Poland bracing for tough talks with EU on virus recovery fund: deputy PM

FILE PHOTO: European Union and Poland's flags flutter at the Orlen refinery in Mazeikiai, Lithuania April 5, 2019. REUTERS/Ints Kalnins

WARSAW (Reuters) - Poland is preparing for difficult talks with the European Union over a planned recovery fund, a deputy prime minister was quoted on Wednesday as saying, amid government fears that Warsaw may become a net contributor, not a net beneficiary, of the fund.

France and Germany have proposed the creation of a 500 billion euro ($550 billion) recovery fund to help countries deal with the economic effects of the coronavirus pandemic.

Support would be directed at the hardest-hit regions. Poland, by far the biggest net beneficiary of funds from the EU budget, has weathered the coronavirus crisis far better than countries such as Italy, Spain and France.

“This is a very difficult situation. We are waiting for the European Commission’s official stance. We are gearing up for a discussion on this issue,” Deputy Prime Minister Jadwiga Emilewicz told Dziennik Gazeta Prawna daily in an interview.

“Excluding us from this form of support is incomprehensible to us ... The extent to which COVID-19 has hit the country should not be the only allocation criterion,” she said, referring to the lung disease caused by the new coronavirus.

Poland’s net contribution to the Recovery Fund could reach 10.39 billion euros, or 1.96% of its national output, according to an analysis by Germany’s Centre for European Economic Research (ZEW) cited this week by Polish daily Rzeczpospolita.

The European Commission, the EU’s executive arm, is due to unveil its own recovery plan proposals later on Wednesday. They are expected to comprise a mix of grants, loans and guarantees exceeding 1 trillion euros.

The number of COVID-19 infections in Poland, the largest country in the EU’s eastern wing with 38 million people, stood at 22,074, including 1,024 deaths, far fewer than in many wealthier west European nations.

The Polish government plans to announce on Wednesday a further relaxation of coronavirus lockdown restrictions.

Reporting by Marcin Goclowski; additional reporting by Pawel Florkiewicz; Editing by Gareth Jones