Poland could lose more than EUR 75 billion from the European Union budget if the authorities fail to approve legislation ensuring greater independence for the judiciary.
The European Commission has made Poland's adoption of legislation guaranteeing the judiciary's independence a condition for the payment of more than EUR 35 billion in post-pandemic aid, which comes from a separate pot.
However, the EC also ties it to the so-called cohesion funds, which are set out in the EU's 2021-2027 budget.
So if Poland does not introduce the legislation required by the EU, undoing the politicization of the courts pushed through by the Law and Justice (PiS) government, it could lose much more funding.
Poland's parliament passed a law last month that rolls back key elements of the EU's controversial changes to the judiciary, a step toward a compromise in the rule of law dispute in order to access EU funds. After negotiations with the commission, the bill would effectively nullify the disciplinary system for judges, who have been subject to special scrutiny by Brussels.
However, President Andrzej Duda, whose signature is required to finalize the changes, plunged the process into chaos by referring the law to the Constitutional Court.
The EU executive has made access to cohesion funds conditional on meeting so-called basic conditions in line with the EU Charter of Fundamental Rights.
In October, the Commission said Poland's access to cohesion funds was in jeopardy because of its failure to comply with EU democratic standards. Linking a larger pool of funds to an amendment to the legislation pushed through last month sets out a more specific condition.
Prime Minister Mateusz Morawiecki last month hailed EU budget aid as a "great success" for his government and described cohesion funding as key to Poland's economic growth. Cohesion funds are drawn from the EU budget and are aimed at strengthening member states whose economies are 90% of the EU average or less.
Elisa Ferreira, the EU's head of cohesion and reform, said Poland had not met all the conditions for the payments, some of which related to "legal aspects." The funds have not been lost, but remain withheld until the conditions are met.
"We are waiting for an internal evolution in Poland, for Poland to recognize that this compliance [with EU rules] is already guaranteed," Ferreira said.
The law remains in limbo. Despite promises by Constitutional Court President Julia Przylebska to proceed urgently, the Court has not yet addressed the law's constitutionality, due to internal disputes. Some judges who question Przylebska's legitimacy as head have threatened not to rule, which could prevent a quorum and hold up any decision.