Poland's Ministry of Finance published a readout of the Economic and Financial Affairs Council meeting held on 13 May under the Polish EU Council Presidency, chaired by Finance Minister Andrzej Domański. Ministers held an orientation debate on the proposed Instrument for Increasing European Security known as SAFE and reached a general approach on a directive updating EU VAT rules for distance sales of imported goods and import VAT, alongside discussions on competitiveness and the economic and financial impact of Russia’s war against Ukraine. The Council also adopted implementing decisions approving targeted changes to the Recovery and Resilience Facility plans of Spain, the Netherlands, Portugal and Slovakia. SAFE was presented as a new financial instrument offering up to EUR 150bn in loans to help member states increase spending on joint defence procurement, with ministers focusing on the budgetary and economic aspects of the financing. The agreed VAT approach would strengthen VAT collection on imported goods by making suppliers responsible for paying import VAT and is intended to encourage broader use of the Import One-Stop Shop for VAT obligations on imports from third countries. Competitiveness discussions centred on simplifying rules and the Commission’s Savings and Investments Union strategy adopted on 19 March 2025, with ministers highlighting the need to complete the single capital market to mobilise private capital for productive investment, while Ukraine-related exchanges included an update on EU financial support instruments, including the Ukraine Facility for 2024–2027. Before the Council formally adopts the VAT directive, it will seek the European Parliament’s opinion. The SAFE proposal remains under discussion in the Council’s preparatory bodies, with the Polish Presidency calling for rapid adoption.

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