Viktor Orbán’s answer to the Tavares report

As soon as the vote in the European Parliament went against the Hungarian government, Viktor Orbán announced that a resolution will be introduced for the Hungarian parliament to adopt that will condemn the Tavares report.

And indeed, by this afternoon the proposed text of the resolution was already on László Kövér’s desk. The bill is signed by three Fidesz members of parliament: Antal Rogán, the leader of the Fidesz caucus, Gergely Gulyás, one of his deputies and the alleged constitutional expert of the party, and Máté Kocsis, mayor of District VIII and a very active young member of parliament.

This afternoon I heard an interview with Gergely Gulyás, in the course of which he was asked whether the idea for the resolution came from Viktor Orbán. Gulyás, who is one of the few Fidesz politicians for whom lying doesn’t come easily, paused. It was a very long pause. Eventually he found the right words: the prime minister can certainly identify with it.

What we must keep in mind is that the resolution comes from Fidesz the party and, as you will see, is at  least in part addressed to the government. So, strictly speaking, Viktor Orbán, the party chief, is asking Viktor Orbán, the prime minister, to do certain things.

Decree of Parliament on the equal treatment due to Hungary

1. We Hungarians entered into the family of European nations by establishing a state and adopting Christianity.

We Hungarians often stood up for European values. There were times when we defended these values with our blood against attacks from outside. In 1956 we armed ourselves against the communist dictatorship. In 1989 we contributed to unifying Europe with the demolition of the iron curtain.

We Hungarians entered into the European Union of our own free will.

We did that in the hope that we would join a community based on law, justice, and freedom.

We Hungarians  do not want a Europe where freedom is limited and not widened. We do not want a Europe where the larger ones abuse their power, where national sovereignty is violated, and where the smaller have to honor the larger. 

We have had enough of dictatorship after 40 years behind the iron curtain.

We Hungarians have always respected the desire of European Union institutions for dialogue, and we have always been ready for reasonable compromises. 

Therefore, we rightly expect the respect and equal treatment due to Hungary from the European Union’s institutions.

We expect the European Union to respect the rights that we acquired after our accession just as it would respect those of any other country. 

The Parliament of Hungary is surprised that the European Parliament passed a decree that it had no right to pass, that exceeded its jurisdiction. The European Parliament made demands, introduced new procedures, and created institutions that violate Hungary’s sovereignty as guaranteed in the fundamental treaty. 

With this decision the European Parliament went against basic European values and led the Union on a dangerous path.

The Hungarian Parliament is further worried by the undue influence of business interests that underlie this abuse of power.

Hungary is reducing the cost of energy paid by families. This may hurt the interests of many European companies that for years have had windfall profits from their monopoly in Hungary. It is unacceptable that the European Union tries to influence our homeland to further the interests of these companies.

The Hungarian Parliament believes that Europe is in danger if the interests of multinationals are realized at the expense of the rules laid down in the fundamental treaty.

Today we adopt a resolution to defend Hungary’s sovereignty and the equality of Hungarians in the European Union.

We call on the Hungarian government not to give in to the pressure of the European Union, not to let the nation’s rights guaranteed in the fundamental treaty be violated, and to continue the policies that make the lives of the Hungarian people easier.

2. This decree of Parliament will enter into force the day after its publication.”

The embellished historical commonplaces that introduce this resolution are to be expected. Hungarians always drag them out when they want to prove their European roots and vaunt their accomplishments in defending Europe from the eastern peril.

What is much more interesting is the government’s attempt to establish a connection between the Orbán government’s lowering of energy prices and the Tavares report which, after all, is about the Hungarian government’s transgression of democratic norms and not about economics. This alleged connection is ludicrous in and of itself, but if we consider that Rui Tavares has been working on this report for at least one and a half years and the Orbán government came up with the political masterstroke of lowering energy prices only a couple of months ago, it should be clear to everybody that there is absolutely no link between the two.

The attempt to cast business interests as a motivating force behind the Tavares report and its acceptance is more than tenuous. Support for it came largely from the left–the socialists, greens, and liberals who are not exactly known for their support of big business. The right- and right-of-center parties are by and large more pro-business. And a majority of their representatives stood by Viktor Orbán.

In his speech in parliament today Orbán again attacked the multinationals and the banks, but some Hungarians, it seems, want more than bellicose talk. Here are the first signs.

