Lagarde: EU law will protect Polish central bank chief if new government unlawfully prosecutes him

The head of the European Central Bank (ECB), Christine Lagarde, has assured the governor of Poland’s central bank, Adam Glapiński, that he will be protected by EU law if the incoming government unlawfully suspends and prosecutes him.

A coalition of opposition groups is set to form a government next week and they have suggested they may seek to put Glapiński – a longstanding associate of Jarosław Kaczyński, chairman of the outgoing ruling Law and Justice (PiS) – on trial.

They accuse him of conducting monetary policy to PiS’s political order, in violation of his constitutional obligations. Glapiński, who has led the National Bank of Poland (NBP) since 2016, denies such claims.

Poland’s central bank governor has accused the media and economists of „lying 24 hours a day” to hide the „great success” in tackling inflation.

He says they are doing it for political reasons ahead of this month’s elections and they „want to harm Poland” https://t.co/zzQAog110u

— Notes from Poland 🇵🇱 (@notesfrompoland) October 6, 2023

In mid-November, a month after the elections that saw PiS lose its parliamentary majority, Glapiński wrote a letter to the ECB president outlining the opposition’s plans to bring him before the State Tribunal, a body empowered to punish the highest officials of state.

While Poland is not part of the eurozone, it is a member of the European System of Central Banks (ECSB), an institution that comprises the ECB and the national central banks of all 27 EU member states.

In a letter dated 1 December and published publically yesterday, Lagarde responded to Glapiński, saying he could count on the protection of EU laws if the lower chamber of Poland’s parliament, the Sejm, unlawfully suspended or prosecuted him.

Prezes EBC odpowiedziała prezesowi NBP w temacie Trybunału Stanu. Adam Glapiński może mieć powody do zadowolenia z tej odpowiedzi pic.twitter.com/duWDhxDUMJ

— Bartek Godusławski (@BGoduslawski) December 4, 2023

“In case the members of the former opposition parties were indeed to submit a preliminary motion to the Sejm, 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 [ECB’s] General Council,” Lagarde wrote.

“As you mention in your letter, Article 14.2 of the Statute of the ESCB and the ECB…offers protection in case the Sejm was to subsequently adopt a resolution to prosecute you,” the letter read.

The ECB president added that, if Glapinski is brought before the State Tribunal – which would automatically result in him being suspended – he could “refer such resolution to the Court of Justice of the European Union and ask for the assessment of its lawfulness”.

Speaking to the Financial Times, NBP deputy president Marta Kightly confirmed that the central bank would file an appeal to the European Court of Justice if that happened.

Poland’s central bank says it will today notify prosecutors of „unlawful threats” against its governor by opposition leader Donald Tusk and one of his deputies, who have said they will remove him from office after winning power https://t.co/IOfp3mQrM8

— Notes from Poland 🇵🇱 (@notesfrompoland) July 15, 2022

However, a leading opposition figure, Sławomir Nitras – who is tipped to be a minister in the new government named next week – responded to Lagarde’s letter by assuring that “no one has any intention of illegally putting Mr Glapiński” on trial.

“Arguments will be presented, which are not difficult to find, and it will all be done according to the law,” said Nitras in an interview with Radio Zet this morning. “And I have no doubt that then Mrs Lagarde, having familiarised herself with the procedure, will have no doubt that this procedure was lawful.”

Last week, Donald Tusk – the opposition’s nominee to lead the new government – likewise announced that any move against Glapiński would be done in a manner that “would not damage the stability or undermine the reputation of the Polish state abroad”, reports the Parkiet business daily.

Both Tusk and Szymon Hołownia – another of the opposition coalition’s leaders and the new speaker of the Sejm – have stated that no final decision on what action, if any, to take against Glapiński has yet been made.

Poland has Europe’s joint worst central banker, finds an international report https://t.co/XQNKvJInvW

— Notes from Poland 🇵🇱 (@notesfrompoland) November 2, 2021

In order to bring the central bank governor before the State Tribunal, a motion would have to be passed by a majority of MPs in the Sejm. If he was indicted, then Glapiński would be automatically suspended from his position.

Opposition figures have argued that Glapiński violated his constitutional obligation to independently execute monetary policy by, for example, making deep cuts to interest rates shortly before the October elections despite stubbornly high inflation.

However, the NBP has denied such claims and argued that suspending its governor would itself be unlawful. Last week, it hung a large banner on its headquarters in Warsaw declaring that: “All activities of the NBP are in accordance with the law and meet the highest international standards.”

„Wszystkie działania NBP są zgodne z prawem” głosi nowy baner na budynku NBP. Hmm 🧐 To ja powiem tak. Są zgodne z prawem Kopernika- Greshama, które mówi, że zły pieniądz wypiera dobry. pic.twitter.com/4peYSFhtKZ

— Joanna Mucha (@joannamucha) November 28, 2023

On Monday, the NBP also published an open letter to Hołownia, in which it argued that the opposition’s accusations were “unfounded” and that “the actions of the NBP and its president in 2020-2023 were based on the best economic knowledge, pursued Poland’s economic interests and were in accordance with the law”.

In the letter, NBP board members explained that the NBP’s decisions to both raise and cut rates in the last three years were linked to global shocks such as the pandemic and the war in Ukraine and were “in line with the practice of other central banks”.

According to a poll published today by the Dziennik Gazeta Prawna daily, 54% of Poles want Adam Glapiński to be brought before the State Tribunal. Less than a third of respondents hold the opposite view.

Większość Polaków oczekuje postawienia Adama #Glapiński przed #TrybunałStanu. W jego obronie staje mniej niż co trzeci badany. Takie są wyniki sondażu @united_surveys dla @DGPrawna i @RMF24pl https://t.co/9LScTTGLGr

— Tomasz Żółciak (@tzolciak) December 5, 2023

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Main image credit: World Economic Forum/Flickr (under CC BY-NC-SA 2.0)