In the opinion of Minister for National Economy Mihály Varga, the proposals of the Hungarian Banking Association disclosed last week do not address the two most pressing problems, and therefore the Cabinet will present its own recommendations for the relief of foreign currency debtors.

As Mihály Varga stressed, the Government is to submit a bill which will represent the interest of borrowers.

According to Banking Association Secretary General Levente Kovács, the institution has elaborated and sent to the Government before the November deadline a comprehensive proposal which deals separately with those who are capable of repaying their debt and those who are not.

Mihály Varga, however, emphasised later on that “although we have received the letter of the Banking Association, but it has to be stressed that solving this issue should have begun with negotiations between the banks and their customers.” As he reminded journalists, the Government had asked banks to amend foreign currency loan contracts until 1 November as the first step for phasing out foreign currency home loans from the Hungarian financial market within the next couple of years.

“There is no news about amended contracts and the banks have not integrated into contracts the Curia decisions although no regulation has prevented them from doing so, Mihály Varga added. The Minister for National Economy stressed that the Government considers two aspects to be crucial for assisting foreign currency debtors: on the one hand, foreign currency mortgages for home purposes shall be phased out and – on the other hand -- borrowers with forint debt shall not end up in a worse position than those with foreign currency debt.

“As the proposals of the Banking Association do not remedy these issues, the Government will submit its own proposals to the National Assembly on 1 November,” Mihály Varga said, adding that a large number of debtors with foreign currency mortgages for home purposes have already received assistance through the Government-mandated early repayment and exchange rate barrier schemes. As opposed to 750 thousand borrowers with foreign currency loans, now there are 150 thousand people who have not yet utilized any available options.

(Ministry for National Economy)