Poland threatens EU budget over linking funding to rule of law

Poland’s prime minister Mateusz Morawiecki has warned that his country’s parliament could shoot down the EU’s next seven-year budget if the bloc pushes ahead with a plan to link European funding to the rule of law.

The mechanism, first proposed in 2018 as a way of redressing the bloc’s inability to enforce its values in recalcitrant member states, has emerged as the key sticking point as officials rush to finalise the package, which has been given added urgency by the resurgence of the pandemic.

After months of negotiations, EU ambassadors and the bloc’s parliament agreed last week on a deal that would tie budget money to respect for EU values, including the independence of judges.

However, that linkage is seen as a red rag by Poland’s ruling Law and Justice party, which has spent much of the past four years at loggerheads with Brussels after launching a judicial reform which the commission believes threatens Polish judges’ independence.

In a letter to the heads of Europe’s key institutions dated November 9 and seen by the Financial Times, Mr Morawiecki reiterated his country’s concerns and warned that Poland would not accept “any discretionary mechanisms that are based on arbitrary, politically motivated criteria”.

“Adopting such mechanisms would potentially lead to applying double standard and treating various EU Member States differently — while granting the [European] Commission a unilateral right to impose financial sanctions, basing its decision not on actual infringements of the rule of law, but on a purely political motivation,” he wrote.

“Without sufficient guarantees that Member States’ treaty rights will be respected, we do not see the possibility of ratifying the budget in the Polish parliament.”

Mr Morawiecki’s warning follows a similar threat from his Hungarian counterpart Viktor Orban, whose country, like Poland, has been the subject of long-running but ultimately inconclusive EU disciplinary proceedings over the rule of law, known as the “Article 7” process.

However, blocking the ratification of the package would be a risky path for either Hungary or Poland to pursue. Both countries stand to gain substantially from the centrepiece of the EU’s recovery proposals — a plan to distribute €390bn of grants to member states hit hard by the pandemic.

This would provide a net benefit worth 3 per cent of their 2019 GDP, according to calculations from the European Central Bank in September.

Johannes Hahn, the EU’s budget commissioner, said earlier this week that the overall package was “very favourable” for countries including Hungary and that the rule of law mechanism was not targeted at any specific nations.

Mr Morawiecki’s letter comes amid simmering tensions between Law and Justice and its junior coalition partner, United Poland, let by hardline justice minister Zbigniew Ziobro.

A long-running power struggle between Mr Ziobro and Mr Morawiecki erupted in September, almost triggering the collapse of the coalition, and in recent weeks, politicians from Mr Ziobro’s party have been pushing for Poland to take an uncompromising line on the EU’s budget plans.

Patryk Jaki, a former deputy to Mr Ziobro who is now an MEP, said on Wednesday that the EU’s plans to link funding to values such as the rule of law was an attempt to “appropriate” competences that belonged to the member states.

“The only procedure set out in the treaties relating to the rule of law is Article 7 . . . The problem with this is that you couldn’t find a majority [of member states for sanctioning Poland] and so you dreamt up a procedure outside the treaties, and by doing this broke the law,” he said during a debate on the EU budget.

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