because we will be talking about the Safe program, but also about F16, among other things. I think that Professor Mariusz Miąsko will also comment on this fact in a moment, you could say it's a historic moment. And Professor Mariusz Miąsko is a professor associated with the Nicolaus Copernicus University, but also an analyst, an expert in international politics and armaments. Good morning. Good morning. Hello, Madam Editor. Hello everyone. Well, just a moment ago we heard an F35 over the Polish sky, over Warsaw here in Castle Square. And now we will talk about armaments and the safe, because on the one hand, we have the government arguing that this program is a historic opportunity to modernize the army, but there are already a lot of question marks. We have allegations that some of these funds are allocated, for example, to refinance previously planned purchases or even to basic equipment such as helmets. The question is whether we are building the capabilities that are needed in Poland at the moment, or are we rather wandering in the fog when it comes to these expenditures from the Sejm. How do you rate this? So yes, I would like to address this F35 first, and doubly so, because it is indeed, in a sense, a historic purchase. Well, first of all, because we purchased the F35, I wanted to congratulate Polish employers, Polish entrepreneurs and employees of Polish entrepreneurs who actually financed the purchase of these aircraft in 90-some percent. Let us remember that 90-odd percent of the revenue of the entire Polish budget is made up of revenue from taxes and various other, one could say indirect levies, which are paid and contributed to the broadly understood budget, not only to this strict budget, to the broadly understood budget by Polish entrepreneurs and employees who work for Polish entrepreneurs. So it is a great success of Polish entrepreneurs and employees of Polish entrepreneurs that we purchased these planes for the Polish state, for all citizens and for ourselves . It is very important that this resonates. If anyone would like to question this 95% of revenues, I don't have time for that today because that's not what this program is about, but I'd be happy to explain why this is the actual cumulative value generated by entrepreneurs. No politicians have ever bought us any planes because they have no money. Same with officials. That's true. And about this starting point. Yes Sir . And congratulations, and we should remember that. Congratulations to all of us. Exactly . Well, the safe was supposed to be such an impulse, perhaps it is an impulse for the Polish arms industry, but today are we already seeing these real benefits for domestic producers, because this is probably the fundamental question. Or is there a risk that a significant portion of this money will go to foreign suppliers? What do these first stages look like? I'll explain now. Yes, great question, excellent question. I'll explain now. It's like, I'm going to refer to this F35 again. You must know that we actually have three or four financing paths. These are, so to speak, the four boxes from which the Polish arms industry is financed, partly the army and the border guard. The first one is the, one might say, already famous safe, about which we have doubts of a constitutional nature, whether this agreement was concluded at all in the formal sense . And indeed, the government here assumed that, and there is information in the media that approximately 80% of the funds that Poland took out under the loan called the safe deposit box are to be transferred to the Polish arms industry. This is not entirely precise information. The mechanisms inside work a little differently. This is more of a media fact. But in fact, according to declarations, because I have not seen these contracts, 60-odd contracts were signed with Polish plants worth PLN 120 billion. I am not basing my opinion here on hard material in the form of contracts, which, as I say, I have not seen, but on a certain elementary trust in the media coverage of Polish officials who claim that so many contracts worth PLN 120 billion have been concluded . the second path of financing and it is important that if it is true that 62 companies have already signed this agreement, it means that these funds will largely flow to Polish companies and will expand, serve the development of Polish technological thought. The second path, the second funding path is exactly the one that financed the F35. This is the American path. This is an open special credit project that allowed us to finance the purchase, because everything Poland buys is actually bought on credit. She also bought what she buys from the United States on credit. By the way, this loan had a higher interest rate than the safe, but we will get to that in a moment, because the safe interest rate is not a fixed rate. perhaps we will explain this in a moment. The advantage of the safe over this line of credit from the United States is that it is almost 100%, because this is also a certain simplification, but the overwhelming majority of technologies are produced in the United States and it can be said that the share of Polish enterprises in the development of new technologies, and I emphasize new technologies, in this financing path is small. there is a third financing path, it is Korean. And here the situation is somewhere in the middle between a bit like a safe and this financing path from the United States. Here we have partially financed technologies that are being developed in Korea, and partially developed, they will be implemented in Poland. Um, and both paths, both the Korean path and the American path, are more expensive in terms of interest rates today, I emphasize, which is very important, today, than this safe. Well, ladies and gentlemen, why is it cheaper? It is cheaper because it is not actually the European Union that grants this loan. Contrary to what we hear in the media again, it is actually financial institutions and European Union banks that provide this loan and it is partially redistributed to Poland. Mhm. And the European Union's influence on financial markets is greater than Poland's influence. Therefore, if Poland wanted to issue bonds, because Poland issues bonds every day, if Poland wanted to issue bonds, it would have to incur a cost of about 5% over and above sometimes over 4, sometimes over 5% of the redemption value of the issued bonds. However, when using SEJ, the cost is about 3%, but this is also not fully true information, Mrs. Editor, ladies and gentlemen . then I can explain that there is such a need. Mhm. Well, of course, let the professor explain this, because we are talking about huge amounts and a debt that we will feel for decades and that we will have to pay back as Poles. But also the question is whether, to put it somewhat logically, there are countries that could have benefited, but did not benefit on such a large scale as Poland. Well, take Germany for example. Well, this is probably a brilliant question, Mr. Editor. Ridiculous question. Therefore, it is also necessary to clarify why Germany did not benefit. Exactly, because we need to know that Germany is considered a much more economically stable country and better located geopolitically on international capital markets. Therefore, Germany is issuing bonds. I average it so that no one notices that there is some difference in the details, but as a rule they issue bonds with an interest rate of 3%, and Poland with an interest rate of 5%. Due to the above, it is not profitable for Germany to use the SEJ with an interest rate of 3.2%, while it is profitable for Poland to use the SEJ with an interest rate of 3%. For Germany, the safe deposit box would be more expensive, and for Poland it is cheaper with cheaper money on the international market, so in my opinion, there is a purely mathematical reason why Germany is not interested in a more expensive loan when they have a cheaper one for Poland. However, this is a very serious problem, because we do not know how much we actually received this loan for. The only thing we know and what is a kind of safety net is that this loan is not a loan with compound interest. This means that we will not pay interest on interest, because first of all, for 10 years we will pay only interest, and later, which is also highly debatable, but at least the government has adopted the perspective that at least it is not compound interest. Therefore, this cost of servicing this loan is a little more predictable . It is much lower than with compound interest. Okay, that would seem to be a good thing. Only there is one significant problem. When we started talking about the safe in the national discussion, let us remember that everyone said that this loan would cost us 3%. And when it came to signing the contracts, it turned out that it was 3.17%, and currently it is probably around 3.32%. I mean, please note that only, let's say, 2 months have passed and suddenly from 3% we have 3.32. And where does this come from and why does it happen? Well, what determines how much we pay? Well, we settle in Polish zloty and now this is the first factor. And now it means that the stronger the zloty is, the less we will pay, but the weaker the zloty is, the more we will pay. And now that the zloty is weaker? This zloty is weaker in the event of a military infection, for example. If we were attacked by Russia, even on a small scale, which I have been saying for over a year now, they have said it three times on the state radio station, that if we were attacked by Russia even on a small scale, symbolically, then we would fall into a completely different rating basket. then it will turn out that we will not be, our interest rate will not be three and, for example, 3.3% as it is now, but maybe 4% or maybe 5 or maybe s or maybe seven, which means that the less stable it is in our region and in our country, the weaker the zloty will be, the higher the cost of servicing this debt will be, and no one will be able to say in 40 years what the geopolitical situation of Poland will be, because Poland is in such a dangerous place geopolitically and no one can say how much this loan will cost us. And this is, in my opinion, the reason why the government insists on introducing the euro. That is, he would like to somehow stabilize this economic market in Poland through the euro. It has a whole cascade of other problems and errors, as Greece experienced. But the government is trying to compensate somehow in this media message, purely media, it says, say this: "Okay, we're opting for the introduction of the euro, then the interest rate will be much more stable, because the European Union is more stable on the markets. Therefore, we might not have to pay 6%, but maybe a stable three or so." And here we talked about this financing mechanism and about these threats, which are probably a bit downplayed or not taken into account enough. Well, I don't know, because of some political agenda. It is known that it is also very, very strongly used to strengthen particular factions, or on the other hand, those who criticize, in order to strengthen themselves. But if we look at it from a practical and military perspective, because contracts worth tens of billions of zlotys have already been signed, but from the point of view of national security, does it matter how much we buy or what we buy, as if directly, whether the military is getting the equipment it actually needs today to deter Russia, because that's what we're mainly talking about, or maybe equipment that looks good in political media announcements and not necessarily from a practical perspective, then everything comes together . Can we say anything about it today or do we have to wait? Yes. I will answer this a little, Madam Editor, starting again with the economic part, because why doesn't the government boast at all, doesn't explain it in the public sphere, why is it taking out cheaper credit, why isn't the government doing this, why doesn't it say: "We buy Polish equipment, good equipment, we develop Polish technological thought, and on top of that, we do it with the cheapest credit available on the market." because the government would then have to admit that it is building this potential solely from loans. That means the government would have to openly admit that the Polish state has gone bankrupt, that the Polish state would have to be outed by the Prime Minister and say, "I take money every day as Prime Minister, I incur debt, I manage the state in such an ineffective and bad way that every day I have to incur debt for you, the citizens who voted for me , I have to incur 1 billion zlotys in debt." I manage so inefficiently. Therefore, the Prime Minister cannot boast of taking out the cheapest loan for the army. Because, well, because he would have to admit that he takes out a loan at all, that he is not able to manage the country effectively. And now the question is, what exactly is this money going towards? The original mechanism was two of these. The initial mechanism was such that part of the money from the Safe was