EU may cut all funds to Poland in dramatic escalation, US$110 billion at stake

By Grzegorz Adamczyk

The European Commission may stop all EU funding for Poland, which would amount to €35 (US$35) billion from the EU Recovery fund and €75 billion from the multiannual EU budget, according to reports in the Financial Times and Polish daily Rzeczpospolita.

Despite frantic Polish government attempts at negotiating a way out, the EU commission has apparently confirmed that, for the time being, it will not be refunding realized or planned investments.

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The move would amount to the most dramatic escalation yet between the left-liberal establishment in Brussels and conservative governments in Central Europe.

Only technical assistance for actions taken to implement European Court of Justice (ECJ) rulings will still be funded.

Even preliminary funding already released could be clawed back, said the EU commission’s spokesman Stefan De Keersmaecker.

Poland’s minister for EU funds, Grzegorz Puda, is surprised at the reports of the European Commission’s position.

He said that the commission had accepted four of Poland’s country programs and that Poland was not violating any fundamental rights.

He feared that this meant the criteria were purely political and that the Polish left-wing opposition had encouraged the commission to take such an uncompromising stance.

Poland’s new minister for EU affairs, Szymon Szynkowski vel Sęk, was asked by Polish Radio whether funding for Poland will be blocked unless Poland backs down over its judicial reforms.

He said he was aware of the trends within European institutions and the risks involved.

He said it was his job to avert these dangers and persuade EU institutions that Poland was fully compliant and fulfilling its obligations.

He argued that the law on the Supreme Court initiated by President Andrzej Duda had led to an agreement with the European Commission and that it was time for European institutions to start keeping their side of the bargain.

If the funds are withheld, Poland will still be able to implement EU projects with its own funds, but without guarantees that these will be refunded.

The condition for them to be funded is for Poland to meet the European Commission’s expectations on the rule of law with regard to judicial autonomy.

In practice, such a massive EU funding cut would mean that a large proportion of Poland’s public investments for 2023 would be under severe threat.

With Poland’s budget and economy under pressure due to the war in Ukraine and its global economic effects, the country is ill-prepared to deal with such a significant funding cut.

POLAND IS THE LARGEST RECEIVER COUNTRY

The question of which countries are paying more in EU contributions than they are getting out is a contentious issue for some and was also one major factor in the Brexit vote in the UK.

After Brexit, only nine EU members contributed more than they got out of the EU, at least in direct monetary contributions.

Before the withdrawal, the United Kingdom was the second largest donor country with about €10 billion in net contributions, while Germany paid in more, €17.2 billion, and was the largest net contributor to the EU.

France and Italy are the next in line and are large net donors as well.

Poland was by far the biggest monetary benefactor from the EU, ahead of Hungary and Greece.