On February 29, the European Commission formally approved the release of 137 billion Euro of European Union funds, giving the green light to the first payment of 6.3 billion Euro in the framework of the Recovery Plan. EU Commission chief Ursula von der Leyen had announced the release of funds while on a visit to Poland a week prior. 

However, this announcement does not mean Poland automatically receives the entire sum of 137 billion Euro. As the frozen funds stem from different “pots”, a hand out will not happen in one go but over the course of the next three years until 2027 – and there are procedures to be followed. 

“Today we turn a page on the Rule Of Law issues [with Poland] as we recognise the important strides made by the government,” said EU Commissioner for Values and Transparency, Věra Jourová on X.

Funds had been withheld from Poland due to rule of law concerns, accusations of undermining the independence of judges and allowing the justice system to be influenced by party interests. 

Following the Polish general elections in October 2023, the new pro-EU government under former EU Council chief Donald Tusk has taken steps to undo the changes brought by the then-incumbent nationalist Law and Justice (PiS) government. Tusk intends to comply with EU standards and restore Poland’s access to the EU budget.

What happened? 

The history of the dispute between the previous Polish PiS government and the European Commission dates back to 2015, when the Law and Justice party came into power. 

In the eyes of the commission, court reforms brought by the PiS party compromised judicial independence and were not in line with the rule of law of the European Union of which Poland has been a member since 2004.

This led the EU to freeze a part of the cohesion funds and the whole Recovery and Resilience fund, as well as to the start of the Article 7 procedure against Poland by the EU in 2017. The procedure refers to serious breaches of EU values, enshrined in the Treaty of the European Union, and is seen as a last resort procedure. It is used in case of threats to the rule of law and can strip the affected country of certain rights, such as voting rights within the Council. 

In 2022, the commission cut off funding to Poland based on the PiS party’s court reforms. 

Since the Polish elections in autumn last year, which ended the PiS’ eight-year-stint in power, the new government aims to restore the rule of law, close the Article 7 procedure and unfreeze EU funds through reforms.

Poland’s reforms: “a realistic plan” with lots of work left to do

On February 20, the new Polish Minister of Justice, Adam Bodnar, laid out the new government’s judicial reform plan to member states’ European affairs ministers in Brussels, accompanied by Polish Europe minister Adam Szłapka.

The plan, which had been well received in Brussels, consists of a number of legislative changes aimed at reversing the reforms of the judiciary in Poland implemented by the PiS government.

Bodnar’s plan included nine legislative changes, the first of which is an amendment to the Act on the National Council of the Judiciary. The remaining changes concern the Constitutional Tribunal and the Supreme Court. The Polish government also plans to separate the office of the Minister of Justice from the office of the Prosecutor General and to adopt an act on the status of employees of courts and prosecutor’s offices.

However, parts of that plan depend on new legislation, which could yet be vetoed by Polish president Andrzej Duda, who is close to the PiS party that controlled the previous government.

But senior EU officials said the decision to unlock Polish funding was based on the commission’s assessment that Poland had achieved important “super milestones”. The decision does not mean judicial independence has been fully restored, they said.

The European Commissioner for Justice, Didier Reynders, said the Polish government’s commitments to reform were so far ‘very impressive’. Commissioner Věra Jourová, in charge of topics surrounding democracy, disinformation and rule of law, explained that Bodnar had presented “a realistic plan of action to restore the independence of the judiciary”. According to her, that plan represented “a first step” toward the closure of the Article 7 procedure.

However, she also admitted that “there is a lot of work to be done”, given the “extensive list of violations” of the rule of law. “All these issues need to be resolved,” she added, ensuring a “constructive” approach by the Commission in its dialogue with the national authorities.

“When there is a will, there is a way,” commented the Belgian Foreign Minister, Hadja Lahbib, on behalf of the EU Council presidency. Lahbib emphasised the ‘determination’ shown by the recently installed government of Donald Tusk to “reverse the trend” in Poland in recent years. “We welcome this positive dynamic,” the minister said, hoping for the closure of the Article 7 procedure by the end of the Belgian presidency on June 30.

How much and when?

The money – totalling at 137 billion Euro – comes from a development budget controlled by the European Commission (76.5 billion Euro) and from a post-Covid-19 recovery plan (59.8 billion Euro).

The sum can be broken down in both overdue payments that were blocked and payments due in the next few years, which would also have been blocked had the commission not decided to restore Poland’s funding.

The Recovery and Resilience Fund
Almost 60 billion Euro stem from the post-pandemic Recovery Fund of which 25.3 billion Euro are grants and 34.5 billion Euro are loans. Poland had earlier submitted a National Recovery Plan specifying how the money would be used, for example in the area of climate and environmental policies or the field of digitalisation and cybersecurity.

The money of the recovery fund still needs to be approved by EU member states. In general, all payments from this budget have to be approved by a sufficient majority of member states represented in the Council of the EU, following a recommendation by the commission. This applies not just to Poland, but to any EU country seeking support from the recovery fund. On February 29, the commission recommended that the council should approve Poland’s latest payment request.

“Once confirmed by Member States, today’s EU Commission assessment paves the way for the disbursement of the first tranche of €6.3 billion out of the total allocation of €59.8 billion in RRF [Recovery and Resilience Fund] funds to Poland,” Vera Jourová said on X. Poland expects to receive the first tranche in April. 

The development budget
The other 76.5 billion Euro will be paid out according to an investment plan agreed on between the commission and the Polish government for the 2021-2027 period. The plan falls under the EU’s cohesion policy, which funds development in the EU’s less-wealthy member states. Payments from this budget are controlled by the commission and do not require council approval.

The payments are also not immediately disbursed but are reimbursements which are transferred once member states have implemented designated projects. Brussels expects Poland to request the return of around 600 million Euro in the coming weeks, according to commission sources.

This article is published weekly. The content is based on news by agencies participating in the enr.

Editor’s note: Paragraph on Duda edited to clarify he is not a member of PiS but close to the party.