What started out a year ago as a dispute over a post-election transition of power has turned into a crisis in Poland, the European Union’s largest eastern economy. At risk is the democratic order that Poland has built up in the 27 years since ditching communism.
1. What’s the crisis?
There’s a standoff around the Constitutional Tribunal, the country’s highest judicial panel, which can strike down laws. Politicians from the ruling Law & Justice party have called its judges “cronies” defending the nation’s elites. Lawmakers have passed no less than six new laws to “fix” the Tribunal in the past year, while the government has refused to publish, and hence make binding, rulings that rejected the laws parliament passed as unconstitutional. The EU’s executive arm has taken unprecedented steps to push Poland to adhere to the block’s democratic standards, but has taken no action.
2. What triggered the standoff?
Before general elections in October 2015, the former ruling majority picked five judges for the Tribunal, who weren’t sworn in by President Andrzej Duda, a former Law & Justice lawmaker. The Tribunal then declared the previous parliament had overreached its mandate, which was to fill three of the vacancies and leave two for the new parliament. Law & Justice ignored the ruling, annulled the choice of all five judges, quickly picked new ones and had Duda swear them in at the Presidential Palace in a ceremony that took place after midnight.
3. How did the Tribunal respond?
It ruled three of the justices were illegally appointed and refused to let them take part in proceedings. Law & Justice then passed an overhaul of how the tribunal works, making it more difficult for justices to strike down laws. One measure, for example, would require the court to hear cases in the order in which they were submitted, meaning the court might not be able to review legislation until years after it’s passed. This was deemed unconstitutional by the court, but the government refused to publish the ruling, creating a legal limbo.
4. Where is this heading?
As the nine-year term of the Tribunal’s chief justice, Andrzej Rzeplinski, is ending on Dec. 19, Law & Justice is preparing to finally grab control over the highest court. When the Tribunal was set to pick Rzeplinski’s successor this month, justices picked by the ruling party all took sick days, preventing a quorum needed to make such a decision. In the meantime, lawmakers passed a law that allows the president and prime minister to pick an interim chief for the panel in case the existing justices can’t pick their own boss.
5. How have investors reacted?
Once a refuge for foreign-exchange traders to wait out emerging-market turmoil, Poland’s zloty is a haven no more. It has weakened more against the dollar and euro this year than all emerging European peers after the Turkish lira. Since Law & Justice won elections, Warsaw’s WIG20 stock index has declined 9 percent, underperforming more than 80 percent of global equity indexes in the period. The yield on the country’s benchmark 10-year local currency bond stands around 3.5 percent, about 90 basis points higher than before the elections.
6. How is this affecting business?
Businesses have reduced investment, partly because of increasing political uncertainty. Fixed gross capital formation, a component of gross domestic product that measures net investment, dropped 7.7 percent in the third quarter from a year earlier, the biggest descent since 2010. Economic growth slowed to a three-year low of 2.5 percent, although remains strong compared to Poland’s EU partners.
7. How is the world reacting?
Former U.S. President Bill Clinton said Poland is embracing a model touted by Russian President Vladimir Putin, while President Barack Obama said the Polish government must do more to uphold democratic values. The European Commission has gradually turned up the pressure, so far without threatening to force a vote among the other 27 EU members over whether Poland should be stripped of its voting rights. (Hungary has said it would back Poland in any such ballot, which requires unanimous support.) The Polish government has accused Brussels of interfering in domestic affairs, a claim rejected by Frans Timmermans, the EU Commission’s first vice president. “This is not a political question,” Timmermans wrote in daily Rzeczpospolita. “The European Commission fully respects the right of the Polish government to implement its political program. That is how democracy works. However, the ballot can never be used to override respect for the rule of law.”
The Reference Shelf
- A QuickTake explainer on Poland’s populist turn.
- Jaroslaw Kaczynski, leader of the ruling party, says he’s not curbing freedoms.
- Poland’s leaders heard praise, not criticism, from Obama.
- A look at the squabbling between Poland and the EU.