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Hungary central govt to take over HUF 184bn county council debt

Hungary’s central government will take over about HUF 184bn in debt from county councils by the end of 2011, Laszlo Andras Borbely, deputy CEO of the Government Debt Management Agency told reporters on Thursday.

The central government is to take over county government assets as well as their debt by December 31, 2011 under recently passed legislation.

The debt takeover involves some 124 contracts, Mr Borbely said.

The value is preliminary and may change as some of the counties’ debt is denominated in foreign currency, mainly in Swiss franc.

The transaction raises the debt of the central government but is neutral to general government debt as the latter includes debt assumed by local governments too, the AKK deputy CEO noted.

The HUF 184bn figure is about 14% of all local council debt which slightly exceeded HUF 1,300bn at the end of September according to figures from National Bank of Hungary.