President Karol Nawrocki has decided to veto the bill implementing the EU’s SAFE defence loan programme. The justification for the decision points, among other things, to the risk of undermining state sovereignty and transferring part of the competences related to security to European Union institutions.
The president’s veto decision
On Friday evening, the Presidential Office published President Karol Nawrocki’s decision to veto the bill implementing the EU SAFE defence loan programme. The justification states, among other things, that the legislation would violate Poland’s sovereignty and transfer further state competences to the European Union.
The president announced the veto of the SAFE bill in a televised address on Thursday. “I will never sign a law that strikes at our sovereignty, independence, economic security, and military security,” Karol Nawrocki said.
The assumptions behind the SAFE programme
The vetoed bill provided for the creation of a Financial Security Enhancement Instrument, to be managed by Bank Gospodarstwa Krajowego, through which the government would be able to draw on SAFE funds — the EU instrument offering low-interest loans for the rapid strengthening of the defence capabilities of EU member states.
On Friday evening, the presidential website published both the veto decision and its full justification.
“The Act, together with the SAFE Regulation (EU – editor’s note), improperly interferes with the constitutional principle of the sovereignty of the Nation (Article 4 of the Constitution), especially in matters not conferred on the EU under the treaties and in the principle of preserving sovereignty in the process of European integration. It also interferes with civilian control over the Armed Forces of the Republic of Poland and with the powers of the President of the Republic of Poland as Commander-in-Chief of the Armed Forces,”
the document states.
Dispute over competences and sovereignty
According to the justification for the veto, the bill would allow EU bodies to assume “the competences of state authorities in the form of co-decision-making on the armament and military equipment of the Armed Forces of the Republic of Poland, i.e. competences that belong exclusively to the state authorities of the Republic of Poland,” and is therefore inconsistent with Article 90 of the Constitution, which concerns the transfer of certain powers of state authorities to international organisations.
As stated in the justification, the scope of the transferred competences would breach “the limits of integration defined by the constitutional identity of the Republic of Poland” — above all in the area of security-related powers, which form part of the “essence of sovereignty” of the state. According to the president, adopting the bill would create the risk of establishing a new EU competence, namely the participation of EU institutions in deciding on the equipment of the Polish Armed Forces.
“It is one thing for states to coordinate armaments policies independently, and quite another for the EU to determine an EU armaments policy to be carried out by the member states,”
the document reads.
Reservations about the loan mechanism
“From the point of view of the binding Constitution, in my profound conviction, a state in which an external entity co-decides on the armament and military equipment of its army in an amount exceeding PLN 180 billion is not a sovereign (independent) state — it is not a state that independently decides its own fate,”
the justification says.
It was also noted that under the SAFE mechanism a state must submit a request to the European Commission twice a year for the disbursement of each loan tranche. “The Commission assesses the completeness, correctness and consistency of the payment request. If it positively concludes that the conditions set out in the SAFE Regulation have been met, it adopts, without undue delay, a decision allowing the disbursement of the loan tranche — but the Commission’s assessment does not have to be positive,” the justification states.
“A borrowing state has no right to appeal to a court against a negative assessment by the Commission. In other words, Article 45 of the Constitution of the Republic of Poland does not apply in such proceedings, nor do other provisions of Polish law that form part of the system of reviewing the legality of actions taken by public authorities. In light of the above, in SAFE loan proceedings EU institutions act in an authoritative manner,”
the president assessed in the document.
As the justification explains, the Commission applies within the SAFE mechanism a “conditionality mechanism which is legally indeterminate and allows for arbitrary linking of the borrowing state to so-called milestones.” “The Commission’s authoritative action within the SAFE programme (…) is incompatible with the principle of state sovereignty,” it adds.
“The SAFE Regulation allows the Commission to suspend the disbursement of loan tranches at will and to make their payment conditional on Poland fulfilling further, new conditions — various dynamically developed and modified so-called milestones,” the text emphasises. According to the president, a similar mechanism has already appeared in the case of Poland’s National Recovery Plan (KPO).
Constitutional and financial arguments
Citing, among other things, the provisions of the Treaty on European Union, the president argues that EU institutions may act only within the limits defined by the EU treaties — and these do not include competences relating to the Armed Forces of the Republic of Poland. Moreover, according to the justification, under Article 90 of the Polish Constitution no Polish state authority, including the government or parliament, may transfer such powers externally. These provisions are described in the document as the “anchor of sovereignty” of the Republic of Poland.
In addition, according to the president, taking out a SAFE loan in the amount of €43,734,100,805, “at an unknown loan cost (which, given the loan repayment period, may exceed the principal amount borrowed), violates the constitutional prohibition on contracting loans or granting financial guarantees and sureties that would result in the public debt exceeding 60 per cent of GDP.”
According to the president, the vetoed bill designates Bank Gospodarstwa Krajowego as the entity to contract the SAFE loan, whereas this type of foreign borrowing should be undertaken by the finance minister. The president also accuses the government, among other things, of planning an “express” timetable for concluding defence procurement contracts under SAFE — contracts that would have to be signed by the end of May — given how long such processes usually take.
Nawrocki stated that it is “irrational and indicative either of ignorance of the subject matter or bad faith to assume that by 30 May this year it is possible, in a lawful, economical, reliable and purposeful manner, to conclude contracts for the purchase of armaments worth more than PLN 180 billion within the Polish defence industry.” As the justification adds, what is more rational is to assume that such contracts would be signed after 30 May, which “would entail the transfer of significant financial resources to foreign entities.” “The question remains open as to whether this would take place in a lawful, economical, reliable and purposeful manner,” the document concludes.