Poland told to keep hands off central bank

European Central Bank President Jean-Claude Trichet has strongly criticised the Polish government for its attacks on the independence of the governor of its central bank.

Speaking at the International Bertelsmann Forum in Berlin on 23 September, Trichet said that moves against the governor had been "quite damaging for the Polish economy" and for rules on the central bankers’ independence that the EU was trying to establish.

Trichet was referring to the attempt by the government, dominated by the nationalist Justice and Law party, to force Leszek Balcerowicz, the central bank governor, to appear before a committee investigating the sale of Polish banks to foreign companies. The government is also considering taking powers for regulatory banking supervision away from the central bank.

Balcerowicz, a leading architect of Poland’s economic transformation to a free market system, has refused to appear, arguing it would undermine the independence of the central bank governor. His stance has been upheld by Poland’s constitutional court which ruled on 22 September that the inquiry committee was unconstitutional.

Trichet’s criticisms were firmly rebuffed by Poland’s defence minister Rados?aw Sikorksi, also speaking at the meeting, saying that the Polish currency had been "stable" and that Poland enjoyed the lowest level of inflation in Europe. Sikorski, who is not a member of the ruling Justice and Law party, said that while he supported the need for the central bank to be independent there was a "constitutional question of whether [the governor] should be above the law". He said that, in 15 years, Poland’s banking sector had gone from being "completely state-owned" to having one of the highest levels of foreign ownership in Europe.

Sikorski was speaking the day after Polish President Lech Kaczysnki sacked the deputy prime minister, Andrzej Lepper, leader of the Sambroona party, after he criticised the government’s decision to send an extra 1,000 troops to Afghanistan and called for public spending increases which would break the government’s pledge to keep the deficit to 3% of gross domestic product (GDP).

The government has to find new supporters in the parliament or face a new round of elections, probably at the end of November.

In a separate move, the government reinstated former deputy prime minister and finance minister Zyta Gilowska on 23 September after she had been cleared by a court of accusations of spying for Poland’s communist regime.

European Central Bank President Jean-Claude Trichet has strongly criticised the Polish government for its attacks on the independence of the governor of its central bank.

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