Battle of supreme courts: Poland vs ECJ

Dzień dobry and welcome to Europe Express.

Poland will get its days in court this week — with a trio of rulings in Warsaw and at the European Court of Justice in Luxembourg that could have far-reaching implications for the EU’s legal order. We will unpack what those rulings are about and how they fit into Poland’s clash with Brussels over its judicial system.

EU finance ministers are due to meet today to approve the first batch of 12 national recovery plans. Not among them: the plan from Hungary, which is officially past the European Commission’s deadline for assessing it.

Economics commissioner Paolo Gentiloni said he hoped it would be a “matter of weeks” before the commission could sign off on Budapest’s plan, but it will depend on discussions over a number of issues, including the rule of law and public procurement.

We will also unpack US Treasury secretary Janet Yellen urging countries to spend more, not less, during her appearance at the eurogroup yesterday. Take that, euro-hawks.

And in the latest Slovenian faux-pas, I will explore how Prime Minister Janez Jansa managed to irk both Iran’s government and the EU foreign policy chief.

Week in court

Poland’s simmering conflict with the EU over the rule of law is set to heat up this week, with the country’s and the bloc’s top courts due to address a trio of cases with significant implications for the bloc’s legal order and Poland’s position in it, writes James Shotter in Warsaw.

The fight has been brewing since the conservative-nationalist Law and Justice party (PiS) swept into power in 2015 and embarked on an overhaul that gave politicians sweeping powers over the judiciary. The move drew — ultimately fruitless — disciplinary proceedings from Brussels, which regards the changes as a fundamental threat to judicial independence.

Here are the details of the three cases coming up over the next few days:

1. Today, Poland’s Constitutional Tribunal is set to consider whether provisions in EU law are compatible with Poland’s constitution

2. Tomorrow, the tribunal will address a separate case on whether the EU’s top court, the European Court of Justice, can force Poland to suspend elements of its judicial reform

3. On Thursday, the ECJ will rule on whether a new disciplinary regime for judges set up by Poland — which allows judges to be punished for a variety of reasons, including the content of their rulings — breaches the country’s EU treaty obligations

Polish officials have insisted that the judicial overhaul was necessary to shake up a lumbering system that has not been adequately reformed since the collapse of communism. The officials have also claimed that the cases before the Constitutional Tribunal are necessary because the EU has allegedly been expanding its powers without changing its treaties accordingly.

In Brussels, officials regard the cases in front of Poland’s top court — to which PiS has nominated allies, including a communist-era prosecutor — as a political attempt to undermine the bloc’s legal order.

Poland is not unique in challenging the ECJ.

Last month, the European Commission launched legal proceedings against Germany over a 2020 ruling by the country’s constitutional court, which argued that the ECJ had acted beyond its remit in a case relating to European Central Bank bond buying.

It is widely expected that the commission will launch infringement proceedings against Poland as well if its constitutional tribunal challenges the bloc’s legal order. Didier Reynders, EU justice commissioner, told the Financial Times last month that such a challenge posed a “real threat to the very architecture of our union”.

It is unclear how Warsaw would respond to such a situation. Over the past five years, the commission has challenged multiple aspects of Poland’s judicial overhaul. But despite the odd backward step, PiS has not fundamentally deviated from its course.

Chart du jour: Recovery mired in Delta

The rapid increase in coronavirus cases caused by the Delta variant is stoking concerns that Europe’s economic recovery is under threat, particularly in tourism-dependent southern countries. But the outlook has also darkened up north in the Netherlands, where the prime minister apologised yesterday for opening up too soon, given the sudden jump in infections.

Yellen lays down the law

Alongside pledges to rebuild the transatlantic alliance, Janet Yellen brought a few blunt messages on her first European tour as Treasury secretary, writes Sam Fleming in Brussels.

One was the need for the EU to shelve its controversial digital levy to avoid roiling global tax talks — and yesterday, the European Commission confirmed it would park the measure until autumn (after the FT broke the news on Sunday).

