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Poland has frozen the distribution of €282.3 million in EU pandemic recovery funds for the hospitality, tourism, and culture sectors amid allegations of widespread misuse, including purchases of luxury boats, high-end furniture, and a grant linked to a swingers’ club. The suspension follows public outcry after government-published data revealed discrepancies in how portions of the money were allocated, raising questions about oversight and accountability.

The controversy emerged when authorities launched an online transparency portal mapping recipients of the HoReCa scheme, a program designed to aid small businesses impacted by Covid-19 restrictions. Instead of showcasing prudent spending, the platform highlighted grants funding yachts, a pizzeria installing tanning beds, and a southern Poland business registered at the same address as an adult club. Finance Minister Katarzyna Pelczynska-Nalecz announced Tuesday that all 2,400 grants — totaling 1.2 billion zlotys — will undergo individual audits before any further funds are released.

The HoReCa initiative forms part of Poland’s €60 billion EU Recovery Fund package, access to which was delayed for years under the former Law and Justice (PiS) government due to Brussels’ concerns over judicial independence. The current administration, led by Prime Minister Donald Tusk, unlocked the funds after the 2023 elections by addressing rule-of-law disputes. However, Tusk acknowledged that expedited implementation timelines under his government led to relaxed approval processes, which some beneficiaries allegedly exploited.

Opposition figures from PiS have seized on the scandal to criticize Tusk’s leadership. PiS MEP Tobiasz Bochenski staged a symbolic protest outside the prime minister’s office, unveiling a satirical plaque referencing a fictional “Ministry of Herring and Vodka” — a jab at perceived mismanagement. Tusk countered by blaming PiS for initially blocking the funds, compelling his administration to rush allocations. “The previous government’s delays forced us to act quickly, and regrettably, some exploited these streamlined procedures,” he stated Monday.

The European Commission affirmed it is monitoring developments but emphasized that Warsaw retains responsibility for fund management. While the audits proceed, businesses awaiting support face uncertainty, with many still reeling from pandemic losses. Analysts note the scandal underscores broader challenges in balancing transparency with efficient distribution of large-scale recovery aid — a tension affecting multiple EU nations.

The freeze highlights ongoing political friction in Poland, as parties leverage the issue ahead of upcoming elections, while also testing public confidence in the EU’s post-pandemic financial framework. As investigations continue, attention turns to whether reforms will strengthen safeguards or further delay critical support for vulnerable sectors.