The Fiscal Compact (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) was signed on March 2, 2012. Negotiations on this Treaty began between 26 member states of the EU (all but the UK) after the 8/9 December 2011 European Council. 25 contracting parties eventually decided to sign the Treaty (not the Czech Republic).
After ratification by the twelfth Eurozone member state (Finland) in December 2012, the Fiscal Compact entered into force on 1 January 2013. For several contracting parties the ratification is still on-going.
What political/legal difficulties did Poland encounter in the negotiation of the Fiscal Compact, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process.
On 3 February 2012, the Sejm’s European Affairs Committee (EAC) discussed some aspects of the Fiscal Compact negotiation process. The EU Commissioner, Janusz Lewandowski, who attended the meeting, underlined that Poland wanted introduction of Art. 12 par. 3 of the Fiscal Compact.
On 16 February 2012, during the next meeting of the Sejm EAC and Public Finances Commission, the representative of the Ministry of Foreign Affairs Mikołaj Dowgielewicz pointed at the aim achieved by Poland, namely the possibility to participate in the Eurozone meetings (except for the ones on purely internal Eurozone issues).
Similarly, on 31 January 2012, during the joint meeting of the Senat Budget and Public Finances Committee and the EU Affairs Committee, the Undersecretary of the Ministry of Foreign Affairs, Maciej Szpunar, underlined the importance of Art. 12 (3) in the negotiations. Szpunar highlighted also, that one of Polish aims was the openness of the Fiscal Compact (Art. 15 Fiscal Compact), to avoid that a Member State that does not join the Fiscal Compact would need the acceptance of all the Contracting Parties to join if decided to join in the future. Another aim of the Polish government during the negotiations was to narrowly draft the competences of EU institutions under the Fiscal Compact and give the Fiscal Compact a temporary validity, hence the ‘sunset clause’ – as it was described by Maciej Szpunar – in Art. 16 of the Fiscal Compact. Moreover, Poland’s aim during the negotiations was not to create through the Fiscal Compact new institutions, parallel to the EU on the basis of Art. 12 of the Fiscal Compact, in which, according to the Ministry of Foreign Affairs, Poland succeeded. Also Poland’s negotiations aim was to safeguard the primacy of EU law over the Fiscal Compact (Art. 2 of FC), which was also achieved.
How has the Fiscal Compact been ratified in Poland and on what legal basis/argumentation?
The Polish Constitution foresees three types of international agreements demanding ratification.(Cf. question V.2).
The ratification on the basis of Art. 90 was applied earlier only to the Accession Treaty (national referendum) and the Lisbon Treaty (2/3 majority in both chambers), yet in general Art. 90 PC is not limited to European Treaties (see question V.2). The government qualified the Fiscal Compact as ‘an international treaty closed between some of the EU Member States, outside of EU’s framework’ and as ‘supplementing EU Treaties, especially TFEU and Protocol No.12. as well as the Stability and Growth Pact.’
In the case of the Fiscal Compact, the opposition MPs and Senators (PiS and SP) argued for a higher, 2/3 majority vote, yet Art. 90 PC was not applied as a legal basis in the ratification of the Fiscal Compact (Cf. Answer to Question IX.3). In its draft Ratification Act the government proposed Art. 89 (1) PC as a legal basis for the ratification of the Fiscal Compact. (See for comparison also question V.2).
The outcome of the voting procedure was the following. On 20 February 2013 the lower chamber, the Sejm, approved the Ratification Act. Out of 438 MPs attending, 282 voted in favour (governing majority PO and PSL and left-wing opposition SLD and RP, as well as 2 indep.) and 155 against (conservative opposition PiS and SP, 1 independent) and 1 abstained (PSL). Next, on 21 February 2013, the Senat did not introduce any amendments and approved the Ratification Act. Out of 83 senators attending, 57 voted in favour, 26 against. Finally, on 24 July 2013, the President signed the Ratification Act. The consequence of this late ratification was that the Constitutional Court decided to discontinue the proceedings with regard to the constitutional review of the TSCG on formal grounds, namely because the request for constitutional review by the MPs was lodged before the Ratification Act became a binding law. (Cf. question IX.9).
What political/legal difficulties did Poland encounter during the ratification of the Fiscal Compact?
