Xavi Reyes blog The Interim Poland Price Agreement and the ECJ

The Interim Poland Price Agreement and the ECJ

interim poland priceEU Workers central bank has delivered another surprise cut to its key interest rate, aiming to quell fears of a brewing inflation crisis. But the move is also under attack for violating its own cherished independence. Its decision to do so comes amid political turmoil in Poland and as a reelection campaign rages on for the ruling party’s candidate, who is facing strong opposition.

The ECJ, which will decide on whether or not the Court’s order has been infringed, is likely to find that it has. If so, it will impose penalty payments on Poland, which will effectively end up in the coffers of the EU budget and not in the hands of the Polish government.

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PKN Orlen, which is 49 percent owned by the state and the dominant market player in Poland, has denied allegations of manipulation claiming that prices have improved due to efficiencies gained from its recent acquisitions of domestic rivals Lotos, PGNiG and Energa. But the Commission says that its monitoring of European fuel markets has found evidence that the company has engaged in anti-competitive practices and market collusion in Poland. Whether it has or not, a showdown is on the cards over this matter. The Polish Prosecutor has already brought an action before the Constitutional Court arguing that proceedings in Luxembourg are unconstitutional. If the court sides with it (and its new composition inclines me to think that it will), then there is no way around a resumption of the case and a determination of whether or not there has been an infringement.

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