November 23, 2018 / 4:30 PM / 8 months ago

Financial scandal loosens grip of Poland's ruling nationalists

WARSAW (Reuters) - Poland’s ruling nationalists were likely to survive a no-confidence vote in parliament launched on Friday, but have seen their grip on power loosened by allegations of extortion at the financial regulator.

The biggest opposition party, the centrist Civic Platform (PO), filed the no-confidence motion on Friday, accusing the ruling Law and Justice party (PiS) of failing to ensure an independent inquiry on corruption allegations.

On Friday, Prime Minister Mateusz Morawiecki appointed the deputy head of the legal department at state-owned Pekao bank, Jacek Jastrzebski, to head Poland’s KNF financial regulator.

He replaces Marek Chrzanowski, a PiS appointee who resigned last week after the billionaire owner of a bank accused him of demanding payments of millions of dollars to a lawyer for “support”.

Chrzanowski denies wrongdoing. The accusation of corruption at the regulator caused a fall in share prices of Polish banks.

Although PiS has more than enough votes in parliament to survive a confidence vote, the motion comes at a time when its popularity ratings have fallen.

The party faces a general election in a year, and is weathering strong criticism from its political opponents at home, from the European Union and from Poland’s judges.

Along with Hungary’s ruling Fidesz party, it is one of a group of nationalist movements that has gained sway in eastern Europe in recent years, eroding the liberal consensus that held for nearly three decades since the fall of Communism.


“We clearly are dealing with an attempt to sweep PiS scandals under the rug,” said Slawomir Neumann, the head of the PO parliamentary caucus, on Friday.

In a sign that pressure is taking its toll on PiS, the party rushed a legislative amendment through parliament this week partially retreating from reforms that the European Union says undermined judicial independence. Supreme court justices who would have been forced to retire will be allowed to stay on.

The upper house of parliament, the Senate, approved the changes in a session late on Friday.

Poland “seems to be heading in the right direction,” European Commission Vice President Valdis Dombrovskis told reporters in Warsaw on Friday. “We need some time to do a deeper assessment of the legislation.”

Dombrovskis said the investigation of corruption in Poland’s banking sector needs to be carried out quickly, “but we cannot jump ahead of (its) conclusions”.

The head of Poland’s top court Malgorzata Gersdorf said on Friday that this week’s partial reversal on judicial reforms was only one step forward, and other steps would need to be taken to preserve the rule of law.

“The adoption (of the legal) changes is slightly satisfying when it comes to the Supreme Court judges, but it’s just the tip of the iceberg,” she told reporters. Poland’s Senate is expected to sign off on the legal changes on Friday.

Reporting by Karol Witenberg, Joanna Plucinska, Marcin Goclowski; Writing by Joanna Plucinska; Editing by Marcin Goclowski, Peter Graff and Dan Grebler

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