On 19 December 2012, the Sejm EU Affairs Committee, Public Finances Committee and Foreign Affairs Committee discussed the government’s project for the Ratification Act for the first time. The Secretary of State in the Ministry of Foreign Affairs, Maciej Szpunar, underlined that by ratifying of the Fiscal Compact Poland will benefit from participation in the Euro Summits (Art. 12 of Fiscal Compact) and that the Polish parliament will participate in the cooperation with other parliaments. Replying to the arguments that the Fiscal Compact limits sovereignty of Poland, the Undersecretary of State pointed out that, in the context of the Fiscal Compact, sovereignty means for Poland having an impact on the institutional, social and economic architecture of the EU. Therefore, the TSCG was seen by the Government as opportunity for Poland. Szpunar also highlighted that Art. 89 par 1 pt 3 PC is the right legal base for ratification of the Fiscal Compact, as there is no transfer of competence to the EU or any other institution. The Fiscal Compact, in the view of Szpunar, does not imply that Poland automatically joins the Eurozone.
The opposition MPs were critical about the Fiscal Compact. They prepared a motion for rejection of the Ratification Act, which was rejected by the majority of the members of the Committees. In the view of MP Krzysztof Szczerski (PiS), the Fiscal Compact divides the EU Member States; destroys the unity of EU law (is outside of EU law regime, but uses EU institutions); the Euro Summits do not give Poland the same voice in debates as in the ECOFIN Council; the Fiscal Compact and its ratification process are contrary to the Polish Constitution. Also MP Anna Fotyga (PiS) underlined the long period between signing the Fiscal Compact by the Prime Minister and the launching of the ratification procedure, which according to the MP is connected to the attempt to gain benefits in the Multiannual Financial Framework negotiated at that point, by putting forward the Poland will ratify the Fiscal Compact. Further, according to MP Krystyna Pawłowicz, the excessive deficit procedure in the Fiscal Compact impacts on competence of Polish state organs, especially of the Sejm and Senat and Council of Ministers: the EU institutions supervise them within that procedure, which also violates Art.216 and 219 PC (Sejm and Senat’s competences), Art. 221 PC (Council of Ministers’ competence). Moreover, MP Henryk Kowalczyk underlined the problems with the Balanced Budget Rule and its sanctions as causing some asymmetries. Namely, the penalties imposed on Poland would be paid to the Commission, whereas the penalties of the Eurozone Member States to the Fund, from which Poland will not benefit. Additionally, the MPs underlined the vast integration of the Commission in the budgetary procedure, having impact on the admissible amount public debt. Some opposition MPs underlined also problems with the budgetary and economic partnership programme (Fiscal Compact Art.5) with regard to the endorsement by the Commission and the Council of such programmes that limit the independent undertakings of Poland. Furthermore, the opposition maintained that Art.8 of the Fiscal Compact creates a possibility that Poland may be taken before the ECJ by another Member State.
On the contrary, the governing majority MPs maintained that the Fiscal Compact does not violate the Constitution and most of the fiscal constrains exists already in the Six Pack. Finally, the representative of the Ministry of Foreign Affairs underlined again that the Fiscal Compact does not transfer any competences.
Also in an earlier plenary debate on EU Affairs in the Sejm, the Prime Minister encouraged the chamber to approve the Fiscal Compact. At this point the PiS opposition criticised the Fiscal Compact, as a part of the “pseudodemocratic European federation”. The left-wing opposition supported the Fiscal Compact. The right-wing Solidarna Polska expressed its view against the Fiscal Compact, however proposed to the prime minister that it could be ratified at a later time as anyway the Fiscal Compact can enter into force without Poland. To that question the Minister of Foreign Affairs replied that an earlier ratification would improve Poland’s position.
The central debate (19 February 2013) in the Sejm on the ratification of the Fiscal Compact was connected to the discussion of the negotiations of Financial Frameworks 2014-2020 (EU budget). The Prime Minister, Donald Tusk, encouraged the chamber to ratify the Fiscal Compact. The MP Rapporteur (from the governing party PO) first summarised the joint meeting of the committees: the main issues in the discussions the reasons for the ratification, the procedure of ratification, the opposition’s arguments on obligations for Poland caused by the ratification, the limitation of national competences, the introduction of Euro “through the back door” and creation of “Europe of two speeds”. However, the MP Rapporteur underlined that the Fiscal Compact does not put any obligations on Poland and that no competences are transferred. Moreover, in the view of the MP Rapporteur, the Fiscal Compact does not oblige Poland to introduce Euro. Moreover, other governing majority MPs underlined that the Fiscal Compact does not violate the sovereignty of Poland, because as long as Poland can decide to approve or not an international treaty, its sovereignty persists.
