EU to find way to help Poland access frozen funds, Commission says

11 months ago 36

The European Commission will find a way for Poland to access some €111 billion in frozen EU funds as the new Polish government moves toward alleviating the bloc’s concerns about the rule of law, European Budget Commissioner Johannes Hahn said on Wednesday (13 December).

New centrist Prime Minister Donald Tusk’s government was sworn in on Wednesday, the final step in a transfer of power that marks a huge change after eight years of nationalist rule.

Following years of disputes between Warsaw and Brussels under the previous government, led by the Law and Justice (PiS) party, Tusk’s appointment has raised hopes of smoother relations with the European Union.

“We have a lot of expectations and we will certainly support him (Tusk) in his efforts,” Hahn told Reuters in an interview.

“We’re not talking about an immediate transfer of billions — it’s more about de-blocking of funds. We have to see how to proceed,” he said. “I’m sure that we will find ways to help Poland. We don’t have any doubts that they are moving so to say in the right rule-of-law direction,” he said.

Hahn’s comment was the first official word from the Commission about Poland’s prospects for gaining access to the EU funds since the change in government. Tusk arrived in Brussels on Wednesday for an EU summit and will discuss the frozen funds with the Commission on the sidelines.

At stake is Poland’s access to €35.4 billion in grants and loans from the European Union’s recovery fund, which the EU has suspended until Warsaw restores the independence of its judiciary system, undermined by the PiS government.

The same concerns are blocking Poland’s access to €76.5 billion of EU cohesion funds, meant to raise the standard of living in the EU’s poorer regions.

Poland will have to pass new laws to meet some of the Commission’s demands that the country reverse measures adopted by the previous, nationalist government.

But the new laws will require the signature of Poland’s President Andrzej Duda, who is aligned with the former government and has signalled he would not support them.

Duda’s term ends in mid-2025, creating an obstacle for the Tusk government. Hahn said the Commission would work with Warsaw to solve the problem.

“How this can be done is beyond my current knowledge. But we certainly will not wait one and a half years, so I think there must be a kind of solution,” he said.

Cash for Ukraine

EU leaders are likely to reach a deal on €50 billion for Ukraine this week because it is to come in a package with other cash that Hungary, which threatened to block it, will benefit from, Hahn said.

The EU wants to revise its budget until 2027 to add 33 billion euros in loans and 17 billion in grants for Kyiv so that Ukraine, which is fighting off a Russian invasion, has certainty of financing to keep the state running.

“We have been asked in spring by the American government that they would be very much in favour if we could be spearheading the long-term support for Ukraine also as a kind of domestic pressure on the House of Representatives and the Senate to do something similar,” EU Budget Commissioner Johannes Hahn told Reuters in an exclusive interview.

“This is all well understood by all the leaders and that’s why I think in the end, also Hungary will agree, because it’s also about their own interests,” Hahn said on the eve of a EU leaders summit in Brussels to discuss the issue.

“It is a package, it’s not only for Ukraine, there is something in it for migration, border protection, support of countries like Turkey, nowadays good friends of Hungary and vice versa, to get also additional financial means,” Hahn said.

To further sweeten the deal, the Commission decided on Wednesday to unblock Hungary’s access to €10 billion of EU cohesion funds that were frozen because of EU concerns that Hungary did not respect the rule of law. Hungary’s parliament passed laws on Tuesday to improve the independence of courts.

Asked if the EU had an alternative plan to provide Ukraine with the cash even if Hungary blocks the use of the common EU budget, Hahn said:

“One of the qualities of the Commission is always to have a Plan B, but honestly I don’t want to speak about and speculate about Plan Bs because this also creates an exit opportunity.”

Asked if 26 EU countries except Hungary could provide the money through an intergovernmental agreement, Hahn said:

“Of course. It is one of the possibilities. But I don’t believe that Hungary would stay out of the international, not only European, but international community.”