“The ruling of the Polish Constitutional Court, affirming the superiority of national law over EU law, creates significant risks to growth and governance. It is incompatible with EU membership,” said a report published on October 15.

“Governance is a risk factor for Poland’s membership in the EU, which requires member states to recognize the primacy of EU law. It is not clear how and when the current situation will be resolved, much will depend on the development of the domestic political situation. The direction to leave the EU, then we will assessing the likelihood of such an event occurring and potentially taking negative rating action, including, but not limited to, downgrading the rating to negative or placing the rating on a watch list negative. and external financing and governance. Fitch immediately downgraded Great Britain after the June 2016 referendum on leaving the European Union.” – Added.

According to Fitch, if the Polish government complies with the ruling of the Constitutional Court, to which it is nominally bound, it will lead to increased uncertainty regarding the validity of international contracts, the business environment and the broader regulatory framework.

On the other hand, the agency notes, if the Polish government does not comply with the ruling of the Constitutional Court, national principles of the rule of law will be undermined.

Regardless of the final results of the Constitutional Court ruling, the agency believes that the ruling is negative for Poland’s economic growth prospects.

Fitch sees there is no chance for the European Commission to start disbursing money to Poland from the reconstruction fund this year, and any further delays in this regard could lead to a lower GDP growth forecast. A greater risk, according to the agency, is that payments from the EU’s regular budget to Poland will be suspended or blocked.

Fitch currently expects Poland’s GDP to grow by 4.5% in 2022 and 3.8% in 2023.

The further fate of Poland’s conflict with the EU depends, in Fitch’s view, on procedural dynamics at the EU level regarding linking EU money payments to compliance with the rule of law and on how Poland interprets and enforces unfavorable EU provisions. Court of Justice.

Another rating agency – Moody’s – previously assessed that the Constitutional Court ruling on October 7 deteriorates Poland’s relations with the European Union and is negative for Poland’s credit profile.

On October 7, the Constitutional Court, after examining the Prime Minister’s request, decided that European regulations, insofar as EU bodies operate outside the limits of powers granted by Poland, are incompatible with the Polish Constitution. The Constitutional Court also found unconstitutional the European clause authorizing national courts to override provisions of the Constitution or dismissal on the basis of repealed rules, as well as provisions of the Treaty on the European Union authorizing national courts to review the legality of appointing a judge. By the President of the Republic and decisions of the National Council of the Judiciary regarding the appointment of judges.

Prime Minister Mateusz Morawiecki will travel to Strasbourg on Monday, where on Tuesday he will take part in the European Parliament debate that began after the ruling of the Polish Constitutional Court on the priority of the constitution over EU law.

In a statement issued at the end of last week, the European Parliament’s press service said that the European Parliament will re-call the European Commission to quickly activate the conditionality mechanism of the EU budget, and initiate infringement proceedings against the government in Warsaw. “

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Among the three largest rating agencies, Moody’s has the highest credit rating for Poland – at the “A2” level. Poland’s rating according to Fitch and Standard & Poor’s is “A-“, a level lower than Moody’s. Prospects for all assessments are stable.

On October 29, Moody’s will end the fall round of Poland’s rating reviews by major agencies.

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