Poland’s military modernization relies on the EU SAFE program, as rejecting it would create a 226 billion złoty funding gap with no feasible alternatives.
SAFE Program – Critical for Military Funding
There is no alternative to the SAFE program that would allow Poland to acquire such a large injection of funds for security investments as quickly. The program provides 226 billion złoty for military modernization by the end of this decade. This is not a discussion about whether it’s better to take loans from the EU, US, or finance the army independently. Poland cannot afford the luxury of being selective.
Financial Constraints and Alternatives
If Poland were to obtain these funds through the traditional Fundusz Wsparcia Sił Zbrojnych with repayment obligations from the Ministry of National Defense budget, it would suffocate the budget for military modernization by 2028, when repayment of earlier credits must begin. Poland already has contracts for equipment purchases worth approximately 600 billion złoty, with about 500 billion złoty remaining to be paid within a decade.
For further modernization and expansion by 2030, another 500-600 billion złoty would need to be spent, just for weapon purchases, excluding personnel and maintenance costs. The Ministry of National Defense’s current annual budget is about 100 billion złoty, supplemented annually with several dozen billion złoty from the Fundusz Wsparcia Sił Zbrojni.
Senate Amendment Could Free Up Defense Funds
An important element of the SAFE program from Poland’s perspective is a point added to the bill by the Senate, specifying that debt incurred under the program will be repaid from outside the Ministry of National Defense budget. This could effectively mean additional funds for defense. While there’s no certainty this amendment will survive the legislative process, it represents another argument for not rejecting the program.
Presidential Veto Risks and Consequences
It is uncertain what a presidential veto would mean and whether it would definitively block EU funds. Such a veto might not prevent the conclusion of loan agreements with SAFE but could likely delay the entire process. It would also mean abandoning some projects, particularly those prepared by the Ministry of Interior and Administration and Ministry of Infrastructure, and hinder cooperation with Ukraine.
Tight Deadlines Create Implementation Challenges
The short deadlines are the biggest challenge of the SAFE program from Poland’s perspective. One condition is that contracts financed through the program must be implemented by 2030, with Poland’s domestic contracts needing to be signed by the end of May 2024. This creates an extremely narrow window for contract signing and implementation, especially for more complex weapons systems whose mass production is a multi-year undertaking. Any delays and complications introduced by politicians would pose serious risks that some projects might not fit within the tight timeframe.