Polish ruling coalition moves to put central bank governor on trial

Mar 26, 2024 | Business, Law, Politics

In an unprecedented move, Poland’s ruling coalition has submitted a motion to put central bank governor Adam Glapiński – who was appointed under the former Law and Justice (PiS) government – on trial.

They accuse Glapiński – a longstanding associate of PiS chairman Jarosław Kaczyński – of breaking several laws and of violating his constitutional obligation to uphold the political independence of the National Bank of Poland (NBP).

If the motion passes, Glapiński’s will be the first person brought before the State Tribunal, a body empowered to punish the highest officials of state, since 2005. However, he has dismissed the accusations against him as “idiotic”.

The motion to bring Glapiński before the State Tribunal included eight charges:

  • the purchase of state bonds that led to the indirect financing of the state budget deficit by the central bank;
  • failure to secure authorisation from the Monetary Policy Council (MPC) for government bond purchases;
  • currency interventions without due authorisation from the National Bank of Poland’s (NBP) board, at least some of which were aimed at weakening the zloty;
  • lowering interest rates despite accelerating inflation;
  • obstructing certain members of the MPC and NBP board in the performance of their constitutional and statutory duties by denying them access to documents held by the central bank;
  • lack of cooperation with the finance ministry in the drafting of the 2024 budget bill;
  • accepting an unlawful mechanism for automatically calculating and paying to himself four quarterly awards each year;
  • violation of the apolitical nature of the office of the NBP governor.

The motion was signed by 191 of the 459 active members of the Sejm, the lower house of parliament. That is more than the 115 MPs required to support such a motion.

The motion will now be assessed by the Sejm’s constitutional accountability committee, where the ruling coalition has a majority. It can choose either to discontinue proceedings or to propose bringing Glapiński before the State Tribunal.

In the latter case, normally the Sejm – where the ruling coalition also has a majority – would hold a vote in which a simple majority is required in the presence of at least half of MPs to put Glapiński on trial. Should that happen, the governor could be suspended from his position during the legal proceedings.

However, the constitutional court, a body widely seen as being under the influence of PiS, earlier this year ruled that requiring only a simple majority of MPs to put the central bank governor on trial is unconstitutional. It said a three fifths majority is required, something the ruling coalition cannot achieve.

In an interview with the Financial Times yesterday – before the motion was published but after Prime Minister Donald Tusk had announced it would soon be submitted – Glapiński declared that he had “nothing to hide” and was ready to defend himself before the State Tribunal if necessary.

However, he also called the accusations against him “idiotic” and warned that putting him on trial would be “very bad for Poland”. He expressed hope that he could “meet and talk” with Tusk to set straight the “many misunderstandings and bad words from both sides”.

The idea of bringing Glapiński before the State Tribunal has also been criticised by PiS. On Saturday, Kaczyński warned that it would lead to “a lowering of Poland’s credibility, a weakening of the currency, and a reluctance of foreign companies to invest in Poland”.

Commentators have aired mixed feelings about the ruling coalition’s move against Glapiński, with many accepting that there are valid arguments regarding his misconduct but also expressing concern at the idea of putting a central bank governor on trial.

“I am not a fan of Adam Glapiński, but a central bank governor in all civilised countries is untouchable,” economist Janusz Wdzięczak told news website Interia. “The independence of the central bank is enshrined in the constitution and international agreements.”

However, an MP from the ruling coalition, Janusz Cichoń, who also chairs the Sejm’s finance committee, argues that the aim of putting Glapiński on trial is precisely to restore and protect the independence of the central bank.

“This motion is proof that you cannot get away with it, you cannot engage in a political dispute and make decisions that harm the implementation of the main goal of the national central bank and its constitutional role,” he added, quoted by Interia.

Jan Czekaj, an economist and former member of the central bank’s Monetary Policy Council, told the Rzeczpospolita daily that, while “monetary policy pursued under the leadership of Glapiński…can be debated, it is rather difficult to imagine it becoming the subject of criminal proceedings”.

However, he added that denying members of the MPC and the bank’s board access to certain documents “is serious misconduct”.

According to a poll by UCE Research for news website Onet published yesterday, 51% of Poles believe Glapiński should be brought before the State Tribunal while 24.6% of respondents hold the opposite view. A further 7.5% said the issue does not interest them and 16.9% have no opinion.

In Poland’s post-communist history, only two people have been convicted by the State Tribunal: a minister and a senior customs official in relation to a corruption scandal involving the import of alcohol in the 1990s.

The last time the Sejm voted to bring someone before the tribunal was in 2005, when former treasury minister Emil Wąsacz was put on trial. The case against him was eventually discontinued in 2019.

In December last year, the head of the European Central Bank (ECB), assured Glapiński that he would be protected by EU law if the incoming government unlawfully suspended and prosecuted him.


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Main image credit: KPRM (under CC BY-NC-ND 3.0 PL)

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