1. MINISTRY OF NATIONAL DEFENCE BUDGETARY DEPARTMENT ON THE MoND BUDGET FOR 2010 Warsaw, March 2010 BASIC INFORMATION

2. INTRODUCTIONINTRODUCTION  This publication provides the basic information on the national budget, Polish defence expenditures and MoND budget.  To fulfill defence tasks and missions, Poland has allocated (according to the Budgetary Act) 25,719.0 million zlotys (MPLN) to defence expenditures. The 2010 defence expenditures ceiling has been established as defined in the act dated 25 May 2001 on restructuring, technical modernization and financing of the Polish Armed Forces (not less than 1.95% of the Gross Domestic Product of the previous year).

3.  Within the mentioned amount – 25,448.3 MPLN has been allocated to Part 29 – National Defence, and 270.7 MPLN to the other parts of the state budget.  Defence expenditures in 2010 reflect positive trend of the Polish Armed Forces development, capital investment expenses are assumed to reach 22.5% of total MoND budget.  Irrespective of budget resources, MoND expects that process of the armed forces modernization will be strengthen by using of some off-budget resources (domestic and foreigner).

4. Basic macroeconomic indicators 2010 Expenditures 301.2 BPLN MoND Budget 25.7 BPLN Gross Domestic Product– 1,322.3 BPLN (year 2009) 1.95% GDP National BudgetDeficit 52.2 BPLN Revenues 249.0 BPLN Average annual increase in: consumer price index 101.0 % Exchange rates: 1 USD = 3.01 – 3.25 PLN 1 EUR = 4.07 – 4.38 PLN Other Ministries 0.3 BPLN Ministry of National Defence 25.4 BPLN

5. Total defence expenditures in 2010 (the Budget Act year 2010 ) Defence expenditures MPLN 25,719.0 ► Defence expenditures MPLN 25,719.0 (at least 1.95 % GDP 2009 – 1,322.3 BPLN) Part 29 - „National Defence” MPLN 25,448.3 (including: F-16 Program MPLN 198.3) (including: F-16 Program MPLN 198.3) Part 28 Science MPLN 154.0 (Research Projects) Part 20 Economy MPLN 73.0 (Mobilization of Economy Program) Other (excluding MoND) MPLN 43.7 (Paramilitary Defence Program) Defence expenditures of the other governmental institutions Defence expenditures of the other governmental institutions MPLN 270.7

6. Additional financial resources in 2010 TOTAL MPLN 627.7 ► TOTAL MPLN 627.7 Domestic MPLN 213.2 Domestic MPLN 213.2  Armed Forces Modernisation Fund MPLN 71.7  F-16 Program loan repayment MPLN 141.5 Foreign MPLN 414.5 Foreign MPLN 414.5  NSIP (NATO Security Investment Program) MPLN 266.4  FMF (Foreign Military Financing - US Program) ~ MPLN 141.5 (MUSD 47.0)  IMET (International Military Education And Training) ~ MPLN 6.6 (MUSD 2.2)

7. Defence priorities  Professionalization of the Polish Armed Forces;  Allied CRO’s, including: ISAF, NTM-I, KFOR, EUFOR, AIR POLICING and ACTIVE ENDEAVOUR;  Modernization of the Polish Armed Forces, including operational and armament programs;  Implementation of the MoND IT strategy;  Preparation of the armed components declared to NATO Response Forces and UE Battle Groups.

