EU withholding billions in cohesion funds from Poland over rule-of-law concerns

The European Commission has confirmed that it is withholding further billions of euros in funds from Poland due to the government’s failure to address concerns over the rule of law.

The money in question is from the EU’s cohesion funds, which are designed to help poorer member states catch up with the rest of the bloc. Poland is the largest recipient of such funds. It is due to receive over €75 billion during the current 2021 and 2027 budget period.

Poland has already seen a separate pot of around €36 billion in grants and loans – from the EU’s pandemic recovery fund – frozen by the European Commission. On Sunday, the Financial Times reported that Brussels is now planning to freeze cohesion funds as well due to threats to judicial independence.

That position was confirmed by European Commission spokesman Stefan De Keersmaecker to Polish daily Rzeczpospolita, which reports today that Brussels is withholding “virtually all funds for Poland until we repair the judiciary”.

“As a result of the non-fulfilment of basic conditions, the commission cannot reimburse any expenditure submitted by Poland,” De Keersmaecker told the newspaper. “Moreover, if the basic conditions are not met, the commission may recover advance payments at the annual settlement of accounts or at the closure of the accounts.”

This will be a particular blow to authorities in Poland’s 16 provinces, which are meant to complete negotiations over €31 billion in cohesion funds by the end of October, notes Rzeczpospolita. Those provinces are mainly led by opposition parties, who have themselves criticised the government’s judicial policies.

“Losing access to EU funds has a concrete impact on the lives of our inhabitants,” the opposition mayor of Gdańsk, Aleksandra Dulkiewicz, told Rzeczpospolita. “All [our investment plans] may collapse due to the incomprehensible ideology of the government’s eternal war with European institutions.”

The newspaper reports that the main issues holding up the disbursement of funds are the need for Poland to reinstate judges suspended by the disciplinary chamber created by the government and to guarantee the right of judges to refer questions to the European Court of Justice (ECJ).

Earlier this year, the Polish government agreed to a set of “milestones” with Brussels that would roll back some of its judicial policies. It argues that it has fulfilled the conditions – including abolishing the disciplinary chamber – but the commission notes that not all terms have yet been met.

“The commission and Poland will continue working together to overcome the remaining issues,” an unnamed commission spokesman told the Financial Times, adding that Poland still needs to fulfil “enabling conditions” relating to the EU’s charter of fundamental rights.

In a further hit to Poland’s finances, it continues to be fined €1 million per day for failing to comply with an ECJ ruling from last year relating to its disciplinary chamber. Those fines have been levied since last November, and now amount to over €325 million.

Warsaw argues, however, that it has complied with that ruling. The national-conservative ruling party, Law and Justice (PiS), says that the EU is targeting Poland for political reasons rather than due to genuine concerns over the rule of law.

Last month, PiS chairman Jarosław Kaczyński said that Poland would take legal action against the commission if it continues to “illegally” block funds. A deputy prime minister, Piotr Gliński, also announced that the government could seek to replace part of the funds with loans from Asia.

Main image credit: Krystian Maj/KPRM (under CC CC BY-NC-ND 3.0 PL)

Daniel Tilles

Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.