Poland should not face EU action over defence-fuelled deficit, minister says

WARSAW (Reuters) - Poland should not be included in EU measures to limit deficits because it is currently having to spend so much on defence, Finance Minister Andrzej Domanski said on Wednesday.

The European Commission plans to revive its 3% deficit limit, suspended between 2020 and 2023 due to the COVID-19 pandemic and the war in Poland's neighbour Ukraine.

Member states that exceed the limit are required to follow a plan to return below the mark under the bloc's excessive deficit procedure.

"We firmly believe that this deficit results to a very large extent from the defence spending, which is the highest among NATO countries, and that is why we believe that the excessive deficit procedure should not be applied to Poland," Domanski told Polsat News.

Warsaw has been spending about double the NATO requirement of 2% of gross domestic product (GDP) since 2022, amid growing worries that conflict could spread beyond Ukraine.

Poland's 2023 general government deficit came in at 5.1% of GDP, leaving it among nearly a dozen European Union countries at risk of being put under the bloc's excessive deficit procedure.

Domanski said Poland is in dialogue with the European Commission and is discussing the grounds for opening the excessive deficit procedure.

(Reporting by Pawel Florkiewicz and Marek Strzelecki; Editing by Andrew Heavens)