Poland’s finance minister on Wednesday requested the head of the country’s top constitutional court refrain from making public comments until May 13, as concern in Warsaw grows that the country’s constitutional crisis may prompt a ratings downgrade from Moody’s.
However, Andrzej Rzepliński, the chief justice of the Constitutional Tribunal, spurned the request made in a letter from Paweł Szałamacha, giving an interview to the Rzeczpospolita newspaper on Thursday.
Rzepliński explained that Szałamacha wanted him to not speak until Moody’s issues a new report on Poland “because my words, according to the minister, could influence it.”
In the letter, Szałamacha noted an earlier downgrade by Standard & Poor’s, “giving as a fundamental reason the situation around the institution you head.” He noted that Poland “suffered concrete costs” from that decision, and asked Rzepliński “to please consider refraining” from making comments that could worsen the conflict.
In a statement Thursday, the finance ministry said Szałamacha “regretted” Rzepliński’s reaction.
Rzepliński is at the center of a bitter battle over the tribunal with Poland’s right-wing Law and Justice party government. Andrej Duda, the party-backed president, has refused to swear in three justices elected by the previous parliament. The government has also not published a tribunal verdict that found a new law changing the way the tribunal works to be unconstitutional.
The crisis has led to street protests in the country, and strained relations with the EU and some of Poland’s leading allies.
Credit ratings agencies have also noticed.
S&P downgraded Poland to BBB+ from A- in mid-January, and moved its outlook to negative, saying, “Poland’s system of institutional checks and balances has been eroded significantly,” under the new government.
Moody’s, which rates Poland at A2 with a stable outlook, said last month that: “Poland is facing heightened political risk as a result of its constitutional crisis. These developments may impair Poland’s attractiveness for foreign investors, a credit negative.”
The agency is due to issue a rating review on May 13.
Much of the concern from the agencies is focused on political risk, as the overall economy continues to do well. A new forecast from the European Commission issued this week predicts a GDP expansion of 3.7 percent this year — one of the highest rates in the EU.
There is some concern over public finances, thanks to expensive promises made during last year’s election campaign. The Commission expects Poland’s budget deficit to come in at 2.6 percent of GDP this year, the same as in 2015, but for the spending gap to grow to 3.1 percent by 2017, just above the 3 percent allowed under EU rules.
Despite the political turmoil, Poland continues to attract foreign investment. The government announced this week that Mercedes-Benz will build a €500 million engine plant, due to begin production by 2019.
The investment decision “reflects well on the conditions of the Polish economy,” Deputy Prime Minister Mateusz Morawiecki said in a statement.
However, the Polish złoty has underperformed most other emerging market currencies in recent weeks and borrowing costs rose after the S&P decision.
“The ratings agencies have a laser-like focus on the political issue,” said Nicholas Spiro, a partner and macro-economic analyst with Lauressa Advisory, a consultancy. “If Moody’s pulls the trigger, it will have nothing to do with Poland’s ability and willingness to service its debt.”