Poland’s Tusk says motion to try central bank chief is 'ready'

Poland’s Tusk says motion to try central bank chief is 'ready'
A banner on the central bank building reads "All of the NBP's actions are in line with the law". / bne IntelliNews
By Wojciech Kosc in Warsaw March 20, 2024

A motion to put the head of the National Bank of Poland (NBP) Adam Glapinski on trial is “ready” and will be submitted “in the coming days”, Polish Prime Minister Donald Tusk said on March 19.

Any attempt to put Glapinski before the State Tribunal – a special court to try constitutional violations by the president and other top administration figures – is likely to provoke anger from the European Central Bank, sensitive to the issue of independence of central bankers across the bloc.

Tusk did not offer any details about the motion, which has to pass in the Sejm, the lower house of the Polish parliament.

“The motion has been prepared and is ready. It’s going to be submitted in the coming days,” Tusk only told a press conference in response to a question by a reporter.

The incoming centrist government of Donald Tusk has accused Glapinski of blatantly trying to help the then Law and Justice (PiS) cabinet before last October’s election, by making two unwarranted 100bp cuts in interest rates and also by issuing a false prediction of a PLN6bn (€1.38bn) central bank windfall profit (the NBP actually made a PLN20bn loss). The government also says that Glapinski, a longtime PiS loyalist, had violated the Polish Constitution by buying government bonds and failing to react in time to the country’s high inflation rate.

An attempt to try Glapinski is mired in legal uncertainty. The government appears to think that a simple majority in the parliament will be enough to pass the motion, which, according to the law, will automatically suspend Glapinski.

But a January judgement by Poland’s Constitutional Tribunal said that the existing provisions on how the State Tribunal works are in breach of the Polish Constitution. According to the judgment, the parliament must pass the motion by a majority of three-fifths, which the Tusk government does not have.

The government has long said that the Constitutional Tribunal – which the preceding government of Law and Justice (PiS) engineered to ensure sympathetic judgments – is illegal.

The Tusk government is currently working on solutions to overhaul the Constitutional Tribunal to make it independent again as part of a border effort to restore the rule of law in Poland. 

That, in turn, is the demand of the European Commission, which continues to condition the full release of EU funding to Poland on an effective undoing of PiS’ judiciary reforms that, Brussels says – backed by judgments from the EU’s top courts – hollowed out the Polish courts system.

There was no reaction from the NBP to Tusk’s words on March 19.

The zloty also did not react much, having strengthened very slightly against the euro and the US dollar.

The NBP’s Monetary Policy Council – the central bank’s rate-setting body – split over the issue in March. At the March meeting of the council, only six members – all appointed by the PiS government – supported a resolution objecting to the government’s plan to suspend Glapinski.

According to the resolution, suspending or removing Glapinski “would violate the central bank's independence, and as a result, it would have negative consequences for Poles and the Polish economy”.

 

 

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