Minister of Finance Andrzej Domański and Deputy Prime Minister and Minister of National Defence Władysław Kosiniak-Kamysz have signed the first agreements related to the EU SAFE programme, under which Poland is set to receive EUR 43.7 billion in loans for the modernisation of its armed forces. However, new calculations are now emerging showing that the repayment costs may be significantly higher than previously assumed.
The problem is that the final interest rate for the entire programme is not yet known, nor is the final amount that Poland will ultimately have to repay. Meanwhile, even a small change in financing costs translates into billions of zlotys in additional repayments.
The first part of the contracts under SAFE has already been signed. Around PLN 120 billion is expected to flow to Polish defence industry plants for the production of military equipment, including Borsuk infantry fighting vehicles, Krab self-propelled howitzers, artillery systems, and IT equipment. The next stage is to include joint procurement carried out with foreign partners. Orders are scheduled to be completed by 2030. Krab howitzers are to be delivered to units of the 11th and 12th Divisions, while Borsuk vehicles are intended for a brigade of the 16th Division in the Warmian-Masurian Voivodeship. The programme also includes purchases for the Territorial Defence Forces, including bulletproof vests, rifles, and equipment linked to the Eastern Shield project.
Rising cost of the loan
Poland is set to receive EUR 43.7 billion under the SAFE programme, equivalent to over PLN 180 billion. However, there are growing indications that the cost of servicing this debt will be higher than previously assumed.
During work on the SAFE legislation, the Ministry of Finance indicated an interest rate of 3.17%, while noting that it is variable. Meanwhile, the latest report from the European Commission shows that in the second half of 2025 the financing cost has already risen to 3.32%.
According to calculations by “Fakt”, at an interest rate of 3.17% the total cost of interest payments would amount to around EUR 38.8 billion. At a rate of 3.32%, the interest rises to EUR 40.6 billion. This represents an increase of nearly EUR 1.9 billion, or around PLN 8 billion.
Each tranche may have different conditions
Experts point out that public debate often overlooks an important detail: SAFE is not financed under a single, fixed interest rate.
As noted by Mariusz Zielonka, chief economist at Confederation Lewiatan, cited by the WNP portal, each tranche of the programme is effectively a separate loan. This means that subsequent funds may be raised under different conditions than earlier ones.
This is particularly significant in the context of changes in financial markets and decisions by the European Central Bank. According to experts, potential changes in interest rates may affect the cost of future SAFE loans.
As a result, it is currently impossible to precisely determine how much Poland will ultimately repay under the programme. What is clear, however, is that even a small increase in interest rates translates into billions of zlotys in additional burdens for public finances.