Polish Constitution amendments before adopting the euro

ECB was asked for its opinion on a draft law which will amend the constitution of the Republic of Poland.

The draft law looks to propose amendments in the Polish constitution which will help it implement Euro as its currency.

The draft law amends the Constitution3 in order to address obligations stemming from Poland’s membership in the European Union. In particular, the draft law: (a) introduces a new Chapter Xa that consolidates provisions relating specifically to  Poland’s membership in the Union; and (b) amends several existing provisions of the Constitution relating to NBP, by introducing ‘changes necessary for the full performance of Poland’s obligations in respect of its participation in economic and monetary union, allowing for the future introduction of … the euro in Poland’ (hereinafter the ‘NBP amendments’).

The NBP amendments will: (a) redefine NBP’s institutional status and objectives by introducing references to NBP’s membership in the European System of Central Banks (ESCB), to price stability as NBP’s primary objective and to NBP’s  independence from other State bodies; (b) repeal the provisions granting NBP the exclusive authority to issue money and to formulate and implement monetary policy; (c) abolish the Monetary Policy Council (MPC) as one of NBP’sdecision-making bodies6; (d) modify the scope of the Supreme Audit Office’s (SAO) audit of NBP; and (e) remove the reference to the NBP President from the list of State officials that are accountable before the State Tribunal.

The draft law provides that all NBP amendments enter into force upon Poland’s adoption of the euro.

ECB looked at three issues:

(a) whether national law is compatible with Union law on central bank independence and confidentiality;
(b) whether national law is compatible with the Union law prohibition on monetary financing and privileged access; and
(c) the NBP’s legal integration into the Eurosystem.

Read the opinion for more details. Basically ECB asks to make changes with respect to instituional independence. It should explicit mention that Polish Central Bank is independent and  auditing powers of State Audit body should be limited and not interfere with monetary policy in general. It also asks to add the word prices stability explicitly so that functional independence is clear.

One was assuming Poles would avoid joining the EMU (and this) after escaping the recession. One of the main reasons was it not being a member of EMU. But it seems they are going ahead with the process. They might just delay till EMU stabilizes but would join in future.

Other than this, nice insights into linking central banking with constitutional law. It is serious stuff before joining the EMU (though countries can skip all this seriousness later). Wondering how much weight is given to RBI in India’s constitution…. Need to read on that…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.


%d bloggers like this: