By Jan Strupczewski and Marcin Goettig
BRUSSELS/WARSAW (Reuters) - The EU executive launched an unprecedented action against Poland on Wednesday, calling on other member states to prepare to sanction Warsaw if it fails to reverse judicial reforms that Brussels says pose a threat to democracy.
Voicing frustration after two years of fruitless requests to the right-wing government, the European Commission gave the socially conservative Law and Justice party in Warsaw three months to change tack.
But Poland fired back defiantly and was reassured that like-minded allies in Hungary would veto the ultimate sanction of suspending Poland's voting rights in the bloc.
Budapest said on Tuesday that the move by the Commission violated Poland's sovereignty.
Germany and other Western powers threw their weight behind Brussels, which argued that Polish ruling party leader Jaroslaw Kaczynski's push to have control of judicial appointments poses an "existential" threat to EU norms.
The first ever move to deploy the EU's "nuclear option" under Article 7 of the 2009 Lisbon treaty marks a major escalation in tensions with eurosceptics in formerly communist eastern Europe, just as wealthy Western governments prepare to hold down funding for their subsidies in an EU budget hit hard by the departure of second-ranked economy Britain.
"The Commission has today concluded that there is a clear risk of a serious breach of the rule of law in Poland," the Commission said in a statement.
"Judicial reforms in Poland mean that the country's judiciary is now under the political control of the ruling majority. In the absence of judicial independence, serious questions are raised about the effective application of EU law."
In response, PiS, which runs a nationalist agenda, said reforms were necessary and accused the Commission of taking a decision motivated by politics and not by facts.
"This may be an effect not only of the opposition's informing (on Poland to the EC) but also because we don't want to accept immigrants, we don't want to accept Muslim migrants, as we care for the security of Poles," ruling party spokeswoman Beata Mazurek told reporters.
Since coming into power in 2015, the eurosceptic Law and Justice party (PiS) has quarrelled with Brussels over its push to assume more control of the courts and public media, as well as over migration policy.
Critics in Brussels have said PiS policies amount to a tilt towards authoritarianism and subvert the bloc's democratic values, noting in particular the court reforms.
Hours after the Commission's decision, President Andrzej Duda announced he was signing the legislation into law, clearing the final hurdle before the changes go into effect.
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The European Commission, the guardian of EU law, will now ask the other EU governments to declare that Poland's changes to the judiciary constitute "a clear risk of a serious breach" of EU values -- especially the rule of law.
However, it gave Warsaw, where a new prime minister, Mateusz Morawiecki, took office only this month, three months to remedy the situation and said it could rescind its decision if it did so. Morawiecki said he was ready for talks in January.
At the heart of the issue is an overhaul of courts that gives the PiS-controlled parliament de facto control over the selection of judges and ends the term of some Supreme Court judges early.
The PiS government rejects accusations of undemocratic behaviour and says reforms are needed because the courts are slow, inefficient and steeped in a communist era-mentality.
The government remains highly popular at home due to low unemployment, generous welfare spending and an increased emphasis on conservative Catholic values.
Many Poles are also wary of further integration, membership of the euro currency and any plans to enforce the relocation of refugees from the Middle East to EU states.
But PiS is mindful that opinion polls show overall support for EU membership runs at nearly 80 percent, more than in many other EU states, a reflection in part of the economic self-interest generated by EU subsidies.
Public broadcaster TVP, which has become a vehicle for PiS to address its conservative electorate, ran a news ticker on Wednesday saying the Commission's deputy head, First Vice President Frans Timmermans, "wanted to deny Poland the right to reform its country".
Another one said Berlin and Brussels were on an "offensive against Poland since Warsaw asked for reparations", in a reference to government comments in recent months that Germany still owed Poland money for the economic and human losses it suffered in World War Two.
Timmermans, who has conducted talks with Warsaw over the issue for the past two years, said he was acting "with a heavy heart" but was obliged to take action to protect the Union as a whole.
"We are open for dialogue 24/7," Timmermans said.
But he insisted: "As guardians of the treaty, the Commission is under a strict responsibility to act ... If the application of the rule of law is left completely to the individual member states, then the whole of the EU will suffer."
British Prime Minister Theresa May is expected to raise the issue during a visit to Warsaw on Thursday.
(Reporting by Jan Strupczewski in Brussels and the Warsaw bureau; Editing by Alastair Macdonald and Richard Balmforth)