8. Structure of MoND budget in 2010 Capital Investment 5,720.2 Other expenditures 1,674.3 1,674.3 Expenses on military and civilian personnel 7,208.5 Pensions 5,457.6 5,457.6 Other services 764.4 Subsidies 787.3 O&M Costs 3,836.0 21.4%21.4% 3.1%3.1% 3.0%3.0% 15.1%15.1% 6.6%6.6% 22.5%22.5% 28.3%28.3% 25,448.3 MPLN (MPLN)

9. Name of section Expenditures (the Budgetary Act) Share TOTAL BUDGET25,448.3100.0% 700Housing497.81.9% 710Public services0.90.004% 750Public administration244.41.0% 752National defence18,546.572.9% 753Social security schemes5,694.822.4% 755Administration of justice61.30.2% 803Academic education141.00.6% 851Health care224.90.9% 921Culture36.70.1% Section Structure of MoND budget in 2010 (according to sections) (in MPLN)

10. Chapter Detailed list Expenditures (the Budgetary Act) (the Budgetary Act)Share Share in total budget 75201Army2,730.84314.72%10.73% 75202Air Forces1,175.8556.34%4.62% 75203Navy459.8612.48%1.81% 75204Central Support6,117.33932.99%24.04 % 75207Military Police228.0621.23%0.90 % 75208Roman Catholic Chaplaincy20.5300.11%0.08 % 75209Orthodox Chaplaincy2.5760.01% 75210Evangelic Chaplaincy1.6550.01% 75213Command and control of Armed Forces935.0195.04%3.67 % 75215Mobilization tasks of civilian enterprises23.0000.12%0.09 % 75216Crisis Response Operations1,963.59810.59%7.72 % 75217Military Intelligence Service99.0670.53%0.39 % 75218Military Counter-Intelligence Service158.1900.85%0.62 % 75219Special Forces182.0640.98%0.72 % 75220Army support3,711.40620.02%14.58 % 75295Other activities737.4833.98%2.90 % TOTAL18,546.548100.0%72.89% Structure of section 752 „National defence” in 2010

11. PERSONNELPERSONNEL Average salary (in thousand PLN): Soldiers – 3,961 Civilian personnel: –civil servant corps – 3,141 –other personnel – 2,604

12. MILITARY PERSONNEL 110,000 MILITARY PERSONNEL 110,000 MILITARY PERSONNEL (Part 29 National defence) REGULAR SOLDIERS 96,636 OVER-TERM VOLUNTEER SERVICE 864 CADETS 2,500 NATIONAL RESERVE FORCES 10,000

13. MILITARY PERSONNEL (Section 752 – National defence) 43,704 soldiers 6,402 soldiers 43,768 soldiers 16,126 soldiers 110,000 i.e. Central Support, Military Police, Command and control i.e. Central Support, Military Police, Command and control 14.7% 39.7% 5.8% 39.8%

14. PENSIONSPENSIONS TOTAL – 5,457.6 MPLN PENSIONS 106,016 PENSIONS 106,016 DISABILITY PENSIONS 17,364 DISABILITY PENSIONS 17,364 FAMILY PENSIONS 37,720 FAMILY PENSIONS 37,720 Number of pensioners 161,100 161,100 Increase of pensioner number index Valorization index Average pension 100.72% 104.6% 2,713 PLN

15. The Polish Armed Forces operations abroad in 2010 2,600 soldiers 25 observers 27 sailors 20 soldiers 16 soldiers K F O R 233 soldiers 212 soldiers EUFOR 1,963.6 MPLN 7.7% budget of MoND NTM-I IRAQ GEORGIA AFGHANISTAN 100 soldiers AIR POLICING ACTIVE ENDEAVOUR

16. POLAND2009* USA POLAND2010* DEFENCE BUDGET IN COMPARISON WITH NATO AVERAGE (per capita in USD) AVERAGENATO Source: Based on NATO’s statistical tables 2009, * - data for Poland in 2009-2010 – Budgetary Department estimates AVERAGEEUROPEANNATOCOUNTRIES

17. USA POLAND2010*POLAND2009* BUDGET IN COMPARISON WITH NATO AVERAGE (per soldier in thousand USD) AVERAGENATO AVERAGEEUROPEANNATOCOUNTRIES Source: Based on NATO’s statistical tables 2009, * - data for Poland in 2009-2010 – Budgetary Department estimates