European Commission President Ursula von der Leyen walks as she meets with Poland's Prime Minister Donald Tusk at the Chancellery of the Prime Minister in Warsaw, Poland, February 23, 2024. REUTERS/Kacper Pempel
WARSAW (Reuters) -Poland will gain access to up to 137 billion euros ($148 billion) in European Union funds, the head of the EU executive said on Friday, after the new government in Warsaw began implementing reforms it says will restore judicial independence in the country.
Unblocking the cash was a promise made by Prime Minister Donald Tusk's pro-European coalition government, and gaining access to it will provide an investment boost for an economy that has been buffeted by the fallout of the war in Ukraine and is weighed down by weakness in big trading partner Germany.
"I have good news," European Commission President Ursula von der Leyen told a press conference in Warsaw.
"Next week the college will come forward with two decisions on European funds that are currently blocked for Poland. These decisions will lead to up to 137 billion euros for Poland," she said, referring to the EU's college of commissioners, the bloc's cabinet.
Poland will gain access to around 60 billion euros in funds designed to help countries bounce back from the COVID-19 pandemic and transition away from fossil fuels.
Warsaw will also be able to tap around 76.5 billion euros in cohesion funds designed to help raise living standards in the European Union's poorest members.
"It's a ton of money, we will use it well," Tusk said.
'INVESTMENT REBOUND'
The Polish zloty was 0.14% firmer on the day following the announcement, reversing losses from earlier in the session.
"The actual spending of the funds will take several months (we won't see an investment rebound until 2025), but they will help finance this year's deficit," ING economists wrote on social media platform X.
The previous government under the nationalist Law and Justice (PiS) party was embroiled in a long-running spat with the EU over reforms that critics said increased political influence over the courts.
Brussels blocked Warsaw's access to the funds as a result of the row and said Poland had to meet milestones on judicial independence to unfreeze it.
PiS has accused the EU of using the funds as a way to blackmail Poles into electing a government the party says would be more compliant to the bloc's wishes.
"For unblocking the National Recovery Plan, Poland will pay a high price in the form of Donald Tusk's consent to all the expectations of EU decision-makers - the migration pact, entry to the euro zone, changes in treaties and eco-terror," PiS parliamentary party chief Mariusz Blaszczak wrote on X.
Poland has already accessed 5 billion euros that were not dependent on rule-of-law conditions.
The new government's task has been complicated by the fact that President Andrzej Duda, who can veto laws, is a PiS ally and the fact that the party has loyalists in important positions in the judicial system.
However, EU officials have welcomed Poland's action plan on restoring the rule of law.
($1 = 0.9240 euros)
(Reporting by Anna Koper, Alan Charlish, Anna Woodarczak-Semczuk and Pawel Florkiewicz, Editing by Timothy Heritage, Hugh Lawson and Alex Richardson)
