AP

Polish leader faces questions about timing of bond purchase

Jun 8, 2022, 6:41 AM | Updated: 7:14 am

WARSAW, Poland (AP) — Poland’s prime minister faced questions Wednesday over his purchase of 4.6 million zlotys (over $1 million) in Polish treasury bonds, amid suspicions he made an investment that traditionally offers protection against inflation at a time when authorities were officially saying the inflation risk was low.

Opposition lawmakers have demanded that Prime Minister Mateusz Morawiecki explain in parliament whether he bought the bonds in 2021 knowing that rising inflation was on the horizon despite government proclamations.

Prices in May soared almost 14% compared to a year ago, lowering the standard of living for ordinary Poles. Energy costs in particular have skyrocketed, while mortgage rates are rising as the central bank raises interest rates on loans much more than on deposits.

Donald Tusk, the leader of the main opposition party, said there’s something “deeply immoral” in the actions of Morawiecki, who for years served as chairman of the board for a large bank in Poland.

“A few months ago he did not tell the Poles that there would be inflation. But he took care of himself and bought treasury bonds that protected his money against inflation,” Tusk, leader of the pro-market Civic Platform, said this week.

Morawiecki declared the bond purchase in an obligatory yearly financial report.

The government has refused requests by Polish media to provide details of the investments. Morawiecki, facing reporters’ questions on Tuesday, said investing in state treasuries serves the good of the country.

But government spokesman Piotr Mueller acknowledged Tuesday that the bonds could offer some protection against inflation.

“Every citizen has the right to buy them. Bonds are constructed in such a way that you can use them to fight the effects of inflation,” Mueller said.

Morawiecki has blamed the high inflation on Russia’s war against Ukraine, but economists note that other factors are also at play, including shortages and supply problems resulting from pandemic lockdowns.

The Polish central bank had insisted for many months last year — despite rising prices — that inflation would not be a problem before finally moving in the fall to raise interest rates. Meanwhile the Polish government has also cut taxes on fuel and energy and offered cash bonuses to give some relief to citizens, but not enough to offset the level of inflation.

The investments of Morawiecki and his family have come under scrutiny before.

His wife, Iwona, earned over 14 million zlotys ($3.5 million) for selling plots of land that the couple had bought for 700,000 zlotys in 2002 from the Catholic Church, according to the TVN broadcaster.

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Polish leader faces questions about timing of bond purchase