The final countdown: the EU, Poland and the rule of law

Faced with financial and political pressures at home, Poland is inching closer to rule-of-law reforms.

After the European Union’s megadeal with Hungary and Poland’s proposed legislative reforms, all eyes are once again on Warsaw and its protracted conflict with Brussels over the rule of law. Things may finally be coming to a head, as the Polish government looks for ways to secure its share of Covid-19 recovery funds.

On November 30th, a well-known judge, Igor Tuleya, returned to work in the Warsaw district court. Two years ago, Tuleya became a symbol of opposition to governmental reforms limiting Polish judicial independence, after he was suspended for having issued a verdict in 2017 that was critical of the ruling Law and Justice party. The national prosecutor’s office—which is controlled by the party—accused Tuleya of having disclosed material about a case without the prosecutor’s consent. In November 2020, the unlawfully appointed disciplinary chamber lifted Tuleya’s immunity, suspended him from office and reduced his salary by 25 per cent.

For the past two years, Tuleya has been fighting for the restoration of judicial independence in Poland. During this time, multiple court decisions have confirmed that the system under which he was sentenced was unlawful and in breach of European standards. In July 2021, the European Court of Justice (ECJ) ruled that the whole disciplinary system for judges in Poland was ‘not compatible with EU law’. The ECJ also instructed the Polish government to suspend the operations of the disciplinary chamber and revoke its earlier unlawful decisions, including the one concerning Tuleya.

The government ignored all these rulings and in October 2021 the Polish Constitutional Court—which is also aligned with the Law and Justice party—ruled that ECJ verdicts regarding judicial independence must not be implemented in Poland. This was an outright declaration of war against the highest EU court, the primacy of EU law and the protection of the rule of law in the EU. In response, the ECJ imposed fines of €1 million per day on Poland for failing to suspend the operations of the disciplinary chamber. So far, Poland has been fined around €300 million, and the sum is rising.

U-turn signalled

In addition to these fines, Warsaw has been blocked from receiving its share—€36 billion—of the NextGenerationEU Covid-19 recovery fund until it addresses its rule-of-law issues. The return to office of unlawfully suspended judges, including Tuleya, is one of the preconditions of receiving this money. In July, the leader of the Law and Justice party, Jaroslaw Kaczynski, announced an ‘end of concessions’ in the battle with the EU, with his aides claiming that Brussels and Berlin were more dangerous for Poland than Russia was. Recently, however, he has signalled a U-turn.

The reasons for this are simple. The potential loss of the recovery funds would not only result in a lack of money for necessary investments but, more seriously, could lead to a potential collapse of Poland’s credibility on the financial markets. A continued blockade of the EU funds would send a powerful signal to the markets that Poland cannot be trusted.

The fate of Liz Truss’s government in the United Kingdom, brought to its knees by the financial markets following the announcements of its irresponsible tax policy, may have played a role in the Polish government’s U-turn by reminding Warsaw of the power of financial markets to punish brutally those taking reckless decisions. Although Poland’s economic prospects are not as dire as were those of the UK, in October inflation reached 18 per cent and the interest rates on Polish national bonds 9 per cent. The Law and Justice party cannot afford further economic deterioration, especially not with the Russian war on its doorstep, the resulting energy crisis and a parliamentary election looming in 2023.

Few options 

Faced with these financial and political pressures, the Law and Justice government is finding itself left with few options. Tuleya’s reinstatement was just the beginning. On December 13th, the Polish government proposed new reforms of the judicial system to meet the requirements for the release of the EU funds. The reforms would mean that Polish judges would not be punished for referring to ECJ jurisdiction or for refusing to adjudicate in panels with peers whose nominations violate the European standards of judicial independence.

This is the single most important step towards getting Poland’s politicised judicial system back on the right track. It will take time but, if these reforms are implemented, the system of intimidation of judges and prosecutors created by the powerful minister of justice and general prosecutor, Zbigniew Ziobro, would inevitably start to crumble.

Don’t be mistaken: if the new law proposed by the Law and Justice party is adopted, a system based on the rule of law will not be miraculously restored in Poland. The Constitutional Court, the National Judicial Council, public media and the prosecutor’s office—all key state institutions—will remain in the firm grip of the ruling party, which is in breach of the rule-of-law standards and the Polish constitution.

But the battle fought for years by civil society and the European Commission’s steadfastness have yielded results. The Polish government is giving in to the force of law, and in doing so sending a strong signal to populists across Europe. Law and Justice politicians complain that Brussels wants to topple the Polish government by insisting on the rule-of-law requirements, but it is the question of whether and how to follow the EU rules that is bringing the populist camp to the verge of collapse.

Authoritarian instincts

The legislative changes still have to pass through parliament. The Law and Justice party now seems desperate to enforce them even against the will of Ziobro and the members of his United Poland party (an anti-EU nationalist splinter from Law and Justice and its coalition partner in government), who are not interested in any compromise with Brussels and whose votes are indispensable for the government to retain its parliamentary majority.

At least some of the opposition parties will support the necessary changes, so chances are high that the EU funds will finally start flowing to Poland in the second quarter of 2023. But this is certainly not the end of the saga. The government’s defeat in its conflict with the EU could result in the collapse of the ruling majority, as United Poland may leave the coalition in protest.

It is still however entirely possible that Ziobro and Kaczynski will join forces again ahead of next year’s election. There is enough that binds them together: their authoritarian instincts as well as the interest to stay in power. It would be wrong to believe that the concessions made to release the EU funds are anything but tactical.

The commission and the EU member states need to remain watchful; according to the recovery fund’s regulations, the funds can be withheld again and even claimed back if the agreed reforms are reversed. The EU’s principled position, backed by its financial leverage, has proved successful—with both Poland and Hungary. But the EU must now turn this shaky step forward into an iron rule for the future. Otherwise, Tuleya’s symbolic return to the bench will be just a Pyrrhic victory.

This was first published by the European Council of Foreign Relations