WARSAW: Poland's central bank said on Sunday an audio recording of Governor Marek Belka using expletives about colleagues and discussing deals with the government was taken out of context, and that he had not stepped beyond the bounds of his authority.
The Wprost news magazine on Saturday released a recording of a conversation in a restaurant last year in which, it said, Belka told a minister he would be willing to help the government out of its economic troubles if the finance minister was fired.
Some politicians had demanded the resignation of Belka, a long-standing political heavyweight who is generally seen as a safe pair of hands by investors with assets in Poland, the European Union's sixth-biggest economy.
In the first public comment from the central bank since the tape first emerged about 24 hours earlier, it issued a statement denying Belka broke the rules that stipulate the central bank must be independent from the government.
"Governor Belka gave a signal in this statement that he does not intend to resign," said Rafal Benecki, chief economist with ING Bank Slaski.
"It seems to me there will be no market reaction, or it will be very insignificant." But several economists and sources close to the government said the tape especially derogatory remarks Belka made about the central bank's rate-setting council could make it harder to conduct monetary policy.
Elzbieta Chojna-Duch:
one of the members of the council, told Reuters it was a "difficult situation", and said it was likely Belka would give an explanation at the council's next scheduled sitting, on Tuesday. Belka is chair of the council.
In its statement, the bank said Belka expressed deep regret for the language he used in the conversation, with Interior Minister Bartlomiej Sienkiewicz. It said he "apologises to all who have been affected and offended."
But the bank denied Belka, 62, a former prime minister and finance minister, had done anything more serious. It said Belka had met Sienkiewicz last year and the conversation touched on then finance minister, Jacek Rostowski.
"In the private part of conversation Marek Belka informed Bartlomiej Sienkiewicz about the lack of cooperation from the minister of finance," the bank said.
"From the nearly two-hour conversation, only a few minutes of out-of-context passages were published that talk about the stability of the financial system." This was manipulated to try to present the remarks as exceeding the powers of the bank's governor, "which never happened", the statement said.
SECRET RECORDING:
According to extracts of the recording posted on the Internet and a transcript released by the magazine, the man identified by the magazine as Sienkiewicz sets out a possible future scenario in which the government could not meet its financial commitments and faces election defeat.
He refers in vague terms to monetary policy action carried out elsewhere in Europe - an apparent reference to central bank stimulus.
"Is that precisely the moment for launching this sort of solution, or not?" Sienkiewicz asks Belka. The person identified by the magazine as Belka replies: "My condition would be the removal of the finance minister."
He said the replacement should be a "non-political, technical finance minister who will get full support from the central bank". The finance minister at the time, Jacek Rostowski, was removed last November as part of a cabinet reshuffle. He was replaced by Mateusz Szczurek, an economist.
It is unclear if Rostowski's departure was in any way connected to the exchange between Belka and Sienkiewicz. Rostowski's office said on Sunday he would not comment until he had more details. Sienkiewicz's office did not reply to calls seeking comment.
DISPARAGING REMARKS:
The discussion in the restaurant, interspersed by the sound of plates clanking, touches on the possibility the rate-setting council would block the bank helping the government.
"Of course, we have this fucking Monetary Policy Council," says the man in the recording, who sounds like Belka. "But we are able to play with it."
The recording also has Belka making disparaging personal remarks about one of the council members, Jerzy Hausner. Hausner told Reuters on Sunday he had no comment.
Prime Minister Donald Tusk has said he will comment on the tape on Monday at 3 p.m. (1300 GMT). An economist with a major bank, who did not want to be identified, said "it is hard to imagine that Belka would still be able to work together with the MPC".
The central bank is in the process of deciding whether to cut rates, which would mean dropping its policy of keeping them flat until the fourth quarter.
Markets where Poland's zloty currency is traded were operating on Sunday, but there were no transactions taking place, according to Reuters data.
That suggested traders were not concerned enough about the repercussions from the tape on the zloty to interrupt their weekend break.
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