(Bloomberg) -- The European Union is threatening to block budget payments to Poland -- amounting to 18 million euros ($21 million) and growing -- over Warsaw’s refusal to comply with a 500,000 euro-a-day fine.
The European Court of Justice ordered the financial punishment last month after Poland failed to comply with a ruling to shut down its Turow lignite mine, which the Czech Republic says is draining water reserves from the border region.
Asked about the development, Prime Minister Mateusz Morawiecki said on Tuesday that Poland won’t alter its stance as the power-producing plant next to the coal mine is too important for households and businesses in the region.
The European Commission sent a letter to the Polish government last week requesting information about its plan to shut down the mine, according to a spokesperson from the executive body. The letter also said that the EU would cover the amount owed -- including interest -- by offsetting it against future payments from the bloc’s budget.
The EU has already delayed disbursing 36 billion euros Poland requested from the bloc’s massive recovery fund over an unrelated rule-of-law dispute.
Democratic Dispute
A Polish government official earlier said they didn’t consider the commission’s letter to be an official request for payment and expected the notification to come next month. The commission spokesperson said the EU would continue to send requests for payments to Poland on a regular basis until Warsaw closes the Turow site.
Poland, which gets 70% of its electricity from coal, says the Turow facility accounts for as much as 7% of the country’s power supply and switching it off could lead to blackouts and lost jobs. The mine belongs to the nation’s biggest utility PGE SA.
The dispute comes as relations between Poland and the EU plumb new lows. Poland’s top court this month ruled that some EU laws are incompatible with the country’s constitution, undermining a fundamental precept of the union.
‘Silent Revolution’
In response to the rule-of-law crisis, the commission has threatened to use a new budgetary power that would allow it to withhold payments to countries accused of democratic backsliding.
The commission also said it may start legal action that could strip Poland of its voting rights in the bloc.
Speaking to lawmakers in Strasbourg, France, last week, Morawiecki accused EU politicians of blackmailing Poland by withholding the stimulus funds and said the ECJ was conducting a “silent revolution” with its verdicts.
Morawiecki’s government has also threatened to derail the bloc’s business, including sensitive climate talks, if the EU doesn’t release the recovery payments.
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