The right-wing opposition underlined the importance of “the primacy of EU law and EU institutions and EU budget and solidarity” over the “egoistic” Eurozone law, its institutions and budget and internal competition. In the view of the opposition party Solidarna Polska, “the freedom to shape the budget is one of the fundamental elements of state sovereignty”. Again, the PiS opposition underlined that the Fiscal Compact transfers budgetary competences, which is a limitation of Poland’s sovereignty.
The left-wing SLD supported the ratification of the Fiscal Compact, as a “necessary step for further integration”. Yet, the SLD underlined that the government should declare that it would not join the full treaty on the base of Art. 14 par. 5 of the Fiscal Compact before Poland joins the Eurozone, because in such a case, the penalties included in Art. 8 would apply to Poland. Similarly, the Ruch Palikota expressed support for the Fiscal Compact, which “is in Poland’s interest”.
The representative of the Ministry of Foreign Affairs underlined again that Art.119 and 221 of PC are not violated as they do not imply that other institution will approve Poland’s budget, even after joining the Eurozone and being fully bound by the Fiscal Compact.
On 20 February 2013, the Sejm debated the Ratification Act for the Fiscal Compact before the vote. The opposition MP, Tadeusz Iwiński (SLD), asked the representative of the Ministry of Foreign Affairs again with regard to Art. 14 of the Fiscal Compact, to ensure that until joining the Eurozone, Poland will not declare binding Poland with the whole Fiscal Pact. The Under-Secretary of State in the Ministry of Foreign Affairs confirmed that the government has no intention to be bound by the rest of the Fiscal Compact earlier than when joining the Eurozone. The opposition MPs argued that the Fiscal Compact is part of the federalisation of Europe and that the Fiscal Compact transfers the budgetary competences to EU institutions and to the Contracting Parties of the Fiscal Compact. The Undersecretary of State in the Ministry of Foreign Affairs negated any transfer of competences and confirmed that the correct ratification base is Art. 89 par. 1 PC.
On 31 January 2012, the Senators discussed the Fiscal Compact at the joint Budget and Public Finances Committee and the EU Affairs Committee. The Senators asked questions concerning Art. 13 of the Fiscal Compact (whether the Polish parliament will also participate) and whether signing the Fiscal Compact will oblige Poland to contribute to the ESM. They were also concerned about the obligations and rights of Poland under the Fiscal Compact.
The actual discussion on the ratification of the Fiscal Pact took place first at the joint meeting of the Budget and Public Finances Committee, Foreign Affairs Committee and EU Affairs Committee on 21 February 2013. Also here, with regard to Art. 14 par. 5 of the Fiscal Compact, the representative of the Ministry of Foreign Affairs underlined that declaring accession to Title III and IV of the Pact, as a change of the international agreement will need a separate ratification act in the future. The Committees positively opined the Ratification Act.
During the Senat plenary debate on the Fiscal Compact Ratification Act the Senator Rapporteur stated that the Fiscal Compact does not transfer any competences and that Poland is not put under any obligations, but in fact Poland receives rights (Art.12 par.3 Fiscal Compact). Moreover, Art. 89 par. 1 is the right basis for ratification.
Similarly as in the Sejm, the Senat’s right-wing opposition argued that Art. 89 par. 1 PC is not the right legal base for the ratification act. Additionally, the right-wing opposition was concerned with regard to Art. 14 of the Pact that the government will declare in the due time that Poland is bound by the whole Fiscal Compact without an additional ratification act and any influence of the parliament. The right-wing opposition underlined also that the freedom to decide on taxation and budget is the fundament of sovereignty. Moreover, in the view of the right-wing opposition, the ratification of the Fiscal Compact violates Art. 219 PC (competence of Sejm to approve the budget) and Art. 221 PC (budgetary initiative, change of budget etc. has the government). The senators also asked about the consequences of a judgement of the Constitutional Court, in case it adjudicates that the correct legal base for the ratification of the Fiscal Compact is Art. 90 PC. On a formal issue, the opposition complained about the fact that the Senat is taking the decision under time pressure, without the information for the Senators on the Fiscal Compact being circulated in advance and hence claiming a violation the Rules of Procedure of the chamber. Also one of the questions was whether Poland will have to raise taxes (especially CIT) after ratification of the Fiscal Compact. Moreover, it was underlined that transfer of powers to international institutions causes “dedemocratisation” of the EU and the Constitutional Court can serve as the only safeguard by granting more powers to the national Parliament.