Today the verdict was handed down in a case that has been been in and out of court for two and a half years.  The plaintiff took out a foreign currency loan which he now finds impossible to pay back due to the weakening of the Hungarian forint. He claimed that he shouldn’t have to pay the loan back because the bank did not mention the bid-ask spread in the contract. Two lower courts decided in favor of the plaintiff. The case then moved up to the highest court, the Kúria. For a number of days demonstrators have stood in front of the building, waiting in a rather ugly mood. The verdict finally came: OTP, Hungary’s largest bank, is not liable. The plaintiff will have to pay his loan back.

Scuffle in front of Viktor Orbán's house - Népszabadság, Photo Árpád Kurucz

Scuffle in front of Viktor Orbán’s house – Népszabadság, Photo Árpád Kurucz

The crowd outside was outraged at the verdict. One would have thought that the crowd would go OTP headquarters to vent their anger. But no, they headed toward Viktor Orbán’s private residence in Buda. One could see gallows and red-and-white striped flags (the favorite symbol of the Hungarian extreme right), interspersed with the Hungarian tricolor.

So, if Orbán thinks that by whipping up anti-business sentiment he will gain great political advantage, he might be mistaken. These dissatisfied people, it seems, blame him for being unable to “solve their problems.” After all, he promised that he would take care of those hundreds of thousands of people who lost their homes as a result of the collapse of the Hungarian forint over the last few years.

As for Viktor Orbán’s speech in parliament, he didn’t add much to the content of the proposed resolution, except for getting close to calling those Hungarian MEPs who voted for the Tavares report traitors. However, Attila Mesterházy in a forceful speech condemned the Orbán government, the prime minister’s “business interests,” and his “majoritarian rule.”

The Fidesz back benchers are the noisiest ones on the right and unfortunately they are also ignorant. For example, when Mesterházy reminded Viktor Orbán that when he was in opposition he went so far as to ask the European People’s Party to use its influence in the European Union to stop any payment to Hungary, they tried to drown out Mesterházy. I’m sure most of them thought that this was a lie. It was, however, absolutely true. Orbán rarely if ever thought about collateral damage to the country as a whole in his relentless attacks on the socialist-liberal government.

In addition, Attila Mesterházy and Gábor Harangozó on behalf of MSZP turned in amendments to the proposed resolution. Since there is no chance of Fidesz ever accepting any amendment coming from the opposition, by now parties on the left write these amendments in jest. It is an amusing piece that is worth reading.

63 comments

  1. Besides of the rather hmm.. special wording, the resolution seems like another attempt of Orbán to personally distance himself from the Tavares report and push the focus of the public interest toward a conflict between a struggling innocent sovereign country – Hungary – and a lobby group for a monstrous money mongering capitalist conglomerate – the EU.
    All of this happening, because the good leader just lightened the burden of his beloved folk, and the stingy bastards just can’t stand the generosity of the great man…

    Its pretty clear, that this little scripture aimed to effect on the domestic supporters, hardly capable to reach the sensory threshold of the EU as a whole, but hey, Viktor sent a message to those capitalist oppressors who want to colonise us – our great hero, isn’t he?

  2. I am baffled why there is no personal bankruptcy in Hungary, although this has been promised by several governments, including Fidesz’s. Personal bankruptcy protection would have solved some of the problems of the debtors.

  3. Happy Fourth, Dear Eva.
    Yes, it is time “these gangsters go home”. That place would not be Hungary. Peter.

  4. “…the Orbán government came up with the political masterstroke of lowering energy prices…”

    Let’s not forget: As both “tappanch” and Bors Online (Népszabadság and others carried it, too) pointed out, the net burden for all utility prices went up, not down.

    So apart from being OT in the context of the Tavares Report, “the lowering of energy prices” is a blatant lie.

  5. The whole “decree” reads like an other iPad document. It is so poorly drafted, and so out of touch with the real concerns as presented by the European Parliament that it makes you wonder if in the Fidesz government even has a single person left who can be taken seriously. How on earth can any person vote for such a piece of “something”. The whole song and dance about the energy prices that were not even mentioned in the report, and this whole angle on “we are being attacked”. Aren’t these people getting bored from their own disillusionment? ..and it does not matter how many times and who spells it out to Orban and his government that it is NOT the Hungarian people who anyone has a problem with but the current Hungarian government, they just keep repeating the same lines. In essence what Orban is suggesting that anyone in Hungary who the EU does not have a problem with is not Hungarian. I keep reading comments, and now you can hear Mesterhazy (who I am not fond of) that they do not take the EU’s opinion personally, they do understand that the EU does not attack Hungary, and the Hungarian people, still Orban goes on and on about this imaginary attack on Hungary. I am getting the impression that the whole Fidesz group is dealing with the signs of dementia.

