The Ministry of National Economy is drafting a plan that would see the monthly payments of foreign currency mortgage holders drop by 15-20 percent from 2014 and the loans themselves phased out over the next 3-5 years.

Minister of National Economy Mihály Varga told public television on Friday that the plan would parcel up the costs between the banks, the state and, to a lesser degree, the borrowers themselves.

He pointed out that it was unlikely for the scheme to ease the burdens on borrowers to be immediate and sharp as this would entail unsustainably large costs for the banking system. The Government has asked banks to modify contracts by November 1 with a view to reducing payments but they came short of providing a solution, the ministry stated.

Mr Varga said the ministry wanted a solution based on consensus, but "if this costs banks even a single forint they won't be on board". He added however that the government must look at the interests of people rather than the banks.

(Ministry of National Development)