This quote, from President Ursula von der Leyen’s November 2024 address to the European Parliament, where she presented the new College of Commissioners and its program, both reaffirms Europe’s values as a social market economy and puts social dialogue at the heart of future competitiveness.

Improving the lives of people in Europe, strengthening social dialogue, and embracing the principle that economic competitiveness and social progress are complementary objectives are the very essence of Eurofound as an organization. This has been the case for the past five decades, with this year marking the 50th anniversary since its establishment. Based in Loughlinstown in Dublin since 1975, Eurofound works to improve social and employment policies, which ultimately improve the lives of people across Europe. Our policy contribution is focused on collecting and communicating reliable data and providing research to enable stakeholders to take informed decisions that help to build a Europe that works for people.

Duda ignored an appeal by the three opposition parties, which together control a majority of parliamentary seats, saying they will form a government with Tusk as the new leader. Tusk was prime minister from 2007-2014, before serving as president of the European Council for five years.

The opposition parties’ coalition pledges are an indictment of the past eight years of PiS rule and the new government also promised to hold the PiS government to account. “Without holding the pathology and crimes of the previous government accountable, there will not be a just and rule-of-law Poland,” the agreement said.

The coalition also pledged to work on a “predictable tax system,” transparent government finances, de-politicization of public media, improving access to housing and implementing an improved social safety net, according to the text.

While the three parties trying to form the next government are united in their aversion for PiS, they have big differences on issues like abortion, LGBTQ+ rights and energy policy. The Third Way’s opposition to liberalizing stringent abortion laws in Poland led to that issue being left out of the coalition agreement.

A small part of the Left, the Razem (Together) party, said that while it will support the government in the confidence vote expected in December, it won’t formally join the administration because issues like abortion were not included explicitly in the coalition agreement.

BGK’s experience in managing the AFSF could be leveraged to finance strictly military expenditure, which the EIB is currently unable to support. This could serve as a foundation for creating a European Defense Fund, which could be set up and co-managed with other banks.

Creating a new fund through NPBIs offers several advantages. NPBIs possess in-depth knowledge of regional industrial ecosystems, enabling more tailored funding solutions for local companies and research institutions. They also facilitate faster and more efficient allocation of funds. Leveraging their experience with EU funding programs, such as InvestEU, NPBIs are well positioned to implement defense projects efficiently. NPBIs can combine EU, national and private funds, creating significant financial leverage, and integrating various instruments like defense bonds, preferential loans or investment guarantees. Their regional perspective also makes them adept at identifying and supporting strategic companies in the defense supply chain, including research and development initiatives.

Creation of armaments fund(s)

Given the urgency of addressing the armaments gap, we propose that the first step toward implementing the ReArm Europe Plan should involve creating regional or task-based armaments funds , such as one dedicated to the eastern flank of NATO. Such a vehicle could quickly meet the funding needs of countries looking to accelerate defense procurement spending and increase financing for their manufacturing capacity. A regional defense fund would provide new funding opportunities to member states where military modernization efforts are constrained by limited access to financing.

Projects agreed upon at the EU, NATO and member states levels could be financed by a fund, similar to the structure of Poland’s AFSF. The selected NPBI would manage the fund, securing financing with a guarantee from the European Commission and, in some cases, member states too. Such a fund could be anchored in the EU budget, mirroring the setup of the AFSF within the Polish budget, with the Commission providing grants or other resources, including the issuance of defense bonds if necessary.

In terms of financing the expansion of production capacities, the private sector could play a key role, with appropriate incentives such as financing guarantees.

In conclusion, we believe that the European discussion on financing its defense capabilities has now shifted from ‘whether’ to ‘how?’ And NPBIs are the answer, emphasizing the crucial role in managing and raising funds for European financial programs. The advantage of NPBIs, such as BGK, is their ability to quickly absorb new tasks. To us, the EU defense policy represents another assignment, and leveraging such trusted partners offers the fastest route to building an effective and open financing architecture. This approach complements the role of other financial institutions, EIB or potentially a new armament bank modeled on the European Bank for Reconstruction and Development. Modifying a public bank’s mandate is a much simpler process, and given the time-sensitive nature of the current defense investments, regional procurement funds managed by NPBIs offer the most efficient solution.

“We want to end all speculation regarding the alleged loss of support for Donald Tusk’s government. We simply want to end external and internal discussions, and any attempts to undermine the mandate Donald Tusk has to lead the government, and just move forward,” she said.

That, however, is easier said than done. Nawrocki’s victory directly threatens Tusk’s ability to enact his agenda, as the president can veto key reforms in areas including abortion, same-sex partnerships, the judicial system and social security payments for the self-employed.

Nawrocki’s unexpected victory sent shockwaves through Tusk’s four-party coalition, which now promises to intensify efforts to deliver on the commitments made ahead of the 2023 general election. A lack of progress on the initiatives that helped bring the coalition to power two years ago is seen as a key factor behind the shift of voters away from it on June 1.

Nawrocki is expected to chisel away at the government’s effectiveness and popularity ahead of the next general election in 2027.

Tusk’s administration would have needed a three-fifths majority to override presidential vetoes, but falls well short. Indeed, polls already suggest the coalition would lose its majority to the nationalist Law and Justice (PiS) party and the far-right Konfederacja party, whose voters played a key role in securing Nawrocki’s victory.