© Reuters. President of the European Commission Ursula von der Leyen prepares to welcome Poland's Prime Minister Mateusz Morawiecki before a meeting at the EU headquarters in Brussels, Belgium, February 18, 2022. Olivier Matthys/Pool via REUTERS

WARSAW (Reuters) - Poland has made progress in talks with the European Commission on unblocking COVID-19 recovery funds, its prime minister said on Friday, adding that he believed a deal could be reached.

Brussels has yet to approve Warsaw's National Recovery Plan, which is necessary to unblock the 36 billion euros ($40.89 billion) in funding, due to a dispute over judicial reforms the bloc says undermine the independence of the courts.

"The chances after today's talks have slightly improved," Mateusz Morawiecki told a news conference in Brussels broadcast by Polish television, while stressing that it remained to be seen if an agreement could be forged in coming weeks.

Morawiecki was speaking after meeting European Commission President Ursula von der Leyen earlier in the day.

The Commission declined to comment on whether it shared Morawiecki's assessment that chances to unlock Poland's access to the EU recovery fund improved after the meeting.

The European Union's top court on Wednesday cleared the way for the EU executive to cut billions of euros of funds to Poland and Hungary by dismissing challenges by Warsaw and Budapest against a new EU sanction, which would halt funding to members that break European laws.

The current dispute with Poland focuses on the Disciplinary Chamber of the Supreme Court, which critics say is a politicised body penalising judges who oppose Warsaw's judicial reforms.

The EU's top court has demanded that it be disbanded, and last October, ruled Poland must pay one million euros a day in fines for maintaining it.

Poland's ruling nationalists Law and Justice (PiS) and President Andrzej Duda, a government ally, have both proposed legislation to try and end the standoff.

However, critics say both sets of proposals fail to tackle the underlying problem of the politicisation of the judiciary which the Disciplinary Chamber embodies.

Despite the freeze in COVID recovery financing, Poland is going ahead with its National Recovery Plan using its own funds.

"The first tenders will start soon and the money for their implementation is secured," Morawiecki said. "I do not believe that it will not be refunded in the future (by the EU)."

($1 = 0.8804 euros)

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