As the added value of ratification of the Fiscal Compact, the government and the governing majority underlined the possibility for a Polish minister to participate in the Euro Summits (art. 12 par 3 of the Fiscal Compact) and an impact on the future changes of the Fiscal Compact if Poland becomes a Contracting Party. The governing majority senators defended the ratification, pointing also at positive points of Title III (budgetary constraints), the importance of the right to attend the Euro Summits and the strengthening of national parliaments and the European Parliament by the Lisbon Treaty (hence no “dedemocratisation”).
On the margin, it is worth mentioning that a number of academics prepared opinions on the ratification of the Fiscal Compact that differed. Cf. the bibliographic references.
Balanced Budget Rule
Article 3(2) Fiscal Compact prescribes that the Balanced Budget Rules shall take effect in national law through “provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.” How is the Balanced Budget Rule (intended to be) implemented in Poland? Will there be an amendment of the constitution? If not, describe the relation between the law implementing the Balanced Budget Rule and the constitution. If the constitution already contained a Balanced Budget Rule, describe the possible changes made/required, if any.
The Undersecretary of State in the Ministry of Foreign Affairs opined that Poland will not be obliged to introduce the Balanced Budget Rule before accessing the Eurozone, but amending the Public Finances Act to accommodate this rule may have a positive effect. An implementation of the Balanced Budget Rule may take place either when Poland joins the Eurozone or earlier, if Poland would declare willingness to apply the Balanced Budget Rule. In the latter case, as the representative of the Ministry of Foreign Affairs explained, such a declaration demands ratification analogous to the Fiscal Compact ratification as it changes the scope of the Treaty. The Balanced Budget Rule, in the view of the representative of the Ministry of Foreign Affairs does not demand a constitutional amendment, especially as the Fiscal Compact allows anyway for an introduction in infra-constitutional law.
The new stabilization fiscal rule has been introduced by the amendment to the Public Finances Act (hence infra-constitutional law; regular statute-ustawa) in December 2013 (See question VII.7). This rule allows, on the one hand, a security margin with regard to the 3% budget deficit, so that the risk of the excessive deficit procedure is minimised and, on the other hand some flexibility in the budgetary planning (especially investment). This rule has however been introduced in the context of the Six Pack.
Debate Balanced Budget Rule
Describe the national debate on the implementation of the Fiscal Compact/Balanced Budget Rule, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process.
This question does not concern Poland as it is not a Eurozone Member and did not declare earlier willingness to be bound by the Fiscal Compact provisions. On how the Balanced Budget Rule might be implemented in the future, see question IX.4.
Relationship BBR and MTO
What positions, if any, are taken in the national debate about the relationship between the Balanced Budget Rule of article 3(1)(b) Fiscal Compact and the Medium-term Budgetary Objective (MTO) rule in the Six-Pack (section 1A, article 2a Regulation 1466/97, on which see above question VII.10)?
The Secretary of State in the Ministry of Finance, by comparing the Balance Budget Rule (Article 3(1)(b) of Fiscal Compact with the -1%GDP for Member States that participate in ERM2, described the Fiscal Compact Rule as “more ambitious.”
Is there a (constitutional) court judgment on the Fiscal Compact/implementation of the Balanced Budget Rule?
The constitutional review of the TSCG and the Ratification Act of the TSCG, initiated in the ex post procedure by two applications of members of the parliament, is pending before the Polish Constitutional Court (as of March 2013). So far, the Constitutional Court decided to discontinue the proceedings with regard to the constitutional review of the TSCG on formal grounds.
In Poland, the ex ante review is available only on the request of the president who may, before ratifying an international agreement or before signing a bill, refer to the Constitutional Court with a request for the constitutional review of such treaty or bill. This procedure was not at stake with regard to the TSCG. The review of the TSCG was requested by the members of the parliament in the ex post review.
