Poland will gain billions for security. There is simply a green light from the EU.

In Luxembourg today, a strategical decision has been taken for Poland, which opens the way for the payment of further billions from EU funds and at the same time redefines the priorities for their use. European Union Finance Ministers formally approved changes in Polish National Reconstruction Plan (KPO). This agreement not only triggers the payment process of another tranche of funds over PLN 26 billionbut besides gives green light to make a fresh Security and Defence Fundto which it will be allocated close EUR 6 billion. The decision taken under the leadership of Poland represents a strong emphasis at the end of its Presidency of the Council of the EU, and fits into a wider European trend of strengthening resilience in the face of geopolitical threats.

Strategic Return: Rebuilding after pandemic to National Resistance

The National Reconstruction Plan was originally created as a tool to support associate States' economies in exiting the COVID-19 pandemic. Its pillars were to be green transformation and digitalization. However, Russia's violent aggression against Ukraine and the changing geopolitical situation forced a fundamental revision of priorities on the European Union. safety and resilience have become a fresh key component of the EU strategy.

Today's approved changes in the Polish KPO are the best proof of this. The shift of crucial resources to security-related objectives shows that funds that were expected to treat economical wounds after the pandemic will now besides build a shield to defend against future threats. As the Minister of Finance stressed Andrzej Domański, it is about real strengthening of Polish resilience on many levels.

6 Billion Euros for Security: What precisely will be funded?

The key component of the revised KPO is the creation of Security and Defence Fundto which it will be moved close EUR 6 billion. It should be stressed that, according to EU regulations, these measures will not be utilized for strictly military purposes, specified as the acquisition of ammunition or tanks. Instead, they will be invested in widely understood infrastructure of strategical importance and dual usage (civil-military), which is crucial to the resilience of the state.

Investments under the Fund will include:

• Developing and modernising civilian protection infrastructure: Including the construction and modernisation of shelters for the population, which is simply a consequence to expanding awareness of threats.
• Strengthening the Polish defence industry: Funds will support improvement Polish steelworks and another strategical industries that are crucial for defence production.
• Modernisation of dual-use infrastructure: It is about the renovation and construction of roads, railway lines and airports, which service civilian purposes during peacetime, and in a crisis situation can be utilized for fast transport of troops and supplies.
• Cybersecurity and data protection: Investment in the safety of state information systems and critical infrastructure against cyber attacks.
• Development of reflection systems: Appropriations will besides be allocated to improvement radar systemswhich increase airspace monitoring capacity.

As Minister Domanski stressed, the aim is to strengthen the foundations of state security, which is as crucial as direct expenditure on the army.

End of Polish Presidency – Strong accent on Defence

The decision to approve the changes to the KPO was taken at the last gathering of finance ministers (ECOFIN) held within the Polish Presidency of the EU Council. From 1 July the Union takes over Denmark. For Poland it is so symbolic and highly crucial to crown its half-year leadership. Minister Andrzej Domański, summarising this period, he pointed out that in the field of the common defence, targets that previously seemed unattainable have been achieved.

He recalled that Poland was 1 of the initiators of the implementation of a fresh European instrument SAFE (Strategic Accelerator for Fundamental European Defence)the value of which is to be measured EUR 150 billion. This instrument aims to stimulate and facilitate associate States' increased defence spending. Actions at national level, specified as the creation of the safety and Defence Fund under the NAP, are perfectly consistent with this Europe-wide strategy for building a stronger and more resilient Europe.

Third Media Transza: Over 26 Billions of Gold Closer

Beyond the strategical dimension, today's decision has very circumstantial financial implications. The approval of EU finance ministers to change the NCP is the last formal step that allows Poland to apply for the payment of the 3rd tranche of funds from the EU recovery plan.

As announced by the Minister of Funds and Regional Policy Katarzyna Pełczyńska-Nałęczto Poland over PLN 26 billion. According to her declaration, this money should flow into the country still in August. It will be another powerful financial injection for the Polish economy, which will let to implement both projects from the first KPO version and fresh investments in the area of security.

Analytical Comment: A fresh Era of EU Funds

Approval of changes in the Polish KPO is more than just a method modification of the program. This is simply a symbolic minute that shows how fundamentally the priorities of the European Union have changed. In the era of increasing geopolitical threats, EU funds, which so far are mainly associated with road construction, environmental protection or digitisation, gain a fresh strategical dimension – become a tool for building resilience and security.

The concept of "double-use infrastructure" is crucial. It allows, in accordance with the EU Treaties, to channel immense resources towards objectives that de facto reenforce the state's defence potential. The establishment of the safety and Defence Fund under the KPO could become a model for another countries and future EU budgets. This shows that Europe has understood that sustainable economical growth cannot be achieved without a solid foundation of security. For Poland, as a front country of NATO and the EU, this paradigm change is existential.