On 23 February, EC Chairwoman Ursula von der Leyen visited Warsaw. At the press conference with PM Donald Tusk, she announced that in the following week, the EC will formally decide to release €137bn of EU funds from cohesion policy (CP) funds and the National Recovery and Resilience Plan (NRRP). Of the announced amount of €137bn, the NRRP (grants and loans) account for almost €60bn, while the remaining €77bn is grant funding from the traditional cohesion policy.
The positive scenario in terms of unblocking EU funds for Poland after the October 2023 general elections is coming true (see our Think article). Fortunately, the risk of a sudden stop in the inflow of EU funds this year and its implications for growth and public investment has largely been averted.
We see a sizable rise of EU money flowing to Poland. We estimate that the total net inflow of EU funds to Poland (all grants and loans minus the contribution to the EU budget) this year will amount to about 2.7% of GDP versus 1.6% of GDP in 2023. This increase in year-on-year terms partly results from lower-than-expected absorption of cohesion funds in November-December 2023. The combined inflow of CP funds in the last two months of 2023 amounted to merely €1.0bn, while in the last two months of 2022 they reached €5.8bn. According to the latest official reports of mid-February, there still around €5bn left in the ‘old’ cohesion policy budget 2014-20. We expect that these funds will still be disbursed this year, given that they were fully contracted.
