Poland's gold is intended to strengthen its defense
Poland's central bank is considering indirectly using a portion of its sharply increased gold reserves for defense spending. Central Bank Governor Adam Glapiński stated on Tuesday that the bank is prepared to manage its gold holdings more actively in the future and to mobilize valuation gains from the precious metal for security policy purposes.
According to the National Bank, the unrealized gains on its gold reserves currently amount to approximately 197 billion złoty (about 46 billion euros). This potential could—spread out over several years—contribute to financing military investments.
Gold as a Security Reserve—and as a Source of Funding
The proposal comes at a politically sensitive time. President Karol Nawrocki must decide by March 20 whether to sign the government’s bill implementing the European SAFE program. The EU program is intended to provide member states with loans for joint arms procurement.
Nawrocki, who is politically aligned with the national-conservative opposition, sharply criticizes the European mechanism. He argues that the repayment of the loans extends far into the future, and he also fears increased political influence from Brussels.
Instead, the president is proposing a national solution: a defense investment fund at the state-owned development bank BGK. Part of the funding could come from capital gains on Poland’s gold reserves.
Central Bank Signals Readiness
Central Bank Governor Glapiński stated that the central bank is, in principle, willing to realize a portion of these gains. This would not mean that the reserves would shrink. Rather, it would merely change their composition.
“When we sell gold, we exchange it for dollars,” said Glapiński. “The total value of the reserves remains the same—only their structure changes.”
The idea: A portion of the gold would be sold, and the valuation gains would flow into the national budget or the proposed defense fund. Later, the central bank could repurchase the same amount of gold.
Growing Gold Reserves
Poland has significantly increased its gold holdings in recent years. At the end of February, they stood at around 570 metric tons—up from 550 metric tons at the end of the previous year. In the long term, the central bank is even aiming for a total of 700 metric tons. In total, the central bank’s foreign exchange reserves currently stand at more than one trillion złoty, about one-third of which is in gold.
The proposal is likely to further intensify the political debate. Prime Minister Donald Tusk’s government is counting on European SAFE funding, from which Poland could receive around 43 billion euros—the largest allocation within the EU.
Nawrocki and his political allies, however, warn of rising debt and see national control over defense investments as being at risk. It remains to be seen whether the president will ultimately sign the bill or veto it. The government has already announced that it will prepare alternative financing options in the event of a veto.
Glapiński emphasized that any gold transactions would be conducted cautiously and gradually. The goal, he said, is to avoid turbulence in the financial markets and not to create additional inflationary risks. All measures would be implemented within the framework of the central bank’s legal mandate and in accordance with European law.
