NextGenerationEU: European Commission endorses Poland’s €35.4 billion recovery and resilience plan

This article is brought to you in association with the European Commission.

The European Commission has today given a positive assessment of Poland’s recovery and resilience plan, an important step towards the EU disbursing €23.9 billion in grants and €11.5 billion in loans under the Recovery and Resilience Facility (RRF). This financing will support the implementation of the crucial investment and reform measures outlined in Poland’s recovery and resilience plan. It will enable Poland to emerge stronger from the COVID-19 pandemic and progress with the green and digital transitions.

The RRF is the key instrument at the heart of NextGenerationEU, which will provide up to €800 billion (in current prices) to support investments and reforms across the EU. The Polish plan forms part of an unprecedented and coordinated EU response to the COVID-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market.

The Commission assessed Poland’s plan based on the criteria set out in the RRF Regulation. The Commission’s analysis considered, in particular, whether the investments and reforms contained in Poland’s plan support the green and digital transitions; contribute to effectively addressing challenges identified in the European Semester; and strengthen its growth potential, job creation and economic and social resilience.

Poland’s plan includes milestones related to important aspects of the independence of the judiciary, which are of particular importance to improve the investment climate and put in place the conditions for an effective implementation of the recovery and resilience plan. Poland needs to demonstrate that these milestones are fulfilled before any disbursement under the RRF can be made.

Securing Poland’s green and digital transition 

The Commission’s assessment finds that Poland’s plan devotes 42.7% of its total allocation to measures that support climate objectives. The implementation of Poland’s plan is expected to contribute significantly to the decarbonisation of the Polish economy by increasing the share of renewable energy in the energy mix, the energy efficiency of the economy and the independence of Poland’s energy supply. This includes substantial funding for offshore wind energy plants, as well as key changes to the regulatory framework facilitating the construction of offshore and onshore wind farms. Moreover, the implementation of the plan is expected to support an energy efficient renovation of buildings, the modernisation of railways and bus transport, road safety and the development of green hydrogen technologies.

The Commission finds that Poland’s plan devotes 21.3% of the total allocation to measures that support the digital transition. This includes investments to provide universal access to high-speed internet, digitalisation of public services, IT equipment for schools, digital skills and cyber-security.

Reinforcing Poland’s economic and social resilience

The Commission considers that Poland’s plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Poland.

Poland’s plan contains several reforms to improve the investment climate in Poland. This includes a comprehensive reform of the disciplinary regime applicable to Polish judges which is expected to strengthen important aspects of the independence of the judiciary.

Such reform will need to live up to the following commitments:

• All disciplinary cases against judges will be adjudicated by a court, different from the current Disciplinary Chamber, that complies with EU law requirements in line with the case law of the Court of Justice and is thus independent, impartial, and established by law;
• Judges cannot be subject to disciplinary liability for submitting a request for a preliminary ruling to the Court of Justice, for the content of their judicial decisions, or for verifying whether another court is independent, impartial, and established by law;
• Procedural rights of parties in disciplinary proceedings are strengthened;
• All judges affected by the past Disciplinary Chamber rulings will have the right to have these rulings reviewed without delay by a court that complies with EU requirements and is thus independent, impartial, and established by law. 

The Polish plan also includes reforms and investments towards a more universally accessible and effective healthcare system. It supports the modernisation of vocational education, training and lifelong learning, to deliver the right skills for integration in the labour market. Various measures of the plan aim at improving the functioning of the labour market, including a personal income tax reform to incentivise workers who reach the statutory retirement age to continue working. Other measures aim at increasing labour force participation, including of women. These cover reforms and investments in public employment services, long-term care and early childhood education and care.

The plan represents a comprehensive and adequately balanced response to Poland’s economic and social situation, thereby contributing appropriately to all six pillars of the RRF.

Supporting flagship investment and reform projects

Poland’s plan proposes projects in all six European flagship areas. These are specific investment projects which address issues that are common to all Member States in areas that create jobs and growth and are needed for the green and digital transition.

