Karol Nawrocki announced on Wednesday his intention to explore financing options for the nation’s military expansion through the National Bank of Poland, rather than relying on the EU’s €150 billion Security Action for Europe (SAFE) loans-for-weapons initiative.
This move arises from ongoing tensions with Prime Minister Donald Tusk’s pro-EU administration regarding nearly €44 billion allocated under SAFE for the modernization of Poland’s armed forces, a financial commitment repayable by 2070. Nawrocki emphasized, “We have a concrete, Polish, safe and sovereign alternative to the SAFE program that will not involve any financial interest,” during his address alongside NBP President Adam Glapiński.
Financial strategy and concerns
The proposed strategy aims to collaborate with the central bank to secure 185 billion złoty, a sum equivalent to the borrowing Poland would undertake under SAFE. Both Nawrocki and the opposition nationalist Law and Justice party, which supports him, have expressed their reservations about SAFE. They contend that it would impose a long-term debt burden on Poland, introduce exchange rate risks due to the loan being denominated in euros instead of Polish złoty, and potentially invite political conditions from Brussels.
Moreover, the critics argue that contracts funded through SAFE might disproportionately favor Western European defense contractors rather than domestic firms, a claim the government disputes, asserting that 80 percent of the funding will remain in Poland. There are also apprehensions regarding the reaction of the United States, Poland’s primary ally and arms provider, which has voiced concerns about SAFE’s stipulations that restrict participation from non-EU countries.
“The war in Iran and recent U.S. operations also show … above all, the effectiveness of American equipment,” Nawrocki noted.
Political dynamics and future plans
Nawrocki’s announcement comes in the wake of parliamentary approval for a law outlining the allocation of SAFE funds. If the president chooses to veto the legislation, Tusk’s coalition lacks sufficient parliamentary support to overturn the decision. Nonetheless, the government maintains that it could still access EU funds, even with a potential veto from Nawrocki.
Despite this, Nawrocki highlighted that SAFE funding comes with limitations, insisting that his proposal represents, “a concrete and secure alternative for SAFE that will not involve any interest … without credit, without changing Poland’s situation in the EU, and with the flexibility our armed forces need in selecting equipment.”
Glapiński suggested that the central bank might utilize its annual profits to facilitate this initiative. While typically, central bank profits are allocated to the state treasury, this practice has not occurred in recent years. Notably, the NBP has accumulated 550 tons of gold, with ambitions to increase that to 700 tons. However, Polish legislation restricts the central bank’s ability to fund budgetary expenditures directly.
Glapiński clarified, “We cannot use any part of the reserves in the sense that a portion would be transferred, because that would be against the law.” Nawrocki plans to provide more information detailing this approach, which will include new legislative proposals for Tusk and Defense Minister Władysław Kosiniak-Kamysz to review as early as Wednesday.
In response, Kosiniak-Kamysz defended the SAFE program, asserting via X, “The SAFE program provides the fastest and most concrete funding for modernizing the Polish army, which is why the military, the defense industry, and all those committed to strengthening our armed forces are calling for the president to sign the [SAFE] law.” He further remarked, “If additional financing instruments for the army appear, the Polish Armed Forces will only benefit — not as an alternative to SAFE, but as extra resources enhancing security.”