Poland could lose its voting rights in the European Union if it presses ahead with reforms to the judiciary.
The country has become a headache for the EU since the right-wing conservative government won the general election in 2015 and began implementing several laws deemed risky for democracy.
The European Commission, which is responsible for ensuring that member states follow European law, could announce Wednesday that it is stepping up procedures against Poland as Warsaw tries to reform its judiciary.
"Given the actions of the Polish government, the chances of the EU triggering Article 7 are increasing," Janis Emmanouilidis, political analyst at the European Policy Centre think tank in Brussels, told CNBC on Monday.
What does Article 7 state?
The EU's Article 7 stipulates that the European Commission can warn member states to change policy directions when these obstruct the so-called rule of law. If no action is taken by the member states, the European Commission can propose removing certain rights, as a way of sanction, until the country is no longer seen as in breach of the EU's common values. This could ultimately mean that Poland will lose its voting rights at European summits, though that would need a consensus decision between all European countries.
Frans Timmermans, first vice-president of the European Commission, warned last week that the Polish government's decision to push through four reforms that would put the judiciary under government control were pushing Brussels "very close" to triggering Article 7.
Last year, the same government tried to constrain media freedom, but protests across the country didn't allow it to pursue the plan.
Why is the government pushing this agenda?
"It could be a trap," Emmanouilidis from EPC warned. "The President of the PiS party (the ruling party) would love nothing more than seeing the Polish people becoming more critical of the EU," he said.
The ruling PiS party is slightly Eurosceptic whereas the Polish people are vastly pro-European. Emmanouilidis explained that the constant attempts by the Polish government to increase its control could be a tactic to make Poland less EU-friendly.
Thousands of people have taken to the streets of Poland carrying Polish and EU flags demonstrating against the most recent government's proposals.
As a result, the country's president Andrzej Duda, a member from the ruling party, decided Monday to veto the judiciary reforms, arguing they did not strengthen the sense of justice in society and needed to be amended.
What impact is this having on the image of the country?
The ongoing battle between Polish institutions, street protestors and the EU will in the meantime impact the image of one of the fastest growing EU economies.
"The ensuing demonstrations, the clash with the EU, and negative prospects for business environment will erode Poland's image as an investment market," Otilia Dhand, senior vice president at Teneo Intelligence, said in a research note last Friday.