For instance, the investment in green urban transition worth €2.8 billion will support the deployment of renewables and the development of clean and sustainable transport. The plan also includes considerable investments in providing fast internet access to areas with no broadband connectivity.

The Commission’s assessment also finds that none of the measures included in the plan significantly harms the environment, in line with the requirements laid out in the RRF Regulation.

The Commission considers that the control systems put in place by Poland are adequate to protect the financial interests of the Union, once the milestones on additional audit and control measures laid out in the Commission’s proposal for a Council Implementing Decision have been implemented. These concern the milestones related to strengthening certain aspects of the independence of the Polish judiciary as set out above and the use of Arachne, an IT tool that supports Member States in their anti-fraud activities, by enabling them to collect data on final recipients of funds, contractors, subcontractors and beneficial owners and make this available upon request. The plan provides sufficient details on how national authorities will prevent, detect and correct instances of conflict of interest, corruption and fraud relating to the use of funds. Moreover, the milestones relating to additional audit and control measures must be fulfilled before Poland can present its first payment request.

Members of the College said:

President of the European Commission Ursula von der Leyen said: “Today, the European Commission has endorsed Poland’s €35.4 billion recovery and resilience plan. The implementation of Poland’s plan is expected to significantly contribute to the decarbonisation of its economy, while boosting its energy supply independence. The plan also contains several measures to improve the country’s investment climate, including a comprehensive reform of the judiciary aimed at strengthening judges’ independence. Other measures aim at increasing the labour force participation, including of women. The approval of this plan is linked to clear commitments by Poland on the independence of the judiciary, which will need to be fulfilled before any actual payment can be made. I am looking forward to the implementation of these reforms.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “The Commission has today given its green light for Poland’s recovery and resilience plan, which will set the country on a greener and more digital path – congratulations! The plan has a strong focus on the green transition, for example by increasing Poland’s use and generation of renewable energy – particularly from offshore wind farms – as well as developing clean and safe transport and renovating buildings to make them more energy-efficient. All of this will help Poland to reduce its reliance on Russia’s energy supply. Poland also plans further digitalisation of its economy and to narrow the digital divide by ensuring access to high-speed internet and investing in 5G network deployment. Its plan contains prominent healthcare reforms and supports the modernisation of the education system, along with measures to improve the functioning of the labour market. We welcome Poland’s intention to improve its investment climate, including by strengthening the independence of the judiciary. This mix of reforms and investments should produce real change in Poland and help build a more resilient economy. Now it is time to put it into practice.”

Paolo Gentiloni, Commissioner for Economy, said: “Today’s endorsement paves the way for Poland to begin to access €35.4 billion in RRF funding to support investments and reforms that are crucial for the future development of the Polish economy and reflect our commonly agreed priorities. The measures included in the plan – boosting renewable energy, sustainable transport, green hydrogen and energy efficiency – will accelerate Poland’s green transition and increase the country’s energy independence. The plan will contribute to reinforcing public services including education and healthcare, at a time when large numbers of Ukrainians have been welcomed into Poland. It also includes investments to enhance Poland’s digital competitiveness and strengthen cyber-resilience. We have reached this point after long and intensive negotiations, addressing also some fundamental issues related to the rule of law that impact the investment climate. Poland will need to deliver on the key commitments made in this area before any payment can be made.”

Next steps

The Commission has adopted today a proposal for a Council Implementing Decision to provide €23.9 billion in grants and €11.5 billion in loans to Poland under the RRF. The Council will now have, as a rule, four weeks to adopt the Commission’s proposal.

The Commission will authorise disbursements of funds based on the satisfactory fulfilment of the milestones and targets outlined in the recovery and resilience plan, reflecting progress on the implementation of the investments and reforms. 

Some milestones are necessary to ensure the effective protection of the Union’s financial interests and must be fulfilled before Poland presents its first payment request.