The centre-left Polish Government led by Prime Minister Donald Tusk passed a resolution to proceed with accessing funds from the EU’s Security Action for Europe (SAFE) loan facility, despite President Karol Nawrocki’s veto.
The move on March 13 means the government expects to receive the first tranche of the SAFE cash in April.
It comes just a few days after the opposition Conservative (PiS-allied) Nawrocki vetoed legislation creating a mechanism for the SAFE loan. That was because it was possible to avoid the loan by accessing the central bank’s gold reserves.
He said it was unacceptable that the SAFE loan was covered by the European Union conditionality mechanism. This means the European Commission could stop the money if Poland fails to meet any of its policy obligations to the EU.
Poland’s Government official responsible for the SAFE programme, Magdalena Sobkowiak-Czarnecka, said she expects the country to receive its first EU defence SAFE tranche worth €6.5 billion, representing 15 per cent of the total €44 billion loan.
The state development bank BGK will take on the loan on behalf of the Armed Forces Support Fund, with the Treasury providing guarantees.
That means, though, that the funds cannot be used for non-military purposes, such as civilian or border security.
Talks with the EC on the loan agreement are due to conclude by March 20, with a signing expected by late March or early April.
The Tusk administration claims that around 90 per cent of the funds are intended to be spent with Polish companies, across a supply chain of some 12,000 subcontractors linked to the Polish Armaments Group, as well as private firms in drone and space technology.
The presidential veto complicates access to around €1.66 billion earmarked for the Border Guard and Police under the original plan but the government says it is working to find an alternative legal route to channel those funds.
The president’s chief of staff, Zbigniew Bogucki, meanwhile, has criticised the government for trying to “circumvent the law”.
He said its resolution on implementing SAFE should be reviewed by the constitutional court.
Nawrocki made clear earlier in March that he regards the SAFE programme as unconstitutional because it gives a foreign entity, the EU, influence over Poland’s national defence.
The head of state has already submitted to parliament his own legislation to create a sovereign alternative to SAFE which he claims would provide the same amount of funds but interest-free from the central bank.
Tusk’s ruling majority, though, is refusing to discuss the measure, claiming it fails to make clear how the money would be generated. It says it would also mean the central bank breaching the Polish Constitution’s ban on the use of central bank assets to fund the state budget.
