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Thursday, January 20, 2022

Poland threatens ‘assertive’ action if EU doesn’t approve recovery cash

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If the European Commission doesn’t approve Poland’s recovery fund plan by the end of the year, Warsaw could undermine key EU efforts like the Fit for 55 climate package, warned Waldemar Buda, Poland’s deputy funds and regional policy minister.

“If we don’t settle the topic by the end of the year, our willingness to negotiate, the dynamics, and willingness to make concessions will be lower in the new year,” said Buda.

He said Poland’s government has a list of issues it could use in an “assertive” way to put pressure on Brussels, such as blocking votes related to the Fit for 55 package, and also trying to rope Poland’s Agriculture Commissioner Janusz Wojciechowski into helping Warsaw.

Poland and the Commission have been stuck for months over unlocking €36 billion in grants and loans under the EU’s pandemic recovery program, which was originally supposed to be approved by July. Brussels isn’t willing to release the cash unless the nationalist government backtracks on changes to the court system that critics see as eroding judicial independence.

Buda said he’s had 29 meetings with the Commission. The next one is scheduled for Friday. 

“There’s a regulation that says that the recovery fund should be approved in two months … we’re very calm, I’m tolerating this situation,” Buda said, but added that prolonging the talks “is very concerning and everyone is aware that until the end of the year, we need to find an agreement.”

If the plan isn’t approved by December, Poland won’t get a 13 percent prepayment that can be spent for any purpose. If there is a delay, the money won’t be lost but it will be folded into later tranches that have spending conditions attached and which won’t be disbursed before the middle of next year. If that happens, there is less time pressure on Poland, so it will be able to take a tougher position, Buda said.

“We will care much less if we make a deal in January, in March, or in April, and we will be willing to propose less,” he said. 

Taking action

If the Commission continues to block the money, Poland will look at taking action on issues like Fit for 55, the Commission’s flagship green energy reform package.

“There are many countries unhappy with the Fit for 55 package … There’ll be many discussions about issues where a qualified majority will have to be built. It won’t be easy,” he said, stressing that Poland won’t be able to achieve all the ambitious climate goals if it doesn’t get the money. “It’s not the issue of us blackmailing someone — it’s simply undoable.”

He also mentioned the effort to set a minimum corporate tax rate, which has to be decided by consensus.

Warsaw is also looking to Agriculture Commissioner Wojciechowski, who is overseeing the Common Agricultural Policy’s strategic plans of all 27 countries, which need to be approved to disburse farm funding. It’s a key issue for farmers across the bloc.

“Up until now the commissioner hasn’t been involved in this and does his job, but I think he could help us in this case, and the declaration has been made here,” Buda said. “Any other commissioner would do exactly the same thing.”

Commissioners are supposed to represent the Commission and not their home countries. Wojciechowski, who has not been publicly involved in the dispute between Warsaw and Brussels, did not immediately respond to a request for comment.

Buda also referred to comments made by other Polish ministers that Poland should decrease its contributions to the EU budget in protest. 

“It’s nothing good, it’s leading to paralysis, chaos, counterclaims, and it leads to losing control … It can escalate the problem to the extent it will be hard to control,” he said. “I’ll be the last one who will encourage radical solutions, but I won’t have arguments in the new year.”

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