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Rogán: Legal solution could solve fx loan problem; no final decision on utilities

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A legal solution could be the best option for Hungarian borrowers with foreign currency-denominated loans, Fidesz parliamentary group leader Antal Rogán suggested in an interview published in business daily Napi Gazdaság yesterday.

“Although everybody is thinking about a business solution, why couldn’t a legal solution be considered, one based on court decisions until now, among other things?” Rogán said, pointing to precedents in Croatia and Turkey.

Rogán told the paper that an economic solution to the forex-based loans problem would involve dividing the burden between lenders and borrowers: “The state would have only a regulatory role, thus one doesn’t have to think about how to involve the state or even the central bank, rather about how a just situation can be created with strong regulation.”

Added Rogán, “The two main goals are to reduce the burden of repayments for FX borrowers and to eliminate exchange rate risk.”

When asked about the sitting government’s current drive to re-nationalize certain utility companies and the concomitant price reductions imposed on them in 2013, Rogán stated that the government “may choose not to implement a third round of utility tariff reductions next year” and assured that “there is no final concept about making utilities non-profit services.”

Rogán explained that the government is seeking “the right to determine utility prices of utility companies which are in a monopolistic situation so that they cannot make unjustified profits,” explaining that whether this means making utilities into non-profit operations has yet to be decided.

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