Saturday

18th Jan 2020

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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

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.

Poorest regions get least out of EU funding

Countries with a poor public administration are "of course" absorbing less EU cohesion funds, meaning some of the poorest regions are getting the least out of the available money, the EU commission has said.

Magazine

A deep dive into the EU regional funds

While the regional funds account for a full third of the EU budget, they are somewhat under-reported. EUobserver's latest edition of the Regions & Cities magazine looks at the EU's cohesion policy.

News in Brief

  1. 'No objection in principle' on Huawei cooperation, EU says
  2. French aircraft carrier goes to Middle East amid tensions
  3. EU suggests temporary ban on facial recognition
  4. EU industry cries foul on Chinese restrictions
  5. 'Devil in detail', EU warns on US-China trade deal
  6. Trump threatened EU-tariffs over Iran, Germany confirms
  7. EU trade commissioner warns UK of 'brinkmanship'
  8. Germany strikes coal phase-out deal

Magazine

A deep dive into the EU regional funds

While the regional funds account for a full third of the EU budget, they are somewhat under-reported. EUobserver's latest edition of the Regions & Cities magazine looks at the EU's cohesion policy.

Magazine

The EU Agencies Race

In this edition of EUobserver's Regions & Cities magazine, we take a closer look at some of the EU agencies, exploring how their location matters and the benefits for cities and regions to host them.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Join EUobserver

Support quality EU news

Join us