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While the Covid-19 epidemic created serious financial for all state institutions, the local government authorities faced a budget squeeze of unprecedented degree. The fall in revenues due to decreased tax income caused by the recession was compounded by a series of tax reforms introduced over the last two years that shifted resources away from the local authorities without any compensation. Both the government’s previous initiatives in the educational sector (reforming the school system and increasing teachers’ salaries) and the new costs incurred due to epidemic meant that while the revenues keep decreasing, local authorities were burdened with additional costly responsibilities.  

Local governments are being financially haemorrhaged into submission

Even before the outbreak of the epidemic, local government officials had been warning that they were standing against the wall. The educational subsidy from the government was barely enough to cover the wage rises promised to teachers by the Law and Justice. In order to pay them, many mayors had to postpone other investments in their cities. They feared that this reality, which can be defined as “there will not be a new road because we have to pay the new, higher salaries or teachers' ' would cause anger among the inhabitants. In a number of cities, the authorities did not have enough money in the budget to cover own contribution necessary to receive EU subsidies given the condition of co-funding. In others, the budget gap was so large that they were no longer able to pay basic salaries for teachers.

All in all, the estimated total loss in local governments’ personal income tax revenue due to Covid-19 is in the range of PLN 5.3-6.9 bn , amounting to between 2.5 and 3 percent of their total revenue. According to the municipalities’ own data, ninety cities are on track to lose financial liquidity before the end of 2020. Meanwhile, new corporate tax regulations aimed at boosting investment will result in a decrease of local government resources by another PLN 2.7 bn per year. While these losses are supposed to be balanced out by an increase in other tax revenues, these will go directly to the central  budget. As a result, the bill in practice shifted resources from the local to the central government.

The governing camp did not involve the local authorities in designing its Covid-19 strategy, and did not consult them even on the stimulus packages that were meant to lessen the economic downturn. In July, the government proposed a special fund worth PLN 12 bn to support local governments suffering financially from the consequences pandemic. Half of the money is disbursed automatically and in proportion to the population of each locality. The remaining PLN 6bn was made available through a supposedly competitive grant procedure. In reality, virtually none of the large cities (all of which are governed by the opposition) received a single dime. Of the PLN 4.5 bn distributed until now, Warsaw, Kraków, Wrocław, Gdańsk, Łódź, Poznań and Lublin received nothing. The same holds for smaller cities, where there is a clear discrepancy in favour of those ruled by the Law and Justice party.

This year marked the thirtieth anniversary of the creation of the local government in Poland. For many political scientists and activists, its establishment and development over the last three decades is considered to be the highest accomplishment of the political transformation which took place in Poland after 1989. Now the government is ruthlessly executing a campaign aimed at bleeding them to dry in order to destroy the citizens’ trust that they have continued to build since the fall of communism. The recent state takeover of the regional media will only serve as a catalyst for the ruling camp’s further attempts to dismantle the local governments’ independence.

Judicial blitzkrieg continues to face obstacles from the Polish judges

The governing majority is also continuing its relentless attack on judicial independence, the dismantling of which has been the number one item on the Law and Justice’s agenda continuously since 2017. In January, the Polish Supreme Court issued a resolution which stated that all rulings made by the newly created Disciplinary Chamber of the Supreme Court are void and have no legal value due to the political character of the chamber. 

In the same resolution, the Supreme Court attempted to restore legal certainty in Poland by proclaiming that while verdicts issued by judges appointed by the new National Council of the Judiciary up until the date of its motion are binding, those issued after the Supreme Court’s resolution was announced can be legally questioned. Following the resolutions, judges selected by the new National Council of the Judiciary started postponing their cases. In response, the Deputy Minister of Justice Sebastian Kaleta threatened them with disciplinary sanctions.  

The governing camp made intense attempts to foreclose the ability of the Supreme Court to issue its binding resolution. The Ministry of Justice stated that the resolution has no legal effect, even though the law stipulates that it is binding for all judges and courts in the country. The President of Sejm Elżbieta Witek from PiS petitioned for an intervention by the Constitutional Tribunal to solve the alleged competency conflict between the Supreme Court and the legislative and executive branches of the government. 

In February, President Andrzej Duda signed the government-authored draconic bill which aims to stop Polish judges from questioning the legitimacy of the ruling camp’s overhaul of the judicial system. The bill was a response to a CJEU ruling from November 2019 which granted the judges the right to evaluate whether the current composition of the National Council of the Judiciary (NCJ), a professional body tasked with picking judges, meets the criteria for judicial independence enshrined in the EU legal order. 

There was little doubt concerning the direction that President Duda would take, as he has openly supported the bill amid vehement criticism voiced by leading legal academics, the Polish Senate, the Polish Ombudsman, the Venice Commission and the Vice President of the European Commission Vera Jourova. Following the announcement that the law will enter into force as a result of Duda’s signature, the spokesperson for the European Commission Christian Wigand informed the Polish Press Agency that the Commission is carefully analyzing the final version of the bill and will undertake necessary actions without hesitation if they prove necessary. 

The Polish Ombudsman Adam Bodner called the decision of President Duda „a massive step in the direction of judicial Polexit”, referencing the incompatibility of the new lew with the foundational principles of the EU law, including its supremacy over national legislation. 

In November, the Disciplinary Chamber suspended Igor Tuleya, a Warsaw judge persecuted by the ruling camp for his refusal to toe the party line. Tuleya’s last action before his suspension began consisted of sending a preliminary question to the Court of Justice of the EU concerning the legality of the decision of the Disciplinary Chamber that stripped him of his immunity.

The European Commission took legal steps by bringing a case against Poland over the disciplinary rules for judges and the activities of the Disciplinary Chamber to the Court of Justice of the EU. The Commission’s motion was joined by Belgium, Denmark, the Netherlands, Sweden and Finland. The CJEU ruling will be announced in mid-2021.

In recognition of the abuses taking place in the Ministry of Justice and the Prosecutor’s Office, the Norwegian government decided not cancel a programme that would provide nearly PLN 300 mln (EUR 70 mln) as part of the so-called Norway grants (provided by Norway to less wealthy EU countries in return for access to the EU single market) to support the Polish justice system. The Norwegian Ministry of Foreign Affairs issued a statement expressing concern over the status of the rule of law in Poland, and announced it will refrain from signing the agreement. Meanwhile, an appellate court in Germany refused to extradite a Polish citizen accused of fraud, citing concerns over the impartiality of Polish courts in the aftermath of the introduction of the so-called muzzling law disciplining judges.

When the Polish government went about dismantling the Polish justice system, it used its inefficiency and the broad public discontent associated with it as the justification for the sweeping changes. More than four years after the Law and Justice took over, the situation is, somehow predictably, much worse. According to the most recent data concerning the prosecutor’s office, which we have obtained at Gazeta Wyborcza, the number of outstanding, drawn-out cases is growing rapidly. 

The statistics are borderline shocking. Cases which have been handled by the prosecutor’s office for more than 6 but less than 12 months more than doubled, while cases taking between 1 and 5 years have quadrupled. Extremely drawn-out cases pose a threat to the right to fair trial for defendants and plaintiffs alike. Coupled with the reforms which put judges under inordinate political pressure, they contribute to the worsening state of the Polish judicial system and place it on the margins of the EU legal order.


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