BRUSSELS, Oct 8 (Reuters) - A ruling by Poland"s highest court challenging the supremacy of European Union law has plunged the EU into an existential crisis and raised questions about the eastern European country"s future in the bloc. How the drama will play out from here is far from clear. WHAT HAPPENED? Poland"s Constitutional Tribunal, whose judges were appointed by the ruling eurosceptic nationalists of the Law and Justice party (PiS), ruled on Thursday that several points in articles 1 and 19 of the EU treaties were incompatible with the Polish constitution. BRUSSELS, Oct 8 (Reuters) - A ruling by Poland"s highest court challenging the supremacy of European Union law has plunged the EU into an existential crisis and raised questions about the eastern European country"s future in the bloc. How the drama will play out from here is far from clear. WHAT HAPPENED? Poland"s Constitutional Tribunal, whose judges were appointed by the ruling eurosceptic nationalists of the Law and Justice party (PiS), ruled on Thursday that several points in articles 1 and 19 of the EU treaties were incompatible with the Polish constitution. This marks a sharp escalation of a battle with Brussels over the rule of law, and in particular the independence of the judiciary, that has raged since the PiS took power in late 2015. WHY IS THIS AN EXISTENTIAL PROBLEM FOR THE EU? The EU, as a legal entity, is based on the principle that all members recognise the supremacy of EU laws and the fact that it is only the Court of Justice of the European Union (CJEU) that can interpret them. If a member state rejects the primacy of EU law over national law and the CJEU"s right to interpret it, it is rejecting the underlying principle on which the EU is founded.If that is allowed to stand, it raises questions about the viability of the EU itself. COULD IT FORCE A "POLEXIT"? Poland accepted EU treaties on entry to the bloc in 2004 in a referendum and through parliamentary ratification. The same constitutional tribunal, though at that time composed of independently appointed judges, previously ruled that there was no contradiction between the EU treaties and Poland"s constitution. But under the PiS government, Warsaw has refused to implement CJEU rulings that it must dismantle changes to the judiciary which undermine its independence and that it must pay large daily fines to the Czech Republic in an environmental dispute. Some EU officials say the tribunal"s ruling was meant to give the Polish government a legal excuse to ignore the CJEU, but in effect it puts Poland outside the EU"s legal order. There is no popular push in Poland to leave the EU, unlike in Britain before its 2016 Brexit referendum, and the Polish government says it does not want a "Polexit". But the Constitutional Tribunal"s decision could be seen as a sign that Poland"s judiciary has already chosen, de facto, to take the country out of the EU by abandoning the legal pillar on which the bloc stands. The direction this crisis takes will depend on whether Warsaw acts on the court"s ruling, how it applies it and whether it continues to ignore existing CJEU judgements. WHAT COULD HAPPEN NEXT? Some EU officials say one effect of the ruling will be more chaos in the Polish legal system, with some judges applying EU law directly in their verdicts and others, fearing penalties from a PiS-appointed disciplinary court, disregarding it. In response to the ruling, the European Commission, which is the guardian of EU laws, could launch an "infringement procedure" against Poland in the CJEU to force it to accept the supremacy of EU law. That process, which could take weeks or months, could lead to Warsaw being fined. The Commission launched such legal steps against Germany when the German constitutional court questioned the legality of the EU recovery fund project. The Polish case is different, though, because it questions the very basis of EU construction.