Polish Central Banker’s ‘Joker’ Jab Ends Chance of New Term

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Poland's Central Bank Governor Marek Belka
Poland's Central Bank Governor Marek Belka. Photographer: Piotr Malecki/Bloomberg

Polish central bank Governor Marek Belka criticized Poles for voting for a “joker” in this month’s presidential ballots, a remark that effectively torpedoes his chance for a second term.

“We received a red card from you yesterday and two weeks ago,” Belka told an audience of students late on Monday, after opposition candidate Andrzej Duda beat incumbent Bronislaw Komorowski with strong support of Poles under 30 years old. “I don’t agree with it, but I understand. I could understand it even more if you did it by voting for stable left or right opposition parties and not for a joker.”

The governor has resisted calls for looser monetary policy, calling the end of interest-rate cuts in March even as Poland battles record deflation. The 63-year-old former prime minister was at the center of an eavesdropping scandal last year, which already reduced his chances of another six-year term. Duda is set to nominate the next central bank chief in June 2016, with his choice subject to parliamentary approval.

“Following what the governor said yesterday, his chances for a second term are zero,” said Rafal Benecki, chief economist for Poland at ING Groep NV. “With him at the helm, you didn’t have much concern about the central bank’s credibility. This could change, depending on who takes over.”

‘Exotic’ Candidates

Belka, who earlier declined to elaborate on his comments at, Thursday evening said “joker” wasn’t aimed at Duda.

“I am disgusted anyone could ever think this might refer to the newly elected president Andrzej Duda,” Belka said in an interview on the TVN24 news channel. “If you look at candidates in the first round, I think several could claim this honorable term. I had various candidates in mind -- exotic ones, so to speak.”

Belka also said it will be “tough” to meet some of Duda’s spending proposals. The newly elected president’s pledge that banks should convert loans denominated in Swiss franc to zloty at the rate on the day they were awarded would hurt banks and result in “a huge cost” for the country, he said in the interview. Any banking tax should be based on banks’ liabilities, excluding deposits, rather than assets, Belka said.

Forward-rate agreements, derivative contracts used to bet on interest rates, were little changed, continuing to show that tightening was more probable than loosening over the next 12 months. Poland’s benchmark rate stands at a record low 1.5 percent, while the consumer-price index dropped 1.1 percent in the 12 months to April, dropping for a 10th consecutive month.

‘Boiling’ Belka

Jacek Rostowski, the top adviser to Prime Minister Ewa Kopacz, called Belka’s comments “shocking.” Beata Szydlo, who headed Duda’s election campaign, said it would be better if the governor “didn’t participate in political discussions.”

In his rant Monday, during which he said he was “boiling” over the election result, Belka didn’t make clear whether the “joker” remark was directed at Duda or Pawel Kukiz, a political novice and former punk rocker who surprisingly garnered a fifth of the vote in the first round of voting on May 10.

He was addressing a gathering of scholarship students, who belong to the segment of younger voters facing unemployment of more than 20 percent. Sixty percent of voters under 30 cast ballots for Duda on Sunday, venting their anger at job prospects even though Poland has enjoyed the fastest economic growth in the European Union since the global economic crisis.

‘Deeply Mistaken’

“With such regularity, we’ve discussed how wonderfully everything went over the past 25 years of transformation, which was to us, the elites and the CEOs here, a great success,” Belka told the gathering at the Warsaw Stock Exchange. “The last weeks and hours show how deeply we were mistaken.”

Belka, who has led the central bank since 2010, was taped making disparaging comments about fellow policy makers and discussing potential help for the government before the election. The scandal, which erupted last year, has limited his influence over the 10-member Monetary Policy Council he chairs.

Duda’s Law & Justice party tried to start a legislative procedure to oust him over the tape scandal, with Szydlo saying last year he may have broken the constitution and compromised the central bank’s independence. Lacking a majority in parliament, the party failed to push through the initiative.

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