Leszek Skiba, a social adviser to President Karol Nawrocki, explained in detail during a press conference the mechanism of the Polish SEJF, that is, the Polish Defence Investment Fund. He spoke, among other things, about constitutional guarantees, the absence of state indebtedness, parliamentary oversight, and supervision by state services over the spending of funds.
“Of course, there is no interest, because this is a payout from the profit of the National Bank of Poland,”
emphasized Leszek Skiba.
During the press conference, three pillars of sovereign financing were presented.
“There will be no depletion of reserves, meaning that the amount of gold and the value of foreign currency reserves will not decrease,” he said. He stressed that this is a safe solution that does not involve increasing the state budget’s debt.
“Of course, there is no interest, because this is a payout from the profit of the National Bank of Poland. The forecast over the coming years amounts to PLN 185 billion, but considering that the budget is usually less effective when it comes to financing defense, additional mechanisms have been introduced specifically for the Minister of National Defence, such as bond issues, credits, and loans,”
he noted.
Leszek Skiba assessed that although the profit from gold should be sufficient, the additional solutions proposed are intended to allow for increased defense spending.
The act fully guarantees the independence of the National Bank of Poland and is consistent with the Constitution and European Union law.
“We are dealing neither with a loan from the National Bank of Poland nor with any unlawful transfer of funds. This is a practice repeated every year,”
the president’s social adviser stressed.
“No Increase in State Debt”
As stated during the conference, the Polish SEJF implies no increase in state debt, because financing will be carried out exclusively from accumulated reserve profits. There will be no need to issue new tranches of domestic debt, nor will the central budget be drained (taxpayers’ funds will remain untouched).
The costs of the EU’s SAFE program and the Polish SEJF were also compared. The source of capital for the former is external financial markets, while for the latter it is the profit of the National Bank of Poland. The EU program would cause a drastic increase in debt, whereas the Polish SEJF bypasses the central budget. The cost of capital (interest) for SAFE would amount to at least PLN 180 billion, compared with zero costs under the presidential proposal.
These funds will be able to go exclusively to the defense industry and cannot be used for other purposes.
Fund Council and Steering Committee
A Fund Council and a Steering Committee will be established.
“All of these activities will be performed free of charge, so there is no concern that anyone will receive any remuneration here. The intention is for the Fund Council to include representatives of, for example, the President, the Prime Minister, the Minister of Defence, and the Minister of Finance,”
explained Leszek Skiba.
The Minister of Defence will be the holder of the funds, while the banking operator will be Bank Gospodarstwa Krajowego. The Council will approve strategic directions and design a multi-year financial plan.
The Steering Committee, in turn, will make ongoing decisions and approve the annual plan.
“This is a place where cooperation between representatives of different state authorities is needed,”
the presidential adviser noted.
He also spoke about an anti-corruption safeguard intended to ensure the proper use of funds. Parliamentary oversight will also be guaranteed, with the parliamentary Defence Committee playing a role in the supervision.