How has the EU budget dispute affected the power struggle within Poland’s governing camp?

Another flashpoint in an ongoing power struggle

Last November, Poland (together with Hungary) threatened to veto the EU’s 2021-27 budget and coronavirus recovery fund following controversy over a proposal to link the disbursement of Union fiscal transfers to “rule of law” conditionality. The Polish government accused Germany, the then-holder of the EU presidency, and the European Parliament (EP) of proposing a mechanism positing an extremely wide range of “rule of law” violations that could be considered for sanctions if they even risked affecting the Union’s financial interests.

Since it came to office in autumn 2015, Poland’s ruling right-wing Law and Justice (PiS) party has clashed with the EU political establishment over a number of “rule of law”-related issues, notably its judicial reform programme.

PiS argued that the proposed conditionality regulation was a political instrument based on vague and arbitrary criteria and lacked a legal basis in the EU treaties. The party warned it that could be used by the EU political establishment to curb national sovereignty and interfere in almost every sphere of public life by, for example, exerting pressure on PiS to abandon its radical systemic reforms and accept liberal-left moral-cultural norms.

However, although the mechanism itself could be passed with the support of a qualified majority, the budget and coronavirus recovery package to which it was linked required unanimous consent.

At the same time, the EU budget negotiations became another flashpoint in the bitter internal power struggle currently taking place within the Polish governing camp. PiS is actually the largest component within the United Right electoral alliance, which includes two smaller parties. Given that the government only enjoys a parliamentary majority of five seats, and each of them has around 20 deputies, these parties increased their political influence after the autumn 2019 election.

During the last few months, one of them, United Poland (SP) led by justice minister Zbigniew Ziobro, has been staking out a series of hardline right-wing conservative policy positions and criticising the government for being excessively compromising and ideologically timid.

This included calling, from the outset, for the government to use its EU budget veto to reject the proposed conditionality mechanism in its entirety. Ziobro has introduced many of the government’s most controversial policies over the last five years, notably its judicial reforms, and represents what might be termed the “traditionalist-revolutionary” faction within the governing camp that remains committed to pushing ahead with radical state re-construction and promoting a conservative vision of national identity and traditional values.

A trap for Morawiecki?

At the heart of this jockeying for position were two protagonists who have been rivals since PiS took office and represent the main ideological-programmatic currents within the governing camp: Ziobro and Prime Minister Mateusz Morawiecki.

Morawiecki is the key figure in the governing camp’s “modernising-technocratic” wing which also has strong conservative values, and has at times been very critical of Poland’s post-1989 establishment, but believes that PiS has to find more effective ways to reach out to better-off, well-educated voters in urban areas where traditional institutions such as the Catholic Church hold less sway, especially among younger Poles, by focusing on socio-economic transformation rather than moral-cultural and ideological issues.

Morawiecki appears to enjoy the backing of PiS leader and deputy prime minister Jarosław Kaczyński, who exercises a powerful influence in guiding and determining the government’s programmatic and strategic priorities and has provided a crucial source of cohesion and unquestioned authority within the governing camp. According to media reports, last summer Ziobro offered to dissolve his party and re-join PiS (which he left in 2011 after questioning Kaczyński’s leadership) but was rebuffed by the ruling party’s leader, who feared his future leadership ambitions.

Kaczyński seems to believe that, in order to make progress with its radical state reconstruction project and engage effectively in broader ideological debates on moral-cultural issues, PiS has to win public support by demonstrating its competence in socio-economic policy and international relations, and feels that Morawiecki is best placed to achieve this.

Some commentators argued that Ziobro chose the EU budget issue on which to take a stand because he knew that it put Morawiecki in a potentially extremely awkward position. If the prime minister failed to use the budget veto to try and block the conditionality mechanism, Ziobro and his allies could portray him as a weak and ineffective defender of Polish interests.

However, one of the main reasons that Morawiecki was appointed prime minister in 2017 was to “reset” PiS’s relations with the EU political establishment by presenting Poland as a constructive member state and de-coupling the “rule of law” dispute from Warsaw’s ability to develop a pragmatic working relationship with the European Commission and major Union powers.

Any Polish budget veto could have seriously undermined Morawiecki’s reputation as an effective EU negotiator and deal-maker, risking the country’s political isolation and potentially bringing very significant financial costs.

Poland was set to be one of the largest beneficiaries from the 2021-27 EU budget and coronavirus recovery fund, with PiS hoping that the 770 billion złoties in grants and loans earmarked for the country would help it to achieve a strong, post-pandemic economic rebound. However, the potential budget impasse prompted the Commission to start work on ways of circumventing Poland (and Hungary)’s objections by pushing through the coronavirus recovery fund as a deal among the remaining member states.

