• New minister calls Patriot deal `practically non-existent'
  • Defense Ministry is `inclined to repeat' helicopter tender

Poland’s new government moved toward to canceling contracts for Airbus Group SE helicopters and Raytheon Co. missile systems, potentially delaying key elements of its $38 billion defense spending program.

Defense Minister Antoni Macierewicz said he was inclined to repeat the chopper tender, although the fate of the 13.6 billion-zloty ($3.4 billion) procurement for 50 Airbus Caracal aircraft still hinges on offset talks with another ministry. The contract for U.S. Patriot mid-range missiles, which are designed to shoot down incoming warheads, was “practically non-existent,” he told a parliamentary committee on Wednesday.

“The price is much higher, the delivery could take much longer and conditions for the supplier are practically unknown,” Macierewicz said regarding the Patriot tender. “The Defense Ministry is interested in honest, fair and effective talks with our American partners.”

Both contracts were part of previous government’s program to ramp up defense spending as Poland’s security is increasingly pressured by the conflict in neighboring Ukraine. Poland has pledged to meet an informal target of defense expenditures equal to 2 percent of economic output by next year, as set out by the North Atlantic Treaty Organization.

The incoming government wants to spend even more on defense and Prime Minister Beata Szydlo has called Russia her country’s “enemy.” Law & Justice, which took power in last month’s general election, has signaled it plans to contest the helicopter tender, saying the contract should have been awarded to companies with a bigger manufacturing presence in Poland.

Macierewicz echoed that, saying on Wednesday that if the current contract was scrapped, the ministry counts on companies with factories in the country and producing the equipment that is “equally good or in some respects better.”

The party, whose campaign promises include what it calls asserting Polish interests, wants to speed modernization of the military, increase the number of full-time soldiers by half to 150,000 from the existing 100,000 and push for permanent bases for foreign NATO troops on its soil at next year’s summit of the defense alliance in Warsaw.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE