Polish magazine says central bank chief discussed removal of minister

WARSAW Sat Jun 14, 2014 7:34pm EDT

Marek Belka, President of the National Bank of Poland (Narodowy Bank Polski), delivers a speech during a conference on European economic integration in Vienna November 18, 2013. REUTERS/Heinz-Peter Bader

Marek Belka, President of the National Bank of Poland (Narodowy Bank Polski), delivers a speech during a conference on European economic integration in Vienna November 18, 2013.

Credit: Reuters/Heinz-Peter Bader

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WARSAW (Reuters) - A Polish magazine said on Saturday it had a recording of a private conversation in which the central bank chief told a minister the bank would be willing to help rescue the government from economic troubles on condition the finance minister was removed.

The weekly Wprost news magazine said it had a recording of a meeting in a Warsaw restaurant last July between central bank governor Marek Belka and Interior Minister Bartlomiej Sienkiewicz. It did not say who recorded their conversation, or how it had obtained the recording.

According to extracts of the audio recording posted on the Internet by the magazine, which have been heard by Reuters reporters, and were also emailed to Reuters by Wprost in transcript form, the minister sets out a possible future scenario in which the government could not meet its financial commitments and faced election defeat.

The man identified in the transcript as Sienkiewicz refers in vague terms to monetary policy action carried out elsewhere in Europe - an apparent reference to central bank stimulus.

"Is that precisely the moment for launching this sort of solution, or not?" Sienkiewicz asks Belka.

Belka replies, according to the transcript: "My condition would be the removal of the finance minister."

The finance minister at the time, Jacek Rostowski, was removed last November as part of a cabinet reshuffle.

Repeated calls by Reuters to the mobile telephone number of a central bank spokesman and the interior ministry's press office went unanswered. The government's press office did not pick up calls seeking comment.

It is unclear if Rostowski's departure was in any way connected to the exchange between Belka and Sienkiewicz. Reuters was not immediately able to reach him for comment on Saturday.

Tusk said at the time the changes were to inject new energy into the government, and Rostowski did not publicly object to leaving.

"UNFORTUNATE BUSINESS"

The magazine published a summary of what it said was the conversation between Belka and Sienkiewicz on its website. It said it would publish more details in its next edition on Monday.

In the recording, the person who sounds like Belka can be heard, between the clanking of plates, using an expletive to describe the central bank's Monetary Policy Council, responsible for setting interest rates.

Prime Minister Donald Tusk said on Twitter he would comment on the magazine's report on Monday.

"Unfortunate business. I don't underestimate it. I will comment on that publicly on Monday at 3 p.m. (1300 GMT) during a news conference," he said.

Poland's central bank is required to be independent of the government, according to a ruling by the Constitutional Tribunal in 2000.

Two sources in Tusk's Civic Platform party, who did not want to be identified because they were discussing internal party business, said they expected changes in the Cabinet as a consequence of the publication of the recording.

"The context of the whole discussion is awful and puts both gentlemen in a very bad light," one of the party sources said about Belka and Sienkiewicz.

A source close to the central bank said that with a few incautious sentences Belka put at risk what up to now had been an impeccable reputation. "He will have to work incredibly hard to keep it," said the source.

Jaroslaw Gowin, who quit his post as justice minister in Tusk's government last year and is now in opposition, said in a Twitter post on Saturday in reference to the Wprost report that Belka and Sienkiewicz should be dismissed. He did not give a reason.

But Deputy Prime Minister Janusz Piechocinski said the recording should be treated with caution. "Polish politics is awash with rumours and insinuation," he said.

It was not possible to establish from the excerpts whether Belka and Sienkiewicz were talking informally or in serious discussion of the outlines of a potential deal. It is also not known if Belka espoused different views in other parts of the transcript.

Poland suffered a sharp economic slowdown last year. The government was forced to revise its budget after forecasts for budget revenue proved over-optimistic. Since then, the public finances have improved and the economy is back to robust growth.

The central bank governor is nominated by the president and confirmed by parliament.

The law allows for the removal of the governor only in the event of incapacity, a criminal conviction, or a ruling by the state tribunal that the incumbent cannot hold an official post.

(Additional reporting by Marcin Goclowski, Pawel Florkiewicz and Adrian Krajewski; Writing by Christian Lowe; Editing by Sonya Hepinstall and Eric Walsh)

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