At the same time, while PiS said that the EU could move ahead with next year’s spending in a provisional way if the long-term budget was not agreed, the government’s critics warned that this could involve cutting existing programmes and preventing new ones from starting.

An acceptable compromise?

In fact, Poland dropped its veto threat at the December European Council after securing an additional interpretative declaration added to the summit conclusions which explained how the conditionality mechanism would be used. Most importantly from the Polish government’s perspective, although the text of the new “rule of law” regulation remained unchanged the conclusions reiterated that it applied only to financial irregularities involving the misappropriation of EU funds and that a causal link between the breaches of rules and negative consequences for the Union’s financial interest had to be sufficiently direct and specifically established; the mere finding that a “rule of law” violation had occurred was not sufficient to trigger the mechanism.

This was to be guaranteed by guidelines prepared by the Commission on how the new instrument would be used which are expected to include the precise methodology for carrying out its assessment of whether particular “rule of law” violations threaten the EU’s financial interests.

The summit conclusions also delayed the implementation of the mechanism pending a challenge to its legality in the EU Court of Justice by Poland (or other member states) so that the Commission could incorporate such a judgement into its guidelines; a process that could take several months to complete, possibly even longer. Finally, the summit agreed that conditionality would only apply to the new budget starting in 2021 and the coronavirus recovery fund, and not for payments made from the current one (which could still run for another three years).

Morawiecki argued that this represented an acceptable compromise that guaranteed Poland’s national interests, while the government’s supporters (and some of its opponents) claimed that the conditionality mechanism was now so watered down that it would not prevent PiS from continuing with its radical state transformation programme, including completing its judicial overhaul.

Ziobro overplays his hand

However, Ziobro and United Poland leaders disagreed with Morawiecki’s interpretation of the summit outcome and strongly criticised the prime minister’s decision to allow the conditionality regulation to enter into force as part of the budget package without legally enforceable safeguards. The interpretative declaration, and any guidelines that might emerge from them, would, they argued, not amend the mechanism because they did not represent a binding text under EU law.

As it turned out, Ziobro ended up overplaying his hand. To be consistent and follow through the logic of his argument, Ziobro should have resigned from the government. But this would have cut United Poland off from the power, patronage and funds that flow from government participation. United Poland was also very unlikely to secure re-election if it were to stand independently in a snap parliamentary poll that would almost certainly have ensued if the party left the government (the next election is not scheduled until autumn 2023).

At the same time, potential allies in a new political project challenging PiS on its right flank – such as the radical right Confederation (Konfederacja) grouping, or the milieu linked to the Catholic broadcaster Radio Maryja, which has been very influential among Poland’s “religious right” electorate – are currently on the defensive.

In the event, the United Poland leadership voted by 12 votes to eight to remain part of the governing camp. This was in stark contrast to the stance taken last May by Jarosław Gowin, the leader of PiS’s other smaller governing partner the liberal-conservative Agreement (Porozumienie) party. Gowin resigned from the government and threatened to pull his party out of the ruling coalition over a disagreement about the timing of the presidential election, only to return in triumph as deputy prime minister and economy minister following the autumn ministerial reshuffle.

Although Ziobro’s party resolved to vote against approving the EU budget deal in parliament, this should not be a problem for PiS as it can rely on the support of most of the opposition on this issue. So by overplaying his hand and not following through on this earlier tough rhetoric, Ziobro was forced to retreat and lost credibility, while Morawiecki emerged from the dispute considerably strengthened.

Laying the groundwork for a new political formation?

However, it is too early to write Ziobro off, not least because PiS needs the votes of United Poland to retain its slim parliamentary majority, and his ongoing bitter personal rivalry with Morawiecki will continue. The lack of trust and divisions between the governing camp’s more ideologically hardline traditionalist-conservative and “centrist” technocratic-modernising currents, and their two key protagonists, are very deeply rooted and also run through PiS itself, many of whose old guard are ideologically closer to Ziobro and wary of Morawiecki’s ambitions.

Kaczyński’s authority as the dominant figure on the Polish right, which has kept the lid on the various factional and leadership disputes, is also starting to wane and, sooner or later, Ziobro will return to testing its limits.

So although the governing camp has survived the latest challenge to its unity posed by the EU budget veto dispute, the struggle over the future shape of the Polish right continues with further conflicts between the competing factions certain to re-emerge. Ziobro also knows that he has very little of chance of taking over the governing camp’s leadership in its current configuration.

As a consequence, his hardline stance on the EU budget veto (and other issues) may be part of laying the groundwork for a new political formation emerging on PiS’s right flank, either from the ruins of an imploding “United Right” or as a breakaway grouping, with Ziobro’s party at its core.

Main image credit: Krystian Maj/KPRM (under public domain)

Aleks Szczerbiak is Professor of Politics & Contemporary European Studies at the University of Sussex. The original version of this article appeared here.