Hungary’s government may grant tax benefits to banks if they lower the burdens on borrowers, Antal Rogán, head of the parliamentary group of the ruling Fidesz party, told commercial broadcaster HírTV. According to local daily Magyar Nemzet, the Curia (Hungary’s Supreme Court) will not supplement its earlier ruling on foreign currency mortgages before the autumn, although the cabinet was expecting a ruling and subsequent legislation changes for May.
Chiming together with what Prime Minister Viktor Orbán told an international press conference on Monday, after securing himself and his party another four-year term by a landslide at Sunday’s polls, Rogán also said the bank tax is here to stay, adding though that specific rules may be subject to bargain.
One condition to that is that the banks must be willing to give something in return to those who had borrowed in foreign currency. The cabinet is ready to remedy the disproportional features of FX loan contracts with retroactive effect, he said, adding that the Constitutional Court had given Parliament the go-ahead to do so. The court ruled that there needs to be equal burden sharing between the creditor and the borrower, he said.
It is good news for the banks, including listed OTP, that the government apparently has in mind a relief package for FX debtors that shares the burdens (via tax benefits) instead of slapping them onto the banks only, i.e. that the state is willing to pitch in too. Also note that previously - during the early FX mortgage repayment scheme - banks were given tax incentive (30%) of the bank tax, but they still incurred gigantic losses (nearly HUF 260 bn) on the programme.Rogán said lawmakers will need to bring a decision on FX loans already this year. In his view, a schedule will be laid down this year, according to which FX loans will be phased out from the Hungarian market.
Although the Hungarian government is awaiting a decision by the Curia on foreign currency mortgages by the end of May, after a ruling by the European Court of Justice scheduled for 30 April, the Hungarian Supreme Court will likely supplement its ruling of December 2013 only in the autumn, local daily Magyar Nemzet reported no Wednesday. Lawmakers can only then decide on a relief package for FX debtors.
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