Ousting the head of Poland’s central bank to appoint a pro-euro chief would be “playing with fire” and could crash the zloty, the bank’s head warns Donald Tusk’s new parliamentary majority.
National Bank of Poland (NBP) president Adam Glapiński accommodated the previous PiS government too much on monetary policy and undermined the bank’s independence, say Donald Tusk’s Civic Coalition (KO) and its allies.
However, Glapiński, whose second six-year term began in 2022, says Tusk’s majority wants to oust him to force Poland to adopt the euro.
The move would be an “attack on the very heart of our financial security”, he said in a 10 November press conference.
Poland’s constitution lets parliament suspend the president of NBP by placing him before a special tribunal for failing to perform his duties.
Glapiński says he will not back an application for Poland to join the Euro during his term of office.
Poland’s EU accession treaty formally commits Poland to adopting the euro, but does not set a date.
Discussing Poland’s entry into the euro can begin when Poland “reaches the level of development in Western countries”, says Glapiński. This will take at least eight to ten years, he says.
“It can be done earlier, but to the detriment of Poland,” and harm GDP growth, he says.
Tusk and allies also criticise Glapiński for a steep September interest-rate cut which blindsided investors and sparked a selloff in the zloty.
During the campaign, they promised to hold the central bank president accountable for failing to combat inflation.
“Strong international organisations would definitely react” to a move to oust him, says Glapiński, who threatens to notify the European Central Bank, the World Bank, and International Monetary Fund.
The NBP is “one of the most credible central banks in the world, with huge reserves, including gold,” he says.
An attack on him will cause ratings for Polish debt to fall, and it is irresponsible for politicians to attack central bank leader, he says.
Poland’s new majority has not committed itself to a timetable for joining the Euro, although the KO, the Left, and Szymon Hołownia’s faction of the Third Way are known to favour earlier entry.
Poland’s constitution also specifies the Polish currency is the zloty.
However, the constitution would not stop Poland entering the ERM II mechanism, limiting the variation in the zloty’s value against the Euro, making long-term maintenance of the zloty relatively pointless.