Poland Moves Closer to EU Lawsuit Over Local-Court System

(Bloomberg) -- European Union regulators stepped up pressure on Poland to scale back legislation on the country’s court system in a bid to protect judicial independence. The zloty fell to a two-week low.

The European Commission, the EU’s regulatory arm, sent the Polish government a final warning over a law covering ordinary courts on the grounds it violates the bloc’s non-discrimination rules by fixing a retirement age of 60 for female judges and 65 for male judges. The commission has also expressed concerns about what it says is “discretionary” power handed to the Polish justice minister to prolong the mandate of judges who have reached retirement age and to dismiss and appoint court presidents.

Polish authorities have a month to make changes or face a possible lawsuit at the EU court in Luxembourg. The commission’s latest threat follows an initial warning sent in late July -- a day after the controversial rules were published in Poland -- and a subsequent reply by the Polish government.

“The commission has carried out a thorough analysis of the reply and found that at this stage the concerns originally raised have not been adequately addressed,” commission spokesman Margaritis Schinas told reporters on Tuesday in Strasbourg, France. “Poland now has a month to address these specific concerns and we’ll take it from there.”

The zloty declined to the lowest in two weeks. The Polish currency weakened as much 0.5 percent to 4.2682 per euro, before trading 0.38 percent lower at 5:40 p.m in Warsaw.

“We treat today’s weakening of the zloty in reaction to the news as excessive,” Piotr Kalisz, chief economist at Citigroup Inc’s Bank Handlowy SA, said in an emailed note.
“Probably market participants confused the (standard) infringement procedure with the much more important” EU investigation over the rule of law in Poland.

Democratic Standards

Both cases are part of a dispute over democratic standards in Poland under the ruling Law & Justice party. The separate commission probe into the rule of law -- the first of its kind in the EU -- could lead to a move to strip the Polish government of its voting rights in the 28-nation bloc.

“The commission, in line with treaties and EU rules, will do all it can to make Poland’s life harder,” Piotr Buras, head of the European Council on Foreign Relations Warsaw office, said by telephone. The EU executive “may use all means it has to show it has determination to act on Poland.”

Regarding Tuesday’s final warning in the narrower infringement case, Polish government spokesman Rafal Bochenek didn’t answer a call seeking comment. Katarzyna Sobiecka, a Foreign Ministry spokeswoman, said she couldn’t comment immediately.

--With assistance from Marek Strzelecki and Nikos Chrysoloras

To contact the reporter on this story: Jonathan Stearns in Strasbourg, France at jstearns2@bloomberg.net.

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Jones Hayden