Addressing the European Parliament last week, the European Commission president proclaimed a “unity of purpose that is truly remarkable” within the EU in the face of Russian aggression on the Ukrainian borders.
Yet even as Ursula von der Leyen spoke, a European court ruling was raising the stakes in a dangerous confrontation between her commission and one of its biggest member states that has the potential to undermine the EU’s agenda just as it seeks to present a united front to its adversaries.
The European Court of Justice on Wednesday said that a new regulation seeking to protect the EU budget from rule of law violations by member states was legally solid. The move paves the way for Brussels to start withholding funding from countries including Poland — where a contested judicial overhaul has morphed into a fundamental challenge to the bloc’s legal order.
For von der Leyen, who took over the commission just months before the Covid pandemic, the stand-off with Warsaw is proving to be one of the most treacherous issues she has been forced to address. Within the EU, she faces loud calls to take a hard line with Poland over what some believe to be an issue at the very core of the EU’s identity — the rule of law and judicial independence.
Yet like her mentor, former German chancellor Angela Merkel, the commission president’s instincts incline more to the search for compromise, as she seeks to damp down a damaging legal and political battle that some have warned could ultimately pave the way to Poland exiting the EU.
In recent days, there have been signs that Poland’s leaders are also now actively seeking to de-escalate the issue. Warsaw’s push for detente has been framed in part by the near and present danger in the east, where the Russian troop build-up on Ukraine’s border has put a premium on Western unity.
But Warsaw is also facing economic strains from rising energy prices and inflation, meaning it has become increasingly anxious to unlock Poland’s €36bn share of the EU’s Covid-19 recovery fund — a condition for which is judicial reform.
Senior officials in Brussels privately welcome the tentative signs of a thaw coming from at least parts of the Polish political establishment, and on Wednesday Poland’s de facto leader Jaroslaw Kaczynski, founder of the ruling party, said he was “optimistic” about resolving the dispute.
The nagging fear in the EU remains, however, that Poland will fail to muster the domestic political consensus needed to push through anything other than narrowly targeted reforms to aspects of its heavily contested judicial overhaul. Absent a significant breakthrough, the feud still risks spilling over and disrupting the broader legislative business of the EU.
“The rational step for Poland would be to wind down this rule of law conflict urgently — partly because of geopolitical reasons but also because they have so much money at stake,” says Petri Sarvamaa, a Finnish MEP from the centre-right EPP Group who helps lead its work on rule of law issues. “But they are still not doing enough.”
Once seen as the EU’s greatest economic and political success story following the union’s eastern expansion, Poland has in recent years become its most disruptive member. At the core of its fractious battles with Brussels lies a project led by the conservative-nationalist Law and Justice Party (PiS) that has progressively subjugated the judiciary to the executive.
This has involved efforts to neuter its constitutional court and the creation of a disciplinary chamber with the ability to punish judges for the content of their rulings, which critics say amounts to a tool for politicians to bend judges to their will.
Brussels has responded with a series of infringement actions against Poland as well as a 2017 decision to open so-called Article 7 proceedings — the provision of the EU treaty that protects the bloc’s values against rule of law violations.
Last year relations between Warsaw and Brussels slumped to their lowest ebb since Poland’s accession in 2004. The country’s bid in May for a share of the €800bn NextGenerationEU recovery fund became snarled in Brussels, as the Polish government resisted calls for reforms to abolish the disciplinary chamber as part of the conditions attached to the plan.
Then Brussels in September demanded the imposition of daily penalties on Poland for its failure to comply with court-ordered interim measures related to the disciplinary chamber.
The decision, spearheaded by justice commissioner Didier Reynders and EU vice-president for values Vera Jourova, provoked deep anger within PiS, given that Poland had made a pledge during the summer to reform the chamber. “It destroyed the atmosphere,” recalled one senior Polish official.
The depth of the bad blood towards the commission was laid bare during a November trip by Reynders to Warsaw, when Ziobro publicly presented him with pictures of a ruined Warsaw in the aftermath of the second world war.
