Cost of Prolonged War in Ukraine: Study Case Poland's Budget
Cost of gargantuan budget (/military assistance) for Ukraine from U.S., make a deepened recession in U.S. and also low rating for Biden.
What about Poland, one of Ukraine’s closes allies?
Poland may struggle to fund its multibillion-dollar plan to buy a record number of weapons in response to Russia’s invasion of Ukraine, experts have warned. Most Nato countries have beefed up their military spending as a result of Vladimir Putin’s war, a seismic event that prompted Germany to proclaim its own Zeitenwende, Finland to join the military alliance and France to pledge meeting the Nato spending target sooner. But Warsaw stands out as it is on track to spend more on defence than any other Nato ally, relative to its gross domestic product.
The rightwing government of premier Mateusz Morawiecki plans to spend 4 per cent of GDP on defence this year, double the alliance’s target. While in absolute terms the Polish spending pales in comparison with the US or UK, the decision has prompted questions over how Warsaw will fund the change, including what areas of public spending might be cut to compensate. Ahead of parliamentary elections this autumn, Poland’s government has told voters that only big military purchases can keep them safe.
By supporting Ukraine at a time of need, the Polish government has chalked up points with other European governments. Soon after Russia invaded, in late February, Poland welcomed hundreds of thousands of refugees and drummed up support for arming Kyiv. In March, it sent its prime minister to Kiev alongside Czech and Slovenian counterparts.
Three months later, Germany, France and Italy were playing catch-up, bolstering the ruling Law and Justice (PiS) party narrative that European leadership was shifting to the East. Warsaw’s harder stance on Russia also increasingly appears vindicated, as the conflict sheds light on the security issues of NATO’s eastern flank.
But Russia’s war against Ukraine has also spurred less liberal ambitions. The Polish Defence Minister has repeatedly trumpeted its plans to more than double its security budget in 2023 with the view to building up a “great army” capable of withstanding the shock of a Russian armed attack.
Europe’s most powerful army
Analysts believe such plans could make the Polish army the most powerful in Europe. French defence website Méta Défense highlights a “spectacular reinforcement of the Polish army’s overall capacity, which, by the end of the decade, will include 1,500 modern tanks, an equal number of infantry combat vehicles, 1,200 mobile artillery units and several thousand light armoured vehicles to exceed the arms capacity of the French, German, UK, Italian, Dutch and Belgian forces combined”.
The government, which is expected to spend 3% of the national budget on defence, now intends to grow its land army from four to six divisions, equivalent to 300,000 soldiers, compared with the current figure of 115,000. It will also see a significant boost in firepower. The national defence policy excludes pre-emptive strikes but seeks to deter any armed aggression.
Warsaw will rely not only on purchasing existing technology, but also on partnerships that are likely to strengthen the Polish national arms industry. Plans have been made to acquire US tanks and helicopters, as well as HIMARS missiles, the latter of which proved highly effective during combat in Ukraine.
Other contracts have been signed with South Korea, including shipments of tanks and howitzers and as recent orders of 288 artillery rocket launchers. More importantly, these purchases from Seoul appear to include technology transfers and cooperation deals that could increase the autonomy of the Polish defence industry, perhaps even to rival that of the country’s western European counterparts.
All along, the EU’s defence industries have been systematically disregarded in favour of US, UK and South Korean equipment (with Poland switching from Airbus to Italian brand Leonardo, only to drop them for Boeing Apache helicopters).
The PiS favours overseas kit
These plans chime with the realist “geopolitical ideology” driving PiS and large swaths of the Polish conservative landscape. They also clarify the country’s position on Europe.
Ever since the early 1990, the Polish right wing has considered NATO membership more significant than EU membership, whereas liberals and moderates have been more open to the political integration of Europe. These discrepancies have long beenblurred by Poland’s more general concern to be part of the international organisations of Europe and the western world, but they are now becoming more and more salient.
