Reuters: US Dollar Report: UPDATE 1-Hungary PM says not planning a "Blitzkrieg" on banks

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UPDATE 1-Hungary PM says not planning a "Blitzkrieg" on banks Jul 26th 2013, 06:21 Fri Jul 26, 2013 2:21am EDT By Gergely Szakacs and Christian Lowe BUDAPEST, July 26 (Reuters) - Hungarian Prime Minister Viktor Orban said on Friday a measure he is planning to help borrowers struggling with foreign currency mortgages would not wreck the country's financial system. Investors have already been battered by nearly four years of aggressively pro-consumer policies under Orban that have cost them huge sums of money and are bracing for more pain after his government said it was preparing more help for borrowers. In an interview on public radio, Orban, who is seeking re-election next year, said he wanted to move fast with the new measure, but he also sounded a conciliatory note. "We are proposing a solution that does not wreck the financial system but helps (borrowers) in trouble," Orban told public radio in an interview. Financial markets fear a repeat of a measure imposed by Orban's government in 2011 - known in Hungary as the final repayment option - under which borrowers were allowed to repay foreign currency loans in a lump sum at artificially low exchange rates. Orban on Friday indicated that this time around, the mortgage relief would be more nuanced. He said he had given his Economy Minister, Mihaly Varga, a mandate to eventually phase out forex home loans, but how this was done would the subject of talks with the banks. "When you want something against which there is enormous resistance but it is important for the people, you do not need negotiations, you need a Blitzkrieg," Orban said. "The final repayment scheme was one such option." "Now Hungary is strong, therefore, we are not aiming for such a solution but peaceful, calm talks." Many of the mortgages that could be affected by the government's plans were issued by international banks. Austria's Raiffeisen and Erste, Germany's Bayerische Landesbank and Italy's Intesa Sanpaolo are among the big lenders with businesses in Hungary. Link this Share this Digg this Email Reprints

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