The government overestimates the Monetary Policy Council's (RPP) influence on the economy, Wiesława Ziółkowska, a dovish member of the council, told the WBJ last week.
"The government has a lot of problems," Ziółkowska said following the RPP's monthly meeting. "(And) they are looking for other helpful factors in the central bank area."
The RPP cut interest rates a conservative 50 basis points last week - its third such cut in three months - bringing the base rate to 8.5%. It also lowered its year-end inflation target from 4-6% to 2-4%. Afterward, the Democratic Left Alliance (SLD)-led government continued its calls for deeper cuts and more aggressive monetary policy.
Ziółkowska said the government should stick to its own areas of responsibility.
"The government is responsible for fiscal and structural policy; the RPP is responsible for monetary policy," she said. "This division was respected when the economy was in bloom."
But with the economy flat and unemployment approaching 18%, the government considers monetary policy its responsibility as well, she said.
"When the economy started to slow down, politicians turned to the RPP," Ziółkowska said. "The government overestimates the importance of interest rates for GDP growth."
She said the government is looking for something tangible it can control.
"Our economy is in a bad situation," she said. "A lot of firms are in bad situations
There are populist people in Parliament."
Ziółkowska questioned whether the government, or even the press, had an effect on the 10-member council's decisions.
"We should do what we're focused on doing," she said. "This is of course a biased opinion, but I think we are independent. All the other members of the RPP avoid political confrontations."
Last Tuesday, members of the OPZZ trade union gathered in front of the National Bank of Poland, demanding the removal of its chairman, Leszek Balcerowicz.
Ziółkowska said her record of independence speaks for itself.
"I try to act the same way no matter what political party is in government," she said. "I voted for higher interest rates cuts when (former Prime Minister Jerzy) Buzek was in power, (and) I vote for them now."
Ziółkowska added that she didn't think the gap between the government and the RPP would ever be bridged.
Changing the mandate of the RPP "is unconstitutional," she said, referring to the government's plan to add six new dovish members to the council, effectively stacking the deck in favor of deeper rate cuts in the future.
- Staff report