Another request was for EU holdouts to the global tax deal — Hungary, Ireland and Estonia — to join the consensus and sign up. It remains to be seen when and whether they will comply.

As she met euro area finance ministers on Monday, Yellen issued a further, pointed intervention, this time on budgetary policy.

While she praised the EU’s response to the fiscal crisis as “decisive and unprecedented”, Yellen also made it clear that she does not believe the bloc has gone far enough. 

Member states needed to “seriously consider additional fiscal measures” aimed at ensuring robust domestic and global recovery, she said.

The fiscal framework should support an economy of the future and not lead to procyclical economic outcomes

To a similar end, the EU will need to create a fiscal framework that has “sufficient flexibility” to allow countries to respond forcefully to future crises, while also permitting investment in sustainable infrastructure, research and other areas that can foster inclusive growth. 

Yellen’s intervention took her into some of the most sensitive policy questions on the EU economic agenda: has Europe done enough to bolster its growth prospects with its existing stimulus package, and how and when should the Stability and Growth Pact be reformed to improve future policymaking.

EU finance ministers had been planning to keep a lid on those debates for the time being — and at least until after German federal elections in September. Yellen, however, has shown no interest tiptoeing around the EU’s political calendar.

Jansa vs Iran

Slovenia’s prime minister Janez Jansa had a penchant for rocking the boat even before his country took over the rotating EU presidency, which he gave an awkward start in Ljubljana. 

But his demand for an investigation into the alleged role of newly elected Iranian president Ebrahim Raisi in the execution of thousands of political prisoners in 1988 has caused a diplomatic skirmish with Tehran over what Jansa’s role is and whether he really represents the EU position.

Ambassadors were called in for questioning, phone calls were made and Tehran said it was unacceptable for Jansa to level such “baseless accusations”.

The Slovenian premier has dug his heels. Yesterday, he posted to Twitter an allegation that his critics may somehow be linked to a domestic money-laundering scandal in violation of the Iran embargo in 2008-10.

Jansa’s initial comments were made on Saturday at an event in Berlin organised by the National Council of Resistance of Iran, an opposition group that was considered a terrorist group by the EU until 2009 and the US until 2012. (Iran still considers it a terrorist organisation.)

Former US secretary of state Mike Pompeo also spoke at that event and made similar comments to Jansa’s. 

EU foreign policy chief Josep Borrell said Iran’s foreign minister called him on Sunday to ask “whether the comments by the Slovenian PM represented the official EU position”.

“Most definitely not, no,” Borrell said, explaining that even though Slovenia holds the rotating presidency of the EU Council of Ministers, it is either himself or the president of the European Council, Charles Michel, who speaks on behalf of the EU on foreign policy matters.

“I don’t have anything to say regarding the opinions of the Slovenian PM. It’s his responsibility, but what he said does not reflect and he’s not representing the European Union,” said Borrell.

What to watch today

1. Poland’s Constitutional Tribunal rules on EU law provisions

2. EU finance ministers meet in Brussels to approve the first batch of national recovery plans

Notable, Quotable

This will be the first time we will have substantive programmes to address energy poverty

• Trading carbon: Brussels wants to allow industry to maintain free carbon credits for more than a decade and offer billions of euros of financial aid to poorer households in a bid to win support for its effort to dramatically reduce carbon emissions. The FT has the story.

• Must-vax: France will make vaccination against Covid-19 compulsory for all healthcare workers, President Emmanuel Macron announced yesterday. France has one of the most vaccine-sceptical populations in Europe, and only about 40 per cent of carers in old people’s homes are vaccinated.

• Zelensky in Berlin: Ukraine’s president Volodymyr Zelensky met Germany’s chancellor Angela Merkel yesterday, as well as her potential successor, Armin Laschet. Top of his agenda was an attempt to limit the scope of the Nord Stream 2 gas pipeline, which Zelensky said posed a direct threat to the EU’s energy security.

• Calling Damascus: Some smaller European countries, including Cyprus and Serbia, have started to tentatively reopen diplomatic channels with Syria. Greece has also re-engaged Damascus as a possible way to allow refugees to return to Syria.

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