The TSCG is an international treaty demanding ratification with a prior approval expressed by the parliament in the bill. (See question V.2) The Polish Constitution grants the ratification competence to the president; it is the president that ratifies the treaty.. In the case at stake, the parliament approved the ratification of the TSCG, but in the moment when the MPs lodged the application for constitutional review (23 March 2013), the president has not yet ratified the treaty. In other words, the application for the ex post constitutional review has been lodged too early. Hence ex post review was excluded. The ex ante review was also excluded, because the president has not demanded it. Therefore, the Constitutional Court will only decide on the constitutionality of the procedure leading to the approval of the TSCG by parliament (the bill approving the TSCG – Ratification Act) and will not review the TSCG, unless the applicants again request the constitutional review of the merits of the TSCG, being that the president has since ratified it on 24 July 2013.
Joint cases K 11/13 and K 12/13
1)Name of the Court: Constitutional Court
2)Parties: group of MPs, group of Senators (applicants) the Sejm, the Senat, the Attorney General (participants)
3)Type of action/procedure: ex post review, on the basis of Art. 191 par. 1 in connection with Art. 188 PC: The Constitutional Tribunal shall adjudicate regarding, among other, the conformity of statutes and international agreements with the Constitution, following the application of the President of the Republic, the Marshal of the Sejm, the Marshal of the Senate, the Prime Minister, 50 Deputies, 30 Senators, the First President of the Supreme Court, the President of the Supreme Administrative Court, the Public Prosecutor-General, the President of the Supreme Chamber of Control and the Commissioner for Citizens’ Rights.
4)Admissibility issues: The application was admitted by the Court. Constitutional Court will give justification to the admissibility in the judgement.
5)Legally relevant factual situation: The compatibility of the Ratification Act for the TSCG and of the TSCG as an international treaty with the Polish Constitution
6)Legal questions and arguments of parties:
A group of PiS MPs (21.03.2013) lodged application to the Constitutional Court asking for a constitutional review of both the Ratification Act of the TSCG and the TSCG itself.
According to the MPs interpretation of the TSCG, the Treaty is binding for Poland from the moment of entry into force (Art. 14(2) TSCG) or deposition of the ratification document (if done later), but its application is postponed to the moment of the abrogation of the derogation (Art. 14(5) TSCG). In the view of the MPs, Article 26 of the Vienna Convention of the Law of Treaties (Pacta sunt servanda) creates however an obligation to observe and perform the TSCG in good faith. Hence, the TSCG, in the view of the MPs, has to be compatible with the Constitution already at the moment of its ratification because it is demanded by international law. In addition, in the view of the MPs, the Treaty as a whole needs to be compatible with the Constitution. The possibility to be bound only by some of the parts of the Treaty does not mean, according to the MPs, that the other parts of the Treaty might be contrary to the Constitution. The MPs underlined that as the whole TSCG has been ratified, formally Poland is bound by the whole treaty.
-[regarding the ratification procedure] compatibility of the TSCG’s Ratification Act with Art. 90 PC:
a) compatibility of Art. 3 par. 1 of the TSCG which transfers the control competences of Sejm expressed in Art. 95 par. 2 PC to the European Commission (Sejm exercises the control over the activities of the Council of Ministers. The introduction of the automatic correction mechanism violates this control power of the Sejm, even if the correction mechanism will be implemented to national law and even if it is supposed to fully respect the prerogatives of national parliaments. Moreover, if the correction mechanism is implemented in Poland in the infra-constitutional provisions, the competences of the Sejm stemming from the Constitution will be violated.)
b)compatibility of Art. 3 par 2 of the TSCG which transfers the competences of Sejm expressed in Art. 95 par. 1 PC in connection with Art. 4 par. 1 PC to the European Commission acting on behalf of an international organisation (Common principles foreseen in Art. 3 par. 2 of the Fiscal Compact violate the Sejm’s legislative autonomy expressed in Art. 95 par.1 PC, as the framework for adopting the national legal act is created by an international institution.)
c)Compatibility of Art. 5 par. 1 and par. 2 of the TSCG which transfers the competence of the Sejm and the Council of Ministers expressed in Art. 219 par.1 and Art. 221 PC. ( Creation of new competences for the EU Commission and the EU Council. Introduction of the EU institutions into the budgetary process violates the autonomy of Sejm and the Council of Ministers, as the only organs designated by the Constitution to participate in the budgetary procedure).
d)Compatibility of Art. 7 of the TSCG which modifies the obligations expressed in Art. 126 TFEU. In consequence, according to the applicants it means a redefinition of the scope of conferred competences, which were transferred before through the ratification of the Lisbon Treaty. In particular the competences of the Council of Ministers expressed in Art. 146 par. 1 and par. 4 pt 9 PC are limited, jointly with the limitation of the competences of the Sejm and Senat expressed in Art. 95 par. 1 PC in favour of the European Commission. (The automatism of the support of Member States for a Commission’s recommendation limits the freedom of decision of a national Minister in the Council. By limiting the scope of decision-making by representatives in the Council, the competences of the Sejm and the Senat are violated, as in the EU legislative process the national representative in the Council substitutes the legislative role of the Sejm and the Senat. Moreover, the automatic support for Commission’s recommendations, which may be overturned by the reversed qualified majority vote has only a procedural character and is independent from the position of a single Member State.)
e)Art. 8 par. 1 of the TSCG which limits the competences of the Constitutional Court expressed in Art. 188 PC by creating a competence of the CJEU to review acts of national law, in case of the implementation of Art. 3 par. 2 of the Fiscal Compact by Poland through an infra-constitutional act.
f)Art. 8 par. 1 and par. 2 of the TSCG, which grants the CJEU a new competence to review the exercise of competences by the legislative power. This limits the competence of the national courts expressed in Art. 10 par. 1 and par. 2. (The financial sanctions imposed by the CJEU are a penalty for not executing its judgement, hence they are a penalty for not acknowledging the authority of the CJEU).
g)Art. 10 of the TSCG which extends the scope of competences transferred to the EU in the ratification of the Lisbon Treaty, by transferring competences of the Council Ministers to exercise the foreign affairs policies expressed in Art. 146 par. 1 and par. 4 PC. Poland will have to participate in every initiative launched by the Fiscal Compact contracting parties, as Art. 10 provides that the contracting parties “stand ready to make active use.” This provision limits the decision-making power of a Member State.
-[ on the merits] compatibility of the TSCG with Art. 1, Art.2, Art. 4 par. 1 and par.2, Art. 95 par.1, Art. 104 par. 1, Art. 219 par. 1, Art. 221, Art. 216 par. 5, Art. 235 par. 4 PC:
a)Art. 3 par. 1 of the TSCG with Art. 216 par. 5 PC (the lower limit of a structural deficit of 0.5 % of the gross domestic product at market prices is not identical to the rule existing in Art. 216 par. 5 PC which provides that ‘it shall be neither permissible to contract loans nor provide guarantees and financial sureties which would engender a national public debt exceeding three-fifths of the value of the annual gross domestic product.’ It hence creates a new obligation in the budgetary procedure. The primacy of the automatic correction mechanism, if implemented as an infra-constitutional law, will result in violation of the Constitution. )
b)Art. 3 par. 2 of the TSCG with Art. 235 par. 4 PC, Art. 4 par.1 and par. 2 and Art. 221 PC. (Art. 3 par. 2 of the TSCG demands, in principle, an introduction of the “golden rule” into the Constitution [only mitigated by the possibility to introduce an infra-constitutional provision]. Only a legal obstacle, in contrast to a political one [e.g. insufficient parliamentary majority] may excuse a MS from not implementing the “golden rule” at the constitutional level. Hence, in the view of the applicants, this provision limits the scope of the decision of the parliament [and the supreme power of the Nation exercised by its representatives] whilst debating a constitutional amendment.)
c)Art. 5 par. 1 of the TSCG is not precise enough and hence violates the democratic state ruled by law principle expressed in Art.2 PC. (The notion of “EU law” may cause that Poland will be bound by fiscal-budgetary norms which were approved without Poland’s participation in areas where Poland is under derogation).
d)Art. 8 par. 1 of the TSCG violates Art. 235 par. 4 in connection with Art. 4 par. 1 PC. It also violates Art. 2 PC. (If the “golden rule” is introduced at the constitutional level, the Commission and the Contracting Parties will gain authority to assess and impact on a constitutional amendment procedure that has a democratic legitimacy and is a sovereign right of the Nation).
