Poland’s €44B Defence Boost: EU Approves SAFE Loans

The European Union has given final approval to nearly €44 billion (185 billion zloty) in loans for Poland to support defence spending, a move that has sparked domestic political controversy. The funds, part of the Security Action for Europe (SAFE) financial instrument, are intended to bolster Poland’s defence capabilities but face potential opposition that could delay or block their access.

EU Approval and Funding Details

Poland was allocated a €43.7 billion share of SAFE last September, the largest portion of the €150 billion fund available to all member states. The European Commission approved Warsaw’s formal request for the funds in January. Final approval from the Council of the European Union, comprised of representatives from national governments, was issued today to Poland and seven other member states, following a similar approval for eight others last week.

The decision makes SAFE funds available to Belgium, Bulgaria, Cyprus, Denmark, Estonia, Finland, Greece, Italy, Latvia, Lithuania, Poland, Slovakia, Spain, Croatia, Portugal and Romania. The Czech Republic, France and Hungary are still awaiting approval.

“These implementing decisions will pave the way for affordable, long-term loans to be released by the commission under the SAFE instrument, demonstrating that the EU is delivering when it comes to defence,” said a spokesperson for the Cypriot presidency of the Council of the European Union.

Government Response and Planned Spending

Polish government spokesman Adam Szłapka welcomed the decision, stating on social media that the Polish arms industry would greatly benefit from the SAFE programme. The government anticipates that approximately 80% of the funds will be spent domestically.

Poland’s application for the funds includes a 300-page dossier outlining 139 projects to be financed by SAFE, though the list remains classified for security reasons. The government has pledged to release more information to the public as soon as possible. One known project is the development of a new anti-drone system, in collaboration with Norwegian partners, to protect Poland’s eastern borders.

Opposition Concerns and Potential Veto

The lack of transparency regarding the allocation of funds has drawn criticism from the opposition Law and Justice (PiS) party. PiS also argues that the EU could arbitrarily block funds in the future. Concerns have also been raised that the requirement to spend the majority of SAFE funds within Europe could potentially strain Poland’s relationship with the United States, a key security partner and supplier of military hardware.

Last week, the government’s majority in the Sejm approved a bill establishing a mechanism for Poland’s National Development Bank (BGK) to receive the SAFE funds, despite opposition from PiS and the far-right Confederation party.

PiS leader Jarosław Kaczyński has appealed to President Karol Nawrocki to veto the legislation. He claims the SAFE programme aims to distance Poland from the United States and bring it under German influence. President Nawrocki has expressed similar doubts about SAFE, which was a key topic at a recent National Security Council meeting.

Government Reassurance and Alternative Plans

Prime Minister Donald Tusk reiterated the importance of SAFE and urged PiS and Nawrocki to support the programme. He emphasized that the EU-backed loans offer “very favourable terms,” with interest rates lower than those secured by the previous PiS government from South Korea for military equipment purchases.

“I honestly cannot understand the motivations of those who are currently deciding to try to block this money,” said Tusk. “Even if they veto it, we will find ways to save at least some of these funds, but it will take time, and it will also cost some unnecessary money and stress.”

Government plenipotentiary for SAFE funds, Magdalena Sobkowiak-Czarnecka, stated that even if Nawrocki vetoes the bill, the government can still sign an agreement with the European Commission to receive the funds.