April 10, 2010, 6:01 PM EDT

(For more on the plane crash and the death of Poland’s president, see {EXT2 <GO>})

By David McQuaid and Piotr Skolimowski

April 11 (Bloomberg) — Polish President Lech Kaczynski and central bank Governor Slawomir Skrzypek were killed yesterday along with several key members of the country’s political elite when their plane crashed in western Russia, where they were to mark the 70th anniversary of a massacre of Polish officers.

The 60-year-old president’s wife, Maria, and leaders of the country’s main opposition parties and military, including the Army Chief of Staff Franciszek Gagor, also died, Foreign Ministry spokesman Piotr Paszkowski said in a phone interview. The crash, which happened as the aircraft was on approach for landing in Smolensk, killed all 96 on board, according to Russia’s Emergency Ministry.

Under Poland’s constitution the duties of the president, which are largely ceremonial, will be assumed by the speaker of the lower house of parliament, Bronislaw Komorowski. He will set a date for a presidential election within two weeks and the vote must be held within 60 days. Komorowski is the candidate of Prime Minister Donald Tusk’s Civic Platform party and polls show he was poised to defeat Kaczynski in presidential elections, originally scheduled for the second half of the year.

“This is the most tragic event in the history of Poland outside wartime,” Tusk said in a televised speech. “Such a dramatic event is unprecedented in the modern world.”

Consequences

Executive power under Poland’s constitution is concentrated in the hands of the prime minister as head of government. The president has the power to veto legislation and make some appointments, including generals, judges, ambassadors and the governor of the central bank. Kaczynski, a former anti-communist dissident who promised Poles a “moral revolution,” came to power in October 2005.

“Two candidates for president are dead along with almost the whole leadership of the leading opposition party,” said Edmund Wnuk-Lipinski, a sociologist at the Polish Academy of Sciences. “It’s hard to imagine it won’t have consequences for the way politics is practiced in Poland.”

Piotr Wiesiolek, a deputy governor of the central bank, will temporarily assume the governorship. The central bank’s Monetary Policy Council will meet on April 12 to discuss how to proceed. The death of the governor won’t affect the zloty, which is up 6 percent against the euro this year, or the country’s financial stability, board member Anna Zielinska-Glebocka said in a phone interview.

Implications

“We do not see any negative implications for markets,” said Simon Quijano-Evans, head of Europe, the Middle East and Africa at Credit Agricole Cheuvreux, in an e-mailed note to clients. “Poland’s constitutional framework is solid and clearly states the steps that have to be taken in such a situation, and the economic system will continue to function in an orderly manner, with the central bank taking a very clearly- defined role.”

European Central Bank President Jean-Claude Trichet said he was “saddened and shocked” to hear of the accident and that he “deeply regrets the loss of a highly esteemed” colleague.

Hundreds of Poles gathered in front of the presidential palace, lighting candles, laying flowers and praying. The roads leading to the palace were crowded with onlookers as the police blocked off the surrounding area. Churches around the country announced services to commemorate the dead.

“I thought it’s some stupid April Fool’s kind of a joke when I heard the news and I am in such a state of shock that I can’t stop crying,” said Maria Przyborska, a 54-year old teacher from Warsaw, who laid roses at the palace gates. “I didn’t vote for Kaczynski, but this was my president and I can’t understand how this could happen.”

World Leaders Respond

The delegation was to attend an anniversary ceremony commemorating the murder of thousands of Poles killed in the spring of 1940 by Soviet forces under Josef Stalin at the Katyn forest, close to the city of Smolensk.

Prime Minister Vladimir Putin on April 7 hosted a meeting with Tusk in an effort to heal the two countries’ difference over the massacre, making him the first Russian leader to pay his respects to the more than 4,000 Polish officers killed in the Katyn forest, a crime denied by the Kremlin for half a century.

U.S. President Barack Obama said he called Tusk to express his “deepest condolences to the people of Poland on the tragic deaths,” according to a statement. The “loss is devastating to Poland, to the United States, and to the world. President Kaczynski was a distinguished statesman who played a key role in the Solidarity movement, and he was widely admired in the United States as a leader dedicated to advancing freedom and human dignity.”

‘Grief and Mourning’

Russian President Dmitry Medvedev ordered “a thorough investigation in full and closest cooperation with the Polish side,” according to a statement on the Kremlin’s Web site. He declared April 12 a day of mourning.

Medvedev also addressed the citizens of Poland on state television to say “all Russians share your grief and mourning. I want to express my deepest, most heartfelt condolences to the people of Poland, and my empathy and support to families and friends of the victims.”

German Chancellor Angela Merkel called the deaths a “political and human tragedy for Poland, for our neighbor country,” in comments broadcast by N24 television out of Berlin. “I gladly remember that Lech Kaczynski invited me to the Polish national holiday on the 11th of November 2008, that was a very special gesture also for a neighbor country like Germany; we spent many, many hours talking about Polish and European history.”

