SAFE loan agreement within several dozen hours. “The advance payment will be received immediately”
— We will sign this agreement within several dozen hours. On our side, there will be four signatures: Deputy Prime Minister and Minister of Defense Władysław Kosiniak-Kamysz, Minister of Finance Andrzej Domański and two representatives of Bank Gospodarstwa Krajowego. There will be two signatures from the European Commission: Commissioner for Defense Andrius Kubilius and Commissioner for Budget Piotr Serafin – said Sobkowiak-Czarnecka on TVN24.
She reported that 15 percent the entire amount can go to Poland immediately.
– It's a matter of hours. This is what we talked about with Piotr Serafin. This money is already waiting, noted Sobkowiak-Czarnecka.
“Use of the EU rating”
The plenipotentiary reminded that the idea of the SAFE mechanism is to use the EU's rating to borrow money for the purchase of weapons, thanks to which Poland will pay lower interest rates than in the case of obtaining funds on its own. – So first the European Commission borrows on world markets and then we get the money – she said.
In Sobkowiak-Czarnecka's opinion, the government's negotiations with the EC were a historic success because Poland became the largest beneficiary of the program, a significant part of which will go to the Polish arms industry.
Read also: Huge funds will go to Poland. The defense sector will gain billions
The representative informed that after signing the contract, BGK will immediately receive approximately PLN 20 billion.
— Everything will happen through the Armed Forces Support Fund, a mechanism that already exists and is operated by Bank Gospodarstwa Krajowego — she added.
Sobkowiak-Czarnecka pointed out that decisions on what to spend SAFE money on should be made by the military, not politicians. She noted that due to President Karol Nawrocki's veto of the SAFE Act, the money from the mechanism would not be able to support other services, but the government would find funds for this purpose.
EUR 44 billion for the needs of the armed forces
— It will probably end with all the funds, i.e. almost EUR 44 billion, going to the needs of the armed forces. Whereas We will not leave you without support […] Police and Border Guard – she pointed out.
In accordance with EU regulation by the end of May, member states will be able to order defense equipment themselves under SAFE. After this date, they will have to look for partner countries for each purchase.
Read also: SAFE and the president's veto. We asked leading businessmen. “I'm terrified”
This is a key date for Poland, because most of the purchases we plan are orders in the Polish industry. As Sobkowiak-Czarnecka said recently, there is no fear that Poland will not be able to complete these orders by the end of May.
Low interest loans
The EU SAFE program provides for: EUR 150 billion of support in the form of, among others, low-interest loans, primarily for the purchase of military equipment, especially those produced in Europe. The EC granted Poland a total of EUR 43.7 billion. These funds are intended to finance defense projects provided for in the Polish investment plan. They are to be intended, among others, for: for the implementation of the East Shield program, the development of anti-drone systems, anti-aircraft defense, artillery and the modernization of military transport infrastructure. According to the government's declaration, 89 percent funds will go to Polish industry and economy.
In mid-March, President Karol Nawrocki vetoed the act implementing SAFE – it assumed the creation of a special fund to which EU funds would be allocated. In response to the veto, the government adopted a resolution on the Armed Poland Program, which authorizes the Minister of National Defense and the Minister of Finance and Economy to sign the agreement and documents regarding the SAFE loan on behalf of the government. The loan will be taken out by Bank Gospodarstwa Krajowego for the benefit of the Armed Forces Support Fund (FWSZ). The loan will be repaid from funds not included in the minimum limit for defense spending.
Is it SAFE? Well, prices are up by 30%.
Critics emphasize that the program's short deadlines will result in overpaying for equipment. The example of Romania is given.
“When we started discussions on SAFE, some private ammunition producers presented their price offers. Now, when we sign contracts, they come back to us with prices higher by about 30 percent. They add this additional 30 percent to the amounts they had previously proposed. We will not accept it,” said Radu Miruță, Minister of National Defense of Romania.
Defense Industry Europe says Rheinmetall AG's offer for the MLI (Mașina de Luptă a Infanteriei) infantry fighting vehicle program on the Lynx KF41 platform exceeds initial estimates by more than 30%, representing an increase in total costs of approximately EUR 1 billion. The portal adds that there were also suspicions that Rheinmetall tried to lower some technical requirements and asked the Romanian government for financial support.
