Publication date: February 26, 2026
Introduction
The Act of 13 February 2026 on the SAFE Financial Instrument for Enhancing Security is the national legislature’s response to the European Union’s establishment of a new financial mechanism aimed at strengthening the defense capabilities of Member States. The SAFE Instrument (Strategic Technologies for Europe Platform) was established pursuant to a regulation of the Council of the European Union of 27 May 2025 as an emergency measure to accelerate investment in the European defense industry and increase the interoperability and readiness of the armed forces of EU Member States.
SAFE is the first loan-based financial instrument in the history of the European Union, whose sole purpose is to enhance security and defense capabilities. The total pool of funds amounts to approximately €150 billion. Poland, as the program’s largest beneficiary, will have access to €43.7 billion in the form of a low-interest loan. This scale gives the regulation particular significance, both financially and systemically.
The bill was passed by the Sejm by a majority of 236 votes, with 199 votes against and four abstentions. The voting process itself indicates that the bill was the subject of significant political debate, concerning both the defense financing model and the level of public debt.
The SAFE instrument was created in response to the need for accelerated modernization of the defense industries of European Union member states and increased strategic autonomy. Discussions on its launch were initiated and finalized during the Polish Presidency of the EU Council, underscoring Poland’s active role in shaping this initiative.
The SAFE mechanism provides low-interest loans to Member States for investments approved by the European Commission and confirmed by a Council Implementing Decision. Access to these funds is conditional on joint procurement involving at least two Member States, as well as the possibility of cooperation with Ukraine or EFTA/EEA countries.
Poland submitted its application for financial assistance on November 28, 2025, and the European Commission approved a €43.7 billion investment plan at the end of January 2026. The plan includes 139 projects, a significant portion of which concern the modernization of the Polish Armed Forces and strengthening the protection of the country’s eastern border.
The legal structure of the SAFE Financial Instrument for Enhancing Safety
Pursuant to Article 2 of the Act, Financial Instrument for Enhancing Safety is established within the structure of Bank Gospodarstwa Krajowego (BGK). The provisions of the Act of 27 August 2009 on Public Finances, concerning funds established or entrusted to BGK pursuant to separate acts, apply to the instrument.
This solution aligns with the model of using a state development bank as the operator of specialized special-purpose funds. BGK serves as the formal borrower of EU funds, while the State Treasury, represented by the minister responsible for public finances, guarantees the liabilities.
The Minister of National Defence has a leading role in the coordination of Financial Instrument for Enhancing Safety, which reflects the sectoral nature of the investments covered by the financing.
Funds from Financial Instrument for Enhancing Safety come primarily from the SAFE loan, but the Act also provides for other sources of financing, including state budget funds, loans and bonds issued by BGK, and non-repayable foreign funds.
This structure is mixed and provides the instrument with financial flexibility. BGK can invest available funds and enter into transactions to hedge currency and interest rate risks. These solutions serve to minimize the financial risk associated with servicing liabilities.
Purpose of funds and scope of investment
Funds from Financial Instrument for Enhancing Safety are allocated to financing or co-financing projects qualified by the European Commission for SAFE loan financing. The act also provides for the possibility of refinancing expenses incurred before the release of EU funds by the Armed Forces Support Fund, the National Road Fund, the Railway Fund, and the state budget.
Key projects include investments in modern weapons systems. These include:
According to government declarations, over 80% of the funds will go to the domestic defense industry. Among the entities eligible for funding are:
The instrument therefore has not only a defensive dimension, but also an industrial and economic one.
Guarantee mechanism and liability of the State Treasury
Of particular importance is Article 10 of the Act, which provides for BGK’s liabilities under the SAFE loan to be covered by a State Treasury guarantee covering 100% of the principal, interest and direct costs.
This guarantee:
This solution strengthens the financial credibility of the instrument, but at the same time transfers the economic risk to the state budget.
Financial planning and parliamentary control
The Act introduces an extensive financial planning system. BGK prepares an annual financial plan for Financial Instrument for Enhancing Safety, which is agreed upon with relevant ministers and the Minister of Finance, and then approved by the Minister of National Defense.
The reporting mechanism includes:
This ensures parliamentary control over the use of funds and transparency of activities.
Control and audit system
Audits of task implementation are conducted in accordance with the Act on Audit in Government Administration. The purpose of audits is to verify the achievement of implementation milestones, expenditure compliance, and identify fraud risks.
The audit of Financial Instrument for Enhancing Safety’s management of funds has been entrusted to the Head of the National Revenue Administration. The audit covers BGK, the institutions carrying out the tasks, and the ultimate recipients of the support. The scope of the audit includes, among other things, the accuracy of accounting records, the completeness of documentation, and the protection of the European Union’s financial interests.
The Act amends the provisions of the Public Finance Act, incorporating the Financial Instrument for Enhancing Safety into the defense clause. Financial Instrument for Enhancing Safety expenditures are included in the calculation of defense spending in accordance with EU methodology.
This instrument is an example of using a fund structure located outside the traditional state budget, while maintaining the responsibility of the State Treasury. While this increases financing flexibility, it also raises questions about public debt and the transparency of liabilities.
The SAFE Financial Instrument for Enhancing Security Act creates a comprehensive legal basis for the use of an unprecedented financial instrument for defense purposes in the European Union.
Financial Instrument for Enhancing Safety combines elements of EU law, public finance law, and sectoral defense regulations. In the systemic dimension, it strengthens the role of the state development bank as an operator of strategic funds, and in the fiscal dimension, it expands the catalogue of security policy financing instruments.
The scale of the financial commitment, the guarantee structure, and the connection to the domestic defense industry make this act not only technical but also systemic and strategic. It constitutes one of the most significant legal acts in the area of state security financing in recent years, contributing to the broader process of building European strategic autonomy and strengthening the Republic of Poland’s defense capabilities.