For the PiS, the EU appears as a secondary arena, particularly given the bloc’s readiness to confront Poland when it considers its government violates certain European principles. The new arms deals with South Korea are a clear indication the PiS government no longer wishes to depend upon, or show internal solidarity with, the EU in matters of defence.
These developments may be linked to attempts that were made back in January to create a new alliance with Ukraine and the UK. It is evident PiS sees the EU simply as a stepping stone on the path toward liberal globalisation, rather than a means of integration and new solidarity between member states.
Full-on rearmament
News of the military expansion have come under fire from the Polish opposition. Opposition parties unanimously supported a move that allocates 3% of the national budget to defence, but Jarosław Kaczyński, the PiS President and effective leader of the government wants it to reach 5% in the future.
Some former defence ministers have said the current approach will damage local industry. A scandal involving French-made Caracal helicopters, dating back to 2016, has also resurfaced, following a leak of old government e-mails that plotted a smear campaign against the French equipment. These Airbus helicopters were due to be delivered to Poland between 2017 and 2022, whereas 96 new US Apaches have just been commissioned, with only 18 deliveries confirmed so far. All this has occurred outside the usual bidding procedure.
Opposition leaders also denounce PiS’s anti-Europeanism, revealing cracks within what was once a pro-Atlantic consensus. Opposition parties have pledged to review the government’s military contracts should they emerge victorious from elections in 2023.
Could the plans be scrapped?
The current rearmament policy is being rolled out ahead of an election that, according to polls, looks less positive for the PiS. The country has seen the highest inflation (at almost 16.4%) since the 1990s. Various other crises that have been mismanaged by the government, including the Oder environmental disaster.
Rocketing household energy prices and coal shortages are liable to hurt the groups likeliest to vote for PiS (e.g. elderly people, rural areas and regions of economic stagnation), who may turn out in fewer numbers during the legislative election.
In light of this difficult situation, the PiS is pushing its defence position and nationalist rhetoric to reinvigorate rifts and polarise politics, especially by playing an anti-German card. The PiS has even managed to bring the issue of German reparations back to the fore, for the devastation caused to Poland in WWII. But these all-too-obvious electoral gimmicks may not work as well as they did in the past.
With Russia’s aggression increasing the nationalist rhetoric within the country, opposition parties have not attacked this argument but instead criticised the government for brushing aside the cost of buying weapons. After high yields forced Poland to scrap a bond sale in October, former defence minister and opposition politician Tomasz Siemoniak wrote on Twitter that “the defence ministry is buying without a plan and apparently without money”.
Last year Poland was already proportionally Nato’s third-highest spender, after Greece and the US. In contrast, Germany and France are still struggling to meet Nato’s 2 per cent spending target, despite pledges to significantly increase their defence budgets. As well as other significant military contracts, Warsaw announced in February a $10bn purchase of Himars artillery systems produced by Lockheed Martin. The nearly 500 launchers included in the order are more than the number stationed in the US. “The problem is not getting Himars but getting such a huge number of them,” said retired Polish major general Bogusław Pacek, a professor of international relations at Kraków’s Jagiellonian university. Besides Himars, the US is selling Poland F-35 fighter jets, Apache helicopters, Abrams tanks and more Patriot missile systems. Last year Poland also became one of South Korea’s biggest military customers, including a $5.8bn contract for tanks and howitzers. Warsaw should win plaudits for helping Ukraine but its military spending “is becoming all about the elections”, said retired Polish general Waldemar Skrzypczak. “We have over 8mn older people who need to feel safe and who can decide who wins [the vote] and the government isn’t now thinking about the future generations who will pay the bill.”
