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Gov’t earmarks HUF 20 bln for folded loans

The Hungarian state has earmarked a guarantee budget of HUF 20 billion to support bank loan constructs that folded as a direct cause of the economic crisis, the dailyNépszabadság reported.

Ever since February 2009, the treasury’s expenses were raised by HUF 1 billion to HUF 2 billion monthly from meeting guarantee provisions. The boosted costs are due not only to the crisis but the state making far bigger commitments to provide guarantees to loans taken out.

Of the loans applied for by small and middle enterprises during the year, some 70% were backed by the state and it is these business constructs that are seeing the biggest number of defaults and causing the state the biggest expenses. (Népszabadság)