How will Poland’s ‘rule of law’ dispute with Brussels play out in national politics?

Poland’s ‘rule of law’ dispute with the European Commission is becoming increasingly entangled in the country’s domestic politics. How this plays out will depend on whether Poles hold the government responsible for the threat of EU sanctions and reduced fiscal transfers, or believe the opposition is putting the national interest at risk in order to gain political advantage.

Linking the ‘rule of law’ and EU funds

Last month, Grzegorz Schetyna – leader of liberal-centrist Civic Platform (PO), Poland’s governing party between 2007-15 and currently the main opposition grouping – claimed that the Commission would ‘freeze’ EU funds due Poland in the Union’s 2021-27 budget because of the failure of the current government – led, since autumn 2015, by the right-wing Law and Justice (PiS) party – to respect the ‘rule of law’. These funds would be ‘unfrozen’ if Civic Platform won the next parliamentary election, scheduled for autumn 2019. Poland is currently the largest beneficiary of EU fiscal transfers, which many commentators see as crucial to the country’s economic modernisation.

Mr Schetyna was referring to the fact that, in its May proposal for the next EU budget, the Commission outlined plans to link the distribution of so-called ‘cohesion spending’, used predominantly to fund public investment in less well-off states like Poland, to ‘rule of law’ adherence. Under the new instrument, the Commission could suspend, reduce or restrict access to EU funding if it felt that there were ‘generalised deficiencies’ in the investigation and prosecution of fraud or corruption, or an individual member state’s judicial system undermined the determination of court cases, relating to the management of EU funds. The decision to suspend funds could only be over-turned by a qualified majority in the EU Council, giving the Commission much greater leeway in determining whether there should be sanctions against member states.

The Commission proposed this new regulation in part because of its ‘rule of law’ dispute with the Law and Justice government which has been ongoing since January 2016. At the end of last year, in a major escalation of the conflict the Commission initiated an action against Poland under Article 7 of the European treaties for what it considered ‘systemic threats’ to the independence of the country’s courts, threatening Warsaw with sanctions, including possibly suspending its European Council voting rights. The Commission’s original concerns stemmed from a dispute over appointments to, and the functioning of, Poland’s constitutional tribunal, but in July 2017 were widened to include the Law and Justice government’s controversial judicial reform programme. The Commission agreed with criticisms articulated by Poland’s legal establishment and most opposition parties that the reforms allowed the ruling party to pack the courts and judicial bodies with its own nominees, which meant that the constitutionality of legislation could no longer be guaranteed.

The government’s supporters argued that the reforms were in in line with the Constitution and sorely needed because Polish courts were too slow, deeply inefficient and tolerated frequent irregularities. Law and Justice believes that, following the country’s flawed transition to democracy in 1989, the judiciary, like many key Polish institutions, was expropriated by an extremely well-entrenched, and often deeply corrupt, post-communist elite, which then co-opted a new legal establishment that perpetuated its legacy. They also accused the Commission of bias and double standards, arguing that the reforms were in line with practices that existed in other established Western democracies, and said that Law and Justice had been singled out because it is out of favour with the socially liberal and multi-cultural policies supported by the EU political establishment, and has been robust and assertive in advancing the country’s national interests.

Seeking reconciliation with Brussels

However, earlier this year Law and Justice tried to seek reconciliation with Brussels. Last December, party leader Jarosław Kaczyński – who, although he does not hold any formal state positions, exercises a powerful behind-the-scenes influence in determining the government’s programmatic and strategic priorities – installed finance minister and respected former international banker Mateusz Morawiecki as the country’s new prime minister. Mr Morawiecki struck a more emollient tone than his combative predecessor Beata Szydło, who had a fraught relationship with the Commission, and it was hoped that he could ‘re-set’ Warsaw’s relations with the EU political establishment. Law and Justice was concerned that a lengthy and debilitating dispute with Brussels could alienate more moderate Poles, the vast majority of whom remain supportive of their country’s EU membership, and overshadow Polish-EU relations.

In addition to the new ‘rule of law’ regulation, the Commission has proposed both a sharp reduction in traditional EU spending areas such as cohesion funds and changing the criteria for their allocation so that, in addition to a region’s GDP per capita, they would include new indicators less advantageous to Poland. As a consequence, Poland is expected to lose 23% of its cohesion fund monies in the next EU budget. The Polish government argues that the current 2014-20 budget was always likely to be the last from which the country benefited so substantially given that British withdrawal from the Union would reduce the overall level of the funding available, and Poland’s GDP has been increasing steadily while new EU spending priorities have emerged. The government’s critics, on the other hand, say that the cuts reflect the fact that Law and Justice has found itself marginalised within the EU’s decision making structures and alienated the major European powers. Either way, Warsaw was hoping to defuse the ‘rule of law’ row so that it could focus on building an effective ‘friends of cohesion’ coalition in the forthcoming budget negotiations.

