By Karol Badohal
WARSAW, March 5 (Reuters) – Poland’s central bank (NBP) will not propose any alternative to the European Union’s ‘SAFE’ programme for defence financing that lowers its reserves, Governor Adam Glapinski said on Thursday, adding that he believed the bank’s profits could be used.
Warsaw was the biggest beneficiary of the EU’s 150-billion-euro Security Action for Europe (SAFE) initiative to boost the continent’s armed forces, but the programme has been hotly debated in Poland as nationalists oppose Brussels getting involved in defence.
Nationalist opposition party Law and Justice (PiS) says SAFE would saddle Warsaw with debt, limit arms purchases from Warsaw’s most important ally, the U.S., and that it comes with conditions that PiS says are intended to allow German meddling in Polish affairs.
The government has dismissed these views and says ‘SAFE’ is essential for Polish security in the face of what it says is a rising threat from Russia.
However, PiS urged their ally President Karol Nawrocki to veto a bill that would create a mechanism for spending the money from the EU loans.
POLISH ALTERNATIVE
On Wednesday Glapinski appeared alongside Nawrocki, who said they had been discussing a plan to use Polish funds instead of the EU loans.
However, Nawrocki and Glapinski did not announce specific details of how such a plan would work.
“We intend to propose actions that will not lead to a depletion of our foreign exchange reserves,” Glapinski told a news conference on Thursday. “We do not seek to deplete our reserves. We have accumulated these reserves for a different purpose.”
He said central bank profits could be used and that the government and the presidency should be the first to know the details.
He said the NBP would act within the limits of its mandate, but that Poland’s presidency was working on draft legislation that would increase the central bank’s ability to support defence spending, without elaborating.
Leszek Skiba, an adviser to Nawrocki, wrote on X that the plan would involve the NBP using profits from the increasing value of its gold reserves.
($1 = 3.6794 zlotys)
(Reporting by Pawel Florkiewicz, Karol Badohal and Marek Strzelecki; Writing by Anna Koper and Alan CharlishEditing by Gareth Jones)