Top Polish Court Moves to Derail Probe of Central Bank Chief
(Bloomberg) -- Poland’s controversial top court ruled that a parliamentary probe into the actions of the central bank governor is unconstitutional because it undermines the monetary authority’s autonomy.
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The decision by the Constitutional Tribunal, whose own independence from politicians has been questioned by the European Union, will make it more difficult for the government to investigate Governor Adam Glapinski. Financial markets have largely ignored the saga, with the zloty, stocks and bonds gaining since pro-EU parties won last year’s election.
Glapinski, an ally of the nationalist Law & Justice party that lost power late last year, has denied any wrongdoing. He has been accused by a group of lawmakers of politicizing the National Bank of Poland’s policy as well as irregularities in the bank’s bond-buying program.
“The constitutional principle of the independence of the NBP excludes the possibility of granting political bodies, such as parliamentary committees, powers that would constitute a means of pressure on the central bank,” Justice Krystyna Pawlowicz said in the tribunal’s ruling on Tuesday. The process could “paralyze” the central bank, she said.
‘Further Actions’
Prime Minister Donald Tusk’s coalition has set up a parliamentary probe of Glapinski, a process which could lead to his suspension or even oust the governor before his term ends in 2028. So far, lawmakers have detailed their accusations against the central banker and a special committee has met, but the panel hasn’t yet held any hearings.
The committee is expected to hear testimony from witnesses and experts, and is likely to demand Glapinski answer its questions, a process which could prove difficult given this verdict. The EU has questioned the independence of the Tribunal after it was repeatedly revamped under the previous administration, whose appointees currently control the court.
The central bank wasn’t immediately available for comment. Zdzislaw Gawlik, a lawmaker from the ruling coalition who heads the special committee, said the panel will “observe existing law and the committee will take further actions in September.” He didn’t provide details.
Glapinski wrong-footed investors when his Monetary Policy Council sharply cut interest rates before last year’s elections, sending the zloty into a tailspin. After the vote, the governor’s rhetoric turned more hawkish and the panel has not lowered official borrowing costs since, which Tusk said this month is impeding the country’s economic growth.
Tusk, who has pledged to revive the rule of law in Poland, called one of the tribunal’s previous verdicts regarding the Glapinski probe “non-binding.” The Tribunal’s latest ruling, as well as several others, was initiated when Law & Justice lawmakers requested that the body investigate whether the probe of the central bank chief was constitutional.
--With assistance from Maciej Martewicz and Wojciech Moskwa.
(Updates with quotes and details from the first paragraph)
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