According to György Surányi, the situation of foreign currency borrowers needs to be resolved quickly, since the longer the solution goes, the deeper the wounds on the Hungarian economy and the financial system.
A former president of the Good Finance Bank said in a lecture at a local college in Nyíregyháza on Wednesday that he urgently needed to settle the situation of foreign currency borrowers, as the longer the overall solution, the deeper the wounds for the Hungarian economy and financial system.
In particular, he called it “painful” that the measures taken so far did not address the “fate” of the 120,000 families who, for years, had been unable to repay their loan.
The former central bank chief who twice chaired the MNB between 1990 and 1991 and then between 1995 and 2001 stressed that
Any delay involves significant costs, expenses
the serious economic and social problem, as he put it, is becoming more and more expensive.
Before a large number of economics students and lecturers, György Surányi explained that foreign currency lending was introduced in June 2001 during the first Orbán government, at the initiative of the Good Finance Bank, with the support of the Cabinet and the decision of the then parliament.
“And, of course, with the help of the opposition,” which, when it came to government in 2002, would have had the opportunity to intervene, curbing its significantly growing loan portfolio, he added. And customers are responsible because, as many have said, foreign currency loans were unsecured, even though such loans should only have been made available to those with foreign exchange earnings.
The Hungarian economy entered a path that was unsustainable
György Surányi stated that between 2001 and 2007 the Hungarian economy entered a path that was unsustainable and resulted in external and internal indebtedness. He said the situation was not properly addressed, although many people trusted the solution after the change of government in 2010. After this was delayed, experts came up with suggestions in 2011, pushing for the conversion of loans into forints, the cost of which would have to be borne by banks, to a lesser extent by the state and customers, he recalled. At that time, the Swiss franc was 210 forints, so installments could have fallen by 40-45 percent. Banks are estimated to have “bailed out” at $ 400 and $ 40-45 billion a year, but the proposal was not accepted, he said.
Instead, in the fall of 2011, the first action was the early repayment, which, as the former MNB chief claimed, was not aimed at those in trouble, and meant “huge profits” for the richer. Then he eased the tide, but the non-payers were not concerned either.
In connection with the measures taken in the summer of 2014
Said that he was unfairly making the banks solely responsible for the situation, and that it would impose a burden of around HUF 1,000 billion on them.
According to economists, the most troubled 120,000 foreign currency creditors, who have about half a million members of their families, could be helped if the experts’ proposal of 2011 was adopted.
That is, the state would provide interest subsidy on their home repayment, a guarantee for those who could not pay it, and they would pay rent for the dwelling, so their right to housing would remain while their property would be mortgaged.