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Orbán urges decision on forex loans by top court

Issues

Prime Minister Viktor Orbán on Friday said he is pressing for the Kúria, Hungary's supreme court, to take a decision on the matter of foreign currency-denominated loans. Orbán told Kossuth Rádió that Hungary's leaders in the judiciary – first of all the head of the Kúria – had to be encouraged to take a legal uniformity decision on the matter of FX loans.

“If we see that the matter has been put in order, then the government can without risk of upsetting people’s everyday lives, take a decision that is in harmony with the legal position established by the judiciary,” Orbán said.

Several top government officials have recently said they expect the Kúria to produce a ruling on the matter of forex-based loan borrowers that allows lawmakers to take legislative measures. Hungary's Parliament recently passed legislation that opens an exchange rate cap scheme to more forex borrowers – the latest in a series of measures to provide them with assistance – but National Economy Minister Mihály Varga said further measures must be formulated.

The Kúria said on Wednesday it could take a decision on whether to launch a legal uniformity procedure on the matter of forex-based loans after a survey of rulings involving such contracts. The Kúria said its civil department “wants in the near future to gauge how many court cases are underway in the country related to foreign currency-denominated lending contracts, and furthermore, to determine based on legally binding rulings whether disparate legal practice can be established.

György Wellmann, who heads the Kúria’s civil department, said at a conference on Thursday that the court would weigh decisions taken thus far, but added that the legal position was clear and there were, at most, only differences of opinions on the details of the court decisions. A solution to the problem of forex-based loans cannot be expected from the courts, he said.

Wellmann said that for loan contracts to be invalidated, reasons had to be established that existed at the time the contracts were signed. But the problem in court cases involving forex loan borrowers is the exchange rate changes that have taken place since the contracts were signed, he said.

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