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Polish growth looks strong as EU releases recovery funding

Brussels approved an advance payment of €5.1 billion to Poland as part of long-delayed EU pandemic recovery funds. The move comes ahead of the expected return to office of pro-European premier Donald Tusk in Warsaw.

This marks the first payout

since recovery funds were frozen in 2021 over rule-of-law concerns under the outgoing nationalist Law and Justice (PiS) government. The recent parliamentary elections saw Tusk's pro-European coalition triumph, promising to restore judicial independence and unblock Poland's share of EU funding.

Poland is anticipated to receive around €60 billion from the EU's recovery fund, with most funds contingent on the reversal of judicial reforms criticized by the European Commission for limiting judges' independence. However, the conditions for the €5.1 billion advance payment, approved on Tuesday, are tied to emergency measures related to energy and the green transition, addressing additional costs prompted by the Ukraine conflict.

EU Commission Vice-President Valdis Dombrovskis emphasized that regular tranches of funding would only be disbursed once the specified milestones on judicial independence and other elements are fully implemented.

Donald Tusk's election victory is viewed as crucial for Poland's repositioning within the EU, and he has swiftly worked to secure the release of frozen EU funding. The advance payment, expected in January, coincides with Tusk assuming office. While the ruling PiS government seeks credit for unlocking EU money, approval from other EU member states is still pending, likely to be addressed in early December's finance ministers' meeting.

The commission clarified that the advance tranche would later be deducted from Poland's future payment requests, linked to progress on judicial reforms. Caretaker prime minister Mateusz Morawiecki's attempt to form another PiS government faces challenges, while Tusk enjoys support from 248 of the 460 legislators in Poland's lower house.

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