This is yet another post in which I decry the depressing stupidity of public debate in Poland, especially when it comes to matters of economics and finance. The recent EU summit, aside from making a large (though rather back-door) policy breakthrough with respect to bailing out illiquid governments, has also proposed that the central banks of EU countries guarantee a loan to the IMF, with the aggregate value of some 200 billion euros. The funds are presumably going to be set aside in order to be used to help eurozone governments facing liquidity problems.
Poland's share in that guarantee is supposed to be somewhere in between 5 and 10 billion euros, and it's going to be funded through Polish central bank's currency reserves (which really means foreign government bonds held by the bank). At any rate, what prompted this note was an argument I've heard from a politician of the opposition party, debating against Poland's participation in this loan: namely, that even though on the face of it we're lending to the IMF, "everyone knows" we'll really be lending to Greece and Italy in order to save the euro, and it is a violation of the constitution to use the central bank of Poland to defend a non-Polish currency.
This was said with a straight face, by someone who used to be a Foreign Minister, about a loan to the IMF. Whose main (and at the time of its birth, only) function is pooling funds from central banks of many countries in order to provide their participants insurance against speculative attacks on their currencies.
Let me rephrase that again: the argument is that we can't be lending this money to the IMF because everyone knows they will use it to protect a foreign currency from speculative attack.
Poland's share in that guarantee is supposed to be somewhere in between 5 and 10 billion euros, and it's going to be funded through Polish central bank's currency reserves (which really means foreign government bonds held by the bank). At any rate, what prompted this note was an argument I've heard from a politician of the opposition party, debating against Poland's participation in this loan: namely, that even though on the face of it we're lending to the IMF, "everyone knows" we'll really be lending to Greece and Italy in order to save the euro, and it is a violation of the constitution to use the central bank of Poland to defend a non-Polish currency.
This was said with a straight face, by someone who used to be a Foreign Minister, about a loan to the IMF. Whose main (and at the time of its birth, only) function is pooling funds from central banks of many countries in order to provide their participants insurance against speculative attacks on their currencies.
Let me rephrase that again: the argument is that we can't be lending this money to the IMF because everyone knows they will use it to protect a foreign currency from speculative attack.
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