Poland signs $51.5B EU defense loan deal under SAFE rearmament scheme

Poland became the first country on Friday to formally sign an agreement under the European Union’s SAFE defense financing program, securing access to €43.7 billion ($51.5 billion) in low-interest loans aimed at accelerating military modernization and boosting Europe’s defense industry.

Deputy Prime Minister and Defense Minister Wladyslaw Kosiniak-Kamysz signed the agreement in Warsaw alongside Finance Minister Andrzej Domanski, with EU Budget Commissioner Piotr Serafin and Defense Commissioner Andrius Kubilius representing the European Commission.

Poland is the largest beneficiary of the SAFE initiative, which will provide up to €150 billion in loans to EU member states by 2030 for joint defense procurement and military-industrial development.

“This is an investment in the security of Poland and of Europe,” Kosiniak-Kamysz told reporters at the signing ceremony, adding that most of the procurement would be directed toward domestic defense firms.

Around 89% of the funding will remain in the country, supporting local manufacturers and infrastructure projects tied to the military sector, according to the Polish government.

The funds are expected to support Poland’s flagship Eastern Shield border defense program, as well as anti-drone systems, air defense capabilities, artillery purchases and upgrades to military transport infrastructure.

The first tranche of approximately €6.5 billion is expected to be transferred by the European Commission later this month, said officials.

Serafin described the agreement as “a breakthrough moment for European defense cooperation,” saying the SAFE mechanism is designed to strengthen frontline states and expand Europe’s industrial capacity.

Kubilius said Russia’s war with Ukraine has fundamentally changed Europe’s security assumptions.

“Europe can no longer rely on the peace dividend,” he said in Warsaw. “We need to build deterrence, resilience, and industrial readiness together.”

Poland already spends the highest share of GDP on defense in NATO, at more than 4%, and has launched one of Europe’s largest military modernization programs following Russia’s full-scale invasion of Ukraine in 2022.

Warsaw has purchased tanks, fighter jets, artillery systems and missile defense platforms from the United States and South Korea while expanding domestic production capacity.

The SAFE mechanism reflects a shift within the EU toward collective defense financing amid uncertainty about long-term US commitments to European security and growing pressure to reduce dependence on American weapons systems.

European Commission President Ursula von der Leyen previously described SAFE as part of Europe’s effort to “take greater responsibility” for its defense capabilities.

Friday’s signing also highlighted tensions within Polish politics about the growing role of EU defense financing.

In March, President Karol Nawrocki vetoed legislation that would have created a dedicated fund to facilitate Poland’s participation in the SAFE program.

The government of Prime Minister Donald Tusk responded by authorizing the defense and finance ministries to proceed through a separate Cabinet resolution under the “Arming Poland” program.

Opposition politicians aligned with Nawrocki have expressed concerns about increased EU influence in defense policy and long-term borrowing commitments, whereas the government argues that the funding is critical for accelerating military readiness.