Officials Battle over Poland’s Central Bank
The Governor of the National Bank of Poland wants to make sure reserves will be covered in case the zloty strongly fluctuates.
The conflict between President Lech Kaczyński and the Polish Prime Minister Donald Tusk about central bank activity had deep after Piotr Kownacki, head of the presidential cabinet, said the intention of the Warsaw government to increase the powers of bank in consolidation the state budget violates the Constitution, writes Bloomberg.
Sławomir Nowak, political adviser of Prime Minister Donald Tusk, warned at the end of last week that the government could amend the legislation so that the central bank profits to go to the state budget and not be used to cover foreign exchange risks.
Kownacki has stated that such a measure would mean that “the central bank will put foreign reserves and stability of the Polish zloty in danger.”
Conflict on the monetary and fiscal policies between President Kaczynski and Prime Minister Tusk comes shortly before the presidential elections of 2010, when the two will fight for the office of head of state.
Tusk wants expedite adoption of the euro, while the president and the Polish central bank governor Sławomir Skrzypek vehemently oppose such actions. Tusk’s Proposal to affect the image of Poland externally, believe analysts.
“Such a government intervention would arouse a great controversy and could affect the image of Poland, because it would be interpreted as an attack on central bank independence, “said Stanislaw Gomulka, former deputy minister of finance and, now, chief economist for the club business in Warsaw.