Polish central bank chief faces suspension after parliament files motion for trial

Polish central bank chief faces suspension after parliament files motion for trial
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 22, 2024

More than 100 Polish MPs from the ruling majority submitted a motion to the parliament on March 21 seeking to put the National Bank of Poland Governor Adam Glapinski on trial for alleged violations of the Polish constitution and for being too politically involved.

The nearly 70-page motion lists eight charges against Glapinski, who has headed the NBP since 2016 amidst controversies regarding his political background and – critics have long said – blatant allegiance to Law and Justice (PiS), the previous ruling party. 

In theory, the motion could lead to the suspension of Glapinski or – a less likely scenario – to his ousting from the position of Poland’s key monetary policy maker. It could also bring the government into conflict with the European Central Bank for breaching the central bank's independence.

The motion’s biggest claim is that Glapinski made the NBP buy government or government-guaranteed bonds during the COVID-10 pandemic to “finance the state budget deficit to the amount of at least PLN144bn [€33.47bn],” the motion says.Financing budget deficits by the NBP is forbidden in the Polish constitution, the motion points out.

The MPs also say that Glapinski pushed the Monetary Policy Board, the central bank’s rate-setting body, to cut interest rates twice in September and October in a politically-motivated move to help PiS in the election campaign at the time.

The motion also claims that Glapinski’s single-handedly decided on two currency market interventions in December 2020 and March 2021, blocked information exchange inside the NBP, and lied to the public about the NBP’s expected financial result for 2023, saying during the campaign that the central bank would turn in a PLN6bn profit.  Later, the motion alleges, the NBP admitted that it was likely to incur a loss of around PLN17bn instead. The NBP’s financial results for 2023 are due in April.

The MPs also say that Glapinski granted himself quarterly bonuses in breach of the NBP’s internal regulations and openly supported the PiS government in his statements while lambasting then opposition leader Donald Tusk.

Tusk has long said removing Glapinski from his post is one of his priorities once he takes over power.

The move by the ruling coalition’s MPs now signals the PM is about to carry out his pledge despite the controversies it will arouse in the EU. The ECB is likely to speak in support of Glapinski, considering the motion and the rhetoric that accompanies it a political challenge to the central bank’s independence.

“Any measure affecting your ability to perform your duties as governor of NBP may, if not lawful, affect your independence and by extension the independence of the general council [of the ECB],” the European Central Bank’s chief Christine Lagarde said in a letter to Glapinski in December, before the accusations against the governor were laid out.

The motion is now expected to go to a dedicated parliamentary committee that will put it out to vote in the plenary. The date of the vote is unclear. According to Polish law, if the parliament decides Glapinski should face trial, he will be suspended automatically.

The NBP did not have an immediate comment on the motion.

The Polish zloty did not react to the news, remaining stable against the euro and the US dollar.