(Bloomberg) -- European Central Bank President Christine Lagarde said Poland’s monetary policy chief could refer any potential action to suspend him to the European Union’s top court, signaling reluctance to take sides in an escalating political spat.
It was the ECB’s first cautious assessment of a dispute that’s turning into one of the major challenges for Poland’s incoming government under Donald Tusk, a former European Council president.
Lawmakers from the next ruling coalition have accused Governor Adam Glapinski of orchestrating politically motivated interest-rate moves before the Oct. 15 parliamentary election and alleged irregularities in the bank’s bond-buying program.
Responding to a letter from Glapinski, Lagarde said a motion to sideline him could affect the institution’s independence “if not lawful.”
“You could refer such resolution to the Court of Justice of the European Union and ask for the assessment of its lawfulness,” Lagarde wrote in a letter dated Dec. 1 and posted on the ECB’s website.
Tusk’s party has pledged to put the governor in front of a special tribunal, a motion that would effectively suspend him in his duties and may eventually lead to his ouster well before his second six-year term ends in 2028. The incoming premier said Friday there’s no rush to decide on the probe as the coalition assesses its legal case.
Glapinski has consistently rebuffed the accusations and said the legality of the central bank’s bond-buying program was approved by the ECB. The National Bank of Poland’s board members called allegations political at a news conference on Monday.
Tusk’s coalition allies secured a majority in the Polish parliament on a promise to reverse years of democratic backsliding under the ruling nationalist Law & Justice party. Glapinski is a long-standing political ally of the outgoing party.
The spat is also personal. Glapinski alleged in an interview last year that Tusk was tasked by the EU’s executive to bring down the Polish government and introduce the euro.
The governor has sparked controversy in recent months. His panel unexpectedly cut rates by three-quarters of a percentage point in September, triggering a selloff in the zloty and raising speculation over whether the he was trying to help the government win re-election.
After the ballot, Glapinski surprised again by pausing the easing cycle, saying new fiscal risks may fan inflation.
(Updates with Polish central bank comments in sixth paragraph.)
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