EU-DIGEST

European leaders warned Poland that the union was prepared to deploy further legal sanctions against Warsaw in response to its defiance of EU law, as they urged the country to walk back its challenges to the bloc’s judicial foundations.

In their first face-to-face talks since Poland’s top court ruled that key parts of EU law are not compatible with the country’s constitution, leaders voiced strong support for the European Commission’s pledge to hit back at Warsaw.

However, numerous leaders also called for political dialogue to be prioritised alongside legal measures, as they sought to ease a bitter row that has triggered fears that Poland could ultimately exit the Union.

Read more at: Brussels wins support for further legal steps in dispute with Poland | Financial Times

At Germany's Constitutional Court, the Bundesbank's chief opposed the European Central Bank's buying of bonds to ease the pressure on eurozone countries.

But Germany's finance minister and a German ECB board member strongly defended the policy.
The ECB programme is credited with arresting the eurozone crisis.

ECB President Mario Draghi promised last year to do "whatever it takes" to save the euro, setting out the Outright Monetary Transactions (OMT) scheme, whereby the ECB could buy up unlimited amounts of a country's debt if investors pulled out.

Confidence has returned to the markets, even though the ECB has not needed to put its plan into action.
The interest rates on government debt have fallen back from the unsustainable levels that forced several governments to take bailouts and threatened Italy with the same fate.

There are fears that a court ruling against it could reignite market panic.

However, at Wednesday's Constitutional Court hearing, Mr Weidmann argued that the ECB policy was incompatible with a central bank's narrow role of controlling inflation.

"Secondary market bond purchases should not be used in my understanding in a European currency union to lower the solvency risk premiums of individual countries," he told the court, according to the Financial Times.

"Because that, among other things, threatens to annul the disciplining role of market interest rates and undermine financial responsibility."

But German ECB board member Joerg Asmussen said the policy was within the mandate of the ECB, and that countries receiving help would have to sign up to a programme of tighter discipline, monitored by the EU's bailout fund.

"We have no doubt this strong signal was required to convince market participants of our seriousness and decisiveness in pursuing the objective of price stability," he said.
He also denied that Germany's liability under the scheme was unlimited, saying the potential outlay is "effectively limited" by the fact that it is restricted to bonds with a short maturity.

 Read more: BBC News - ECB's eurozone rescue scheme challenged in Germany

Nongovernmental organizations across the country are being threatened with fines stretching to $20,000 or more, as authorities press on with sweeping checks that activists are calling a government-orchestrated crackdown on civil society.

Prosecutors have said the checks are aimed at uncovering extremist activity and are routine, but NGOs fear they are part of a wider campaign to bring the nongovernmental sector to heel. Many independent organizations say they would be forced to close if prosecutors follow through on threats of hefty fines.

"Several NGOs are being raided by prosecutors as we speak, and about a dozen have been sanctioned. But this is only the start. Eventually, I estimate that hundreds will be fined or sanctioned in other ways," said Pavel Chikov, a member of President Vladimir Putin's human rights council.

Russian prosecutors have strongly refuted claims that the NGO inspections are biased, and Foreign Ministry spokesman Alexander Lukashevich said during his weekly press briefing Thursday that authorities were "simply trying to bring discipline to the activities of foreign NGOs" and acting within the realms of Russian law.

U.S. Ambassador Michael McFaul told the Russian Public Chamber on Thursday that, although he hoped the NGO checks would not strain U.S.-Russian relations, Washington was concerned about the "new challenges to contacts between our societies," Interfax reported.

Read more: NGOs Facing Stiff Fines Amid 'Crackdown' | News | The Moscow Times