EU Court upholds €320 million fine against Poland!
The European Commission acted correctly when it deducted €320.2 million from Poland’s share of the EU budget in connection with a controversial judicial reform introduced by the previous government, the General Court has ruled. “In recovering the amounts due, the Commission did not infringe EU law,” the judges in Luxembourg said on Wednesday.
The Commission, which oversees the common budget and approves regular payments, has a "compensation mechanism" that it can use when a member state refuses to pay fines imposed by the highest court, the European Court of Justice, for legal breaches.
In the case of Poland, fines worth 1 million euros a day were imposed in October after the nationalist Law and Justice (PiS) government ignored an interim order to immediately suspend the effects of its judicial reform, which the Commission said jeopardized the separation of powers and placed the judiciary under political control. The main point of contention was the disciplinary chamber of the Polish Supreme Court, which PiS authorized to punish magistrates according to the content of their decisions.
Warsaw offered concessions by adopting a new law in June 2022, but still refused to provide the requested amount. In April 2023, the fine was reduced to €500,000 per day. The standoff prompted the Commission to activate the “compensation mechanism” and deduct the accumulated penalties from Poland’s share of the EU budget.
Poland, a major beneficiary of agricultural and cohesion funds, opposed the deductions, saying the June 2022 law deserved a postponement, and filed a complaint with the General Court to recover €320.2 million in lost funds.
The daily fines were in place until June 2023, when the ECJ issued its final ruling and struck down the reform in its entirety. The court said it was “incompatible” with the right to access an “independent and impartial judiciary.”
On Wednesday, the General Court rejected Poland's request for a refund and concluded that the Commission acted lawfully when it activated the "compensation mechanism". "Since Poland had not fully complied with its obligations, the Commission was obliged to ensure the full recovery of that amount, " the General Court said.
The decision could still be appealed by the government of Prime Minister Donald Tusk, who, upon taking office in 2023, moved swiftly to undo the reform introduced by PiS. Tusk's promise to restore the rule of law convinced Brussels to release 137 billion euros in cohesion and recovery funds, which had been paralyzed by the controversial regulation.
"What is important is that the European Union acts consistently with all member states when it comes to rule of law issues, that we ourselves follow a due process," Michael McGrath, the European Commissioner for Democracy, Justice and the Rule of Law, said on Wednesday, hailing the "very good success rate" of the court cases.
"Compliance with the rule of law is not à la carte, it is not an optional extra. It is a fundamental part of membership in the European Union."
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