  6. Two independent MPs submitted an amendment to the bill that makes it obvious how ridiculous the resolution is (it was not supported by the government supermajority, of course, but it is still hilarious). I hope the link works.

    Click to access 11729-0006.pdf

  7. And the new law on rescuing the FX borrowers is being made….I guess will be passed overnight. If the Curia is allied with the banks, OV will solve this on legislative level…another levy for the banks probably. The example will likely come from the Croatian judgement and people will be able to repay their loans on the original FX rate. This is the price of the FX borrower voters…

  8. In no country in the world, certainly not in Canada or the US, could banks do what was done in Hungary with those ‘deviza-kölcsönök’. Those Swiss frank loans did more than anything else to undermine people’s faith in Western democracy. Fidesz is doing its best to counteract all this. When it comes to the EU, Hungarian PR is a disaster, not sophisticated enough. Hungary needs Madison avenue!!!

  9. @Joe Simon: I beg to differ. in the US there is the US dollar which is a global currency…no need for FX loans. Such loans, in fact, were applied in many countries, especially in those where interest rates in local currency were sky-rocketing (such as in Hungary). Also a fact that each government supported this, including the former Fidesz government which was the one ENABLING the FX loans by their corresponding amendment of the law (remember, at that time the slogan was: 3 rooms, 3 chlidren, 4 wheels – they knew that it would not be possible by taking HUF loans…) I agree only with that banks were too flexible when monitoring creditworthiness. Those people who could not have afforded to take a HUF loan took an FX loan, which in itself made them risky. But these people cannot simply escape liability just because it is a trend now to blame banks (who – otherwise certainly deserve this blame to an extent). No one could have reasonably believed that FX rates will be the same for 30 years. Not long ago there were two world wars within such period of time…And if one looks at the historical changes of the Swiss franc, it could determine that since the 70s it was always stronger and stronger.

    And one should neither forget that lending in EUR was absolutely reasonable both for the banks and borrowers at that time since all governments predicted that soon there will be EUR in Hungary! Thus, if we blame the banks, we should blame the state as well as the people. Consequently, the burden should be shared proportionally and not just borne by the banks.

  10. Joe Simon :
    In no country in the world, certainly not in Canada or the US, could banks do what was done in Hungary with those ‘deviza-kölcsönök’. Those Swiss frank loans did more than anything else to undermine people’s faith in Western democracy. Fidesz is doing its best to counteract all this. When it comes to the EU, Hungarian PR is a disaster, not sophisticated enough. Hungary needs Madison avenue!!!

    Obviously you have no Polish friends, and don’t read the French Press. The “Swiss Franc Scam” as I like to call it has spread all over Europe, from simple citizens with home loans to local governments with big public debts.

  11. The Fidesz Law Factory just changed their own law to be able to appoint a completely reliable fidesznik to be the new chief of the Media Authority, aka Chief Censor.
    (By the way, the successor of the late Ms Szalay should have been appointed long time ago by law)

    This has become a regular pattern – they change the laws back and forth just for the sake of a single person.

    Remember – a minister does not have to have any university degree any longer, just a high school diploma (for the sake of Nemethne).

    Now there is no law or economics degree requirement from now on for the chosen, but still unnamed new Chief Censor.

    http://index.hu/kultur/media/2013/07/05/nem_kell_jogi_diploma_az_nmhh_elnokenek/

  12. Minusio :

    “…the Orbán government came up with the political masterstroke of lowering energy prices…”

    Let’s not forget: As both “tappanch” and Bors Online (Népszabadság and others carried it, too) pointed out, the net burden for all utility prices went up, not down.

    So apart from being OT in the context of the Tavares Report, “the lowering of energy prices” is a blatant lie.

    It is quite something. In a country where money is not in abundance people don’t seem to pay attention the size of their bills? The whole thing is baffling.

  13. The truth is the vast majority of the population don’t care or are even aware of events at the EU this week. The vast majority don’t care about the issues raised relating to the constitutional rape of their nation, the independence of the media and judiciary and the corrupt mafia state being built up by Orban and his cronies.

    Indeed Orban needs to be careful about attacking too literally or publicly the EU on their constitutional concerns because that might well play too far into the Jobbik line, ie “Well, if the EU are disrepecting the Motherland, then why do we continue to remain a slave of our Brussels Overlords?”.
    But Orban and his business mafia do not wish to give up all that lovely EU money which is delivered to all intents and purposes on a cash first, inconveneint questions much later basis.

