Monday

30th May 2016

Focus

EU freezes €4bn of Polish funds in fraud case

  • Warsaw - the money is not 'lost' the commission said (Photo: metaphox)

The European Commission has blocked over €4 billion of money for Polish roads, causing dismay in the run-up to an EU budget summit next week.

It took the decision after the Polish prosecutor accused 11 people - 10 of them CEOs of large construction firms and one of them a former director in Poland's road agency, the GDDKiA - of colluding to fix prices for tenders for EU-co-funded projects.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The frozen money concerns €4 billion of unspent Polish allocations from the EU's 2007 to 2013 budget in the "infrastructure & environment" programme.

The commission is also freezing €382 million of unspent Polish funds in its "development eastern Poland" programme.

It said in a statement to press on Wednesday (30 January) that in order to get the money flowing again, Poland must "undertake a wide-ranging control/audit to establish the scope of potential irregularities and risk of other projects having been affected."

It noted: "Where and if irregularities are detected, the Polish authorities should make financial corrections and withdraw the irregular expenditure from payment claims to the commission."

It added, using capital letters: "The commission has ZERO TOLERANCE when it comes to to fraud."

Its decision prompted stinging rebukes from the Polish side.

Poland's regional development ministry called it "absolutely unreasonable" in its statement on Wednesday.

The deputy minister for regional development, Adam Zdzieblo, called it "sudden and without justification." He added: "We believe the European Commission will withdraw it as quickly as possible."

The minister herself, Elzbieta Bienkowska, told Polish radio: "The Polish system of project selection, the choice of contractors, is absolutely just and it is Poland which is the injured party in this case [of alleged collusion]."

The furore comes ahead of next week's EU summit, where Polish leader Donald Tusk will try to persuade EU paymasters - Germany, the UK and the Netherlands - to give more money for eastern Europe in the 2014 to 2020 EU budget period.

Some Polish diplomats are quietly dismayed about the timing of the revelation.

But for her part, commission spokeswoman Shirin Wheeler, said the timing has nothing to do with Brussels.

She noted that Poland was initially notified in a letter on 21 December and that the problem hit the Polish headlines only today "probably because someone on the Polish side decided to speak to media."

She added that Poland is normally "a model of good spending," but the fact that one of the accused people is a GDDKiA director poses questions on how far the rot has spread.

"We would not be fulfilling our responsibility to Polish taxpayers and to other taxpayers if we did not seek reassurances," she told EUobserver.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

News in Brief

  1. Hungary reinforces fence on Serbian border
  2. Juncker to seek renewed backing for TTIP talks
  3. EP president rules out return to German politics
  4. Austrian far-right wants to probe election fraud accusations
  5. Irish PM warns Brexit could bring back border controls
  6. Truckmakers risk record cartel fine
  7. London mayor teams up with British PM on Brexit
  8. Syrian refugees sue Denmark over immigration law

Stakeholders' Highlights

  1. ACCAEducation and Training 2020 - Giving Young People the Workplace Skills They Need
  2. EPSUTrade Unions Back New Undeclared Work Platform
  3. European Healthy Lifestyle AllianceCould targeting children’s fitness boost academic performance?
  4. World VisionDeclares the World Humanitarian Summit a Positive Step in a Longer Journey to Ending Need
  5. EJCPresident Dr. Moshe Kantor on Brexit and the Jewish Question
  6. Swedish EnterprisesNew rules for posted workers - Better Protection or the End of Posting ?
  7. World VisionWhy The EU Needs to Put Children at the Centre of Emergencies - In Their Words
  8. ACCASustainability Reporting in Danger of Losing Its Momentum Says ACCA and CDSB
  9. Dialogue PlatformDiversity as Heritage of Humanity! Join the “Colors of the World“ Show at the EP
  10. Centre Maurits CoppietersNew Responses to the Basque Peace Process? MEP Juaristi on Stateless Challenges Conference
  11. European Healthy Lifestyle AllianceImproving Cardiovascular Health Begins by Closing the Gap in Sex Disparities
  12. IPHRBrussels Talks to Take Stock of Human Rights in Turkmenistan

Latest News

  1. Deal with Greece will not work, says Guy Verhofstadt
  2. Greece says it cannot fulfill demands for loans
  3. Juncker agrees to visit Russia in June
  4. Pro-Brexit Tories predict Cameron leadership challenge
  5. Merkel and Hollande pledge unity at Verdun ceremony
  6. Russia mocks ex-Nato chief's new Kiev job
  7. Poland, migration and environment on the agenda THIS WEEK
  8. Does Italy need €14bn of EU budget waivers?