Europe

Poland risks ECB row over move against central bank president

On Thursday leading allies of prime minister Donald Tusk accused Mr Glapiński of pursuing a monetary policy that financed and backed the previous government

Polish prime minister Donald Tusk has accused Adam Glapiński of pursuing a monetary policy that financed and backed the previous government. Photograph: Odd Andersen/AFP via Getty Images

Derek Scally in Berlin
Thu Mar 21 2024 - 19:09

Poland is risking a confrontation with the European Central Bank (ECB) after government MPs presented plans for a parliamentary tribunal into central bank president Adam Glapiński.

On Thursday leading allies of prime minister Donald Tusk accused Mr Glapiński of pursuing a monetary policy that financed and backed the previous government. These include a bond-buying programme they say disregarded constitutional rules.

“These are very strong allegations that, in my opinion, give me full right to say that there will be a state tribunal”, said Krzysztof Gawkowski, deputy prime minister, after collecting 115 signatures required for the tribunal.

Ahead of a full parliamentary vote to establish the tribunal, Mr Glapiński, president of the National Bank of Poland (NBP) denies any wrongdoing and has described the charges as politically motivated.

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Among the charges he faces relate to the bank’s controversial pandemic-era purchase of Polish treasury bonds issued by two state bodies, an investment fund and a development bank.

This move by Mr Glapiński was a breach of the Polish constitution, government MPs argue, because it “ensured indirect financing by the NBP of a budget deficit totalling nearly 144 billion złoty [€33 billion]”.

Other charges include pre-election interest rate cuts in September and October of last year, which MPs suggest were designed to appease voters and allegedly unauthorised interventions in the currency market.

Government MPs accuse the bank president of ‘praising the [former] government of Mateusz Morawiecki and warning against the [current] government of Donald Tusk’

Thursday’s move is another example of the dilemmata facing the Tusk administration. Since taking office in December it has faced repeated accusations of measures that undermine the rule of law; the government says its actions are the opposite: reversing rule-of-law violations by the previous government.

Before leaving office last year, the Law and Justice (PiS) party attempted to block any future parliamentary inquiries into the bank and its president, a friend of PiS chairman Jaroslaw Kaczynski.

In January, the constitutional court tribunal raised the bar for bringing Mr Glapiński before a parliamentary tribunal.

The Tusk administration views the constitutional court itself as a captured political institution, beholden to PiS politicians, and has disregarded many of its recent rulings.

Government MPs accuse the bank president of “praising the [former] government of Mateusz Morawiecki and warning against the [current] government of Donald Tusk”.

But taking on Mr Glapiński now could be viewed in Frankfurt and Brussels as an attempt to violate treaty provision on central bank independence.

[ Poland seeks to reverse dismantling of the rule of law ]

Well ahead of Thursday’s move, European Central Bank (ECB) president Christine Lagarde told the Polish central banker that he could refer any moves against him to the European Court of Justice, should such moves be seen as an effort to undermine the bank’s political independence.

As well as the difficulty of proving its claims of political influence, the bank’s monetary policy – however controversial – has contributed to an inflation drop to 2.8 per cent this month, well within the bank’s target range of 1.5-3.5 per cent.

Opposition PiS politicians say NBP bond-buying was no different to actions of many euro area states during the early days of the pandemic.

Derek Scally

Derek Scally

Derek Scally is an Irish Times journalist based in Berlin

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