Peasants cultivating SLD support for packed council

The ruling Democratic Left Alliance (SLD) is showing some signs of support for a bill that would alter the composition and tasks of the country's central bank, a member of the Polish Peasants Party (PSL), which introduced the act, said Friday. "The SLD is getting ripe, and we think that in the end it will support our project," said Marek Sawicki, the deputy chairman of PSL's executive committee, which submitted the proposal last December. The bill would add six members to the 10-member Monetary Policy Council (RPP), the central bank committee responsible for setting the country's interest rates. The PSL submitted the proposal in an effort to stack the body with members favorable to easing rates in the midst of the country's economic woes. RRP members and its chairman Leszek Balcerowicz, president of the National Bank of Poland, have come under fire for not doing enough to soften the country's monetary policy. Last year the RPP slashed rates six times for a total of 7.5 percentage points. So far this year, the body cut the bank's main interest rate in January by 150 basis points to 10%.

"Once the bill is accepted by the Sejm, the RPP will be given additional tasks that would require close cooperation with (the) government," Sawicki said. Having six additional members would not only promote stable monetary policy but also establish "other goals directed at economic growth and fighting unemployment," he said. Grzegorz Wójtowicz, an RPP member, noted that as of yet there had been no formal movement by the SLD, the dominant party in the three-party coalition government, to support the bill. Wacław Martyniuk, the secretary of the SLD's parliamentary club, said the party would not comment on the matter until a copy of the bill's project is printed. The Labor Union (UP), the government's third coalition partner, has thrown its support behind the bill. The PSL blames the central bank for wreaking havoc on the economy by not cutting interest rates quickly or deeply enough. "Every time the RPP does not lower interest rates, the złoty gains in value and its price drops after three months," Sawicki said. "It's possible to get a return on an investment of 30-35% in just three months if you invest in treasury bonds. (The RPP's actions) allow the draining of $1 billion annually from the financial system.

"It is happening because our interest rates are (the) highest compared to neighboring countries and all the speculative capital is attracted to Poland. If we had lower interest rates, perhaps some part of it would invest in Poland in the form of foreign direct investments. Right now, the RPP is participating in speculation." Discussion of the bill in the lower house of Parliament would begin before mid-June at the latest, Sawicki said, since the speaker of the Sejm has six months from the introduction of a bill to submit it to the floor for debate. The RPP will hold its third meeting of the year on March 26-27. Economists say that the body will likely leave rates unchanged, although a rate cut of 100-150 basis points could come within the next one to two months.