Brussels begins review to possibly unfreeze €76 billion in cohesion funds for Poland

The cash has always been a matter of top priority for Warsaw, one of the largest recipients of cohesion funds, which pay for development projects meant to modernise infrastructure and bridge the gap with richer member states.

But the sweeping judicial reform introduced by the previous hard-right government of the Law and Justice (PiS) party, which empowered the disciplinary chamber of the Supreme Court to punish magistrates according to their rulings, led Brussels to freeze the multi-billion envelope, fearing democratic backsliding would have a detrimental impact on the spending and oversight of European taxpayers’ money.

The new liberal three-party coalition led by Prime Minister Donald Tusk has vowed to reverse course and undo the overhaul, deemed illegal by the European Court of Justice in Luxembourg, and the effects it had on the country’s courts and judges.

Tusk’s government, appointed barely a month ago, is now taking the initiative to prove its pro-EU credentials: last week, the executive informed the European Commission that the legislative changes introduced so far are enough to fulfil the “horizontal enabling condition” on judicial independence attached to the €76.5 billion. 

This condition is “cross-cutting,” meaning it covers all the different tranches that make up the financial package. Without it being met, no money can be released.

“Poland has thereby officially informed the Commission that it considers having fulfilled this enabling condition in the area of judicial independence,” a spokesperson for the Commission said on Monday afternoon. 

“In the Commission, we’re now analysing the letter submitted by the Polish authorities to assess whether the enabling condition in this area is fulfilled and we’re in regular contact with the Polish authorities at both technical and political levels.”

The review of the request can take up to three months, or even longer if the Commission asks Warsaw for clarifications.

On top of the condition related to the judiciary, Poland has at least two “thematic conditions” – transport and healthcare – attached to the respective chapters in the €76.5 billion. None of them have been met yet, the spokesperson added.

Separately, Warsaw is trying to secure unhindered access to its COVID-19 recovery plan, a mix of €34.5 billion in low-interest loans and €25.3 billion in grants. Brussels had approved the Polish plan on the condition of fulfilling three “super milestones,” two of which are linked to the controversial judicial reform. 

So far, the Commission has released €5.1 billion in “pre-financing” from the recovery and resilience plan to provide immediate liquidity for projects that can strengthen energy independence and decrease imports of Russian fossil fuels.

Tuks is pushing for more payments to be unblocked in the coming months.

However, his ambitious timeline could be derailed by President Andrzej Duda, who is politically close to PiS and often espouses similar views. Duda has openly threatened to protect his presidential prerogative and veto the premier’s fast-tracked plan to undo the judicial overhaul, which Duda had supported in the past.

The worsening standoff between Tusk and Duda has attracted considerable media interest and raised concerns of a constitutional crisis. Last week, Vera Jourová, the European Commission’s vice-president in charge of values of transparency, told Euronews that Brussels was “very closely” following the events in Warsaw and would not hesitate to “act” if the political clash led to breaches of EU law.