The European Union Budget Commissioner Günther Oettinger on January 10 warned that Poland could lose out financially if it refuses to give ground in a bitter dispute with the bloc over its judicial reforms.

Asked whether Poland could see its funds cut in the new EU budget starting in 2021 because of issues concerning the rule of law, Oettinger told a news conference in Brussels: “Either… the rule of law and the independence of courts would constitute a condition for claiming European budgetary resources. Or otherwise the restoration of the rule of law could be seen as a possible way of getting more resources.”

As reported by the Reuters news agency, the remarks, which seemed to contradict an earlier statement from his boss, Commission president Jean-Claude Juncker, suggest Poland could also be rewarded for compliance with EU recommendations.

Meanwhile, Poland’s Prime Minister Mateusz Morawiecki, a former banker who took the reins of the conservative government in Warsaw last month, has shown no sign of scrapping the judicial overhaul that critics say weaken judicial independence and the rule of law.

“I genuinely believe that with added effort to explain our intentions we will be able to clarify misunderstandings,” Morawiecki told reporters in Warsaw on January 9 on his return from Brussels. “I believe dialogue will lead to de-escalation.”

Poland’s nationalist ruling party, Law and Justice (PiS), argues the reforms are needed because the judiciary is still steeped in the mindset and practices of the postwar communist era. The party has also tightened control over state media.

Once considered the posterchild of post-communist transition, Poland is now isolated in the EU as crucial negotiations over the bloc’s next seven-year budget begin. Poland is currently the biggest beneficiary of EU funds, receiving €7bn in 2016.