May 31, 2017 / 4:18 PM / 2 years ago

Poland dismisses threat of cut in EU funds

WARSAW, May 31 (Reuters) - Poland on Wednesday dismissed warnings that accusations of its violation of EU standards on the rule of law could cost it European Union money, and also called the idea of accelerating euro zone integration unrealistic.

“Proposals to withhold structural funds for selected member states are simply contradictory to EU treaties,” Polish Prime Minister Beata Szydlo said.

With the EU debating reform of the bloc after Britain leaves it, Germany’s government has set out proposals to freeze access to EU funds for countries that fail to meet EU rule of law standards, according to a document seen by Reuters.

The seven-page document aims to guide Berlin’s approach to upcoming Brussels negotiations on post-2020 changes to the system by which the EU supports development in its poorer members.

This would hit countries such as Poland and Hungary, net recipients of EU cohesion funding, which have clashed with Brussels on legal issues.

Konrad Szymanski, Poland’s deputy foreign minister in charge of European affairs, said the proposals would be difficult to execute as they would give the European Commission powers it does not possess.

“It would mean that a mechanism aimed at de facto restricting the membership of a state depends on the political will of the European Commission, which is the (bloc’s) executive body,” Szymanski told Polish state radio.

Poland is due to receive 86 billion euros ($96.53 billion) in the 2014-20 budgetary period.

Linking funds to the rule of law could be potentially difficult from a legal point of view as it would require unanimity at some stages of the negotiations, including for the final adoption by the European Council, of which both Poland and Hungary are members

But there is a risk that funds for some countries could still be decreased because net contributors to the budget, of which Germany is the biggest, hold more power in negotiations.

Adam Glapinski, governor of the Polish central bank, said that a more “sober” view on whether Britain’s divorce from the EU would pave the way to deeper integration was needed.

In comments published by the Financial Times, Glapinski said that no state would be willing to give up decision-making power over vital issues of taxation and spending.

“All the ideas ... about accelerating EU integration are no more than a pipe dream,” he said. (Additional reporting by Jan Strupczewski; Writing by Lidia Kelly; Editing by Andrew Bolton)

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