By Gabriela Baczynska
BRUSSELS (Reuters) - Slovakia dismantled its dedicated state graft prosecution unit on Wednesday despite European Union concerns, but seemed unlikely to face anytime soon hefty financial penalties akin to those Hungary received over rule of law defects.
Scrapping the USP body is part of a broader criminal code overhaul that Prime Minister Robert Fico pushed despite public protests and EU warnings.
Critics say Fico is damaging democracy the same way Prime Minister Viktor Orban has done in neighbouring Hungary, widely seen as the EU's "enfant terrible" after years of feuds with the bloc over democratic rights and standards.
The EU executive, the European Commission, has Hungary frozen out of some 20 billion euros ($21.7 bln) of aid for damaging democratic checks and balances.
Sources in the EU hub Brussels, however, expected no similar punishment against Slovakia soon, as Fico was towing the line elsewhere.
"It would be premature to go ahead with any major punitive steps. Currently, we don't see Slovakia as a major problem in foreign affairs, as regards handling Ukraine for example," said one national EU diplomat, asking not to be named.
Fico and Orban share criticism of Ukraine and a dovish stance on Russia. But the former has kept such comments for his domestic audience, while the latter repeatedly stalled EU support packages to Kyiv and sanctions against Moscow.
'BALANCING ACT'
An EU official described a careful "balancing act" to avoid alienating Fico, while also trying to fairly assess democratic health in Slovakia, a formerly communist country of some 5.5 million people in the EU's east.
"You have to be very careful with this one. There are lessons learned from Hungary," a second official with the EU's central institutions said of Slovakia, adding the Commission should swiftly start an "infringement" case over USP.
A third EU official said this could start in the coming weeks. Such a case could end up with the bloc's top court and eventually lead to some fines.
But that would take months and any penalties ordered in a specific case would typically be much lower than amounts the Commission can otherwise withhold from the bloc's shared budget over broader deficiencies, as in the case of Hungary.
There was no immediate comment from the Commission.
Fico has served as Slovakia's prime minister three times before. He was forced to resign in 2018 amid protests after the murder of a journalist investigating public graft.
Fico repeatedly accused the USP, which dealt with cases involving senior officials and politicians from his SMER-SD party, of bias.
The European Commission warned Bratislava in February that his criminal law overhaul would have "a direct and significant negative impact on EU law and the Union's financial interests", according to a letter to Slovakia's justice minister, which is not public but was seen by Reuters.
Last month, Slovakia's top court halted other proposed changes, thus removing some issues raised by the EU.
Since returning to power last October, Fico has also changed top security positions, lashed out against NGOs, and sought to put public broadcaster RTVS under tighter control.
Slovakia's outgoing president and Fico's political rival, liberal Zuzana Caputova, has warned the veteran politician was undermining democracy. Fico's ally Peter Pellegrini is the frontrunner in Slovakia's presidential election this Saturday.
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