Domański on CNBC: We cannot afford to save on defense

We are in a situation where we cannot afford to save on defense, it is our highest priority, said Minister of Finance and Economy Andrzej Domański in an interview for CNBC television.

He assured that the planned income tax on banks, which is intended to help reduce the deficit, will not harm the banking sector.

The minister, who is visiting Washington in connection with the annual meetings of the International Monetary Fund and the World Bank, responded in this way to the question whether Poland is not spending too much on defense, given the limited return on investment.

– We are in a situation where we simply cannot save on defense. Defense is our priority, security is our priority and that is our highest priority. Of course, we will reduce the deficit in the coming years. We have presented additional revenue measures in our 2026 budget and as a government we are working on additional tools to reduce the deficit, Domański said. He added that Poland is trying to encourage other European countries to increase defense spending because the entire continent will benefit from them.

He emphasized that he was pleased that Poland had received a loan of EUR 43 billion from the EU SAFE program for investments in Polish defense and the European arms sector.

“Polish banks are in good condition and will be able to withstand higher CIT”

When asked about the plan to impose a tax on bank profits, Domański suggested that Polish banks are in good condition and will be able to bear the burden of the tax, which is initially expected to amount to 30%. and gradually decrease to 23%. in 2028

– The position of banks in Poland is very strong. They have a lot of capital and, in my opinion, they benefit from the really high real interest rates that we have in Poland. Many European countries introduce special taxes on the banking sector; We are taking similar steps because we need additional financing for defense, Domański noted. “I think it's common knowledge that we also need to maintain strong public finances to be able to finance our defense spending,” he added.

He noted that banks last year They have achieved record profits and have no liquidity problems, so the new tax will not threaten the health of the sector, especially since the tax covers profits. He added that the main problem of the system is currently not the availability of loans, but the demand for them.

Domański presented Poland's economic situation as very good, emphasizing strong consumer spending, high wage growth and growth on the Warsaw stock exchange. He noted that he expected 3.5 percent. GDP growth next year, further weakening of inflation and maintaining low unemployment. He also noted that the tariffs imposed by the Donald Trump administration are an obstacle to the economy and especially hit the automotive sector, but Poland is exposed to them to a much lesser extent than some of its neighbors.

– I think we're doing really well. For me, the most important thing is to accelerate investment, both public and private. We are working on new tools that will accelerate private investment, because we cannot rely solely on the budget.

From Washington Oskar Górzyński (PAP)

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