‘Shocked’

Israeli President Shimon Peres said his country is “shocked by the report of the terrible tragedy that has struck Poland,” in a statement distributed by e-mail yesterday. Israel “shares in the mourning of the Polish people and the free world.”

Britain’s Prime Minister Gordon Brown said “the whole world will be saddened and shocked as a result of this tragic death,” according to a statement.

The government of the largest of the 10 former communist nations to join the European Union since 2004 held an emergency cabinet meeting yesterday after the crash. The country, whose economy was the only EU member to avoid a recession during the credit crisis, will hold a week of national mourning, Komorowski said in comments broadcast by TVP INFO.

‘No Divisions’

“In the face of this tragedy we are all together; there are no divisions, no differences,” Komorowski said.

The plane, a Tupolev 154 built in 1990, clipped the tree line at about 10:50 a.m. yesterday Moscow time and broke in two as the pilot attempted a fourth landing amid heavy fog at a military airport near Smolensk, Rossiya-24 said, citing officials at the scene. Newswire RIA quoted an unnamed Russian security official as saying pilot error was a factor in the accident.

The Tu-154 model has been around since 1968. Russia’s largest airline, OAO Aeroflot, stopped operating the plane in January of this year, spokesman Oleg Mikhailov said in a phone interview yesterday.

“There hasn’t been an accident on this scale in politics since the airplane was invented,” said Wnuk-Lipinski. “It’s such a shock that I still find it hard to believe this has really happened.”

Body Found

Rossiya-24 TV showed live footage of rescue workers attempting to extinguish pockets of fire among the wreckage at the airport, about 320 kilometers (200 miles) west of Moscow. The president’s body was found several hours after the crash, RIA Novosti reported.

“The plane was landing in bad visibility,” Andrei Yevseyenkov, press secretary for the Smolensk region’s governor told Rossiya-24. “Dispatchers at Severny military airport suggested that the plane land in Minsk (about 200 kilometers away) but the pilots took their own landing decision.”

Medvedev dispatched the Emergency Ministry’s Sergei Shoigu to the site of the crash and formed a special commission headed by Putin to investigate the cause. Tusk and Putin also met at the crash site and laid flowers by the wreckage. The two will talk with Russian officials conducting the investigation.

The Investigative Committee of the Prosecutor General’s Office is looking into whether bad weather, human error, a technical malfunction or other reasons caused the crash, according to a statement on the committee’s Web site. A criminal case has been initiated, it said. Both black boxes have been found and the “the plane is completely destroyed,” RIA Novosti cited Shoigu as saying.

Political Elite

Among the victims were key members of Poland’s biggest opposition party, Law and Justice, including current and former heads of the party’s parliamentary caucus, Grazyna Gesicka and Przemyslaw Gosiewski as well as the party’s main economic expert Aleksandra Natalli-Swiat, and deputy parliamentary speaker Krzysztof Putra.

The list also includes deputy parliamentary speaker Jerzy Szmajdzinski, who was the presidential candidate of the opposition Left Democratic Alliance. That means the crash killed the presidential candidates of two of Poland’s three largest parties. Kaczynski had already won the endorsement of the opposition Law and Justice party. He was to officially declare his candidacy in May.

‘Twist of Fate’

“These are all people who are on the front line for Poland domestically and internationally,” said Marek Matraszek, Warsaw-based head of CEC Government Relations, which advises companies in their relations with the government. “They will be very difficult to replace.”

Ryszard Kaczorowski, the last Polish president in exile during World War II, Janusz Kurtyka, the head of the Institute of National Remembrance, which investigates Nazi and Soviet crimes against Poles, were also on board the plane, according to a list of passengers posted on the government’s Web site.

Former Czech President Vaclav Havel, who led the country’s fight against Communism, called the crash a tragedy without comparison.

“I would say that we weren’t that close politically but that is irrelevant,” Havel said yesterday in an interview on Czech state-run television. “Even if it had been a different Polish president, to have all this occur together, it’s an unbelievable twist of fate.”

–With assistance from Maciej Martewicz, Marta Waldoch, Monika Rozlal in Warsaw, Brad Cook, Anna Shiryaevskaya, Lyubov Pronina, Denis Maternovsky in Moscow, Douglas Lytle, Alan Crosby, Jim Gomez in Prague, Nicholas Comfort in Frankfurt. Editors: Tasneem Brogger, Chris Kirkham.

To contact the reporter on this story: David McQuaid in Warsaw at dmcquaid1@bloomberg.net Piotr Skolimowski in Warsaw at pskolimowski@bloomberg.net

To contact the editor responsible for this Chris Kirkham at ckirkham@bloomberg.net