Reynders later told the FT that Ziobro had explained this was what Germany had done to his country. “My answer,” the commissioner said, was that since then “we have enlarged the European Union and we are now living in peace and democracy.” This, he added, involved “full respect for fundamental rights and the rule of law.”
Reynders made it clear that he intended to continue applying unrelenting pressure on Poland to reform its judiciary and abide by European court judgments — including via the unprecedented step of deducting unpaid fines from EU budget payments.
The framed photograph was still sitting on the floor of Reynders’s office when the FT visited last month, and the commissioner indicated he had no intention of mounting it on his wall, saying he preferred the portrait of Nelson Mandela that dominates his office.
The search for compromise
Finding a response to this rancorous stand-off has proven one of the most internally divisive topics faced by von der Leyen, and her internal critics say she has struggled to forge a coherent strategy. Her inclination has been to seek political space for compromise with Poland, rather than adopt the more confrontational posture that some commissioners have advocated.
Germany’s CDU, from which both von der Leyen and Merkel hail, has trod a relatively emollient line on rule of law disputes in the union — an approach mirrored in Merkel’s handling of illiberal Hungarian prime minister Viktor Orban. German relations with Poland have always been particularly sensitive, given their fraught history.
While some senior commission officials pushed last autumn for the president to unleash the new conditionality mechanism against both Poland and Hungary, allowing EU funding to be interrupted because of rule of law violations, von der Leyen held back.
Instead, she opted in November to dispatch an informal letter of inquiry to Poland and Hungary airing concerns about rule of law standards, triggering acute frustration in the European Parliament, which is still calling loudly and persistently for the commission to act. “Deep down, I don’t think von der Leyen wants to use [the mechanism],” says one EU official.
To Brussels’ dismay, Poland’s constitutional tribunal declared in October that key elements of the union’s law were incompatible with its constitution, triggering fears that Poland’s Eurosceptic rightwing was setting the country on a path that could one day lead to exit from the EU.
Nevertheless, at the urging of Merkel, von der Leyen continued to seek a political solution to the stand-off, working to find a way to strike a deal with Prime Minister Mateusz Morawiecki over the recovery fund.
When von der Leyen privately tested the appetite among senior commissioners for a deal on the recovery plan in late November, however, they warned that there was no evidence that the Polish government was fully committed to seeing through the judicial reforms necessary to unlock the funding.
Hopes for a deal fizzled, to von der Leyen’s deep disappointment. “They genuinely believed it was feasible last year. The problem was Morawiecki’s lack of authority,” recalls an EU official.
That dismay was mirrored in Warsaw, where Morawiecki, says the Polish official, felt he received too little support from the commission president. “He has a feeling that he paid a lot, and she doesn’t pay anything, but still expects we will find a solution,” the official said, adding that von der Leyen failed to appreciate how difficult the dynamics were within the Polish coalition government. “The situation has deteriorated week after week, and frankly we have lost control.”
A new overture
It was against this inauspicious backdrop that the mood in Warsaw appeared to abruptly change a few weeks ago.
Polish president Andrzej Duda put forward a bill to scrap the disciplinary chamber for judges. Duda, an ally of PiS, pitched the overture as an effort to help the government unblock the billions of euros of recovery funding currently being withheld by Brussels. But amid mounting tensions in Ukraine, he also argued that Poland needed to improve relations with its allies.
“I am deciding to do this to give the government a tool to end the fight, because a fight with the European Commission is not what Poland needs at the moment,” he said. Government officials echo his arguments.
“The most important thing in foreign policy is to preserve the security of our community and our own countries . . . This discussion with the European institutions is a kind of family dispute,” said Marcin Przydacz, Poland’s deputy foreign minister. “The reform needs to be continued. The previous one was not perfect. Second, we need to concentrate on security issues. And third, we need to have better relations with the European institutions.”
Rather than simply backing Duda’s proposals, PiS MPs a few days later put forward changes of their own, which they claimed addressed EU concerns about the chamber’s independence. These include moving the power to discipline judges to newly formed randomly selected panels of Supreme Court judges.
The bill also provides for judges disciplined for the content of their rulings to be reinstated except in cases where rulings were the result of “serious and totally inexcusable forms of conduct on the part of the judge”.
