The Polish People's organization task was sent to the Sejm to order finance for defence and to “fix” the presidential proposal, the alleged Polish SAFE 0 percent. Karol Nawrocki vetoed a low-interest debt bill from the EU, proposing to benefit from the NBP profit. So the people want the profit of the central bank to support defence, but alongside the EU loan.
"We want the NBP profit to strengthen safety – a strong army, police, Border Guard, SOP and peculiar services. Our “Safe Poland” task is in line with the Constitution, cleans up the President’s proposal and removes the barriers that are blocking measures today. We keep its function and bet on cooperation”, wrote Deputy Prime Minister and at the same time head of the peoples Władysław Kosiniak-Kamysz.
SAFE dispute
A twelve days ago. Karol Nawrocki vetoed the Government Act on SAFE, beginning up Poland’s way to a low-interest debt for defence from the EU. The President's Chancellery has submitted another task in the Sejm to establish the Polish Defence Investment Fund (PFIO). The head of state has called her initiative “Polish SAFE 0 percent”, highlighting the allegedly cost-free nature of the solution. The starting point for the presidential bill was the proposal of Adam Glapiński, president of the National Bank of Poland. In early March, the head of the Central Bank proposed to revalue the gold held by the NBP through ‘active management of reserves’, which, in his opinion, could make it possible to get very advanced profits. According to Glapiński, the value of unrealised gross from the increase in the valuation of gold is PLN 185 billion. This amount could be paid out by the NBP in the form of profit over a fewer years to be utilized for defence.
The presidential proposal met with a cool reception on the government side. The reservations afraid first and foremost lack of clear indication of real fresh sources of backing for the military. The head of the MON Władysław Kosiniak-Kamish besides raised issues of a systemic nature, assessing that the task may be incompatible with the Constitution – mainly due to the President's anticipated participation in the supervision of the fund. In his opinion, this would mean entering into the powers of the government and the Ministry of Defence in the management of the improvement of the armed forces.
Doubts have not been limited to MON. besides critical of the proposal was the talker of the Sejm Włodzimierz Czarzasty, who decided to halt work on the project. As a result, the presidential initiative stuck in the Sejm, becoming the starting point for alternate proposals – the PSL project.
Money not only for the army
What is the proposal of the people and what is different from “SAFE 0 percent”? The PSL task is not a completely fresh structure, but is mostly based on solutions previously proposed by the President. The core of both concepts remains common – it is about the establishment of the Polish Defence Investment Fund (PFIO) in the Bank of the Gospodarstwa Krajowy, which would be an additional tool for financing safety spending. The main origin of the fund's supply in both cases is the funds from the NBP profit.
However, the people propose a more explicit regulation of this issue. Their task assumes that for the next decade PFIO would receive at least 90% of the yearly NBP profit. The remainder would be divided between the reserve fund of the central bank and the funds at the disposal of its authorities.
Significant changes besides concern the way money is spent. While both projects keep key targets for the modernisation of the armed forces – specified as the acquisition of weapons, equipment or investment in military mobility infrastructure – the PSL clearly expands the list of possible uses of measures. The Fund would support not only the army, but besides another formations liable for state security, including the Police, Border Guard, SOP, or peculiar services. This is an crucial evidence because, after the president vetoed the SAFE Programme Act, these services will not be able to benefit from an EU loan.
A fresh component is besides the clear inclusion of the wellness sector. The task provides for the anticipation of financing the strengthening of medicinal entities subject to defence and home affairs ministries. The expenditure directory besides includes investments related to border protection and critical infrastructure, which is part of a broader, systemic knowing of security.
At the same time, any solutions stay unchanged from the presidential proposal. The PSL task does not exclude funds allocated to support commitments from the 3% limit on defence GDP. In practice, this means that any loans made by the PFIO could in future be repaid from the budget of the Defence Ministry, as is the case with the Armed Forces Support Fund.
The financial mechanics of the fund itself remains unchanged. Bank Gospodarstwa Krajowego, managing PFIO, would hold the anticipation of raising funds through bond issuance and borrowing, both on the home and abroad markets. This means that the fund could besides benefit from debt financing alongside the NBP funds.
Limiting constitutional risk
The PSL besides has its thought of a fund management structure. The authors of the task modified the composition of the bodies provided for in the first presidential proposal – primarily the Fund Board and the Steering Committee.
In the case of the Council, the amendments concern both the extension of its composition and its reshuffling. The presidential version of the Council was to be headed by the Minister of Defence, and the group would include representatives of the president and Prime Minister, the Minister of Finance and the typical of the National safety Office. The PSL proposes to complement this group with ministers competent for home affairs and transport, while at the same time giving up the engagement of a typical of BBN.
A akin correction shall apply to the Steering Committee. The draft prepared by the President's Chancellery provides for a five-member composition, including representatives of the MON (as president), the President, Prime Minister, the Ministry of Home Affairs and BBN. People propose to change this configuration – they destruct the participation of the BBN and introduce representatives of the Ministry of Finance, Transport and Minister liable for peculiar Services.
The scope of competence of both bodies remains fundamentally unchanged. The Fund Board would set strategical lines for the PFIO, including approving yearly priorities and multiannual investment programmes. However, the Steering Committee would be liable for day-to-day supervision of spending.
The changes proposed by PSL are not only organisational but besides systemic. This is an effort to "rewrite" the task in specified a way as to reduce the constitutional risks identified towards the first proposal. The main nonsubjective is to postpone the direct influence of the presidential centre on fund management and to make it more explicit in the powers of the government.
The People's task is waiting to be referred to the Sejm.
