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EU plans to unlock €137 billion for Poland

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The European Union is to release €137 billion ($148 billion) of funds that were withheld from Poland due to rule of law concerns, European Commission President Ursula von der Leyen said on Friday.

Next week, the commission “will come forward with two decisions on European funds that are currently blocked for Poland,” von der Leyen said at a press briefing in Warsaw. “These decisions will free up €137 billion for Poland.”

Concerns about judicial reforms under Poland’s previous nationalist government prompted the commission to withhold money from the EU budget that would normally have been spent in Poland.

But in October, the nationalist Law and Justice Party (PiS) was ousted by a centrist coalition led by former European Council President Donald Tusk, who has sought to undo the changes PiS made and restore Poland’s EU funding.

At a meeting in Brussels on Tuesday, Poland’s new justice minister, Adam Bodnar laid out the new government’s judicial reform plan to member states’ European affairs ministers.

In Warsaw on Friday, von der Leyen told Tusk, “I strongly welcome the action plan that your government presented to the member states this week. It is a powerful statement. It is a clear road map for Poland, and your efforts are decisive.”

She said the €137 billion “will be guaranteed by the European Public Prosecutor. This is great news for the Polish people and for Europe, and this is your achievement.”

Von der Leyen said the money will come from two sources: the EU’s cohesion budget, which pays for regional development; and a separate fund created to help the EU’s economy recover from the effects of Covid-19 restrictions.

But of these two budgets, the commission only has the unilateral power to unfreeze the cohesion funds.

Payments out of the recovery budget still need to be rubber-stamped by member states, represented in the Council of the EU, following a recommendation by the commission.

EU budgets run in seven-year cycles, and the cohesion budget for Poland from the start of 2021 to the end of 2027 is €76.5 billion, based on an investment strategy agreed by Warsaw and the commission in 2022.

Poland’s allocation under recovery budget amounts to almost €60 billion, just over half of which is grants and the rest loans.

According to information made available by the commission, the loans amount to €25.3 billion and grants €34.5 billion.

One “factsheet” provided by the commission contradicted these figures, setting both amounts lower. After being contacted by dpa on Friday, a commission spokeswoman clarified that this was a “clerical mistake” that has now been corrected.

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