In Brussels the offers by Duda and the PiS were greeted as the most promising proposals from Poland in many months, with one official spying “a little bit of light at the end of the tunnel”.
The fact that Poland had finally put down concrete and detailed proposals was enough for officials from both sides to re-engage in technical talks last week, after they were previously halted.
Yet neither of the offers addresses the full suite of conditions the commission wishes to see Poland fulfil in order to access the recovery fund, much less the EU’s broader concerns about other changes — such as to the National Council of the Judiciary — that have given politicians greater influence over the judiciary. And whether either bill has any chance of becoming law depends on Poland’s fractious politics.
PiS’s hardline junior coalition partner, United Poland, led by Zbigniew Ziobro, seems unlikely to back either proposal, neither of which was discussed with it before being presented.
In a sign of the mutinous mood in United Poland, one MEP, Patryk Jaki, published a YouTube video questioning whether Duda’s move amounted to “betrayal” and admitting that he was now “ashamed” to have voted for him.
United Poland has also made little secret of its reservations about PiS’s proposals. In a statement, it said that it was analysing whether they amounted “to the realisation of the illegal demands of EU institutions”.
Many in Warsaw remain sceptical that Brussels will ultimately budge when it comes to the blocked recovery fund. Some believe Poland could remove the EU’s leverage by withdrawing from bidding for the recovery fund altogether, saying it would now struggle to spend the money before the deadlines set by the EU.
Yet officials in Brussels still think Poland is sufficiently desperate for the recovery fund cash that it will forge a compromise. “It’s really hurting the [Polish] government that they’re not getting this money from the EU,” argues one official.
The hurdles to a deal are in some ways lower now than they were last year. If Poland had landed on a deal last year it would have unlocked a big wedge of recovery fund pre-financing that was not subject to any of the rule of law conditions the commission was insisting upon.
With the arrival of 2022, however, pre-financing is no longer available. That means that the commission could strike a symbolically positive deal on the Polish recovery fund and still withhold any actual payments until Warsaw proves it can deliver on its rule of law pledges.
Meanwhile, many diplomats suspect the commission will continue to hold back from deploying the rule of law conditionality mechanism against Poland in the short term, preferring instead to bring its first ever case under the new law against Hungary as soon as next month.
That is partly because the grounds for proceeding against Hungary are easier to establish given the longstanding corruption allegations against the country, and the commission is anxious not to flub its first-ever use of the mechanism and find its case rejected in the court.
Despite the whiff of detente in the air, many EU officials remain deeply sceptical that Poland’s political establishment is ready to embrace serious judicial reforms.
The far-reaching nature of the EU’s concerns is set to be aired once again this coming week in the council of ministers, where the longstanding Article 7 proceedings against Poland will once again be litigated.
What Poland proposed “does not seem to fully meet the demands of the ECJ, even if it is an important step forward,” warns one EU diplomat.
In a sign of their continued determination to fight back against the EU’s demands, Ziobro and his allies have been pushing for the Polish government to veto EU measures which require unanimity, including a plan to send a part of the funds from the EU’s emissions trading scheme directly to the EU’s budget.
Ziobro also told the FT last year that he would urge the government to suspend payments to the EU’s common budget if the EU “escalated” the stand-off with Poland — although that threat was widely dismissed in Brussels given Poland is such a big beneficiary of EU cash.
Without support from United Poland, PiS would need to rely on the support of MPs from opposition parties to force a judicial reform bill through parliament. But passing a bill on the judiciary over the protests of Ziobro’s party would raise questions about the future of the coalition.
It is for this reason that some EU officials see the current thaw between Brussels and Poland as being only a limited reprieve, rather than the basis for a properly worked-through strategy to bury the deeper differences between the two sides.
“The Polish government had ample time during the Article 7 procedure and following the ECJ cases to bring their laws in line with their EU commitments, but they didn’t,” said the EU diplomat. “So why might Warsaw want to move now? They want the EU money, and the situation in Ukraine gives them some political cover.”
Additional reporting by Henry Foy in Brussels