The bill will be particularly nasty for the budget, as it could lead to a significant weakening of the banking system with serious consequences for the economy, Belka told the TVN BiŚ broadcaster.
The central banker added that the bill, which could see swiss-franc mortgages being exchanged to equivalent ones in Polish złoty, could have a dilapidating effect on the bottom line of many banks, particularly on top of a new tax on banks, which will come into force in February.
“Banks can somehow brush off the new tax, but having additional costs on top of that, plus the ‘swiss-franc bill’, is a recipe for a banking crisis in the country,” Belka said.
He added that the bill as outlined by Polish President Andrzej Duda will be “extremely nasty for the budget”, adding that “there is no social need for such a law”.
“This will lead to a significant weakening of the banking system with very serious consequences for the economy,” Belka, a former director of the European department of the International Monetary Fund, said.
Poor(s) rating for Poland
Belka admitted that he was very surprised that Standard & Poor’s lowered its rating for Poland on Friday, saying the New-York based rating agency went “too far” in its report about possible financial threats facing the country, following several economic and political changes introduced by the Law and Justice (PiS) government which won the 25 October general elections.
“The downgrade reflects our view that Poland’s system of institutional checks and balances has been eroded significantly as the independence and effectiveness of key institutions, such as the constitutional court and public broadcasting, is being weakened by various legislative measures initiated since the October 2015 election,” Standard & Poor’s said.
On Monday, the National Bank of Poland released a statement relating to the S&P downgrade of one notch from A- to BBB+ on Friday – the first downgrade ever for the Polish economy.
“The Polish economy is characterised by strong fundamentals and high macroeconomic stability,” the NBP statement read.
“Economic growth is stable and close to the potential growth rate. The current account deficit decreased in recent years, and NBP foreign exchange reserves remain at a high level.”
The decision by S&P saw the złoty drop to four-year lows against the euro, and 13-year lows against the US dollar. It has since regained some ground. (rg/pk)