70% of the Modernisation Funds to be Used by the Polish Industry?

During the meeting of the commission, MP Bartłomiej Bodio (PSL) has presented assumptions of the project, according to which at least 70% of the defence-allocated capital expenses would be used to conduct purchases from the Polish companies, in accordance with Article 7., Section 3. of the 25th May 2001 Act on Restructuring and Technical Modernisation and Financing of the Polish Armed Forces.

MP Bodio noted that the regulations of the European Law, particularly referring to the Article 346 of the Treaty on the functioning of the European Union, provide an option of excluding the treaty’s regulation in order to protect the basic security interest of the country. Bartłomiej Bodio has also referred to examples of strategic documents in France and UK, regarding support granted to the national defence industries.

Bartłomiej Bodio also reminded the participants of the meeting that defence industry is both an indispensable element of the state security system (together with the Armed Forces) as well as an integral part of the state economy. He emphasized the fact that, in Poland, the defence industry employs more than 20 000 people, with a similar number of cooperative parties. Thus it should be considered to transfer of 70% of the general capital-expenses to the Polish defence industry to be of paramount value.

The initiator of the new project has also claimed that meaning of granting support for the Polish defence industry in the process of modernisation of the Armed Forces has been significantly increased, within the context of the Ukrainian crisis, due to the fact that potential new supplies of armament and equipment need to be secured, should any threat to the national security be present. The Parliamentary Analytic Office doubted whether introduction of such a “general” clause regarding the capital expenses (without express indication in the sector orders) will be compliant with the EU legal regulations.

In his response, professor Waldemar Gontarski stated that the EU Court of Justice in Luxembourg, in its judgement, rather accepts exclusion of the defence-related issues from the public procurement procedures in a wider scope, than it is in case of double-purpose goods, in case related to Finland (judgement made on 7^th Jun. 2012). In his opinion the judgements are rather directed towards “protection of the national security”, placing the responsibility within the scope of defence in the hands of the legislative bodies of the member states.

The commission did not reject the project, which means that it could undergo further proceedings.