The Polish government is considering issuing defence bonds because, contrary to earlier hopes, defence spending will not be exempted from the EU’s excessive deficit procedure, Finance Minister Andrzej Domański (PO, EPP) said.

The European Commission has rejected Poland’s request to exclude defence spending from the excessive deficit procedure, a proposal that Domański has advocated for months. 

Such an exemption would have benefited several EU member states, but Poland stood to gain the most as it is currently facing significant budgetary pressures due to increased defence spending. 

On his visit to Washington, Domański announced, “It is confirmed that this will not be excluded.”

The possibility of excluding at least part of Poland’s defence spending from the European Union’s excessive deficit procedure seems relatively likely, according to the minister. 

In the face of a refusal from Brussels, Poland could issue defence bonds, Domański announced, adding that Poland’s GDP is expected to grow by 3.9% in 2025. 

On 19 June, the Commission proposed that Poland, France, Italy, Belgium, Hungary, Malta and Slovakia be placed under the excessive deficit procedure due to a lack of corrective action.  

The procedure is triggered when an EU country’s budget deficit exceeds 3% of GDP, or its public debt exceeds 60% of GDP. The aim is to ensure that government debt is low or at sustainable levels. 

Poland to further increase spending  
“Defence spending is Poland’s priority. Next year, I will increase nominally and in relation to GDP,” Domański wrote on X last summer.

Poland allocated 4.1% of its GDP to defence in 2024, totalling around PLN 160 billion (€34.78 billion). For 2025, Wa saw plans to increase this budget to 4.7% of GDP, or around PLN 186 billion (€40.43 billion).  

With this, Poland aims to maintain its leading position in NATO regarding defence spending as a percentage of GDP, well above the Alliance’s minimum requirement of 2%. 

Polish Defence Minister Władysław Kosiniak-Kamysz (PSL, EPP) said earlier that Poland and Lithuania also expect the EU to contribute financially to constructing the so-called Eastern Shield on the Lithuanian and Baltic lines. 

He argued that the arms industry should be a priority for the EU and that countries should purchase equipment together.

(Aleksandra Krzysztoszek | Euractiv.pl)