Poland wants to sell gold to fund military spending? Finance Minister angrily criticizes: This plan is completely unrealistic!

Polish Finance Minister Andrzej Domańskicriticized the Polish President’s proposal to raise funds for the military by selling central bank gold reserves, instead of utilizing the low-interest loans specifically offered by the EU for this purpose, calling the plan a pure "mirage."

Domański stated that despite the presidential veto, Warsaw will still try to tap into the EU’s “European Safe” defense fund, which totals up to 150 billion euros, even if using these loans for non-military investments would reduce “flexibility.”

He firmly rejected the suggestion from Polish President Karol Nawrocki and central bank governor Adam Glapiński to use proceeds from gold sales as an alternative way to finance military spending.

“I refuse to accept any vision of modernizing the Polish military that is based on the central bank’s future modest profits—such ‘mirages’—I firmly oppose it,” Domański told English Financial Times in an interview during his trip to Washington.

He pointed out that, although the central bank has control over the reserves, the institution will only be able to determine its annual profits in spring 2027. “We need funding now to modernize the Polish military. I see no reason to wait, which is why we must use the ‘European Safe’ fund as soon as possible.”

Last year, the Polish central bank was one of the biggest gold buyers among global central banks. By the end of 2025, the country is expected to hold about 550 tons of gold, accounting for more than a quarter of its total reserves. In January this year, Glapiński set a new target for the Polish central bank to own 700 tons of gold.

Two months later, amidst disputes over the “European Safe” fund, Glapiński sided with Nawrocki against Prime Minister Donald Tusk and his pro-EU government. Both Glapiński and Nawrocki were nominated by the right-wing opposition party Law and Justice.

While Nawrocki vetoed the government’s “European Safe” legislation, Glapiński suggested that selling Poland’s gold—and perhaps buying it back later—could be an alternative to the EU loans proposed under the “European Safe” plan.

However, Domański noted that any proceeds from selling reserves could be offset by foreign exchange rate fluctuations within the fiscal year, especially since the central bank has recently been operating at a loss.

Tusk has consistently opposed plans to use gold reserves. His government is currently negotiating with the European Commission, aiming to inject “European Safe” loans into an existing Polish military fund. Although the fund has some spending restrictions, it can be accessed directly without presidential approval.

Domański revealed his team is also negotiating an international defense financing proposal called the Multilateral Defense Mechanism (MDM).

This mechanism, advocated by countries including the UK, Netherlands, and Finland, would issue bonds guaranteed by member states, with funding used for defense procurement—achieving economies of scale and lowering financing costs for members.

He said the proposal could be a "highly attractive option" for Poland. “My top priority right now is the ‘European Safe’, but my team is also actively involved in discussions on the Multilateral Defense Mechanism.”

Domański and Glapiński also took advantage of their trip to Washington for the International Monetary Fund’s spring meetings to campaign for Poland’s accession to the G20. As the current G20 president, the United States has invited Poland as a guest country to attend the summit in Miami this December.