Last week, EU Commissioner Didier Reynders received Polish Minister for EU Affairs Szymon Szynkowski at his office to discuss the independence of the judiciary in the context of the RRP milestones. Despite the European Commission’s approval of the Polish Recovery Plan a few months ago, Poland has not yet seen a single euro cent from the EU recovery fund. The European Commission would not allow Poland to access the Multiannual Financial Framework (MFF), citing the EU Charter of Fundamental Rights, unless it carries out certain judicial reforms. Nevertheless, Warsaw believes it has met these conditions months ago.
“The European Commission cannot reimburse any expenditure submitted by Poland regarding EU funds because it does not meet the enabling conditions. If Poland fails to comply with the enabling conditions by the end of the year, the Commission may recover advances paid in the annual accounting period.” – said Stefan De Keersmaecker, a spokesman for the European Commission, in response to a journalist’s question a few weeks ago.
“The European Commission has broken the agreement on the Polish recovery plan, treating Poland’s access to EU funds as a political issue.” – Polish President Andrzej Duda said recently.
At the end of May 2022, the Polish Sejm adopted a legislative package to settle objections raised by the EU institutions regarding the disciplinary chamber of the Polish Supreme Court. The adoption of the package has allowed the €35.4 billion Polish recovery plan to be approved by Brussels, while the Commission has made it clear that the Polish government must meet a number of milestones to comply with EU law before the country can receive any payments.
According to Warsaw, the Polish government has fully complied with the changes expected by Brussels, as the reform law mentioned earlier, entered into force on the 15th of July. Under the new legislation, the Disciplinary Chamber of the Supreme Court, which has been under criticism from the EU, has been abolished and a new chamber for professional liability has been created. The Polish government was confident regarding the approval of its reforms hence it has already started to pre-fund projects under the recovery plan.
However, no payment has been made to Poland since then, on the contrary. A few weeks ago, four lawyers’ organizations, supported by the lobby group The Good Lobby Profs, filed an action in the European Court of Justice against the Council decision approving the recovery plan, asking for its annulment. The arguments put forward in the action are eerily similar to the objections raised by the Commission refusing to reimburse Poland for pre-financing EU funds.
According to the position outlined in the request, the milestones set out by the Commission conditional to payments, circumvent a number of requirements of the European Court of Justice relating to the independence of the Polish judicial system. The milestones provide for a reform of the disciplinary system for judges, the establishment of a new body to replace the Chamber and a review of the cases of judges affected by decisions of the Disciplinary Chamber. However, the organizations supporting the action argue that the decisions of the Disciplinary Board should be annulled and that the cases of Polish judges subject to disciplinary measures should not be reviewed, but that these judges should be reinstated to their previous positions effective immediately, as required by previous rulings of the European Court of Justice.
The European Commission is now intervening in the Polish case on similar grounds as mentioned above, however on a completely different legal basis, the so-called „enabling conditions”, which threatens Poland’s access to a substantial €73 billion in funds.
But what are the enabling conditions?
The so-called horizontal enabling conditions are defined as the ex-ante requirements necessary for the efficient and effective implementation of the specific objectives linked to EU programs. For the first time, the EU’s Common Provisions Regulation includes, for the period 2021-2027, specific enabling conditions for funds under shared management between the EU and the Member States.
One of these conditions, next to other requirements such as the adequate functioning of the public procurement market or the rights of people with disabilities, is to ensure compliance with the Charter of Fundamental Rights of the European Union when implementing EU programs. The requirements for the independence of the judiciary are identified in the regulation of EU programs as part of compliance with the Charter.
According to the interpretation of the EU institutions, the Commission should take into account the commitments made by the Member States in the context of the RRF milestones related to the independence of the judiciary when assessing the enabling conditions, however it should not – and legally cannot – limit itself to the scope of the milestones. This is because, as the Commission argues, the legal basis for the enabling conditions is significantly broader than the requirements of the RRF regulation.
According to the EU’s regulation on Recovery and Resilience, recovery plans must be in line with the relevant country-specific recommendations set out in the European Semester, while the MFF is available for compliance with the Charter and the rule of law criteria.
