SAFE is a €150 billion European Union defence financing initiative focused mainly on military procurement, with a strong emphasis on equipment manufactured in Europe. The programme was introduced as European countries sought to strengthen defence capabilities amid security concerns linked to Russia’s war against Ukraine.
Poland became the first of the 19 participating countries to sign a SAFE agreement, with Lithuania expected to follow. The signing opens the way for an advance payment of around €6.5 billion to be transferred to Poland as early as May.
The agreement was reached despite political disputes within Poland over the mechanism used to secure the funding. Right-wing President Karol Nawrocki vetoed related legislation, arguing that the European Union could “arbitrarily suspend” financing under the 45-year loan arrangement for political reasons.
Prime Minister Donald Tusk’s government responded by adopting a resolution allowing state development bank BGK to take out the SAFE loan and channel the funds through the Armed Forces Support Fund. The move avoided the need for the vetoed legislation and authorised the defence and finance ministers to conclude the agreement with the European Commission.
The Armed Forces Support Fund, established in 2022, is already used to finance military procurement projects in Poland. Officials said using the fund for SAFE financing should allow most major weapons programmes to proceed largely according to plan, although some projects included in the original investment proposal may lose funding.
SAFE financing is expected to support several of Poland’s key defence priorities, including the East Shield border fortification project, anti-drone systems, air defence, artillery, armoured vehicles and ammunition production. A number of Polish defence companies are expected to receive SAFE-backed orders as part of the programme.
Among the companies expected to benefit are MESKO, which produces ammunition and missile systems including the Piorun air-defence system, Dezamet and Fabryka Broni “Łucznik” in Radom. Fabryka Broni “Łucznik” manufactures small arms including Grot rifles, Beryl rifles and VIS 100 pistols.
Other expected beneficiaries include Huta Stalowa Wola, producer of the Krab howitzer, Rak mortar and Borsuk infantry fighting vehicle, as well as Wojskowe Zakłady Elektroniczne in Zielonka, which works on radar, electronic warfare and air-defence components. WZL No. 1 in Łódź, which services military aircraft and helicopters, is also expected to receive support.
Additional SAFE-backed funding is expected to go to Zakłady Mechaniczne “Tarnów” in Tarnów, which manufactures machine guns, sniper rifles, grenade launchers, mortars and anti-aircraft systems. CENZIN, which specialises in arms trade, equipment supplies and modernisation services, is also expected to benefit from the programme.
Source: TVP World.