Consequently, the government tried to open up a dialogue with Brussels and amended some aspects of its judicial reforms. These modifications included: removing the justice minister’s ability to fire the heads of lower district and appeal courts without consultations with local judicial bodies and the National Judicial Council (KRS), a body which selects judges and decides how Polish courts are run; equalising the retirement ages for male and female judges; the President, rather than justice minister, determining which supreme court judges could continue in office when they reached retirement age; allowing the publication of three disputed 2016 constitutional tribunal rulings that had previously been blocked by the government; and restricting the number of bodies that could initiate the new ‘extraordinary appeals’ procedure that allows for the re-opening of ‘wrongly passed’ verdicts from the last 20 years.

No change to the core of the reforms

However, the government’s critics argued that these changes were largely cosmetic pointing out that, for example: the justice minister had already dismissed 150 of the 730 local chief judges; the majority of the National Judicial Council was still selected by parliament rather than the legal profession (albeit by a qualified three-fifths supermajority); and the three disputed constitutional tribunal rulings had been superseded by later legislation and were published with the caveat that the decisions had been taken unlawfully. Indeed, even though government supporters argued that the concessions represented a significant demonstration of Warsaw’s willingness to compromise, they left the core of the reforms – allowing elected bodies a greater say in the functioning of the courts and appointments of judges and their supervisory bodies to make the judiciary more accountable – intact.

Consequently, although the renewed dialogue initially improved relations between Warsaw and Brussels, the Commission felt that the Polish government’s concessions did not address its main concerns. The fate of the 27 (out of 72) supreme court justices who were obliged to stand down on July 3rd as a result of the reduction in their retirement age from 70 to 65 – including the court’s first president Małgorzata Gersdorf whose six-year term of office was, the government’s critics argued, stipulated in the Polish Constitution and is refusing to resign – still depended upon Law and Justice-backed President Andrzej Duda. Moreover, the ‘extraordinary review’ procedure could still be initiated by the justice minister (in his capacity as chief prosecutor) and, the Commission felt, threatened the stability of Poland’s legal system. For its part, Warsaw expressed doubts as to whether the Commission was acting in good faith and insisted that it could make no further concessions.

As a result, the Commission decided to push ahead with the Article 7 procedure and an initial formal hearing was held at the June EU General Affairs Council. However, to move to the next stage of the procedure, 22 of the Council’s remaining 27 members (Poland is excluded) will have to vote that the Polish reforms constitute a ‘clear risk of a serious breach of the rule of law’. Even then, a subsequent vote to trigger sanctions requires unanimity and the Hungarian government for one has made it clear that it will oppose any such moves. At the beginning of July, the Commission also decided to launch an infringement procedure against Poland before the European Court of Justice, arguing that the new early retirement provisions for supreme court judges threatened the judicial independence enshrined in the EU’s charter of fundamental rights, which could also carry heavy financial penalties for Warsaw. Frustration with the limits of the Article 7 process also helps to explain why Brussels is proposing the new regulation linking the disbursal of EU funds to ‘rule of law’ compliance.

A risky strategy?

While many Poles have misgivings about aspects of the government’s judicial reforms, they are also very dissatisfied with the way that Polish courts function and also find constitutional issues such as this rather abstract. Nonetheless, the liberal-centrist opposition sense that the proposed ‘rule of law’ regulation provides an opportunity to link these questions to the more salient issue of Polish access to EU funds. Last month, Civic Platform appeared to be testing this strategy in the run-up to the autumn local elections, suggesting that Law and Justice’s ‘rule of law’ dispute with Brussels could damage investments and modernisation projects in every locality. If this works then the link between the ‘rule of law’ and EU funds could become a major issue in both the summer 2019 European Parliament and autumn 2019 national elections. However, even those EU member states taking the Commission’s side against Poland in the ‘rule of law’ dispute may be reluctant to give Brussels such sweeping powers, and while the regulation could be approved by a simple majority Warsaw has suggested that it is prepared to veto the whole EU budget (which requires unanimous support) to block it if necessary.

Moreover, for Civic Platform’s strategy to work Poles need to perceive a very clear link between the ‘rule of law’ dispute and possible suspension or reduction of EU funds. But the new budget will not come into effect (and may not even have been agreed) before the 2019 elections. At the same time, although Poles are overwhelmingly pro-EU they are also wary about the Union’s institutions becoming involved in the country’s internal affairs and there is a risk that the opposition will become too associated with (and, therefore, end up getting the blame for) possible EU sanctions. A good example of this risk was a statement last month by Civic Platform’s Warsaw mayoral candidate Rafał Trzaskowski who went further than Mr Schetyna and suggested that his party had actually persuaded Brussels to freeze Poland’s EU funds rather than withdraw them altogether. Mr Trzaskowski thus implied (even if that was not necessarily his intention) that Civic Platform was exploiting its links with EU political elites, who share their dislike of Law and Justice, to conduct behind-the-scenes negotiations on how Poland’s EU funds should be withheld unless Mr Schetyna’s party wins the elections. By doing so, he left Civic Platform open to the charge that it was jeopardising the national interest to gain political advantage. How Poland’s ‘rule of law’ dispute with the EU political establishment plays out in domestic politics, therefore, depends critically on who frames the terms of the debate most successfully, and whom Poles blame for the threat of EU sanctions or reduced fiscal transfers.