What powers does EU have to bring Poland into line over legal dispute?

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Brussels has vowed to use all tools at its disposal to reassert the supremacy of EU law against the ruling of Poland’s Constitutional Court, but the exceptional nature of the case might curtail Brussels’ scope of action.

In a verdict read on Thursday evening, the Polish tribunal ruled that some provisions of the EU treaties are incompatible with the Polish constitution.

The judges, in a majority decision, said the country’s EU membership did not give EU courts supreme legal authority (article 19) and did not mean Poland had shifted its sovereignty to the EU (article 1).

“It’s the first time we have a ruling against the [EU] treaties,” Didier Reynders, European Commissioner for justice, told reporters on Friday afternoon.

The verdict is seen as a direct and unprecedented attack against the primacy of the EU law, one of the union’s cornerstone principles. Established back in 1964 as a result of the precedent-setting Costa v ENEL case, the principle states that, in all cases where the EU has competence, the bloc’s laws have priority over national legislation, even over a country’s constitution. It is considered essential to ensure the proper and uniform application of EU law across all territories.

Reynders said the ruling represented a “new situation” but denied it amounted to a “Polexit” — as many commentators have said — because that pertains to the realm of politics while the verdict is a “legal issue”. (The case that led to Thursday’s ruling was, in fact, initiated by a petition from the Polish Prime Minister Mateusz Morawiecki.)

“I’m not surprised about the situation in Poland,” Reynders admitted.

“We have introduced a different kind of action to protect the independence of the justice system,” he said, referring to the various legal action that Brussels has launched against Warsaw in recent years in a bid to deter the government from introducing controversial judicial reforms.

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Last month, the Commission asked the EU’s Court of Justice to impose daily fines on Poland after Warsaw failed to dismantle the disciplinary chamber of judges, as had been mandated by the Luxembourg tribunal.

Daily fines are the final stage of an infringement procedure, which begins with the Commission sending a letter of formal notice to a member state suspected of breaching EU law and gradually escalates according to the country’s willingness to cooperate.

The executive launches legal action on a regular basis to ensure the correct application of EU law but most cases are resolved through negotiation and rarely reach the EU’s Court of Justice.

And yet, opening a new infringement procedure might be futile this time due to the novel nature of the Polish ruling. According to the verdict, the EU’s Court of Justice no longer has absolute authority to interference with the Polish justice system, which means Warsaw is now entitled to reject Luxembourg’s verdicts if considered necessary to protect the country’s constitution.

Reynders avoided saying whether his team will opt for a new infringement procedure and insisted the European Commission will analyse the ruling in detail to decide the most appropriate course of action.

“We are a guardian of the treaties and, of course, we are analysing the situation now to see what are the most efficient tools,” he said.

His words echoed a statement released earlier that day by his boss, European Commission President Ursula von der Leyen.

“All rulings by the European Court of Justice are binding on all Member States’ authorities, including national courts. EU law has primacy over national law, including constitutional provisions,” she said. “We will use all the powers that we have under the treaties to ensure this.”

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But the unprecedented character of the new crisis greatly reduces the European Commission’s range of options.

Poland is already under the Article 7 procedure, a more radical measure that can result in the loss of voting rights, but the process is stalled because it requires the unanimity of the other 26 member states. Hungary, also under Article 7, has joined forces with Poland to block the procedures against each other.

That leaves the Commission with the possibility of using a new conditionality mechanism that can suspend EU funds for a country suspected of breaching EU law. The executive could find a legal pathway in article 3 of the regulation, which lists “endangering the independence of the judiciary” as one of the violations that can affect the “sound financial management” of the EU budget.

The decision to suspend payments would have to be endorsed by the EU Council — which comprises the leaders of EU countries — with a qualified majority vote. Should this happen, Poland could be hit hard: the country is the biggest recipient of EU funds, having received more than €18 billion in 2020.

However, the mechanism has never been used and some fear it could stoke anti-EU sentiment inside the punished country. So far, the Commission has dodged activating the new scheme, even in the face of a potential lawsuit from the European Parliament over failure to act. But the extraordinarily defiant nature of the Polish ruling can serve as the justification Brussels has been waiting for.

Using money as a bargaining chip has already yielded results in Poland: several regions revoked their declarations as “LGBT-free zones” after the Commission threatened to withhold as much as €126 million in EU funds. The executive had previously opened an infringement procedure into the matter.

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The Commission can pile further pressure on Warsaw with its €750-billion recovery fund.

As part of its national plan, the Polish government has requested €23 billion in grants and €34 billion in cheap loans from the EU’s package. The executive continues to assess the Polish plan and has repeatedly extended the deadline to publish its review, which then has to be sent to the EU Council for approval before cash payouts begin.

Although a Commission spokesperson said on Friday the assessment will go on despite the new developments, Brussels is unlikely to greenlight the Polish plan as long as EU primacy inside the country is not guaranteed.

The constitutional court’s ruling will not enter into effect until it’s published in the official journal, a decision left to the discretion of the government itself. If Brussels manages to brandish its financial power to convince Warsaw to backtrack, the most damaging consequences might be averted.

With Article 7 activated but stalled and infringement procedures severely weakened, money seems to be the Commission’s last resort.

“This will be one of the defining moments of the presidency of Ursula von der Leyen because this goes so much to the heart of the European Union,” Daniel Freund, a German MEP who seats with the Greens and is a frequent critic of the Polish government, told Euronews.

“The question now is: will she protect the integrity of the European Union or of European Union law? Because when one member states says, ‘well, we pick and choose which EU law we want to apply,’ well, then the union is falling apart.”

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