The Polish government, the first to pledge to send Soviet-made fighter jets to Ukraine, has repeatedly lambasted Germany and other allies for dragging their feet in approving the delivery of modern armament, including tanks and fighter jets, to Kyiv. Like other nations, Poland does not disclose the terms of defence contracts. Purchases have been kept off the regular budget books and are instead within a special fund for emergency spending. There are few details on whether sellers will produce weapons in Poland, or on the additional costs of overhauling airfields and other investments required to incorporate the latest equipment into Poland’s military. During a visit to a US tank factory this month, Morawiecki said talks were under way to repair in Poland the Abrams tanks that the country will start receiving by June, as well as to produce some of the ammunition. “Many of the contracts are very unclear. The government also says they will involve some production and create many jobs in Poland, but I don’t know if that is a hope or a reality,” said Pacek.
Poland’s government has argued that homegrown military production will boost its economy as well as support its plan to double the size of its armed forces to 300,000. Polish officials also predict that weapons made under licence could be sold to other countries. “The scale of spending will be a trigger to create an active and innovative defence industry ecosystem,” said Jacek Siewiera, the head of Poland’s national security bureau. “We will never achieve the level of the industry of the United States and some other allies but this is now going to be one of the crucial sectors of industry in Poland.” Poland already makes weapons such as Krab howitzers, Piorun anti-aircraft missiles and Rosomak infantry vehicles. It also produces personal equipment ranging from night-vision goggles to handguns. But the nation’s record for larger projects is patchy — its navy took 17 years to build the Ślązak patrol ship.
Recommended War in Ukraine Russia’s war transforms sleepy Polish city into aid hub for Ukraine “Our problems with building a single warship without any special armament show our limited capacity,” said a former military official who asked not to be named because he was involved in this procurement. Siewiera said Poland could “raise more money on the markets” to pay for weapons. “Acceptance among society for this spending is absolutely high,” he added. Poland has lower government debt than many Nato partners, at 49 per cent of GDP last year. “We have been buying a lot and I can only hope that Poland has managed to negotiate good deals,” said opposition politician and former foreign minister Radosław Sikorski. “It’s not obvious to me that Poland has the ability to pay for all of this when you look at how the financial markets are now and our recent record in terms of selling bonds.” If financial markets remain volatile, western allies could help cover the bill for weapons stationed in Poland but on behalf of Nato’s eastern flank, said Polish state secretary Marcin Przydacz. “Can we afford it? We have no other choice,” he said. “We believe both the EU and Nato should be a bit more actively helping us to do this.”
At Poland’s Rzeszow airport, where President Biden’s plane touched down this week on his way to Kyiv, U.S.-made Patriot missile batteries point toward the skies. The first American M1A2 Abrams battle tanks are expected to arrive by train this spring, with hundreds of U.S.-manufactured rocket artillery systems to follow.
It is part of a mammoth military spending spree spurred by the war in neighboring Ukraine. Polish Defense Minister Mariusz Blaszczak hopes the influx of arms will help build “the largest land force in Europe,” and he sees Warsaw signing billions in weapons contracts with U.S. suppliers.
“This modern weaponry will elevate our armed forces to a completely new level of defense capabilities,” Blaszczak said in a written interview with The Washington Post. With relations between Warsaw and Washington at a high when materiel can’t be manufactured in Poland, it’s only natural “we look at our closest ally,” he added.
The buying spree comes as Poland attempts to solidify a position as a leading pillar of European relations with the United States, with the war in Ukraine shifting the balance of political power in Europe further to the east. That was hammered home this week as Biden — who has yet to visit Paris or Berlin during his term — made his second visit to Warsaw since the war began.
Germany — a traditional bulwark of the transatlantic relationship — has shied away from a military leadership role. And Poland, which is losing out on $37 billion in European Union cash because of its democratic backsliding, can claim moral high ground when it comes to security and its long-standing skepticism toward Moscow.
For years, Polish politicians “have been insisting that Russia is a real, existential and civilizational threat,” Blaszczak said. He cited a warning from Poland’s late president Lech Kaczynski in the wake of Moscow’s 2008 invasion of Georgia: “Today Georgia, tomorrow Ukraine, and then it well may be my homeland — Poland.”
