— SAFE is the cheapest and most effective source of financing for the modernization of the Polish army – said Minister of Finance Andrzej Domański, emphasizing that the program is based on multi-year loans with a long grace period.
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Domański noted that the state budget would not be able to generate such funds on its own in a short time, pointing out that we are talking about an amount of up to PLN 200 billion.
Savings in debt service
Minister of Finance Andrzej Domański drew attention to the savings resulting from the use of the SAFE program.
In comparison with the costs of issuing standard treasury bonds, the state can save PLN 36 billion, and in the case of financing by Bank Gospodarstwa Krajowego (BGK) under the Armed Forces Support Fund – even PLN 60 billion. This solution, according to Domański, is not only financially beneficial, but also allows for greater budget stability.
The minister also referred to allegations about incurring liabilities in euro, which, according to critics, may involve exchange rate risk. He recalled that previous governments also financed arms purchases in foreign currencies, such as the US dollar or the South Korean won.
Read also: Polish investment plan in SAFE approved by the EU. EUR 43.7 billion of support
— BGK has tools to hedge currency risk, and the stability of the Polish zloty against the euro additionally proves the security of this solution – Domański assured.
Political controversy around SAFE
The SAFE program sparked sharp criticism from Law and Justice. Minister Domański described the opposition party's opposition as a “furious attack”, emphasizing that the program supports the Polish defense industry and is of key importance for the economy.
– These are tens of billions of zlotys that will remain in taxpayers' pockets. There is no cheaper source of financing for the modernization of the Polish army, argued the minister.
Read also: The SAFE program divides politicians. See calculations by economists who dispel doubts
Domański also referred to: PiS convention organized in Stalowa Wola, criticizing the choice of venue.
— It is outrageous that, with such strong opposition to the SAFE program, they are organizing the convention in a place that may be a significant beneficiary of this solution, said the minister.
