Poland receives EUR43.7bn defence loan from EU

Poland has become the first country to receive a loan through the EU’s Security Action for Europe (SAFE) instrument, designed to support the acceleration of defence readiness in Europe.  

Announced on 8 May by the Polish Ministry of Defence (MoD), the EUR43.7 billion loan will be used to modernise and expand the country’s military through increased defence capabilities and scaled up domestic production.  

Adopted by the EU in May last year, SAFE is a funding mechanism that will provide EUR150 billion in loans to participating countries in a bid. Poland is receiving the largest share from the SAFE instrument, which the MoD says constitutes the most substantial investment into the country’s security and military in history.  

Almost 12,000 entities across the country are projected to help deliver the SAFE loan, with around 90% of all contracts expected to be signed with Polish companies.  

Deputy Prime Minister Władysław Kosiniak-Kamysz said that, as a result of the SAFE loan, 40 contracts will be signed in May alone to support equipment procurement.  

The country aims to “convert every Polish złoty that [it] will receive into real capabilities as quickly and as effectively as possible,” General Wiesław Kukuła, Chief of General Staff, said.   

The loan will not only increase the defence of Poland, but also the “security of the eastern flank of the North Atlantic Alliance and the EU,” Kukuła added.  

“In a turbulent security environment, close cooperation between EU institutions and countries is more important than ever,” added Andrius Kubilius, Commissioner for Defence and Space at the European Commission.  

Kubilius also announced that Lithuania has received a SAFE loan agreement of EUR6.4 billion. This will be used to help develop strong defence capabilities, support German forces in Lithuania, and defend the eastern region of the EU.