EU Council sued for approving Poland’s €35-billion COVID recovery fund

A key decision-making body of the EU is being sued for its controversial decision to approve Poland’s €35-billion COVID recovery plan.

The legal action targets the Council of the European Union, which is made up of government ministers from each EU state.

It is being brought by four associations representing judges in Europe, who argue the council’s decision fails to restore the independence of the Polish judiciary and disregards previous rulings by the EU’s Court of Justice (CJEU).

They also say the financial approval puts the entire bloc at risk, given the multiple, complex legal links between all EU countries.

“This decision harms the European judiciary as a whole and the position of every single European judge,” the associations wrote in a press release.

“All judges of every single member state are also European judges, having to apply EU Law, in a system based on mutual trust.”

The lawsuit was filed before the CJEU in Luxembourg, which is entitled to review, and potentially overrule, the legislative acts of other EU institutions.

The action is backed by the Association of European Administrative Judges (AEAJ), the European Association of Judges (EAJ), Rechters voor Rechters (Judges for Judges), and Magistrats Européens pour la Démocratie et les Libertés (MEDEL), with the support of the academic group The Good Lobby Profs.

The four associations are seeking the annulment of the council’s decision, taken back in June building upon a recommendation issued by the European Commission.

Poland has not yet received any COVID recovery funds from Brussels: the government is supposed to fulfil a series of agreed-upon milestones to comply with EU law before any payment is made.

The country has requested €23.9 billion in grants and €11.5 billion in cheap loans from the EU’s €750-billion recovery fund, established in 2020 to weather the fallout from the coronavirus pandemic.

The Polish government did not reply immediately reply to a request for comment.

A spokesperson from the Council of the European Union refused to comment on an ongoing legal proceeding.

Milestones under scrutiny

Poland’s national plan was blocked for more than a year over longstanding concerns that judicial independence was being encroached upon.

The dispute between Brussels and Warsaw turned acrimonious and raised concerns of a legal “Polexit”.

At the core of the dispute was the disciplinary chamber of the Supreme Court, which in 2019 was empowered to punish magistrates for the content of their rulings, for asking questions to the CJEU and for verifying that other courts are independent and impartial.

Potential penalties included fines, salary cuts, suspension and the waiver of immunity.

The chamber was immediately condemned by opposition parties, judges’ associations, the European Commission and the United Nations, who saw the reform as a threat to the separation of powers.

Warsaw fought back, arguing the bill was necessary to eliminate the remnants of the communist regime, tackle corruption and improve efficiency.

The CJEU concluded the chamber was not compatible with EU law and asked for its dismantlement and the reversal of the suspensions against judges.

As Russia’s invasion of Ukraine began wreaking economic havoc across the continent, Warsaw relented and reached an agreement with Brussels to undo the reforms and gradually receive the funds.

Under the deal, two main milestones must be fulfilled before any payment is made: 

• Reform the disciplinary regime for judges and replace its chamber with a new body.
• Review the cases of the judges affected by the rulings of the disciplinary chamber.

Regarding the first demand, the Polish government has already closed down the disciplinary chamber and set up its replacement: the chamber of professional responsibility. Legal experts and EU officials have raised concerns about the proposed body and its shortcomings.

“This new law is not ensuring that judges are able to question the status of another judge without risking being subject to disciplinary offence,” European Commission President Ursula von der Leyen said in July.

The second milestone, the review of cases, has also proven contentious. 

The CJEU had previously requested the reversal of most of the decisions adopted by the chamber, a call echoed by President von der Leyen, who insisted reinstating the unlawfully dismissed judges was a key condition. 

But the final agreement between Brussels and Warsaw diluted this demand and turned it into a simple review of cases, which may or may not lead to the eventual reinstitution of judges.

The review can take up to 12 months to be completed, which means Poland will likely receive the first two tranches of recovery funds – and perhaps even the third – while judges remain under the effects of a chamber deemed incompatible with EU law.

The European Commission negotiated an extra milestone to ensure the judicial review has being conducted according to EU legal standards, but the provision will not be triggered until the very last quarter of 2023.