Brussels ready to recoup unpaid fines from Poland as rule of law rift widens

Brussels is poised to withhold more than €100 million from Poland to cover unpaid fines imposed by the EU's top court, the justice commissioner has warned, as he responds to "waves" of problems in the country's judicial system.

Didier Reynders told the Financial Times on Thursday that the commission will shortly send a letter to Warsaw demanding payment of €69 million in accumulated daily fines that Poland has racked up between early November and the start of this week.

If Warsaw does not comply within a 60-day period the commission will withhold the fines from EU payments due to be disbursed to Poland, with interest payments to be imposed on top, he said.

“We are busy with the five waves for Covid, and I don’t know how many waves on the rule of law in Poland,” Mr Reynders said in an interview. “We continue to try to manage the waves one after the other.”

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Separately, the commission has also been preparing to withhold about €50 million of fines related to a separate legal dispute involving Poland and the Czech Republic.

Poland is in a long-running confrontation with Brussels over moves by the country’s conservative nationalist ruling party to gain powers over its judiciary, including via a disciplinary chamber with the power to punish judges.

Warsaw was last October ordered to pay daily fines of €1 million because it failed to comply with interim measures imposed by the European Court of Justice demanding it suspend key aspects of the disciplinary regime.

Judicial independence

The stand-off over judicial independence has soured relations between the commission and the EU’s fifth-largest member state. It has also held up Brussels’ approval of Poland’s plan to spend €36 billion in grants and loans from the bloc’s €800 billion post-pandemic recovery package.

European officials have said Poland should scrap the disciplinary chamber, change its rules and reinstate dismissed judges as conditions for approving Warsaw’s request for pandemic recovery funding, but negotiations foundered late last year.

Mr Reynders said the letter asking for payment of €69 million would come within “hours or days”. He added: “We have seen there was no implementation of the interim measures, so we will ask [them] to pay.”

If Warsaw does not comply daily fines will continue to accumulate, triggering further payment demands from Brussels. A Polish official declined to comment.

Warsaw has also accrued about €50 million of fines after it failed to comply with an ECJ ruling to suspend operations at a lignite mine, which has been subject to complaints from the Czech Republic.

The Czech environment minister said on Thursday that a draft agreement drawn up in September was acceptable to her government. However, Polish media reported that the Polish government could seek adjustments to the draft deal.

Positive moves

Mr Reynders noted some positive moves from Poland on rule of law, including regarding a change to the retirement system of judges, but made clear that the overall trend in the country was not encouraging.

"There are again and again some negative signals coming from Poland," Mr Reynders said. He pointed to new disciplinary procedures against a judge and a request by Zbigniew Ziobro, the Polish justice minister, who has asked the country's constitutional tribunal to rule on a Brussels measure that allows the EU to withhold funding for rule-of-law breaches.

Regarding recent threats by Mr Ziobro to stop Polish payments into the EU budget because of the dispute, Mr Reynders said: "The European Union is paying more to Poland than we are receiving. So, in the end, it's a very strange game." – Copyright The Financial Times Limited 2022