EU Withholds Cash to Poland as Nation Snubs $238 Million Fines

Source: Bloomberg | Bloomberg News July 15, 2022

Poland has racked up 237 million euros ($238 million) in unpaid fines since the European Union’s top court issued a record penalty over democratic backsliding last year — forcing the bloc to start withholding about 111 million euros of EU funds earmarked for the nation.

While Poland has shown a more conciliatory tone with the EU over the criticisms, the government hasn’t paid a cent since the EU Court of Justice in October slapped it with a 1 million euros a day fine for failing to dismantle a controversial regime for disciplining judges, according to Didier Reynders, the EU’s justice commissioner.

“We now have a total of demands for 237 million euros of what Poland owes, and we’ve already offset 111 million euros till now,” Reynders told Bloomberg. “Poland still hasn’t paid its fine. We’re still offsetting amounts.” The Polish government spokesman didn’t immediately respond to request for comment on Friday.

The EU said this week it still has serious concerns over the rule of law in Poland and Hungary and that the war in Ukraine serves as a reminder for the EU to “get its own house in order.” Hungary in April became the first EU nation to get a formal notification under the bloc’s new rule-of-law budgetary powers, the so-called conditionality mechanism, in a process that could ultimately deny Prime Minister Viktor Orban’s government more than 40 billion euros in EU funding.

‘Reforms’

Reynders said the summer months now provide an opportunity to see if Hungary is open for reforms to address some of the EU’s concerns.

“That’s also what I said in more general terms to Judit Varga,” Hungary’s justice minister, whom he met in Prague this week, “but it’s the same thing for the conditionality mechanism” or access to the EU’s recovery fund, he said. “This summer could be used to see if reforms are planned, because if we want to have certain milestones, it needs to come with certain reforms.”