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25th Sep 2016

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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.

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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.

Investigation

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