Head of the European Central Bank: The regulations protect the NBP president

European Union rules protect the governor of Poland’s central bank if the new government plans to unlawfully prosecute or suspend him.

This information was provided in a letter on Monday by the President of the European Central Bank, Christine Lagarde.

The coalition of KO, Third Way and Left, which won a majority in October’s parliamentary elections, claims that NBP President Adam Glapiński changed the bank’s policies to help the Law and Justice government, making it becomes difficult to combat inflation and violation of the constitution. The coalition’s candidate for prime minister, Donald Tusk, claims he has enough votes in the lower house, the Sejm, to challenge Glapiński before the State Tribunal.

“The Statute of the ESCB and the ECB, which includes a guarantee of the independence of the Governors of the National Central Banks, provides protection in the event that the Sejm wishes to adopt a resolution to impeach the President of the NBP” , says Christine Lagarde. said in a letter addressed to Adam Glapiński.

Lagarde said such an accusation could result in Glapiński’s automatic suspension both as head of the central bank and as a member of the ECB General Council, and could therefore be illegal. “You can submit such a resolution to the Court of Justice of the European Union and ask for an assessment of its legality,” Lagarde said.

Members of the Board of Governors of the Polish Central Bank and some members of the Monetary Policy Council warn that any action against Glapiński could have a negative impact on the Polish economy and Polish assets.

“Undue pressure on the bank and its organs.” Members of the NBP Board of Directors write to Hołownia

Members of the NBP board of directors sent an open letter to the chairman of the Sejm, Szymon Hołownia, in defense of President Adam Glapiński. The authors of the letter indicate that in recent weeks there have been voices from the coalition camp about the possibility of taking Glapiński before the State Tribunal for “the ineffective fight against inflation and the purchase of government bonds during the COVID period.” These accusations, as they emphasize, are unfounded, and the NBP president’s actions “were based on the best economic knowledge, pursued the economic interests of the Republic of Poland and were in accordance with the law.”

Members of the NPB board of directors indicate that the high inflation was caused by the post-pandemic crisis and Russian aggression against Ukraine. They cite the International Monetary Fund’s advice from June 2023, which states that “the Monetary Policy Council appropriately raised interest rates from near zero in 2021 to 6.75%, and entered a pause in October 2022.”

The purchase of bonds during the pandemic was in turn a response to the risk of threats to price stability in the medium term. The IMF has also assessed it positively. Moreover, as the authors of the letter emphasize, the purchase did not violate the provisions of the Treaty on the Functioning of the EU and was in accordance with the provisions of the Polish Constitution, as well as with similar actions of other central banks.

“The NBP’s actions in 2020-2023 saved our country from economic collapse and subsequently suppressed inflation, which was mainly a result of the Covid pandemic and Russian policies. Therefore, it would be a punishment to bring the NBP president before the State Tribunal. for the exemplary performance of his duties” – was highlighted in leaves.

Political pressure

In light of these arguments, members of the NBP board argue that attempts to change the position of the NBP president are purely political in nature.

“In addition, there are vague allegations of undermining the apolitical nature of the position being held. They are so vague that it can be concluded that the only violation of the President of the NBP is the fact that the coalition established after October 15, 2023, This allows us to conclude that the purpose of publicly considering the possibility to use procedures that would lead to the resignation of the current president of the NBP is an attempt to put unnecessary pressure on the central bank and its organs. ,” they wrote.

Source: Do Rzeczy