Marshal Kuchciński handed over to the Senate the bill adopted by the Sejm, which contains provisions grossly contrary to fundamental human rights, the Constitution of the Republic and the Civil Code. The new Act on the Bank Guarantee Fund, the deposit guarantee system and forced restructuring legalizes the possibility of theft of money belonging to the failing bank’s customers and shareholders. What’s more, he puts the administrative body of the state above the law, allowing him to take unlawful resolutions, the enforcement of which is not able to withhold even the final court decision. The new, exceptionally extensive (387 articles on 320 pages) the BFG Act introduces criminal laws, creating dangerous precedents limiting fundamental civil rights and freedoms, and ruining the legal system by interfering with the content of many other laws. Establishing such regulations can not justify anything, and certainly not the order to implement dubious EU directives. The story is on jacahuesca.com
The theft, legalized in the new BFG Act, is euphemistically called “waiver of liabilities”. Glaringly contrary to the basic principles of law, the provisions of this Act grant the BFG Management Board the right of imperious interference in the contractual relationship between the creditor and the debtor. They allow him to write off the debts of a failing bank in administrative and legal mode, without asking permission from his creditors, or even without looking at the compliance of his resolutions with the law. The possibility of an administrative cancellation of obligations – called from English Bail-In – is one of the so-called instruments. compulsory restructuring, which may be subject to a failing bank, an investment company or a savings and credit union. Bail-In mechanism was used for the first time in Cyprus in 2013. Today it is being introduced into the legal systems of many European countries.
Statutory consent to robbery
The fundamental, natural and inalienable human right to property and its protection is set out in art. 64 of the Constitution of the Republic of Poland. The right of ownership can sometimes be administratively limited, for example in the case of establishing an easement or forced expropriation of the property with appropriate compensation, but not abolished. Restrictions on the use of constitutional freedoms and rights may be established only when they are necessary to ensure public safety or order, or to protect the environment, health and public morals, or the rights and freedoms of others. These restrictions may not violate the essence of freedoms and rights, as clearly stipulated in art. 64 section 3 and art. 31 section 3 of the Constitution of the Republic of Poland.
The new Act on BFG in art. 201 sec. 1 allows for the total annihilation of the right of ownership (redemption of receivables) on the part of the creditor of the failing bank (depositary, investor or shareholder) and justification of the need to recapitalize the failing entity. Such justification is unacceptable for the restriction of any constitutional right, let alone to the violation of the essence of the right of ownership, that is, its destruction by the power of a resolution issued by the administrative body of the state. The Constitution of the Republic of Poland prohibits this.
The essence of the right of ownership is the freedom to use and dispose of property by the owner, with few restrictions on this freedom resulting from the principles of social coexistence. It is reflected, inter alia, in the provision of art. 508 of the Civil Code, which states that the obligation expires when the creditor releases the debtor from the debt and the debtor accepts it. This means that only the bank’s creditor can cancel the debt incurred on the bank’s side at the time of accepting the deposit, selling financial instruments or the bank’s shares. For the remission of receivables, it is necessary to cooperate between the creditor and the debtor, i.e. to conclude an appropriate agreement between them. It is unacceptable, however, that any third party interference in the liability relationship between the creditor and the debtor.
The provisions of art. 201 sec. 1 stand in gross conflict with art. 508 of the Civil Code, therefore it is a kind of cynicism to use the words in the new BFG Act: ” The Fund may, without the consent of the owners and creditors of the entity in the restructuring, cancel or convert liabilities to recapitalize the entity ” (Article 201 sec.1). Granting or not granting consent to a state administration body is without object, because only the creditor has the right to dispose of his debt and redeem debts to his debtors.
Exclusion of the right to court
Claiming and annulling the resolution of the BFG Management Board on the cancellation of the obligations of the failing bank would be very easy because of the obvious contradiction of such a resolution with the basic principles of the applicable law. The authors of the new Act on the BFG have therefore introduced a legal mechanism guaranteeing the effectiveness of a nationalized robbery. It was recorded in the bizarre provision of art. 105 section 3 of the new BFG act, which stipulates that a valid administrative court judgment stating the Fund’s decision in violation of the law does not affect the validity of legal acts performed on its basis and does not prevent the Fund from taking actions undertaken on its basis.
