EC to punish Poland, Turkish inflation surges

The infringement procedure launched this week by the European Commission against Poland – in response to controversial legal reforms and the associated worries about the erosion of judicial independence – has put the country in the headlines this week. We are concerned that deteriorating institutional quality will weigh on medium-term economic prospects. In the near-term, though, we doubt that the start of this procedure will have much impact on Poland’s financial markets or economy.