EU deducts €30 million from Poland’s funds to cover unpaid fines

The European Commission has deducted tens of millions of euros from Poland’s EU funds in order to cover fines Warsaw has refused to pay for failing to comply with a European Court of Justice (ECJ) ruling to suspend operations at a coal mine.

Polish media outlets first reported yesterday that the money had been withheld, with their findings later confirmed by the finance ministry. It is the first time the EU has ever taken such action against a member state.

Just over €30 million has been deducted so far, a figure that is likely to rise significantly as Poland currently still owes almost €200 million in unpaid fines. That number is growing €1 million every day due to Poland’s failure to close its disciplinary chamber for judges, as ordered in a separate ECJ ruling.

In unprecedented step, EU to deduct funds from Poland for unpaid fines

Around half the money already deducted comes from the Knowledge Education Development programme, which promotes sustainable employment and labour mobility while seeking to combat poverty and social exclusion. The other €15 million was taken from regional development funds for the Kuyavian-Pomeranian province.

It is not yet known officially why funds for that province – which has no link to the ECJ case – were chosen. But an anonymous inside source told Dziennik Gazeta Prawna that the region had simply been “unlucky” because it was currently first in line for a tranche of EU funds.

The finance ministry told RMF that the missing funds will be replaced from Poland’s state budget, and assured that no beneficiaries of the programmes will be affected.

It also notes that the decision not to comply with the ECJ order to close Turów coal mine was “taken in accordance with the public interest (jobs, economic stability of the region) and in order to secure the energy security of the country”. Turów is responsible for around 7% of Poland’s electricity generation.

In February this year, Poland reached an agreement with the Czech Republic – which had brought the case over Turów – to end their dispute over the mine. Prague then withdrew its case at the ECJ, but by that stage Warsaw had already accrued €70 million in fines for failing to close the mine.

A few days later, the European Commission announced that it would begin deducting those fines from Poland’s EU funds. It was the first time such a step had ever been taken against a member state for failing to comply with an ECJ ruling.

Separately, since November Poland has also been receiving daily fines of €1 million for failing to suspend its disciplinary chamber for judges as ordered by the ECJ. Those fines have reached a total of over €150 million so far.

In January, the European Commission sent Warsaw a call to pay the first €69 million, but the Polish government has so far refused to do so. It has also failed to close down the disciplinary chamber, which, as well as the daily fines, has led the European Commission to withhold billions in Covid recovery funds.

Main image credit: ChrisGoldNY/Flickr (under CC BY-NC 2.0)

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