The introduction of this regulation means de facto depriving the creditors of the failing bank of the constitutional right to court, which is guaranteed in art. 45 para. 1 of the Constitution of the Republic of Poland. What practical meaning is the final judgment of the court that does not stop the illegal actions of the state administration body? Of course none. What kind of state does it allow for the activities of its administration despite their unquestionable conflict with the law?
This is the second, in addition to the violation of property, a dangerous precedent consisting in introducing into the legal system provisions drastically violating the basic civil rights and freedoms guaranteed in the Constitution of the Republic of Poland. Breaking the constitutional protection of property rights and the right to a just court opens the door to legalize every other lawlessness.
Bankerism and submissiveness of power
The introduction of the Bail-In mechanism into the new BFG Act is under the pressure of the European Union, which filed a lawsuit against Poland against the European Court of Justice for late implementation of the BRRD ( Bank Recovery and Resolution Directive ) issued by the European Parliament and the Council on 15 May 2014 year (2014/59 / EU). In the statements of many politicians and officials, as well as in the reports of the majority of information media, the necessity to quickly implement the BRRD is emphasized due to the threat of EU financial penalties, while the issue of gross violation of basic civil rights and freedoms is marginalized or even omitted.
The basic doubt that arises in connection with the compulsory implementation of the Bail-In mechanism concerns the basis on which the European Union authorities require the introduction of unfair and unconstitutional norms to the Polish legal system that protect financial institutions at the expense of their clients and shareholders. Not every law is a good law. The law, which is established to enable plundering of one another, is a rogue law. Fryderyk Bastiat drew attention to this already in the 19th century. Examples of unjust and inhuman legal systems, as well as accounting for the effects they cause, can also easily be found in the latest 20th-century history of Europe.
The second doubt concerns the submission of the Polish government and the parliamentary majority to the absurd dictates of the European Union. Why did not any Polish government – both the previous one and the current one – apply to the Court of Justice of the European Union with a complaint and a motion to annul a bandit BRRD directive in whole or in part? In 2014, the Polish government appealed to the EU Court of Justice against the European tobacco directive, which prohibits the sale of flavored and menthol cigarettes from 2016 and 2020. Why, then, did not complain about the BRRD directive, which brings much higher risks to Polish society than the restriction of production in six tobacco plants?
The arguments that are cited to justify the BRRD directive refer to the need to save insolvent banks for fear of the alleged destructive effects of their bankruptcy on the financial system and the economy. Confirmation of the absurdity of such argumentation can be found inter alia in the statements of Janusz Szewczak – vice-chairman of the Seym Committee on Public Finance, former Chief Economist of SKOK and author of the book under the meaningful title of “Banksterzy”. His statement, quoted below, comes from May 19, while the Sejm adopted the new BFG law the next day.
“We are dealing with blackmailing Polish authorities that if these banks fall, it will be a drama. After all, there are a lot of banks in the world and the demise of a few is not a drama, on the contrary – it can be a kind of purifying the market from dishonest financial institutions. Other banks will be happy to take over the clients of these banks, whose greed is eclipsed by common sense and risk calculations. Those who, colloquially speaking, have robbed themselves must face the consequences just like any other entity that must go bankrupt as a result of poor management or supervision. This is inscribed in the risk of this type of activity.
After all, these banks have their (not poor) foreign owners who can eventually recapitalize them if they so wish. If not, you can always take over for the proverbial zloty, recapitalize for the shares. It is also possible to take over these banks, as happened eg in Germany after the 2008 crisis, when the local government borrowed EUR 18 billion to Commerzbank Komers Bank, but in exchange for taking over the bank’s shares, in other words, the German government became the owner of a private bank. Incidentally, the bank that has mBank in Poland.
This example shows that it can be done and there is no drama. Anyway, it was necessary to think earlier about the stability of the banking system, when you were borrowing something that you did not actually do, when you sold toxic and dangerous products, such as fraudulent polysolokaty and insurance in a capital fund. This is money and someone has to bear the consequences. Here in Poland, for the last 26 years, there were no guilty parties, and if it was already, then it was an ordinary Kowalski. It is high time to end this. “(Source: Nasz Dziennik, 19 May 2016)
In the last paragraph of the quoted statement, as well as his book, Janusz Szewczak refers to the pathological business model of modern banking, which generates gigantic profits thanks to three as unique as absurd privileges: (1) the privilege of using the principle of partial reserve to borrow money that the bank never he did not have; (2) the privilege of granting the government monstrous, unpayable, interest-bearing loans in the form of so-called eternal debt secured by taxes; (3) the privilege of controlling the money supply by starting or stopping lending.
