Poland edges closer to unblocking frozen EU funds

BRUSSELS / WARSAW ― Poland is confident it can unblock over €100 billion of frozen EU funds. The question is, will Brussels play ball?

The new pro-EU government of Prime Minister Donald Tusk has vowed to restore democratic standards and win EU funds suspended by Brussels over concerns of backsliding under the previous Euroskeptic government led by Law and Justice (PiS).

EU Justice Commissioner Didier Reynders praised the new government’s efforts to reestablish judicial independence during a trip to Warsaw on Friday.

“This is a change that is warmly welcomed,” he said during a press conference with the Polish Justice Minister Adam Bodnar, signaling a thaw in relations between Brussels and Warsaw.

But Polish President Andrzej Duda — who hails from PiS and has made a habit of picking fights with Tusk — is standing in the way of the release of the frozen funds. There is a chance Duda won’t agree to reforms designed to restore the rule of law — and Tusk’s ruling coalition doesn’t have the votes in parliament to override his veto.

The warming relations between Poland and the EU follows the appointment of Tusk ― a former president of the European Council ― as the country’s prime minister last month. But his first weeks in office have been dominated by fights with Duda as he attempts to remove PiS associates from the state apparatus, pursue a pro-EU agenda and unlock vital money.

Seeing the money

Brussels expects Warsaw to meet several conditions related to judicial independence — known as “super milestones” in Brussels jargon — to access its share of the EU’s post-pandemic recovery fund, which amounts to €59.8 billion between grants and loans.

What makes things difficult is that all criteria must be fulfilled before a country can start seeing the money.

On top of this, Brussels suspended €76 billion of EU cohesion funds — designed to reduce inequalities across the bloc — until 2027 over concerns on political interference on courts.

Bodnar is starting by making personnel changes, removing some prosecutors and judges from their posts.

But to fulfill all conditions, the government will have to pass a law revamping the National Council of the Judiciary (NCJ), the body that chooses new judges, but which has been found to be politically compromised by European courts.

The government dismissed concerns that Duda might block the reforms. Deputy Justice Minister Dariusz Mazur said he is counting on the president to be “willing to fix this status of the NCJ together with us.”

“The disbursement of funds will depend on the government’s actions and will not be related to the president’s actions,” said a Polish official who was granted anonymity to discuss ongoing negotiations. They added that Warsaw hopes to receive a first tranche of recovery cash totaling €23 billion in the spring.

Three months

But Poland might be closer to unblocking a first tranche of the cohesion money, which come with more lenient rules. The Commission can release parts of the funding as national capitals meet related objectives.

On Wednesday, Poland informed the Commission that it met the conditions to access this money, a spokesperson from the Commission told POLITICO. They added that the EU executive will decide whether to approve the funding within three months — and without consulting member countries.

On Saturday, Funds and Regional Policy Minister Katarzyna Pełczyńska-Nalęcz said in a television interview that the first blocked cohesion funds should arrive in Poland by the end of March or early April; Poland has submitted a request for a payment of €6.9 billion.

"There is a green light so that we can finally submit documents for the cohesion funds — this is called a self-assessment," she said, adding that after the assessment is reviewed by the European Commission, Poland will be able to submit funding applications to Brussels. "This is another two-three months plus another 1.5 months."

The new Polish government also intends to end the so-called Article 7 procedure that was opened in 2017, when the country was considered at risk of breaching the bloc’s core values.

The mechanism provides for the most serious political sanction the bloc can impose on a member country — the suspension of the right to vote on EU decisions.

“We will be preparing further documents that will set out a roadmap for ending this process," Bodnar said on Friday.