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The EU should not punish Poland for its record defence spending that helps protect the continent from further Russian aggression, the Polish finance minister has argued.
Andrzej Domański told the Financial Times that Brussels should show solidarity rather than threaten “unfair” fiscal sanctions against Poland for its ballooning military expenditure.
“We spend a huge part of our GDP on defence and we are spending it also to help to some extent other [EU] members,” Domański said. “We deserve special treatment — if it was not for defence, we would not have the excessive deficit.”
Poland’s government recently adopted a 2025 budget that raises defence spending to an unprecedented 4.7 per cent of GDP. Warsaw is already spending 4.1 per cent of GDP on its military this year, double the Nato target and the highest level among the alliance’s members.
In July the European Commission opened a so-called excessive deficit procedure against Poland for running a fiscal gap of 5.7 per cent this year, above the 3 per cent of GDP limit set by the bloc’s rules.
“I believe it’s quite unfair that we are in this [excessive deficit procedure.] I believe more international solidarity should be expected here,” Domański said.
The Polish government earlier this week presented a plan saying Warsaw will cut the deficit to 2.9 per cent of GDP in 2028, provided the economy keeps growing.
France and Italy, as well as five other EU countries, are also subject to the same sanctions procedure and are demanding more time and leniency from the commission in bringing their deficit down. French Prime Minister Michel Barnier has recently warned that France could only meet the 3 per cent target in 2029, two years later than initially planned.
In November the commission will publish its assessment of each country’s multiyear plan to reach a deficit of 3 per cent of GDP. Domański said he was “pretty optimistic” about Brussels approving Warsaw’s deficit- reduction path.
Under the plan it submitted to the commission, Poland has pledged to reduce spending by 0.82 per cent of GDP on average over four years, even as it will allow for an increase in military spending in 2025, a person close to the negotiations said. Discussions are constructive, another person said, and the commission was expected to give a positive assessment to the plan.
Still, the resumption of excessive deficit procedures, which were suspended during the coronavirus pandemic, seemed at odds with the EU’s latest drive to boost public investments, Domański said. Last month former Italian premier Mario Draghi called for the EU to raise investments by €800bn a year as part of his recommendations to boost the EU’s competitiveness.
“We have EU rules and because of that, we have to go down with our deficit, but we cannot lose [sight of] the big goal of Europe,” Domański said. “In a world where Mario Draghi is saying we should invest €800bn a year — and actually Poland is doing that already — we cannot be punished because of our spending and because of our investments.”
Besides defence spending, that also includes money that Warsaw planned to disburse in order to accelerate the transition of its energy sector away from polluting coal, he said.
Additional reporting by Paola Tamma in Brussels
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