to be spent on hard armaments, and partly on, among other things, redistribution, the police, the border guard, and the functioning of these services. Later there, as a result of, you could say, the president's opposition, a change occurred. BGK took care of servicing this mole. And now it's like this , you can make it as if it were two boxes. The first box is related to the production and manufacturing of new technological ideas related to defense on the cannon. Well, everything that only Polish Poland or Poland has at its disposal for ammunition and so on and so forth. There is quite a lot of this Polish technological thought that will be co-financed. And the second part goes to infrastructure related to preparing, one might say, Polish borders for defense. And the government started from the assumption that it was about preparing, so to speak, the entire border infrastructure, around the border, etc., etc., related to de facto support to some extent for services such as the border guard and to some extent for the police. And the government assumed that if it shifted some of these funds to the area I mentioned here, from public funds, from European Union credit funds , it would not have to allocate funds from an expensive loan. So here are two financing boxes. When it comes to this first financing box, the development of Polish technological thought undoubtedly makes sense. This is completely beyond dispute. Let us remember, ladies and gentlemen, that until 1989 Poland was the manufacturer of its own Iskra training and combat aircraft. Previously, it had its own combat aircraft, yyy Lim, and remember that it was a manufacturer of these Lims, i.e. fighter jets at that time, for quite a long time. Fully hunting. It was one of the best in the world. Let us remember that Polish helicopter designs were created , because we even have the Sokół. We had a very large potential, which we had IRDA, ladies and gentlemen, which has already been liquidated in this so-called new Poland. Some people say that after the intervention of US politicians or representatives of US politicians, let's remember that at that time, in those conditions, at that time, in those conditions, at that time, in those conditions, at that time, in those conditions, it was an excellent combat training aircraft or battlefield. M, it's not about whether someone will now enter into a polemic whether he was great or not, but the point is that we produced, we had our own technological idea, and currently we produce on a minimal scale, I mean, absolutely small scale. We have grot carbines that have been very, very, very improved. It can be said that they actually meet most of the army's expectations. And it turns out there is no order for them. Well, because Polish-Ukrainian relations are such that when Ukrainians received them for free, they gladly took them and kissed their hands. They did not take them without kissing the Polish hand. And in any case, it's not about them kissing, it's about the fact that without any particular gratitude in terms of political gestures, but when they would have to pay for them now, they are not interested, they do not use them, at least that's the latest information that has reached me, that they do not use and are not interested in purchasing Polish technological ideas. we have to produce them for the internal market, so it's actually good that there are some funds and that they come from the cheapest possible credit. Why is the government not afraid, because perhaps this is also of interest to you, the editor, why is the government not afraid of accusations, for example, and being brought before a state tribunal for signing it contrary to the Polish constitution, as constitutionalists claim. Well, I am not a constitutionalist, so I rely only on the opinions of those whom I consider to be the most outstanding Polish constitutionalists. So why is the Polish government not afraid of charges and being brought before the state tribunal? Well, ladies and gentlemen, it will be easy to defend yourself before the Court of Justice by demonstrating that at that moment the person who signed these international agreements on the safe deposit box did not have a cheaper option. Well, it will be difficult to accuse us of concluding a contract on the most economically advantageous terms available on the market. Well, there is also this narrative that we can use Polish gold, right, from the National Bank of Poland. Well, theoretically we can, let's say we have those 400 tons there, but if we were to use that Polish gold, first of all, according to Polish regulations, it's not allowed, it's not allowed for the National Bank of Poland to buy it, but even if we were to create a financial mechanism, excuse me, a legal mechanism that would allow us to release some of those resources from those 400 tons, let's remember, let's remember that we don't have those 400 tons locally. As far as I know, at least, we are entitled to 400 tons. We have some of it, we only have some of it by law, but even if we had such a mechanism and we were to release some of these resources, you know what would happen on the financial markets. This means that Poland would again lose its financial credibility and stability. Why? Because Poland is enormously in debt. It is, it is, Poland is bankrupt. Poland is hugely in debt. And now what causes us to receive any financing at all, meaning crediting on the international market, I'm generalizing a bit with a certain hyperbole, so that economists don't start writing that this is a simplification, because it is a simplification, but I'm talking to everyone, to all listeners, not just to economists. So if Poland did not have these 400 tons of gold, which serves as collateral for the repayment of loans that the government is taking out on a gigantic scale, our cost of servicing these bond issues would be even drastically higher and that is why we cannot really afford to effectively release these resources. So this issue, you know, financing is very complex, it is very multi-threaded. It is very multi-threaded, but it is definitely worth looking at because this issue concerns us all. Professor, thank you very much for clarifying at least some of these big question marks that exist and which I hope we will also discuss on Radio Wnet. Professor Mariusz Miąsko, professor at the Nicolaus Copernicus University in Warsaw, who specializes in international politics in the broad sense of security. also in the military. Professor, thank you very much for the interview. Thank you very much.