EU Recovery Funds and Rule of Law in Poland [PODCAST]

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European Liberal Forum

In this episode of the Liberal Europe Podcast, Leszek Jażdżewski (Fundacja Liberté!) welcomes Piotr Buras, the head of ECFR’s Warsaw office and a senior policy fellow at the European Council on Foreign Relations. They talk about the EU funds and the issues related to the rule of law in Poland, the prospects for implementing the necessary reforms that would bring the judicial independence back on track, and the impact of the current situation on the forthcoming parliamentary election in Poland.

Leszek Jażdżewski (LJ): You have recently written for the ESFR an analysis titled “The final countdown: The EU, Poland, and the rule of law”, in which you claimed that the Polish government may eventually accept the conditions of the European Commission and agree to implement the necessary reforms – or rather withdraw the so-called ‘reforms’ that had a detrimental effect on the rule of law in Poland in the past few years. To better understand what is this all about, could you briefly describe the issues that Poland is currently facing in relation to the rule of law?

Piotr Buras
Piotr Buras

Piotr Buras (PB): The problem is twofold. First, there is the backsliding of the rule of law, which started already in 2015 with the unlawful changes in the Constitutional Court. This was followed by the politicization of the Polish judiciary. Through a number of reforms, the Polish government has acquired very strong influence on the appointment and disciplinary system for judges. All this was done to such an extent that the Polish judiciary system no longer complies with the EU requirements and the European standard of judicial independence.

This issue was emphasized numerous times by the European Court of Justice (ECJ), the European Court of Human Rights in Strasbourg, and many other international institutions. That is the core of the problem: the principal of judicial independence is not protected in Poland; it is not in place.

The second dimension of the problem includes the discussion about the EU Recovery Fund. Even though Poland is the key beneficiary of this financial scheme, the money has not yet been transferred to Poland exactly because of the problem with the rule of law. The reason for that is that under the Recovery Fund regulation, EU member states are expected to comply with certain requirements. Needless to say, the Polish government has committed in the National Recovery Plan to implement a number of reforms, so that at least some basics of the rule-of-law system are restored.

The problem, however, is that these commitments have not been met, which is why the European Commission could not release the money for Poland. The fact remains that the Polish government, having the knowledge that the Commission would not release these funds, has not even requested it so far. Therefore, there is a prolonged games between the European Commission and the Polish government. In June 2022, the Polish parliament adopted a law that was supposed to meet the requirements of the Commission, but it was not sufficient. On January 13, 2023, the parliament finally adopted a law that may pave the way for the release of the EU funds.

 

The link between the rule of law and the release of the recovery money is at the core of the Polish controversy. It is also the main leverage that the European Commission has had to force Warsaw into a compromise, to change the current law, so that the rule of law is restored.

LJ: How can the newly passed bill bring Poland closer to receiving the money from the Recovery Fund?

PB: This is the second bill regulating the judiciary system that was adopted by the Polish parliament in response to the EU’s expectations and requirements regarding the rule of law. As I have said before, in June 2022, another law was passed. However, it was widely perceived as (including an informal assessment by the Commission) a bill that would not meet the expectations.

Therefore, in the summer of 2022, the Polish government changed its strategy and decided to stop all negotiations with the European Commission. Jaroslaw Kaczyński, the leader of the Law and Justice (PiS) party, said that no compromises would be possible anymore. Basically, as it was framed, the message sent by the government, the prime minister, and the party’s leading politicians was that Poland would not sacrifice its sovereignty in order to receive meaningless financial support from the European Union. As such, there was a break in the negotiations.

However, in autumn, the Polish government realized that not receiving this money could be disastrous – both economically and politically. Economically, because Poland clearly needs this money for investments, digitalization, green transformation, reforming healthcare, among others. Moreover, another reason why these funds are so important for Poland is the fact that our financial credibility would suffer and, as a consequence, the interest rates on the Polish bonds would rise if the European Commission was to freeze this money indefinitely.

Politically, it is even more important. PiS agreed to a compromise, because they had realized that in view of the forthcoming 2023 parliamentary election, not having this money could prove detrimental to the party’s interest, as it would be difficult to explain even to their own electorate why the money is not coming.

Clearly, there was a shift in the ruling party’s strategy and so the negotiations started again. At that point, the European Commission formulated a number of specific requirements that need to be met by the Polish government. These, of course, were based on the commitment of the government already featured in the National Recovery Plan, which was signed in June 2022.

