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Draft of foreign-currency debt relief plan completed

The final version of a relief plan for Hungarians unable to repay their foreign-currency-denominated loans has been submitted to the government, daily Magyar Hírlap reported.

The plan would allocate HUF 50-60 billion from the central budget to replace the foreign-currency-denominated loans of troubled borrowers with low-cost, state-subsidized loans.

The plan would provide low-cost credit primarily to borrowers whose foreign-currency-denominated mortgage debt exceeds the value of their homes, the newspaper said.

The state would take over credit costs if the forint is weaker then a certain fixed rate against the currencies, and this debt would disappear later with the strengthening of the forint. Under the plan, the homes of those unable to repay their foreign-currency-denominated mortgages would be converted to state-subsidized rental units.