Relations appear to warm between the central bank and the government

In line with expectations, the Monetary Policy Council (RPP) did not lower official interest rates on Friday, but quite amazingly, the cabinet re frained from criticizing this decision. Until now, every time the RPP left rates unchanged, Prime Minister Leszek Miller and government spokesman Michal Tober would say that the Council was out of touch with reality and is harming the economy. This time, Tober simply stated that Miller had no comments on the decision, because "he wasn't there." Relations between the government and the National Bank of Poland (NBP) have clearly warmed, with the RPP meeting the new Finance Minister Grzegorz Kolodko on Thursday. "The meeting took place in a good atmosphere and focused on real [economic] issues," said NBP governor Leszek Balcerowicz. Although Balcerowicz admitted that Kolodko's plans for the government to help ailing companies by reducing their debts is causing some concern, he added that it is difficult to assess these proposals without knowing the full details. He also praised Kolodko for pledging to lower the budget deficit and declaring that low inflation will be a priority for him. (Gazeta Wyborcza, July 20-21, p. 25) T.J.