Economy
Hungary's PM Orbán says we should brace ourselves for the worst
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Gas situation - preparing for the worst
In the interview recorded late on Thursday and aired on Friday morning Orbán reiterated that the ethnic Hungarian minority in Ukraine needs autonomy.
As regards the conflict between Russia and Ukraine and its consequences he said we should brace for the worst. Whether or not there will be problems with gas transit in the future, we still need to prepare for the worst, he said. We need to have scenario that prepares the country for the worst, he reiterated. The country needs to be secured, not only in a military sense which has been taken care of at the last NATO summit, but also economically, he added.
The filling up of gas storage units is progressing at a nice pace and the fill rate will soon reach 60%, Orbán said, adding that this was also on the agenda at its meeting with Gazprom’s Chief Executive. We need a large volume of gas and we will get it, he said.
According to state-owned Hungarian newswire MTI, Orbán and Miller on Monday discussed the preparatory work on Russia's South Stream gas pipeline project - which is planned to pass through Hungary - as well as "stable and reliable natural gas supply for the winter".
Hungary's gas pipeline network operator FGSZ said on Thursday it was indefinitely suspending gas supply to neighbouring Ukraine for technical reasons. Ukraine state-owned gas firm Naftogaz labelled the move as "unexpected and unexplained".Settlement by banks
Asked whether the obligatory compensation of borrowers by local credit institutions for the use of unfair lending practices will not deal a blow to the entire banking sector, Orbán responded that banks in Hungary are wealthy and capital-strong. He said he regularly consults with the heads of foreign parent banks and what he takes away from these talks is that they also want this thing to be over and done with as soon as possible - including the conversion of forex loans into forints.
In its legal uniformity decision of 16 June 2014, the Curia (Supreme Court) took a position in several issues affecting FX loans, after which the government created a regulation on the settlement of the contractual terms of FX loans. Pursuant to the regulation, after the review of the exchange rate margins and unilaterally raised interest rates, damages arising from the contract modifications declared invalid will be refunded to borrowers.
The regulation also prohibits unilateral raises in interest rates until 30 April 2016.
The National Bank of Hungary estimate the amount to be refunded to debtors at around HUF 942 billion, the central bank said in the Inflation Report on Thursday. It also expects the relief package for FX borrowers to generate a 0.2-0.3% increase in GDP in 2015.
Fair banking system on its way
Orbán also said that a new bill will be submitted on loans, as it has become evident how large damage the unilateral contract modifications can cause, first to clients and then to banks when they obliged to compensate borrowers.
At a government meeting on Thursday the Justice Minister has undertaken to submit the draft to the government which will submit the bill to Parliament as soon as possible, Orbán said. The plan is to put the law on fair banks into effect as of 1 January next year.
In the interview recorded late on Thursday and aired on Friday morning Orbán reiterated that the ethnic Hungarian minority in Ukraine needs autonomy.
As regards the conflict between Russia and Ukraine and its consequences he said we should brace for the worst. Whether or not there will be problems with gas transit in the future, we still need to prepare for the worst, he said. We need to have scenario that prepares the country for the worst, he reiterated. The country needs to be secured, not only in a military sense which has been taken care of at the last NATO summit, but also economically, he added.
The filling up of gas storage units is progressing at a nice pace and the fill rate will soon reach 60%, Orbán said, adding that this was also on the agenda at its meeting with Gazprom’s Chief Executive. We need a large volume of gas and we will get it, he said.
According to state-owned Hungarian newswire MTI, Orbán and Miller on Monday discussed the preparatory work on Russia's South Stream gas pipeline project - which is planned to pass through Hungary - as well as "stable and reliable natural gas supply for the winter".
Hungary's gas pipeline network operator FGSZ said on Thursday it was indefinitely suspending gas supply to neighbouring Ukraine for technical reasons. Ukraine state-owned gas firm Naftogaz labelled the move as "unexpected and unexplained".Settlement by banks
Asked whether the obligatory compensation of borrowers by local credit institutions for the use of unfair lending practices will not deal a blow to the entire banking sector, Orbán responded that banks in Hungary are wealthy and capital-strong. He said he regularly consults with the heads of foreign parent banks and what he takes away from these talks is that they also want this thing to be over and done with as soon as possible - including the conversion of forex loans into forints.
In its legal uniformity decision of 16 June 2014, the Curia (Supreme Court) took a position in several issues affecting FX loans, after which the government created a regulation on the settlement of the contractual terms of FX loans. Pursuant to the regulation, after the review of the exchange rate margins and unilaterally raised interest rates, damages arising from the contract modifications declared invalid will be refunded to borrowers.
The regulation also prohibits unilateral raises in interest rates until 30 April 2016.
The National Bank of Hungary estimate the amount to be refunded to debtors at around HUF 942 billion, the central bank said in the Inflation Report on Thursday. It also expects the relief package for FX borrowers to generate a 0.2-0.3% increase in GDP in 2015.
Fair banking system on its way
Orbán also said that a new bill will be submitted on loans, as it has become evident how large damage the unilateral contract modifications can cause, first to clients and then to banks when they obliged to compensate borrowers.
At a government meeting on Thursday the Justice Minister has undertaken to submit the draft to the government which will submit the bill to Parliament as soon as possible, Orbán said. The plan is to put the law on fair banks into effect as of 1 January next year.