Then, in December last year, the Law and Justice government put forward a bill proposal which became very controversial in the Polish political debate, because the government claimed that the wording of the bill was fully coordinated with and agreed upon by the European Commission. They also claimed that should the bill be passed in its proposed form, then the EU money would be released. However, if we take a look at the bill (which was eventually adopted by the Polish parliament in January 2023) it becomes obvious that it does not meet these commitments agreed upon between the Commission and the Polish government.

An even more fundamental problem is that the bill is clearly unconstitutional. It violates the Polish Constitution in a fundamental way because it makes the Supreme Administrative Court (one of the highest courts in Poland) responsible for dealing with disciplinary matters, which is simply not in line with the Polish Constitution, which clearly defines the competences and responsibilities of this court. It also does not live up to another important goal, namely the compliance with the rulings of the ECJ.

Therefore, in a nutshell, the said bill will not change the Polish judicial system for the better, nor will it make it more compatible with the European law. Conversely, it will make the matters even more problematic and chaotic from the constitutional point of view.

This is why the Polish opposition was faced with a real dilemma. Whether the European Commission will respect this law and recognize it as the fulfillment of the requirements that need to be met is an open question. However, of course, the fact that the law is unconstitutional is not so relevant to the Commission, as it will not assess its constitutionality of the Polish legislation. There is a high probability that, in the end, the Commission will wave it through. In this context, for the opposition to say ‘no’ to this bill was very risky, because as a consequence it was accused by the government (even before the voting) of putting the EU money at risk, should it oppose the introduction of the law.

The opposition’s dilemma was also related to the fact that the government did not have its own majority to pass the bill. This is because part of the government, United Poland (Solidarna Polska), a small party of Minister of Justice Zbigniew Ziobro has been opposed to any changes of the judicial system for the very beginning. It has not been genuinely interested in any compromise with the European Commission, nor in the money coming to Poland, because the party is openly anti-EU. It has no interest in either contributing to the positive image of the European Union as the supporter of the Polish economy or the success of the prime minister, who, in the government, is the main advocate of a compromise with the Commission, because the minister of justice and the prime minister are not really political allies but rather enemies – despite being in the same government.

The political situation is extremely complex. The government needed the votes of the opposition to pass the bill. The opposition did not vote in favor of the bill; instead, it abstained. However, since a simple majority was required, the bill was passed anyway. Now, the Senate (the upper chamber of the Polish parliament) can introduce some changes to the bill, which will be likely rejected by the parliament. Therefore, we should expect that this bill is actually the final version of what the parliament can produce in order to comply with the EU’s requirements.

The, there is the open question of what will be the ultimate decision of President Andrzej Duda. He is politically affiliated with the ruling party, but already before Christmas, he signaled that he did not perceive the new bill favorably – but not for the same reasons that were raised by the opposition (that the bill does not go far enough), but rather that it goes too far when it comes to making concessions to the European Union. The president fears that the bill would undermine his constitutional competence in regard to appointing judges. He even said that he finds this version of the bill ‘unacceptable’. Now, however, for the president to prevent this bill from entering into force by vetoing it – after both the government and de facto the opposition supported the bill (even though the latter abstained) – would be very difficult politically.

All this shows a massive complexity of the political setup in Poland. The bill itself, the question of rule of law and the future of the Polish National Recovery Plan, all this plays in the Polish politics. This needs to be seen against the upcoming parliamentary election in the autumn this year.

LJ: Is there any risk that the European Commission might reject the bill? Did the government cover all the main issues?

PB: This is the key question, and nobody really knows. The Polish government claims that it had received assurances from the European Commission that this bill would be enough to meet the demands. However, there is no formal statement by the Commission (and there could have been one) that this is the case. There are, however, some recent statements by Commissioner Didier Reynders, who stated that the bill was promising, but in the end the main criterion for the Commission will be the assessment whether the bill improves the situation in the Polish judiciary.

For me, as well as for a number of judges and legal experts in Poland, it is obvious that we cannot talk about an improvement of judicial standards in Poland, should this bill enter into force, because of its unconstitutionality and the fact that it does not solve the problems addressed by the European Commission nor by the Polish government in the National Recovery Plan. One of the key issues is that Polish judges can face disciplinary charges for referring to the European standard of judicial independence defined by the ECJ. This issue was raised by the Commission, and it is one of the primary reasons why the Polish judicial system does not comply with the EU law. This problem is not solved by the new bill.

