NBP Governor Rules Out Reserve Cuts for Defense Plan

The governor of the central bank of Poland announced on Thursday that a domestic alternative to the European Union's defense financing initiative will be designed to protect the nation's foreign exchange reserves. Adam Glapinski, head of the National Bank of Poland (NBP), explained that while the country is the largest intended recipient of the 150-billion-euro Security Action for Europe (SAFE) program, the central bank is exploring the use of its own profits to support military expenditures instead. The SAFE program has triggered significant debate within the country. The nationalist Law and Justice (PiS) party argues that the EU-led framework could increase national debt and potentially limit defense procurement from the United States. Additionally, critics within the party suggest the program's conditions might facilitate unwanted involvement from Germany in domestic affairs. > "We intend to propose actions that will not lead to a depletion of our foreign exchange reserves." The current administration views the SAFE initiative as a critical component of national security, citing a growing threat from Russia. However, political tension has escalated, with opposition leaders urging President Karol Nawrocki to block legislation required to access the EU loans. Glapinski clarified that the central bank’s reserves are earmarked for specific economic stability goals and should not be diverted. He proposed that NBP profits could serve as a viable funding source. Leszek Skiba, an adviser to the president, noted that these funds could be derived from the rising value of the bank's gold reserves. This development occurs as analysts track the performance of the EUR/PLN and USD/PLN currency pairs in response to regional security concerns. > "We have accumulated these reserves for a different purpose." The presidency is currently working on legislative drafts to enhance the central bank's capacity to fund defense projects while adhering to its institutional mandate.