Poland has won the European Commission’s approval for its strategy to reduce its budget deficit, a plan that includes increased defence spending.
The plan was approved despite its deviation from the standard guidelines due to Poland’s increased defence spending, which is seen as a key effort in the current geopolitical climate.
The recommendations issued by the European Commission on Tuesday recognise that Poland’s budgetary path deviates from the usual benchmarks. In 2025, Poland plans to reduce its deficit by only 0.25% of GDP – half of the recommended minimum of 0.5%.
However, the plan compensates for this slower start with more significant cuts in the following years, exceeding 1% of GDP annually between 2026 and 2028.
The Polish government had pushed for defence spending to be included in the deficit calculations. While EU treaties do not allow such expenditure to be excluded from the deficit, the Commission recognised the financial burden of Poland’s defence commitments when assessing the plan.
In addition, the EU considered Poland’s co-financing of projects funded by European programmes and investments under the national recovery plan.
Poland’s strategy aims to bring its deficit below the EU’s 3% GDP threshold by 2028. If successful, it would leave the excessive deficit procedure by 2029.
While the Commission’s approval gives Poland some breathing space, achieving the significant reductions planned for 2026-2028 will require disciplined fiscal management.
For now, the decision highlights a degree of flexibility from Brussels, reflecting the bloc’s recognition of Poland’s strategic spending priorities.
Poland’s defence spending
Poland’s record defence spending of PLN 118 billion (around $28 billion) for 2024 makes it a NATO leader in terms of defence spending as a percentage of GDP (over 4%).
This includes funding for major equipment purchases such as tanks, artillery and missile systems, many of which will be sourced from international partners such as South Korea and the United States.
The government also plans to expand the armed forces to 300,000 personnel, signalling its ambition to build one of Europe’s most robust military infrastructures.
Despite these efforts, the increase in spending has sparked debate at home. Critics question whether the unprecedented military investment could reduce funding for other critical sectors or further increase Poland’s national debt.
Supporters, however, argue that strengthening defence capabilities is essential for Poland’s sovereignty and its role as a key NATO member amid the ongoing war in Ukraine and broader geopolitical tensions.
(Aleksandra Krzysztoszek | Euractiv.pl)
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Publish date : 2024-11-27 22:38:00
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The post Brussels approves Poland’s defence-focused deficit reduction plan – Euractiv first appeared on Love Europe.
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Publish date : 2024-11-28 08:57:11
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