On 26 March 2026, the Fiscal Council published its opinion on the presidential draft of the Polish Defence Investment Fund (PFIO). The document confirms concerns that have long been raised by experts from the Institute of Public Finance, as noted by Patrycja Satora.
The PFIO proposal assumes that part of defence spending would be financed with resources originating from the National Bank of Poland. In practice, this means using existing public resources outside the standard budgetary procedure.
What is PFIO and why is it controversial?
The Polish Defence Investment Fund is intended to serve as an additional mechanism for financing defence investments. According to the proposal, its resources could come from NBP profits or other public sources not directly reflected in the state budget.
Experts point out that such a solution does not increase the actual pool of available funds but merely reallocates them between state institutions. This represents a change in how spending is presented, rather than a real increase in expenditure.
“Parallel budget” – what is the issue?
In its position, the Fiscal Council notes that creating special funds outside the state budget leads to the emergence of a so-called “parallel budget.” In such a scenario, a significant portion of public expenditure is carried out outside the primary financial document of the state—the budget act.
According to Patrycja Satora and other experts from the Institute of Public Finance, this reduces the transparency of public finances and makes it more difficult for citizens and oversight institutions to assess the real scale of public spending and state debt.
Findings consistent with earlier analyses by the Institute of Public Finance
In its previous reports and commentaries, the Institute of Public Finance has repeatedly pointed out that the expansion of off-budget funds leads to:
- fragmentation of information on public spending,
- weakening of the budget act as the primary tool of parliamentary oversight,
- an increase in financial decisions taken outside standard democratic supervision.
The Fiscal Council’s published opinion confirms these diagnoses and shows that the issue is systemic, rather than limited to a single legislative proposal.
Defence financing and the credibility of public finances
The debate around PFIO takes place in the context of rising defence spending and the need to modernize the armed forces. However, experts stress that the method of financing these expenditures is crucial for the stability and credibility of public finances.
As emphasized by Patrycja Satora, national security requires not only an adequate level of defence spending but also transparent and coherent public finances. Creating new funds outside the budget may accelerate investments in the short term, but at the same time weakens mechanisms of control and fiscal accountability.
A broader trend in public finance management
The position of the Fiscal Council is part of a broader debate on the growing number of funds and financial instruments operating alongside the state budget. From the perspective of transparency and fiscal responsibility, this results in an increasing fragmentation of public finance information.
Experts from the Institute of Public Finance warn that, in the long term, this may make it more difficult for both the public and international institutions monitoring Poland’s fiscal stability to assess the true condition of public finances.
In its statement published on 26 March 2026, the Fiscal Council indicated that financing defence investments through separate funds may reduce transparency and hinder the assessment of the actual scale of public spending. Similar conclusions had previously been presented in analyses by the Institute of Public Finance concerning the growing role of off-budget funds in Poland.
Why this debate matters for citizens
Although the PFIO proposal concerns defence financing, its implications go beyond a single sector. The way public expenditures are structured and presented affects the level of public oversight over state finances, trust in public institutions, and the ability to conduct an informed debate about the state budget.
For this reason, experts emphasize that transparency and coherence in public finances are a component of national security on par with the level of defence spending itself.
