Poland's ruling Law and Justice (PiS) party is losing traction in opinion polls, but it isn’t giving any further ground in its rule-of-law dispute with the European Commission.

And there’s no sign that the EU is planning to release €35 billion in loans and grants from its pandemic recovery fund.

Warsaw has yet to formally apply to Brussels to release the funds, something it had pledged to do in July. The country’s Ministry of Development Funds and Regional Policy said it plans to make Poland's first application for payment covering the period from February 1, 2020 to June 30, 2022 in the fourth quarter of this year.

"The Polish government is digging in and is preparing a narrative on how the recovery fund is not really needed at all," said Jakub Jaraczewski, research coordinator for Democracy Reporting International, an NGO. "They’re kind of preparing to lose it."

There’s no indication that either side is preparing to give way.

Commission President Ursula von der Leyen last week said that Poland had failed to meet the EU’s “milestones” in rolling back changes to the justice system that violated EU rules by bringing the courts under tighter political control.

Poland’s ruling United Right coalition passed legislation on July 15 that moves some way toward the Commission's demands by renaming a controversial chamber on the Supreme Court that disciplines judges. But those measures haven’t gone far enough, von der Leyen told Poland’s Dziennik Gazeta Prawna newspaper.

Poland has yet to reinstate the suspended judges, and the country is still facing fines of €1 million a day for ignoring rulings on the judicial system from the Court of Justice of the EU.

“Poland must honor the commitments it made to reform the system of disciplinary measures,” she said.

But Warsaw doesn’t plan any further steps to meet those commitments.

On Tuesday, Paweł Szrot, head of President Andrzej Duda’s cabinet, told Polish television: “The president has already announced that he has ended his activity in this area, the law was adopted, it was presented to the institutions of the European Union.”

He reiterated the need for a two-sided compromise on the issue and added: “The president believes that this money should be granted to Poland.”

A Commission spokesperson declined to comment.

The issue is a political landmine for the government.

Inflation in Poland was 15.5 percent in July, one of the highest rates in the EU, and government finances are under growing strain. Meanwhile, PiS, the leading party in the nationalist ruling coalition, lost first place to the opposition Civic Platform party in one recent opinion poll. That's a first since 2015 and comes ahead of next year’s parliamentary election — with the EU cash crucial to reviving its fortunes.

But getting that money would mean retreating on the government's judicial reforms, which would be unpalatable to the party’s core right-wing electorate.

"The party would have to admit a defeat in a policy it has pursued since 2015," said Jacek Kucharczyk, head of the Institute for Public Affairs, a Warsaw think tank. "That would be a huge blow to the party’s credibility and could lead to a real meltdown in opinion polls."

He said that the Commission’s tough stance on rule of law has surprised Warsaw.

“PiS understood that the deal with the Commission was that it would pretend to undo the reforms, and that Brussels would accept that. But the Commission came under such pressure that it toughened its position,” he said.

Now Warsaw is playing a waiting game with the Commission, hoping that it “gets exhausted and throws in the towel by accepting the reforms and releasing the cash,” Kucharczyk said.

“I think they’re digging in,” said Jaraczewski. “The loser in this situation is of course the Polish people, who will not see this money.”