The Polish Finance Minister, Andrzej Domański, reiterated the urgent need for Member States to invest massively in the defence sector on Wednesday 19 February, during a political dialogue in the European Parliament’s Committee on Economic and Monetary Affairs (ECON), at which he gave an overview of Polish priorities for the Council of the European Union.
As at Tuesday’s ‘Economic and Financial Affairs’ Council (see EUROPE 13582/15), Mr Domański welcomed the recent announcement by the President of the European Commission, Ursula von der Leyen, that the derogation clause in the Stability Pact could be activated to exempt military spending from deficit and debt calculations.
He also referred to the Polish non-paper, which recommends drawing up a code of conduct to identify the type of expenditure in the defence sector that could be taken into account in assessing the existence of an excessive government deficit, in accordance with the ‘corrective arm’ of the Pact (Regulation 2024/1264), as revised in 2024.
Poland, like seven other EU countries, is subject to an excessive deficit procedure.
“The aim is to leave the rules as they are and to describe them precisely in a code of conduct” so that governments can operate in “a predictable environment” and know what types of equipment to invest in, said Mr Domański, citing “jets, tanks, ammunition factories or new soldiers (...)”. “From discussions I have with ministers from other countries, it’s not crystal clear for them what kind of spending could be deducted or not. We don’t want it to be discretionary”, he replied to a question from Rasmus Andresen (Greens/EFA, German) on the exemptions envisaged.
The Polish note recommends a very broad interpretation of the military expenditure to be taken into account, since it includes: - infrastructure expenditure, including dual-use expenditure; - an increase in personnel expenditure, including training; - capital government investment in production potential related to military equipment, ammunition or other means used by security services.
To see the Polish non-paper: https://aeur.eu/f/fk1
Asked by Jónas Fernández (S&D, Spanish) how to invest massively in defence while reducing public debt, but without launching a European loan, the Polish minister emphasised his “pragmatic” side, aware that such a thorny issue could not be resolved quickly.
Turning to the other priorities of the Polish Presidency, Mr Domański mentioned the work being done to boost economic competitiveness by simplifying regulations and lowering energy prices.
Finance. Poland’s ambition is to rapidly start negotiations with the European Parliament on the retail investment package, to reach an agreement in the EU Council on payment services “very soon” and to bring the interinstitutional negotiations on access to financial data (FiDA) to a successful conclusion.
Banks. On the ‘CMDI’ package aimed at strengthening the resolution of a large failing bank in the EU, the Polish Minister said that an Interinstitutional Agreement was possible, although he did not hide the difficulty of the task of bringing the initial positions of the EU Council and Parliament closer together (see EUROPE 13437/4).
The Chair of the ECON Committee, Aurore Lalucq, said that all the issues had been discussed at the political trilogue on Tuesday 18 February. With a view to the trilogue on Wednesday 12 March, the EU Council and the Commission will provide documents on key elements such as the hierarchy of creditors, the objectives of a bank resolution and the ‘least cost test’ identifying the least costly measures during a resolution, and the intervention of deposit guarantee schemes.
Taxation. In the area of taxation, Mr Domański made the proposal for a directive strengthening administrative cooperation (‘DAC 9’) the top priority of the Polish Presidency (see EUROPE 13559/22).
“We need to implement in the EU the rules on top-up tax reporting by the largest corporations and to foresee automatic exchange of information by Member States”, he said in this regard, setting the objective of an agreement in the EU Council “in March”. (Original version in French by Mathieu Bion)