US offers rare loan of $2 billion to Poland modernise its defences

The Biden administration stated Monday that it is extending a $2 billion loan to Poland, which has served as a corridor for weapons entering Ukraine, to help the ally modernise its defences.

The State Department said in a statement that Poland is a “stalwart” ally of the US whose “security is vital to the collective defense” of NATO’s eastern flank and that such funding is reserved for Washington’s most important security partners.

The US government is also giving Warsaw with up to $60 million in Foreign Military Financing (FMF) to facilitate “urgent procurements of defence articles and services from the United States,” according to the State Department. The $60 million is a loan subsidy intended to ensure that Warsaw can achieve favourable credit conditions.

Since Russia’s full-scale invasion of Ukraine, Poland has been a loyal backer of the nation, providing over substantial numbers of its own tanks, fighter planes, and other weaponry. It has also served as a conduit for the majority of Western armaments destined for Ukraine.

It has been modernising to replace what it handed away, much of which was based on outdated Soviet technology, placing orders with US and South Korean defence firms.

The Polish-Ukrainian relationship has recently been strained as a result of a commercial dispute centred on Ukrainian grain entering the Polish market and pushing down the prices available to Polish farmers. During the conflict, Poland’s Prime Minister Mateusz Morawiecki stated that his nation will no longer transfer weaponry to Ukraine.

The comment created some confusion. Analysts noted that Poland has already in fact given Ukraine most of what it has to give, and the statement was made ahead of a Polish election and did not mean much. But it also raised concerns that Western support for Ukraine could be weakening.

US officials have sought to play down the spat, praising Poland’s role in helping Ukraine and noting that it is in Poland’s strategic interest for Ukraine to prevail against Russia.