The Recovery Fund is therefore not about broad possibilities for investigation. In fact, the RRF Regulation was never intended by the Commission as an instrument to protect the rule of law. The recommendations of the European Semester, which must be in line with the recovery plans, is also distant from the world of rule of law procedures. Introduced in 2010 as a response to the economic crisis two years earlier, the original aim of the Semester was to coordinate economic, employment and budgetary policies in Member States, and while the coordination of many policies is now covered, it is essentially part of the framework for economic governance.
It is therefore not surprising that the descriptive part of the Polish Country Report 2022, adopted in June, mentions a few lines of criticisms of the judicial system, however the recommendations do not address the Polish judiciary at any point. In legal terms, therefore, the recommendations of the Semester cannot be used to hold the Polish government accountable for judicial reforms in terms of access to the recovery fund, given that no such recommendation has been made by the EU institutions.
The Polish recovery plan therefore contains commitments not to the recommendations of the Semester, but to the protection of the Union’s financial interests, in order to enhance the effectiveness of the internal control mechanism in Member States. These commitments laid down in the Polish Recovery Plan in relation to the Polish judicial disciplinary system are primarily aimed at clarifying the scope of the disciplinary liability of judges by law, so that the initiation of preliminary rulings or the content of judicial decisions cannot give precedent to disciplinary action but indicates that proceedings can be initiated for professional reasons. In addition, judges affected by previous disciplinary decisions should have the possibility of review. Poland has made no further commitments which it fulfilled through the legislation that entered into force in July. The European Commission’s approval of the Polish recovery plan in this instance, indicates that these judicial reforms are sufficient to ensure that the financial interests of the Union are not threatened.
The situation is different regarding access to the Multiannual Financial Framework. Expectations of the rule of law concerning the independence of national courts are based on the premise that if the independence of the EU courts is compromised, they lose their ability to fulfil their role in upholding the rule of law, one of the values enshrined in Article 2 TEU. This is also mentioned in Article 47 of the Charter of Fundamental Rights, which provides for the right to an independent and impartial tribunal for any person claiming a right under EU law in a particular case. As to whether a Member State is in compliance with the Charter, the Commission, according to its own interpretation of the horizontal enabling conditions, can take into account various factors, from infringement procedures to judgments of the CJEU and reports of the Fundamental Rights Agency, including facts established in other EU procedures – rule of law, conditionality procedure, European Semester – or even individual complaints. Moreover, the independence of the national judicial systems is determined on a very wide scale. Not least in the light of the ECJ’s judgment in February 2022 in a Maltese case, which held that the independence of the judiciary does not preclude the prime minister of a member state from deciding on judicial appointments themself, since in that case an independent body provides an opinion on the candidates for the prime minister.
This situation gives rise to a number of uncertainties.
On the one hand, the linking of the Member States’ share of the Recovery Fund and the MFF is a political decision on the part of the European Commission, as the legal bases of the two instruments and the objectives and preconditions set out in them are different. What is sufficient criteria to access the recovery funds may not be satisfactory to receive the European structural and investment funds. However, it is clear that the horizontal enabling conditions cannot be invoked to withhold payments from the recovery fund.
On the other hand, if the violation of the principles of the rule of law – such as issues concerning the independence of the judiciary – directly affects the protection of the financial interests of the Union, then the conditionality procedure can be launched. However, no such procedure has ever been launched against Poland. The concerns regarding the milestones under the recovery plan and the existence of enabling conditions in withholding EU funds, have one commonality: they can be taken unilaterally by the European Commission, without the approval of the Council.
It is beyond the scope of this analysis to assess the Commission’s reasons for avoiding the Council procedure in the Polish case. But the confusion is compounded by the fact that, despite the approval of the Polish recovery plan and the fulfilment of its conditions, the European Commission continues to fine Poland €1 million a day for non-compliance with last year’s European Court of Justice ruling on the disciplinary chamber. This amounts to a total of €325 million since last year.
The situation in the Polish case could serve as a very informative example for Hungary, as new demands for judicial reform have reportedly been raised in the negotiations regarding the recovery fund. The conclusion of the rule of law conditionality procedure is therefore no guarantee, and even if the European Commission approves the Hungarian recovery plan at the end of this month, the issue of horizontal enabling conditions could create uncertainty in the Hungarian case.