By Gabriela Baczynska
BRUSSELS (Reuters) -The European Union executive Commission said on Thursday it regretted Slovakia dissolving its dedicated state graft prosecution unit and warned the bloc "will not hesitate" to act to safeguard its financial interests.
Despite public protests and EU warnings, Prime Minister Robert Fico dismantled the unit, as his critics sound alarm that he is damaging democracy in the formerly communist country of some 5.5 million people.
"The Commission regrets the dissolution of the Special Prosecutor's Office without the introduction of safeguards to ensure investigations can continue effectively," a spokesman told Reuters.
He said the closure "could undermine the effectiveness of investigations, not least on offences that affect the EU budget."
The Commission will assess the consequences, the spokesman added, and "not hesitate to take action to ensure respect of EU law and the protection of the EU's financial interests."
The spokesman did not specify any potential sanction. But sources told Reuters the Commission was likely to open a legal case for violating EU laws, a so-called "infringement", against Bratislava in the coming weeks.
"It has not been decided yet" said one official, who spoke under condition of anonymity. "(But) they deserve it."
Such a case could end up with the bloc's top court and eventually lead to financial fines, unless Bratislava aligns.
SLOVAK ELECTION
A court case would take months and any penalties imposed would typically be much lower than payments the Commission can otherwise withhold from the bloc's shared budget over wider deficiencies, as has been the case for Hungary.
Such broader punishment was not likely for now, sources in the Brussels said, as Fico has so far not challenged other EU peers on aid to Ukraine or other key decisions that require unanimity of the bloc's 27 members.
There was no immediate comment from Slovakia's EU mission on Thursday as EU leaders gathered in Brussels to discuss using billions in profits from frozen Russian assets to buy arms for Ukraine as it continues to fight the Russian invasion.
On Saturday, Slovaks vote for a new president in an election that could give Fico a boost in his drive to gain more control of public media, soften anti-corruption laws and withhold support for Ukraine.