Bureaucracy delays SAFE. The agreement for EU billions will take place only in April

Contrary to announcements, it will not be possible to sign a loan agreement with Poland under the SAFE defense loan facility by the end of March. European Commission spokesman Thomas Regnier told PAP on Friday that the agreement will be signed in the second or third week of April.

Regnier confirmed that the EC still plans to pay out the first money from SAFE by the end of April. Therefore, postponing the deadline for signing the contract to April will not affect the deadline paying Poland 15 percent advance payments (approx. EUR 6.5 billion).

The Commission first imposed a more ambitious plan – the loan agreement was to be finalized in March, which was confirmed by the Polish government. According to PAP information, the problem turned out to be the template of the agreement itself, the conclusion of which is necessary to receive an advance payment. The EC has prepared one template agreement, to which member states submitted comments. According to PAP information, capitals submitted about 250 amendments.

– Brussels is a huge bureaucratic machine, sometimes procedures require more time – emphasized an EU source in an interview with PAP.

As this person said, the delay is not related to the “internal debate” in Poland about SAFE. President Karol Nawrocki vetoed the bill introducing the EU instrument into Polish law. Instead of the act, the government adopted a resolution on the Armed Poland program, which authorizes the ministers of defense and finance to sign a loan agreement with the European Commission.

Together with the Polish agreement, agreements will also be signed with 15 other countries that applied for SAFE funds and whose national spending plans have already received the green light from the Commission and the EU Council. Later, loan agreements will be signed with France and the Czech Republic, whose national plans were approved by the EC only on Wednesday, i.e. with a delay of several weeks. Both countries still need to receive the consent of the member states, which have four weeks to make this decision. This means that advance payments for Paris and Prague will be paid later.

The only country whose SAFE national plan has not yet been approved is Hungary. According to an EU source, this happened because the government in Bucharest was seeking more funds than the EUR 16 billion allocated to them under the program. The EC asked Hungary to modify the plan, but the country still has not done so.

The agreement specifies the loan availability period, the amount of advance payments and the rules for their settlement.

In addition to the loan agreement, SAFE beneficiary countries will also enter into operational agreements setting out the link between the implementation of the plan and the corresponding financial assistance, including a preliminary schedule for disbursement of loan installments (with an annual ceiling, if applicable).

According to the resolution adopted by the Polish government, the loan will be repaid from funds that are not included in the minimum limit for defense spending. This is a response to the presidential veto.

The vetoed act provided that a special fund would be created at Bank Gospodarstwa Krajowego to handle funds from EU loans. As part of the solution adopted by the government, the SAFE loan will be taken out by BGK for the Armed Forces Support Fund.

Poland is to be the largest beneficiary of the SAFE program among the 19 EU member states that have signed up to it. The EC granted Poland EUR 43.7 billionfrom which defense projects provided for in the Polish investment plan will be financed.

The EU SAFE program, finally approved by member states on February 17, provides for: EUR 150 billion of support in the form of, among others, low interest loansprimarily for purchases of military equipment, especially those produced in Europe.

From Brussels Jowita Kiwnik Pargana and Magdalena Cedro (PAP)

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