EU recovery money reaches Poland as Tusk delivers on key promise

7 months ago 28

Warsaw received the first tranche from the Next Generation EU fund after the European Commission gave a positive assessment of Prime Minister Donald Tusk’s government’s efforts to restore the rule of law in Poland.

Despite being approved through the National Recovery and Resilience Plan (KPO) in June 2022, the first payment remained blocked for two years over persistent concerns about a lack of judicial independence and democratic backsliding.

After coming to power last December, Tusk’s new cabinet persuaded Brussels to release the recovery money with its nine-bill action plan, which aimed at reversing controversial judiciary reforms implemented by the previous government of prime minister Mateusz Morawiecki (PiS/ECR) and ensuring that the judiciary system is impartial and non-politicised.

“An important day for the Polish economy (…) and for the Polish people to realise that the EU membership pays off for all of us,” Development Funds and Regional Policy Minister Katarzyna Pełczyńska-Nałęcz told a press briefing on Monday.

She noted that the €6.3 billion disbursement, made up of €3.6 billion in loans and €2.7 billion in grants, is “the largest single transfer from the EU in 20 years of Poland’s membership” in the bloc.

The Commission officially unblocked the money for Poland under the Next Generation EU in late February, days after Tusk’s government presented the action plan. Warsaw also committed to abide by the rulings of the EU Court of Justice and respect the primacy of EU law, which was contested by the preceding cabinet.

The EU executive found these steps sufficient to meet the two “super milestones” related to the judiciary independence that the PiS government failed to deliver on and allowed Poland to gradually receive payments under the bloc’s €750-billion recovery fund.

Getting the Commission to unblock the recovery payments was one of Tusk’s promises in last year’s election campaign. The new prime minister blamed his predecessors for failing to agree with Brussels to give Poland the funds it needs to reform and modernise its economy.

According to the EU objectives, Poland must spend about 46% of the money it has been allocated under the EU’s recovery fund plan on investments and reforms related to the green transition and 20% on the digital transition.

As a result, the first tranche will be spent on the government’s “Clean Air” Programme, which will allow homeowners to replace heat sources and insulate their homes, high-speed internet connections for poorly connected areas and transport investments, Pełczyńska-Nałęcz announced.

According to the minister, Poland will send the requests for the subsequent payments and expects to receive an additional €23 billion by the end of 2024. All payouts will be linked to the requirement to complete investments and projects.

However, due to the two-year delay, the National Recovery and Resilience Plan is at risk of not being implemented before the deadline, which means that Poland will not receive the reimbursement for the overdue investment.

To avoid such a scenario and the loss of billions of euros, Warsaw is preparing to revise the plan in consultation with the Commission to ensure its full implementation.

PiS, now Poland’s biggest opposition party, believes launching the recovery funds for Poland was a political decision that depended on who governed Warsaw. The quick acceptance of the new government’s request for payment shows that “no milestones were needed apart from Tusk coming to power,” PiS MP Radosław Fogiel told Euractiv.pl earlier this year.

Last week, Morawiecki told the private radio RMF FM that the delay with payments was the fault of the current ruling majority. He accused Tusk’s camp of asking “von der Leyen not to launch the money” to embarrass the PiS government.

(Aleksandra Krzysztoszek | Euractiv.pl)