Hungary

Hungary’s parliament, in its first decision in the new term, this week passed a bill to extend an eviction moratorium for foreign-currency mortgage debtors, The Wall Street Journal Emerging Europe Real Time blog reported. The moratorium, which also involves debtors who are late with their loan payback, will be in place until the government works out a solution for all households with debts in foreign currencies. The current law only affects debtors who haven’t got anywhere else to stay, but gives no value limit on properties in question.

Unemployment remains a key factor behind insolvency in Hungary. In about 3 out of 4 cases, low or nonexistent income is the reason why people in Hungary run up debt, debt collector company Intrum Justitia noted in a survey on insolvency, Portfolio.hu reported. While umeployment still rates high among the triggers that eventually lead to bad debt, the figure is now lower than in the 2013 survey, Intrum Justitia found.

Hungary’s top court Monday ruled that lawmakers can adopt legislation allowing retroactive changes to foreign-currency loan contracts, but the changes must take into account the interests of both the borrowers and lenders, The Wall Street Journal Emerging Europe Real Time blog reported. Foreign-currency loans–mainly mortgages tied to the Swiss franc–were hugely popular before the financial crisis because they were much cheaper to service than local-currency loans.

The Hungarian central bank Thursday fined 35 banks in an effort it said was to protect consumers after most banks managed to pass on to clients a large share of the extra tax burden the Fidesz-party government levied on the banking sector in 2013, The Wall Street Journal Emerging Europe Real Time blog reported. The National Bank of Hungary imposed a total of 1.2 billion forints ($5.3 million) on the banks for unilaterally changing their services fees, which–the central bank claimed– increased costs for customers.

The central banks of Austria and Hungary should seek a “workable and fair” solution to the problems Austrian banks are facing with Hungary, and shouldn’t become each others’ enemies, Austrian central bank Governor Ewald Nowotny said Friday, The Wall Street Journal Emerging Europe blog reported. “Close relationships are not necessarily always easy relationships. Our two central banks recently faced some difficult issues revolving around some foreign-owned banks,” Mr.

Hungary’s competition authority Wednesday levied its highest ever fine in a cartel case against the country’s largest banks, saying they had discouraged home owners with a foreign-currency mortgage from taking part in a program aimed at reducing their loans, The Wall Street Journal Emerging Europe blog reported.

Standard & Poor’s Ratings Services warned Friday that it may downgrade Hungary further into non-investment grade over the next 12 months should government policies weaken investor confidence and the outlook for recovery, The Wall Street Journal Emerging Europe blog reported. Hungary’s creditworthiness remains constrained by its poor growth outlook, limited monetary policy room, and mounting public as well as private-sector debt, it said. “We also believe that institutional checks and balances have weakened in recent years,” S&P said.

Hungarian operator Magyar Telekom announced plans to apply to the High Court of Justice in England and Wales for a court hearing to be held no earlier than 28 October for approval of its earlier announced debt-equity swap, Telecompaper reported. This should include permission to convene a meeting of creditors for approving the scheme. Based on the preliminary agreement reached in July, holders of more than 70 percent of the operator's senior secured notes due 2016 have agreed to support the restructuring.

Talks between Hungary’s government and its banking association over a relief plan for households with foreign currency mortgages are focusing on exchange rates, the timing of a possible debt conversion and interest on converted mortgage loans, the secretary general of the country’s banking association said Tuesday, The Wall Street Journal Emerging Europe blog reported.

Leading Hungarian tour operator Best Reisen Ltd, hit by big losses on holidays to Egypt and Tunisia, said on Friday it had gone bankrupt, leaving hundreds of passengers in Red Sea resorts in Egypt, Reuters reported. The company said it had financial deposits of 1.3 billion forints ($5.75 million) which would cover the costs of bringing passengers home and compensating clients with booked trips. "Best Reisen specialised in North African countries and the Arab spring did them no good," said Judit Molnar, vice chair of the association of Hungarian tour operators.