Poland’s funds ministry on Tuesday halted all further payments under a multimillion-euro EU-funded program for hotels, restaurants and cultural venues after a transparency push exposed grants for yachts, vodka bars and a business registered at the same address as a sex club.
Funds Minister Katarzyna Pełczyńska-Nałęcz said no additional money will be disbursed until each of the roughly 2,400 grants, worth in total around 1.2 billion złoty (€282.3 million), is individually audited.
“Every złoty will be checked,” she told reporters, blaming rules drawn up by the previous Law and Justice (PiS) government. The aim, she added, was to protect public trust in EU funds and ensure the cash actually supports its intended beneficiaries.
So far, about 110 million złoty (€25.8 million) have been paid out, leaving most of the program’s budget frozen.
The HoReCa scheme, part of Poland’s long-delayed EU Covid recovery plan, was intended to help small tourism and hospitality businesses diversify after the pandemic.
Brussels had withheld the wider recovery fund, worth €59.8 billion for Poland, for years over rule-of-law disputes with the previous government, making its eventual release a signature win for Prime Minister Donald Tusk after his 2023 election victory.
But an interactive online map of recipients, published last week, instead lit up social media with eyebrow-raising purchases ranging from boats and luxury furniture to a grant registered to the address of a swingers’ club.
PiS has seized on the controversy to accuse Tusk’s government of cronyism and waste, and to highlight cracks within the government coalition.
“These funds were meant to rebuild Poland after the pandemic and create new jobs,” said PiS spokesperson Rafał Bochenek in statement on Tuesday. “Tusk promised development that everyone would feel. What we feel is a gigantic stench — and a huge debt we will all have to repay.”
Tusk has defended his government, blaming the previous PiS administration for blocking the funds for years and forcing a rushed rollout.
“One hundred percent of the responsibility for this years-long mess falls on our predecessors, who blocked these funds and left us with very little time to spend them properly so they could reach Polish companies,” he said Monday.
“To make sure the money got out, the funds ministry loosened procedures, and some people took advantage, spending in ways that, rightly, people find questionable, if not outright infuriating,” he added.
A European Commission spokesperson told radio RMF FM on Monday that the EU executive was “following the situation closely,” but stressed that responsibility for managing the funds rested with Warsaw.
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