So Poland is now on a quest to create a military so mighty that Moscow would not dare attack it.
President Vladimir Putin’s war accelerated Poland’s plans to modernize and expand its military. This year, Poland is expected to spend 4 percent of its gross domestic product on defense, double its requirements under NATO. Blaszczak said the aim to double the size of the military to 300,000 troops is “within reach and realistic,” though he did not give a time frame.
Older, Soviet-era weapons donated to Ukraine, including 240 T-72 tanks, are being replaced with more technologically advanced systems.
A $4.75 billion deal to buy 250 M1A2 Abramses was in the works before Russia’s invasion a year ago, while Poland signed another deal, worth $1.4 billion, to buy 116 older M1A1s in January.
Earlier this month, the United States gave the green light to another package of up to $10 billion, including the High Mobility Artillery Rocket System (HIMARS) and 185-mile long-range tactical missile systems. Poland has also signed a deal with South Korea to buy 980 K2 Black Panther tanks.
“There is no other option for Poland other than to increase money on defense,” said Jacek Siewiera, head of the National Security Bureau. “A country in our geographic position has little choice.”
In addition to the access it gives Poland to high-technology systems, the decision to turn to the United States is also a “strategic choice,” Siewiera said. “The most important part is the strategic alliance,” he said, pointing to the fact that Poland is also boosting ties in other key arenas such as energy.
In October last year, Poland picked the U.S. firm Westinghouse Electric to build its first nuclear power plant, in a project that the U.S. Embassy in Warsaw said “represents 100 years of new strategic cooperation between the United States and Poland.”
“What we see in Poland is the usual frontier state reaction,” said Gustav Gressel, a senior fellow at the European Council on Foreign Relations, comparing it to West Germany’s reliance on the United States during the Cold War. “They’ve seen what Russian occupation looks like,” he said, with a nod to the Soviet Union’s invasion and subsequent occupation of Poland during World War II.
But Poland is also reacting to its political isolation from allies in Europe, with unresolved disputes with the E.U. and thorny relations with Germany, said Gressel, who questioned whether some of Poland’s aims are economically feasible.
The export misbalance is putting the currency under pressure, he added. “One wonders economically how a lot of the stuff that’s been announced will be achievable,” he said.
“Somebody has to pay for all that, and you really wonder who it will be. The issue of economic sustainability is there,” Gressel said.
The Polish government, led by the right-wing populist Law and Justice party, has failed to unlock $37 billion in E.U. pandemic relief funds held up until it enacts changes related to the rule of law. It is also being fined $1 million a day for not complying with an E.U. court order related to judicial changes.
Last year, the U.S. Congress approved $288.6 million in military financing for Poland to “deter and defend” against the increased threat from Russia. The cash would relieve some of the economic pressures of Poland’s spending, amid sharply slowing economic growth and 17 percent inflation.
With such high spending, one can’t “just be a client,” said Siewiera, citing plans to step up the domestic Polish defense industry.
Against that backdrop, some of the decisions on buying arms from the United States appear “over-ideological” said Gressel, given that European manufacturers are more open to joint ventures that would help develop Poland’s arms industry.
“The Americans have no interest in cooperating much beyond exporting ready-made stuff to Poland,” he said, noting the size of the market.
But new U.S. weapons aren’t the only additions. The United States has around 11,000 troops stationed in Poland. In the country’s east, the Fifth Corps Forward Headquarters is being made “permanent,” becoming the U.S. Army’s most easterly presence on NATO territory.
A base near Rzeszow, the Polish city where Biden landed this week, is home to hundreds more U.S. troops. The city’s restaurants have started putting steak on the menu to cater to their new customers, Mayor Konrad Fijolek said. There are daily flights of humanitarian and military aid for Ukraine, and military production in the area is taking off.
“In the past, we used to be a city on the outskirts of Poland and the E.U.,” said Fijolek. “Right now, we’re in the center.”