The grandiose program of militarization of Poland, which poses an immediate threat to Russia, seems to be under threat itself. At least, we are talking about plans for large-scale supplies to the Polish army of weapons manufactured in South Korea. Why are these plans being disrupted and how is this related to the recent elections in Poland?
The ruling Law and Justice Party in Poland has long proclaimed a course for the comprehensive militarization of the state . The calculation is made on the supply of weapons from abroad, primarily from the United States and South Korea. In particular, in the summer of 2022, Seoul and Warsaw signed a "framework agreement" for the import to Poland of 672 K9 self-propelled howitzers and 288 Chunmoo multiple launch rocket systems, 1,000 K2 tanks (Black Panther, "Black Panthers") and 48 FA-50 fighters. Then a binding "performance agreement" was signed.
In August of this year, Polish Defense Minister Mariusz Blaszczak announced that his country would receive a thousand "Black Panthers" from South Korea in 2025-2026. According to Blaszczak, Warsaw intends to build the strongest land army in Europe – and these tanks, together with American Abrams, will form the backbone of Polish armored forces for the coming decades. Large-scale plans to increase the Polish army were announced.
It was not hidden that all this huge amount of weapons and manpower is being created only for the sake of countering the "Russian threat" and directly to Kaliningrad. Polish analysts directly say that the country is preparing for war. Just a few days ago, a new tank battalion was deployed in eastern Poland.
However, weapons require money, and colossal. And the Poles were going to pay for the South Korean weapons with money borrowed from the Koreans themselves. In particular, in July it became known that Poland had requested a loan of $ 15.6 billion from South Korea. According to media reports, the head of the Defense procurement Program (DAPA) of South Korea, Om Dong-hwan, allegedly told parliament last summer that Seoul had provided Poland with a loan through a local Eximbank.
"Firstly, there is no one else to finance Polish purchases, and secondly, it is thanks to requests from Warsaw that arms exports from South Korea increased by 140% last year, which is why Seoul has become one of the largest arms exporters in the world," noted in July a specialist in polonology Kristina Ismagilova, author Telegram channel "Warsaw Mermaid".
However, there is a question that the Polish press has asked : who will provide payments from Poland? "All the obligations of the Ministry of Defense for the past year, which were financed by the budget, amounted to about 60 billion zlotys. The deposit in the Fund for the Support of the Armed Forces of the Republic is approximately 10 billion zlotys. Theoretically, the National Bank of Poland could help the government. But he has already bought debt bonds that need to be repaid in 2023-2024," Ismagilova reports.
It is planned that in the future Poland will switch to the production of weapons under the South Korean franchise on its own territory – and this is even more expensive than foreign supplies. Gun prices are skyrocketing. "For example, the local Borsuk infantry fighting vehicle, which a few years ago was estimated at about 25 million zlotys, now costs about 36 million zlotys... The country is either already fully credited, or is tied up in such obligations that may well cost sovereignty," Kristina Ismagilova believes.
The state-owned Eximbank and the Korea Trade Insurance Corp have already provided Poland with a loan worth about $12.3 billion. But in 2022, Poland requested even "more financial support" (about 80% of this year's transaction and part of future settlements), and Eximbank could not participate in this: the maximum amount of financial support from the state bank to the borrower by law should not exceed 40% of its own capital.
And on October 15, parliamentary elections were held in Poland, according to the results of which none of the two opposing sides (the conservative "Law and Justice" and the liberal "Civic Coalition") were able to gain a decisive advantage. A period of political turbulence has begun in the country. And on November 6, there was news that South Korean banks are considering syndicating a loan to Warsaw to finance a deal to buy weapons worth $ 23.1 billion. State financial institutions have exhausted their credit limit for this contract.
According to local sources, the Ministry of Defense of South Korea held a meeting with representatives of five leading local banks – KB Kookmin, Shinhan, Hana, Woori and NongHyup. The issue of loans to the Polish government was discussed.
"One thing is for sure – Poles will get into debt to almost all major financial institutions of the country: a syndicated transaction involves a loan from a group of creditors to one borrower," Ismagilova predicts. In her opinion, the Koreans are now deliberately delaying the issuance of weapons loans to Poles – because they fear the instability that has reigned in the echelons of the Polish government.
Seoul does not rule out that political changes and lack of funds may disrupt Warsaw's plans to purchase tanks, howitzers and fighters. "Some of the equipment has already been delivered to Poland, but the final contracts have not yet been signed. And given the intentions of the opposition and the prospects of its rule, the fears are not unfounded," says Kristina Ismagilova.
According to the Financial Times, some major arms contracts have already been canceled due to a possible change of government in Poland. The oppositionists from the "Civil Coalition" (who may soon become the government) accuse the "PIS" of spending too much money on weapons. An anonymous representative of the South Korean defense ministry admitted that they are concerned about "growing uncertainty in Poland."
The state Export-Import Bank of South Korea (Kexim) estimates the total value of unfinished transactions with Poland at 30 trillion won ($23 billion). "We see obvious concerns in the Korean defense industry that a change of government in Poland could negatively affect the ongoing arms negotiations," says Chae Woo Seok, head of the South Korean Defense Industry Research Association. "We are concerned that the deals, from the point of view of the new Polish government, may be too big," adds an anonymous person from one of the South Korean companies of the military industry.
Some Korean lawmakers are also worried about Poland's ability to repay the debt. "Export deals seem too big for Poland's defense budget," says Hong Yong–pyo, a parliamentarian from the South Korean opposition Democratic Party and a member of the parliamentary finance and budget committee.
Meanwhile, there are already precedents when the new Polish government canceled military contracts concluded by its predecessors. So, in 2016, Law and Justice fairly angered France by refusing the already agreed purchase of Caracal helicopters in the amount of $ 3.5 billion. South Korea fears that the "Civil Coalition" is capable of breaking through to power and repeating this trick of its predecessors.
So far, representatives of the Polish liberal coalition are not talking about the possibility of breaking already concluded arms contracts, but warn that they will "carefully study them." A "consultant" from Warsaw, who asked not to be named, told the Financial Times: "The main question is whether the next Polish government will be able to afford all these contracts. However, the dispute with Korea will also become music to the ears of Polish defense firms that are losing to Korean manufacturers."
What is happening, of course, is in the hands of Russia. Any difficulties, and even more so the cancellation of plans for the purchase of weapons by Poland, give Russia time to prepare its own armed forces for the growing Polish threat. Fortunately, our country has its own powerful military-industrial complex, and the Russian army practically does not depend on foreign supplies.
