Hungary

Hungary's government is open to discussions of a new law on personal bankruptcy if the junior governing Christian Democrats propose it to Parliament, Prime Minister Viktor Orban's Chief of Staff Janos Lazar told a press conference on Thursday, Reuters reported. Lazar added the new legislation, if passed, could affect 100,000-150,000 private borrowers who have run into trouble in the central European country.

Hungary has room to cut its interest rates even more from 1.95%, the lowest on record, because of falling consumer prices and a recent conversion of foreign-currency loans into forints, which has reduced the vulnerability of households, a central banker said. With consumer prices falling on an annual basis for sixth months in a row and posting an annual decline of 1% in February, the central bank last week cut its main interest rate by 0.15 percentage point to 1.95%, The Wall Street Journal reported.

For many people in Central and Eastern Europe, a new experience began a quarter-century ago. Communist governments collapsed, and the wide world of private ownership, democracy and free markets opened up suddenly. It was not always a happy transition, the International New York Times reported. This month, even as Germans were celebrating the anniversary of the fall of the Berlin Wall, the Hungarian government was passing laws and issuing edicts aimed at helping a large proportion of the populace recover from the mistake of buying houses with loans denominated in Swiss francs.

Hungary’s central bank is ready to use part of the country’s foreign-currency reserves to help the government rid households of their costly foreign-currency mortgages, a top central bank official said over the weekend, The Wall Street Journal Emerging Europe Real Time blog reported. While ensuring that the reduction in the country’s foreign-currency reserves were gradual, the central bank would provide the foreign currency to retail banks so they could convert foreign-currency mortgages into the local currency, said Adam Balog, a deputy governor at the National Bank of Hungary.

Hungary's gross public debt jumped to a four-year high of 85.1% of gross domestic product at the end of June, central bank data published Monday showed, The Wall Street Journal reported. Gross public debt calculated under the European Union's Maastricht criteria was 81.7% of GDP a year earlier and 85.6% of GDP in June 2010 when the current government first gained power and the forint, the Hungarian currency, weakened significantly against core currencies amid Europe's continuing economic crisis.

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.