Forex Laws to Reduce Outstanding Principal By 1.5 m Forints, Says Varga

Budapest, November 24 (MTI) – The government-initiated forex laws, awaiting parliament’s vote this week, will reduce the outstanding principal of the average debtor by 1.5 million forints (EUR 4,920), Economy Minister Mihaly Varga told public television M1 today morning.

Varga said that the package, which he called “the greatest and most comprehensive” such proposal in the world, would also extend the option of converting forex loans into forint-based ones to debtors who have participated in the government’s exchange-cap programme. In its original form, the proposal was not aimed at including that group in the conversion scheme.

The minister insisted that conversion would work together with the settlement process, in which banks would be required to inform clients about unfairly collected amounts and, accordingly, about the extent their debt service and outstanding principal would be reduced. Once clients receive those details from their banks in writing early next year, the monthly instalments and the unpaid principal will be converted into forints, he added.

On another subject, Varga said that the government’s subsidy for families with two or more children to buy their first home would be extended to couples with only one child. In future, the subsidy can be used to buy second-hand houses or flats, as opposed to the practice so far which tied the subsidy to new construction.

On the subject of plans to close down private pension funds, Varga suggested that some of the funds would lack the necessary liquidity to make payments to members and leave an estimated 60,000 people unassisted. He insisted that it was a government responsibility to intervene.

Source: http://mtva.hu/hu/hungary-matters