Polish court reforms will unsettle investors, warns ratings agency

Polish judicial reforms – and resulting legal battles with the European Commission – could blight investor confidence and see a rise in corruption, it has been claimed.

Two days after Brussels launched a treaty infringement procedure against Poland, ratings agency Moody’s said legal and political uncertainties could put off potential investors but were unlikely to end in sanctions.

“Poland’s judicial reform severely threatens the independence of the judicial system and undermines the separation of power,” said Moody’s Investor Services in the report.

Major reforms of the judicial system by the national conservative Law and Justice government drew massive street protests in Warsaw and other Polish cities.

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President Andrzej Duda vetoed two bills, affecting supreme court judges and judicial appointments body, but ratified a third, allowing the justice minister to hire and fire judges in district and appeal courts.

Mr Duda has announced plans to present his own redrafted version of the bills he rejected but, given his close ties to the ruling party, Moody’s suggested the rewritten bills would be similar to the originals.

Bad emotions

After the European Commission announced on Saturday it was launching a rule-of-law procedure against Warsaw, Polish foreign minister Witold Waszczykowski described the move as a pessimistic signal for Warsaw-Brussels relations.

“This will ensure months of bad emotions and a negative atmosphere in the bilateral relationship,” he said. Unless “leading European politicians come to their senses”, he warned, the procedure could drag on for years.

Poland has one month to reply to the European Commission’s infringement procedure, a process that can end before the European courts. Last year the commission filed a separate infringement procedure over controversial reforms of the constitutional tribunal.

Deputy foreign minister Konrad Szymanski told Polish news agency PAP the infringement procedure was “unjustified“.

“It should be remembered that social policy and the organisation of the judiciary are the competence of member states,“ he said .

In addition to infringement procedure, the commission may take action under article seven of the European treaties which, in theory, could see Poland stripped of its voting rights at the European Council. However, this requires unanimity among other member states – unlikely given Hungary’s steady support for Poland.

Self-serving clique

Despite growing resistance, Poland’s government has vowed to continue its radical reform of a judiciary it has portrayed as an inefficient, self-serving clique without real democratic control. Critics see, behind talk of reform, efforts by Law and Justice to secure political control of courts and seal its hold on power.

The commission has accused Poland of gender discrimination for reforms that will see women judges retire at 60 and men at 65. It complained, too, that the judicial reforms contained only “vague criteria” on how judges should be fired or retained and handed unacceptable levels of influence to Polish justice minister Zbigniew Ziobro.

Mr Ziobro said EU resistance to the reforms was motivated by “influential groups and politicians ... in whose interests it would be for Poland to be a weak country, open to outside interference”.