Financing of the Armed Forces of the Republic of Poland – conclusions de lege lata and de lege ferenda
Keywords:
armed forces, fiscal sustainability, fiscal rules, public debtAbstract
The beginning of the war in Ukraine drastically worsened the Polish geopolitical situation.
As a result, on March 11, 2022, the Law on Defense of the Fatherland was passed. This law abruptly
increased the expenditure on the Polish Armed Forces. It also established the Armed Forces Support
Fund, which was placed at Bank Gospodarstwa Krajowego. This solution allows public authorities to
circumvent the regulations limiting the level of public debt. In this sense, the establishment of the
Armed Forces Support Fund is a form of creating fiscal illusions. At the same time, two bills were
introduced to the Sejm, in which it was proposed to modify the stabilizing fiscal rule and the constitutional
debt limit. The possible adoption of these laws poses a threat to Poland’s fiscal stability.
References
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Bohn H., The sustainability of Fiscal Policy in the United States, „CESifo Working Paper” 2005, no. 1446, s. 13.
Escolano J., A practical guide to public debt dynamics, fiscal sustainability, and cyclical adjustment of budgetary aggregates, „IMF Technical Notes and Manuals” 2010, January.
Geithner T.F., Stress Test. Reflections on Financial Crises, New York 2014.
Irwin T.C., Accounting Devices and Fiscal Illusions, „IMF Staff Discussion Note” 2012, no. SDN/12/02.
Panfil P., Reguły i iluzje fiskalne w Polsce, Warszawa 2021.
Wernik A., Finanse publiczne, Warszawa 2011.
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