EU probes Polish law, regional aid under threat

Poland could miss out on billions of euros in aid because the European Commission has doubts if the country's newly amended environment protection law meets EU standards, Commission officials say.

On the top of that, opaque and complicated procedures for allocating European Union aid in Poland mean the Commission could also delay or even scrap other huge funds, one official said on Monday, asking not to be named.

"The absorption of EU structural and cohesion funds in Poland is worrying," the official said.

A continued slow flow of EU funds would be a major blow for Poland's new centre-right government, which is due to replace the coalition of Social Democrats defeated in general elections last month.

It could also undermine demands by Poland and other EU newcomers for a substantial increase in spending on them in the bloc's hotly debated 2007-2013 budget.

The EU executive has suspended payments to Poland of more than 1 billion euros ($1.20 billion) from the so-called cohesion fund, which finances big infrastructure projects, because the country's previous environment law was not compatible with EU rules.

EU Regional Policy Commissioner Danuta Huebner told Reuters in a recent interview that although Poland had amended the law this year, the Commission is still not certain the new law meets the standards.

"There are differences between the Commission ... and the Polish side in the initial assessment of this law," said Huebner, Poland's former minister for Europe.

She played down the implications of the dispute, saying it is much too early to say that Poland risks losing EU funds, much needed in the ex-communist country to rebuild its outmoded transport and other infrastructure. "We are still in the period in which I still have no reason to be concerned," she said.

But the Commission official said Poland would have to amend the environment law if it was found sub-standard, with "five points of difference" currently under discussion between the EU executive and Poland.

If the revised environment law were deemed incompatible with EU norms, it would delay the release of the cohesion fund.

Additionally, a highly complicated public procurement law and other regulation delay allocations of the so-called structural funds, which finance smaller projects.

"The complex procedures for appealing in public tenders often block them. This has an impact on structural funds," the official said.

The EU has earmarked some 12 billion euros in aid for Poland from 2004 to 2007. Warsaw counts on at least 60 billion euros in the bloc's assistance from 2007 to 2013.

(Source: Reuters)

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