Warsaw chafes as EU court imposes fine over judicial system

The EU’s top court slapped Poland with a record daily fine of €1m ($1.2m) in a fast-escalating feud over the rule of law that prompted accusations of “blackmail” from Warsaw.

The EU court of justice said on Wednesday that Poland should face the fines after failing to dismantle a controversial disciplinary system for judges, seen by critics as a way to oust those who do not back the populist Law and Justice Party. The zloty dropped to an almost three-week low against the euro after the announcement of the fines.

“This is the next stage of the operation to break Poland away from its influence on the system of our state, it is usurpation and blackmail,” Poland’s deputy justice minister Sebastian Kaleta said on Twitter. He said the court was “acting beyond its competences and is abusing the institution of financial fines and temporary measures”.

The European Commission requested the new penalties in September after Poland ignored the court’s July demands to “immediately suspend” the judicial discipline system. The new bills add to separate  €500,000 daily penalties for ignoring the tribunal’s call to shut down operations at a lignite mine near the Czech border.

Political trajectory

The move towards fines is part of a series of escalating legal disputes that have rekindled a debate about Poland’s long-term political trajectory, delaying €36bn in stimulus funds requested by Warsaw.

Poland has so far failed to pay the daily fine in the Czech EU court dispute over the Turow mine, leading the commission to send a letter to the government for information about its plan to shut down the mine and saying the EU would otherwise cover the fine owed — including interest — by offsetting it against future payments from the bloc’s budget. 

Poland’s nationalist government this month cemented into law a ruling that challenges the EU legal order by saying Polish law can override it. 

The fines come as Poland and Hungary pursue EU court challenges against a conditionality mechanism established in January that allows the EU to withhold budget distributions to member states and which the two nations argue was adopted in violation of the bloc’s treaties.

The Luxembourg-based EU court’s July 14 order for Poland to halt the disciplinary regime was followed a day later by a binding ruling from the same tribunal telling the nation that the mechanism “could be used in order to exert political control over judicial decisions or to exert pressure on judges with a view to influencing their decisions”.

Bloomberg News. More stories like this are available on bloomberg.com