rule of law
What kind of Europe will EU funds reconstruct?
The European Union is not merely a community based on democracy and the rule of law. It is also an organisation which functions in a way advantageous to undemocratic governments and may strengthen their authoritarian impulses.
This paradox is becoming the fundamental problem connected with the Reconstruction Fund currently being launched.
One expression of this dilemma which the EU is currently facing and which it will need to solve in order to secure its future is seen in Slovenia’s assumption of the EU presidency. Prime Minister Janez Janša is a political ally to Poland’s Jarosław Kaczyński and Hungary’s Viktor Orbán. He is taking on independent judges and prosecutors, curbing press freedom and, during the ceremony to take over the six-month presidency, he declared his full support for the laws passed by the Hungarian parliament which discriminate against sexual minorities. The head of the newly formed European prosecutor’s office, tasked with fighting corruption and the fraudulent use of EU funds, spoke of the “high risk” associated with these phenomena in Slovenia. Janša ignored the requirement to send Slovenian prosecutors to this European office, making it impossible for it to function in that country. In spite of this the European Commission decided to recommend member states transfer €2.5 billion from the unprecedented solidarity scheme created this year — the Reconstruction Fund aimed at fighting the economic impact of the pandemic. Poland is set to receive nearly €24 billion to 2025 (independent of funds from the EU budget).
This is not the first time that the required guarantees and controls have not been applied when disbursing EU funds to governments prepared to use them not only for development but also to strengthen oligarchic or authoritarian structures. Orbán’s system could never have arisen so rapidly without EU funds, which form an indispensable pillar of this system, both directly (by way of enormous corruption) and indirectly (by improving the standard of living of citizens). The high risk of similar phenomena occurring in Slovenia is currently particularly high but is especially so in Poland.
The Reconstruction Fund is increasingly accessible but its disbursements are subject to less EU verification than funds from the “traditional” EU budget. This is because it is important to spend the money as quickly as possible, without unnecessary formalities, so that the economy can rebound at pace. Unlike with “normal” funds, there will be no detailed checks of all invoices and the EU will not precisely define the criteria or demand fully transparent tenders. Above all the European Commission will want to ensure there are results (e.g. a renovated hospital); the precise manner in which they are achieved, who made money on them and whether everything adds up on paper will be of less concern. This approach is understandable in economic terms. However, it is based on the assumption that the governments distributing these funds are also guided solely by economic matters and are determined to fight irregularities. This assumption unfortunately borders on naivety.
The biggest threat to the EU’s interests is not currently “normal” corruption, where some EU funds end up in the hands of dishonest civil servants, corrupt politicians and well positioned companies. The biggest threat is that EU funds will strengthen “big corruption”, meaning a state system based on discretion and the logic of political particularism privileging those in power and exploiting resources for their own needs and those of their associates. This clientelist system is an inevitable consequence of the breach of the rule of law and the government’s appropriation of state institutions. The spread of this model of government is destroying the EU from within.
In Poland the most important role in this process is played by the complete politicisation of the public prosecutor’s office and the removal of systemic guarantees of the independence of the courts. Since 2016 the prosecutor’s office has been entirely controlled by the minister of Justice, whose level of control over it is unknown in all other European countries. He can nominate and dismiss prosecutors at will, decide on promotions and rewards, arbitrarily move cases from one prosecutor’s office to another, make personal interventions of how investigations are proceeding and change the prosecutors leading them. It is no surprise, then, that the prosecutor’s office does not intervene when the ruling party’s interests are threatened or that it acts on the diktat of a minister ignoring court rulings. Along with control of the courts, the permanent restrictions of access to public information (e.g. access to the files of closed investigations in the prosecutor’s office) and the marginalisation of social organisations, a prosecutor’s office functioning in precisely this way means that the spectre of “easy” EU reconstructions funds being used to strengthen “big corruption” structures has become a realistic scenario.
This is because the belief that EU institutions will effectively investigate and prosecute misdeeds is based solely on illusions. This is not only caused by the construction of the fund and the EU’s determination to disburse its funds at any cost to stimulate economic recovery — no less important is how the EU’s anti-corruption system functions; and it is above all based on cooperation with the national institutions. When the OLAF anti-corruption agency discovers a case it transfers it to the national institutions, leaving them to decide whether formal accusations will be made. The EU has no influence on this. When Minister of Justice Zbigniew Ziobro’s party spent European funds earmarked for the climate on a party convention – and in doing so hired companies connected to his party’s politicians – the same Zbigniew Ziobro, as public prosecutor, cancelled the investigation. An identical case in Denmark ended with charges being made against the politician involved and the removal of his political immunity.
Membership of the new European prosecutor’s office, which could itself lead an investigation in Poland, is voluntary and Poland has not even joined. Nor does it participate in ARACHNE, a data-mining system looking at how EU funds are distributed and facilitating the investigation of injustices. It must also be disconcerting that Poland is one of the few countries which has not committed itself to guaranteeing any of the principles of transparency when it comes to spending the Reconstruction Fund’s money: providing open access to the data, creating a site collating this information, revealing the final beneficiaries, explaining what the funds were spent on, publishing audit reports. Access to public information will thus be fundamentally restricted for the media and social organisations.
Furthermore, Poland is yet to publish its draft law on the launch of the National Recovery Plan, which is supposed to regulate crucial questions such as: the criteria for granting subsidies, the principles of transparency, the members of the institution monitoring how funds are spent and how it will function. Instead of this, Prime Minister Morawiecki requested that the Constitutional Tribunal will next week rule that decisions from the EU Court aimed at returning judicial independence in Poland may not be applied in Poland. It appears that the system of distributing reconstruction funds is to be particularly tightly fastened against the possibility of effective supervision from the EU and independent domestic institutions. The money spent as part of the Polish National Recovery Plan will flow freely into the National Treasury, boroughs governed by Law and Justice, and favoured companies. It is no more than a rhetorical question whether this will be subject to the appropriate oversight of the law enforcement agencies.
Since 1 January the EU has had recourse to the “rule of law conditionality mechanism”, which was created for application precisely in cases where the fundamentals of the rule of law and balance of power have been so breached in member states as to threaten its financial interests. When applied it could potentially mean EU funds are withheld, but its main aim is to function preventively: to bring about the removal of the systemic problems at the root of the threats. The commission should activate this mechanism without delay. It is essential that it protects the recipients of EU subsidies even in cases when transfers from the EU would be halted. Those who have been awarded subsidies or grants may claim them from their own country.
This is, though, a last resort and insufficient. The European Commission should recommend that the Polish recovery plan only be passed should sufficient principles of transparency be ensured, along with precisely defined criteria for selecting projects, effective monitoring by independent institutions and the full implementation of the rulings of the CJEU. It is unthinkable that the commission could agree to transfer billions of euros to a country where the primacy of European law is being questioned. It should also make sure that social organisations tracking the behaviour of those in power receive appropriate support from the new instrument called the “Citizens, Equality, Rights and Values Programme” which promotes the EU’s fundamental principles.
These measures will be essential in deciding what kind of Europe will be reconstructed as a result of the exceptional solidarity between EU countries. Will it be a Europe standing on the firm foundation of the rule of law and democracy or one further undermined by authoritarian undercurrents feeding off EU support?
The article first appeared in the Polish version in the daily “Rzeczpospolita”.
Piotr Buras – head of the Warsaw office of the European Council on Foreign Relations.