e)Art. 10 of the TSCG violates Art. 4 par. 1 and par. 2 PC. Its lack of precision violates also thee democratic state ruled by law principle expressed in Art.2 PC. (Art. 10 of the Fiscal Compact mentions the use of measures specific to those Member States whose currency is the euro, as provided for in Article 136 TFEU. This reference binds Poland with obligations applicable to Eurozone Members and, hence, goes beyond the competences transferred by Poland in the Accession Treaty. The fact that the legal acts taken on the basis of Art. 136 TFEU are approved only by the Eurozone Members in the Council, without a Polish representative will not be legitimate from the perspective of the Polish constitution. If Poland will become bound by Art. 10 of the TSCG on the basis of Art. 14 par. 5, the Sejm has no possibility to review the declaration of the Council of Ministers expressing such willingness. Hence, such declaration will not have democratic legitimacy. Finally, the uncertainty of the effects of the application of Art. 136 TFEU or the enhanced cooperation violates the principle of legal certainty).
f)Art. 10 of the TSCG violates the sovereignty principle (Art. 4 par. 1 PC) with regard to the right of the Polish People to indicate their political interests and the principle of common good (Art. 1 PC). (The actions prescribed by Art. 10 on matters that are essential for the proper functioning of the euro area may not be compatible with the interest of the Member States with derogation. These actions, which may go against the economic (budgetary) interests of the Member States with derogation, are contrary to the sovereign right to designate state interests and the principle of common good).
g)Art. 16 of the TSCG with Art. 4 par. 1 and par. 2 PC, Art. 95 par. 1 PC, Art. 219 par. 1 PC, Art. 221 PC and Art. 235 par. 4 PC. (The future incorporation of the TSCG into the legal framework of the European Union, puts an obligation on the Contracting Parties not to introduce any changes in the national constitutional and infra-constitutional law, which would be incompatible with the Fiscal Treaty. Hence, the sovereign rights of the Nation are violated [Art. 4 par. 1 and par. 2 PC]: the legislative autonomy of the Sejm [Art. 95 par. 1 PC] with the freedom to specify the principles of and procedure for preparation of a draft State Budget [Art. 219 par. 2 PC] and its role to adopt the State budget [Art.219 par. 1] due to the possible budgetary limits provided for in national law or international treaties. Moreover, Art. 16 of the TSCG violates the freedom of the Nation to shape the constitution according to the procedure of constitutional amendment as expressed in Art. 235 par. 4 PC.)
A group of PiS senators (28.03.2013) lodged applications to the Constitutional Court asking to review:
-If the TSCG’s Ratification Act is compatible with Art. 2, Art. 7, Art. 108 in connection to Art. 104 par. 1 first sentence, Art. 121 par. 2 first sentence and Art. 124 in connection to Art. 112 PC.
–arguments: the Senat Rules of Procedure were violated during the ratification procedure and hence Art. 124 in connection with Art.112, Art. 108, Art. 104 PC were violated; as well as Art. 121 par. 2 (In the view of the applicants, the Senat approved the Ratification Act without amendments within the prescribed period of 30 days, but the procedure leading to the approval violated constitutional provisions. Especially, the legally prescribed period allowing the Senators to prepare for the ratification procedure was unlawfully limited).
-With regard to the Ratification Act itself, the applicants raised that it is incompatible with Art. 7 and Art. 2 PC (as the Ratification Act was ratified without a sufficient knowledge of the senators regarding the subject of the ratification proceedings)
7)Answer by the Court to the legal questions and legal reasoning of the Court: the case has not yet been decided with regard to the ratification procedure.
8)Legal effects of the judgment/decision: The legal effect of the judgement might be that the Court declares the Ratification Act unconstitutional and the act will lose its binding force.
9)Shortly describe the main outcome of the judgment/decision and its broader political implications. The case has not been decided yet (March 2014)
Non-Eurozone and binding force
Has Poland decided to be bound by parts of the Fiscal Compact on the basis of article 14(5) Fiscal Compact already before joining the Euro area, or has this option been debated?
No, Poland is bound only by Title V of TSCG. A possibility to be bound by parts of the TSCG on the basis of Article 14(5) TSCG was discussed in the parliament. The controversial issue was if the declaration to be bound by Title III and IV before Poland joins the Eurozone will demand a separate ratification in the future. The government confirmed that such a declaration will demand a separate ratification act as it is a change of the Treaty. (See question IX.3).
What other information is relevant with regard to Poland and the Fiscal Compact?
The Senate’s committees raised a question concerning Art. 11 of Fiscal Compact: what is the impact of Commission proposals on the coordination of major economic policy reforms on the sovereignty of Polish parliament? The Undersecretary of State in the Ministry of Foreign Affairs answered that Poland will not be bound by this provision and its existence is justified by the need to provide the budgetary discipline and no violation of sovereignty is at stake.