Varga: Legal conditions must be settled before helping fx borrowers

Issues

The government discussed settling the situation of forex-based loan borrowers, and it decided that a solution can happen only after the legal conditions were clarified, National Economy Minister Mihály Varga told local media yesterday.

Varga said that legal uncertainty has arisen from the contradicting court judgments recently made on the subject. He declined to give a date by which a solution can happen, repeating that the legal uncertainties must be tackled first.

The economy minister announced on October 28 that a proposal by the Hungarian Banking Association on assistance for borrowers with forex-based loans will not solve the problem, thus the government will submit its own proposal to Parliament early in November.

Varga told MTI that the Hungarian Banking Association proposal was not adequate because “There was no word of modifications to contracts; the banks did not apply decisions taken by the [supreme court] to the contracts, even though there would have been no legal barrier preventing this.”

Hungary’s government gave banks until November 1 to consult with borrowers to find a solution to their big stock of forex-based mortgages. If they fail, the government said it would act unilaterally.

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