It might seem that having such a privileged position in the economy, allowing for the creation of money from nothing and practicing unlimited usury, banks should not have the slightest financial problems. Meanwhile, unbridled greed, financial manipulation and fraud led large financial corporations to bankruptcy. The financial crisis of 2008 is however only a silent prelude to the imminent impending unprecedented collapse of the world financial system. This breakdown is inevitable, because the modern (shaped over the last three hundred years) model of banking functioning is in its essence a global financial pyramid that must collapse. Its collapse accelerates the development of communication technologies, replacing cash with electronic money and the globalization of financial markets.
Stabilizing, or rather resetting, the system of global finances will require a serious reduction in the amount of empty, fiduciary money circulating in the global circulation, including money that has been deposited in the accounts of clients of banks and savings banks. The reset of the global financial system, which will last at least a few years, will allow the international financial oligarchy to start building another pyramid based on usury and privileges used by private banks. The costs of this reset, of course, we all incur, with the exception of the caste of international banksters. Forced implementation of the Bail-In mechanismin all member states of the European Union is nothing but preparation for a legalized, mega-plundering for years. It is not known from today that no bank would be able to pay its liabilities to its customers if at least a few percent of them would demand cash withdrawals.
Illusoryness of the deposit guarantee system
The efficiency of the deposit guarantee system managed by the Bank Guarantee Fund is very limited. The system is capable of paying deposit amounts in the event of the bankruptcy of small cooperative savings and credit unions, but there may be no money for withdrawals in the event of a bank’s average bankruptcy, not to mention the situation if several bankruptcies occurred simultaneously or would occur on a massive basis the effect of the next international financial crisis. Payments of guaranteed deposits (today equivalent to up to EUR 100,000) may be postponed by up to several years, which means that their real value (purchasing power of money) may significantly fall in this period due to inflation or crisis caused by hyperinflation.
The introduction of the Bail-In mechanism to the Polish legal order will make accumulating any savings in banks extremely risky, not to say meaningless. It is irrelevant that savings in the amount not exceeding the guaranteed deposit amount have more than 90% of the total number of depositors. Payments of guaranteed funds may not be made at all, at least in a reasonable time perspective.
The introduction of the Bail-In mechanism minimizes any chance for society to obtain a pension security. In the face of the bankruptcy of the Social Insurance Institution, plunder of savings from OFE and dramatic demographic situation, the last security option is cut off – the possibility of saving savings safely in old age.
In this context, how should Prime Minister Mateusz Morawiecki’s announcements be made that he wants to enforce saving money on Individual Pension Accounts (III pillar) by introducing the principle that employers will by default transfer part of the remuneration of employees to IKE? Is the same as his support for the TTIP transatlantic trade agreement ( Transatlantic Trade and Investment Partnership), which is an attempt to subjugate sovereign states to the dictates of international corporations? How should Prime Minister Beata Szydło’s words be treated, which on the one hand declares that the European Union is reluctant to accept refugees and the dispute over the Constitutional Tribunal, and on the other hand tacitly supports the implementation of the BRRD criminal directive? After all, what is the nature of the European Union, which on the one hand supposedly cares for Polish democracy and the Constitutional Tribunal, and on the other, forcing the introduction of unconstitutional provisions that are contrary to fundamental human rights under threat of punishment? Who serves it?
It is not too late
The procedure for implementing the new BFG law is not completed. On May 25, she was transferred to the Senate and the President of the Republic of Poland. Chairman of the Senate Committee on Budget and Public Finance, creator of cooperative savings and credit unions – Grzegorz Bierecki announces that the debate and voting on the bill will take place on June 8. Later, the President’s signature, publication in the Journal of Laws and the new law on the Bank Guarantee Fund, deposit guarantee system and forced restructuring may come into force before the holidays.
If the Senate does not remove grossly contrary to the basic rules of law, will the President of the Republic of Poland or anyone else dare to submit an application to examine the constitutionality of the new law on the BFG? Will the Constitutional Tribunal, in turn, show sufficient courage to objectively assess the compliance of this law with the Constitution of the Republic of Poland?
The Cypriot experiment with the confiscation of deposits has shown that everything can be done with the European nations. Just in case, laws are in place that allow for the legal use of force against society in the event of any rebellion.