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Commission moves to cut Polish funds over unpaid coal mine fine

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The European Commission has launched an unprecedented procedure to reduce budget payments for Poland over an unpaid court fine. 

The budget cut, which is expected to amount to approximately €15 million, comes after Polish authorities didn’t pay a €500,000 daily fine over failure to comply with an order from the Court of Justice of the EU in a dispute with the Czech Republic over the Turów open pit coal mine. 

While Warsaw struck a deal with Prague last week to settle the Turów dispute, the Commission said it was still legally obligated to act on Warsaw’s unpaid fines. Poland owes a total of more than €68 million.

“The Commission has informed Poland that it would proceed with the offsetting of payments for penalties due,” a spokesperson for the Commission confirmed on Tuesday, adding: “The Commission will proceed with the offsetting after 10 working days from this notification.”

The move comes at a sensitive moment for Warsaw’s troubled relationship with Brussels. 

Some Polish officials, including President Andrzej Duda, have sought to de-escalate tensions over rule-of-law problems. But the country has yet to concretely address Brussels’ concerns over the independence of its judiciary, and a separate daily fine of €1 million over an illegal disciplinary regime for judges remains unpaid. 

The current offsetting process in the Turów case covers penalties imposed from September 20 until October 19, the spokesperson said. 

“When performing offsetting, the Commission fulfils its legal obligation to collect financial penalties imposed by the Court in accordance with its order of 20 September 2021. In this regard, the Commission follows the rules set out in the Financial Regulation, in the absence of payment by the Member State,” the spokesperson added. 

The Polish government, however, criticized the Commission’s decision.

“Poland will use all possible legal measures to appeal against the plans of the European Commission, the more so that an agreement has been reached between the governments of Poland and the Czech Republic,” government spokesperson Piotr Müller told the Polish Press Agency.

“This is particularly important in the context of the current geopolitical threats from Russia. From the very beginning, Poland emphasized that the decisions taken by the [Court of Justice] had no legal or factual basis. They go beyond the EU treaties and violate the treaty guarantees of energy security,” Müller said, adding: “We want to emphasize that the smooth implementation of projects from EU funds is not threatened.”

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