Another question is how the Commission will assess the bill and its deficiencies. At the moment, no one has an answer to that question. We need to understand that contrary to what the Polish government claimed in the media, saying that the Commission had been stealing Polish money, that it was under the German influence, trying to deprive Poland of the money we deserve, the Commission was highly inclined to release these funds and to reach a compromise with the Polish government as quickly as possible.

Already in the spring 2022 it was ready for a false compromise – to accept some fake reforms offered by Law and Justice. Then, Ursula von der Leyen, the President of the European Commission, had to back down under the pressure from the European Parliament and part of the College (including Frans Timmermans, Margarethe Vestager, Vera Jourova, and Didier Reynders), who stated that they cannot accept something like this because too much was at stake.

Clearly, not only the Polish government is divided as regards how to go about this battle. The European Commission is also not entirely united in this respect. My concern is that the Commission may accept the bill as it was adopted by the Polish parliament, precisely because the inclination to close this file and spend the money has always been very strong. From Brussels’ perspective, this is the moment to close this case.

Politically speaking, it might be a very interesting year for Poland. At the very moment, both the opposition and the European Commission have basically backed down in this fight. The PiS party might have a huge victory in the pocket and a lot of money (billions of euros) flowing into the Polish economy and budget just a couple of months before the parliamentary election in the autumn. As one may imagine, this could be a huge electoral gain for the ruling party.

The new bill is extremely chaotic. It is not only that it is unconstitutional, but also that it is simply a really bad piece of legislation – which was likely done deliberately. There were several provisions of the Polish law which basically allow the minister of justice to go after Polish judges for complying with the EU law and referring to the rulings of the European Court of Justice – which is unacceptable from the EU’s perspective.

Some of these provisions were abolished in the new bill, but others were not. For example, there is a very important provision of the Polish law, known as the so-called ‘muzzle law’, which was not abolished. Meanwhile, it needed to be abolished if Poland was to comply with the demands of the European Commission and the EU law. The ‘muzzle law’ basically allows the Polish government to persecute judges who apply the EU law – of course, in some cases, like those related to the appointment of judges or the standards of judicial independence. This is unacceptable.

What is best known in Europe is the infamous Disciplinary Chamber was, in fact, less important, because this body was abolished. However, the problem was not the Chamber existed, but rather that the judges sitting in it did not comply with the standard of judicial independence. There were people who were appointed in a defective way. The changes that were introduced by the government did not, in fact, improve the situation. The new bill, adopted on January 13, 2023, introduces a solution which is none, because it is completely unconstitutional. Now, disciplinary cases of judges will be dealt with by the Administrative Court, which according to the Constitution has no competence – and cannot have – in this area.

Therefore, constitutional and other concerns related to the new bill are huge. However, it is, of course, still an open question to what extent will the European Commission respect these concerns.

LJ: Will the money from the Recovery Fund play a major role in the election year in Poland? How will it affect the outcome of the parliamentary election?

PB: My personal opinion is that the opposition made a mistake in not opposing the proposed bill. It is really dangerous to give the de facto support for a bill that is unconstitutional, and which does not solve any problems and rather perpetuates (or even aggravates) the fundamental problems of the rule of law. It was a mistake, but, of course, I understand the reasoning behind why the opposition did that. In fact, it did not have any good alternatives – opposing the bill which may open the way to receiving the EU funds would be difficult to explain to the voters and could be easily instrumentalized by the government. On the other hand, the opposition violated its own principles by giving support to this bill.

What are the political consequences of these events? I do not think that the matter of EU funds will be decisive when it comes to the outcome of the Polish election. However, we need to be aware of the fact that it is not really about one issue or huge revolutionary changes, when it comes to support for political parties in terms of the outcome of the election. So, it is possible that there would be one big question that will be decisive and that would be enough for PiS to improve its current result in the opinion polls by a few percentage points. As a result, the outcome of the election could be different than the one we expect today – today, we expect the opposition to win.

Therefore, if 2-3% of the Polish electorate change their minds or get mobilized to support the government because of its ‘victory’, or success, in securing the EU funds, it would be very significant. A lot is at stake. The shifts in the public support will certainly not be massive in the next few months, but even small shifts could prove to be decisive. This is why I think that perhaps it will not be very detrimental to the opposition’s popularity, but the government will certainly benefit from it.


Find out more about the guest: ecfr.eu/profile/piotr_buras/


The podcast was recorded on January 13, 2023


This podcast is produced by the European Liberal Forum in collaboration with Movimento Liberal Social and Fundacja Liberté!, with the financial support of the European Parliament. Neither the European Parliament nor the European Liberal Forum are responsible for the content or for any use that be made of it.


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