BBJ’s stories of the week, August 31-September 6

Now after the standard introduction, what usually follows is a rundown of five or six major stories that developed over the prior seven days, but even with the conclusion of Hungary’s famed “cucumber season,” two storylines overwhelmed all others. Today, then, we’ll be rounding up the coverage of forex-based mortgage loan relief plan negotiations and developments in the runup to the 2014 Hungarian parliamentary elections.

The just-published Budapest Business Journal print edition dated September 6-19 features as cover story the latest on the state of negotiations among the National Economy Ministry, the National Bank of Hungary (MNB) and the Hungarian Banking Association (MBSz) regarding forex-based loans, a story that had marathon-runner legs this week despite not much progress beyond more rephrasings of the expression “under review” – until a Thursday bombshell.

Firstly, everybody who is somebody in Hungarian financial matters commented on. OTP Bank CEO Sándor Csányi went on the airwaves – on the ATV network, to be precise – on Monday night to reassure that his bank would survive any such bailout program, despite projected costs of HUF 300 billion.

News service MTI on Thursday provided further at least one key detail on two proposals submitted on August 27 for such a bailout, namely that these involved either converting all mortgage loans based in foreign currency to forints either all at once or over a period of five years. Ministry stated that “part of the proposals made by the association were unacceptable” and that both proposals are still under review. (There’s that phrase again.)

But then there was Fidesz Parliamentary Group Head Antal Rogán’s stunning threat of deploying the Fidesz-KDNP two-thirds majority: Rogán informed from the party caucus in Visegrád that banks now have until November 1 to solve the problem. Should no alternative proposal be put forth or amendments are not made to proposals currently before the central government, he continued, the government will put forth its own proposal.”

Party interests reportedly “expect banks to modify the contracts ... if this does not happen then the state will step in, and will work out its own proposal which parliament will approve before the end of the year. And the direction of this is fairly obvious.”

This opinion was echoed by Prime Minister Viktor Orbán who, before leaving to begin prepartions for his daughter’s wedding this weekend, gave an interview to Kossuth Rádió in which he stressed the moral obligation of banks which “acted in bad faith” when making the loans.

Orbán himself had also appeared before the Fidesz caucus on Wednesday evening, subsequently getting a fair share of media attention for his sacking of five constituency leaders due to poor performance. Orbán warned his fellow (remaining) party members of the dangers of complacency, reminding them of the upset defeat in the 2002 elections which saw the then-Fidesz government ousted from its parliamentary majority.

Meanwhile, the opposition left-wing parties reckoned their chances in the 2014 balloting may be improving. A story with maximum spin potential landed in the anti-Orbán crowd’s laps last weekend, as Sándor Ladányi, a joint candidate of the MSzP, Together 2014-Dialogue for Hungary (E14-PM) and Democratic Coalition (DK) parties, claimed a commanding victory in a Szigetszentmiklós by-election over the weekend, garnering 52.6% of all votes.

Of course, while this win is certainly quite the small one indeed, the three-party group certainly enjoyed a bit of positivity, with all members touting cooperation as the solution to overcoming the Fidesz-KDNP coalition in the 2014 general elections – but there still seems a long way to go…