A few days ago, the Polish Ministry of Defense presented a 2024 Polish defense effort that will exceed the 5% of GDP mark. As Donald Tusk suggested in mid-December, this is fully in line with previous years. To finance it, Warsaw will rely on 185 billion zlotys of public deficits, or 5% of the country's GDP, on the 682 billion zlotys of the 2024 state budget. Far from provoking the ire of the European budgetary authorities , the Polish government has obtained, for 2024 at least, no sanctions for excessive deficit not be imposed on him.
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Has Poland succeeded where France failed for almost three decades? This is the question we can ask ourselves today, when Warsaw has obtained from the European Union that its 5% public deficits, for 2024, will not give rise to a European procedure for excessive deficits, with the related fines.
Polish 2024 defense effort of 5% GDP will be financed by sovereign debt
Indeed, to finance an exceptional Defense effort representing more than 5% of the country's GDP, the Polish authorities had no other choice than to create sovereign debt, with a public deficit forecast for 2024 representing, again , a little more than 5% of the country's GDP. In other words, we can easily consider that the entire Polish defense effort will, in 2024, be financed by the creation of sovereign debt.
However, the European budgetary authorities, and more particularly the Economic and Financial Affairs Council of the European Union, have agreed to not initiate excessive deficit proceedings against Warsaw in 2024.
In the decision rendered by this council in which France and Germany participate, it is noted the decisive role that Poland, and its powerful armies in the making, will represent in the face of the Russian threat, while taking into consideration the significant weight what Polish military and humanitarian aid has represented to Ukraine since the start of the conflict.
This decision is surprising, especially in France, as the country has, on several occasions, attempted to obtain similar measures to finance its deterrence, or its interventions in Africa against Islamist terrorism.
However, Paris has each time encountered a firm refusal from Brussels in this area. How can we explain, then, that Warsaw obtained European support, where France systematically failed? Far from being ideological, the explanations are, for many, perfectly factual.
Polish fiscal health as a guarantor for the European Union
First of all, it is clear that Warsaw can present, until now, a particularly positive budgetary profile. Thus, the sovereign debt today barely exceeds 50% of the country's GDP, compared to 110% for France, and 65% for Germany in 2023.
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