In brief

• Poland will submit its first disbursement request under the SAFE programme on Friday, for over EUR 6 billion.
• A weaker złoty raises the value of the loan in złoty, although the amount in euros does not change.
• The European Commission will allocate an additional EUR 21.3 billion to all EU member states.

First disbursement under the programme

Warsaw will submit a disbursement request on Friday under the EU SAFE loan instrument for an amount exceeding EUR 6 billion (Ile kosztuje polska pożyczka SAFE? Coraz więcej. Nowe wyliczenia – Business Insider Polska) (Ponad 6 mld euro na obronność. Polska składa pierwszy wniosek o wypłatę z unijnego programu SAFE – Bankier.pl). A report on the implementation of the financed projects will be attached to the request. This was announced on Tuesday in Brussels by Deputy Minister of National Defence Magdalena Sobkowiak-Czarnecka. Of the total allocation, which amounts to over EUR 43 billion for Poland, an advance payment of EUR 6.5 billion was already disbursed in May (Ponad 6 mld euro dla Polski? Pierwszy wniosek o wypłatę środków z SAFE już w piątek – Dziennik.pl).

Contracts and contractors

Within SAFE, the Armament Agency has signed 39 contracts and 12 annexes, with a total value reaching PLN 120 billion. The Cyberspace Defence Forces additionally signed 16 agreements worth PLN 3.4 billion. According to the deputy minister, almost all Armament Agency orders are being carried out by the domestic industry, and contracts for cyber soldiers went exclusively to Polish companies.

Exchange rate raises the cost

Although the loan amount in euros remains unchanged, its value in złoty is rising, because Poland repays the obligation in the European currency (SAFE podrożało. Polska może zapłacić miliardy więcej – money.pl). At the end of May, at an exchange rate of about PLN 4.21 per euro, the debt corresponded to PLN 184 billion. At an exchange rate of about PLN 4.40, it is already about PLN 192 billion, meaning the difference is about PLN 8 billion (Polska pożyczka SAFE coraz droższa. W kilka miesięcy przybyło 8 mld zł – Rzeczpospolita). The interest rate on the financing has also changed.

Second pool for all countries

The European Commission will allocate an additional EUR 21.3 billion from the unused funds of the first call, in which 19 countries received a total of EUR 150 billion (Ponad 21 mld euro czeka w Brukseli. Czy Polska sięgnie po kolejne zbrojeniowe miliardy? - Bankier.pl – bankier.pl) (Nowa pula programu SAFE. 21 mld euro na zbrojenia czeka na chętnych – RMF24). Some countries have reduced their demand: Italy will take EUR 8 billion instead of EUR 15 billion, and Hungary will take EUR 5.4 billion instead of EUR 16 billion. All EU member states may benefit from the additional funds, including those that did not take part in the first round (Drugi nabór SAFE. Czy Polska zdecyduje się na kolejną pożyczkę? – RMF24). Commission spokesperson Thomas Regnier announced that the criteria remain the same, and the Commission first wants to allocate the entire pool.