    So, it makes sense to move the narrative back to the public utility costs and currency mortgages; the fact that it is one mad conspiracy which involves the European left and commies supporting big business and international finance matters not one jot when the Lord Shepherd delivers the “truth” to his unquestioning and faithful sheep.

    And with this narrative, he can put on the back burner the more abstract (for the panel-house resident anyway) questions raised by the EU and continue tom promote himself as the defender of cutprice electricty and sewage.

    They do care about their

  14. One other point about the cutprice electricity. We pay ours on a monthly set payment basis; every year ELMU read our meter, calculate the difference between how much electricity we’ve prepaid for and what we’ve actually used. They then make an estimate based on our usage for the next year. 2 adults, a dog and seventy fish live in our appartment, a state of affairs which hasn’t changed for the last 5 years and usually we have to pay an extra couple of thousand forints or so when our total usage has been calculated- we have even had a couple of refunds.

    This year however we have been landed with a bill foran extra 20 grand, this in a period when our usage hasn’t changed and when supposedly the Lord Shepherd has personally guaranteed a cut in our bills!

    I am still working through our bills and meter readings but between you and me, I really hope the Viktator doesn’t *cut* our charges any further as I am not sure we could afford it!

  15. @oneill, electricity:

    the same here with the electric bill: the company actually raised the monthly flat rate by around 5%, and based this on the difference between the 2012 and 2011 actual usage as measured by their single yearly reading of the meter.

    [I have to check this but I think there were more than 365 days between the two readings. Say they read the meter on January 15 of 2010, February 1 of 2011, February 15 of 2012, March 1 of 2013. etc.- this will always show an increase in my using electricity – so they can increase the monthly flat rate for the following year. This is just a hunch, I will check the actual dates later]

    Sewage, cold water, etc. that goes to the Budapest municipality have increased by 15-20%.

  16. Another Fidesz answer to the Tavares report:

    Today’s print issue of Nepszabadsag (and thus surely the Fidesz print media as well) carries a one-page-advertisement about “Hungary’s victory” – regarding the deficit procedure:

    “Kormany informacio – az EU is elismerte – [12 cm high letters:] SIKERÜLT! – MAGYRORSZAT GYÖZÖTTt! – [ca. 1 cm high print:] Az Europai Unio kenytelen megszüntetni a Magyarorszag ellen 2004 ota tarto Tulzott deficit eljarast. Es aszt jelenti, hogh minden inios penzhez hozzajuthatunk, ami a magyaaroknak jar. – ES AZ ÖNÖK GYÖZEÖLME – azok felett, akik a kudarcunkat akartak – itthon es külföldlön. Szükseg volt hozza minden magyar ember minkajara, eröfeszitesere, tamogatasara es a kozösen meghozott aldozatokra – MAGYARORSZAT JOBBAN TELJESIT.”

    (my very rough and shortened translation, feel free to correct me: IT WORKED OUT! HUNGARY WON! The EU had to stop the deficit procedure against Hungary, which lastet since 2004. That means that we can access all the EU money that belongs to Hungary. THIS IS YOUR VICTORY against those – at home and abroad -, who didn’t want us to succeed. It needed the work of every magyar man, ….)

    They must indeed think of their underlings as very stupid people.

  17. please excuse all the typos, spottet them too late, of course it should be “unios penz” and “EZ az önök gyözölme” etc.

  18. Maria :

    Another Fidesz answer to the Tavares report:

    Today’s print issue of Nepszabadsag (and thus surely the Fidesz print media as well) carries a one-page-advertisement about “Hungary’s victory” – regarding the deficit procedure:

    It is the same in Népszava. Huge!

  19. Eva S. Balogh :

    Maria :
    Another Fidesz answer to the Tavares report:
    Today’s print issue of Nepszabadsag (and thus surely the Fidesz print media as well) carries a one-page-advertisement about “Hungary’s victory” – regarding the deficit procedure:

    It is the same in Népszava. Huge!

    I think it’s shameful that opposition papers carry that add.. but money talks and Fidesz have the money… I think opposition media is fighting for financial survival at this point. But it clearly shows how much Fidesz is able to control and influence the press.

  20. Eva S. Balogh :

    Maria :
    Another Fidesz answer to the Tavares report:
    Today’s print issue of Nepszabadsag (and thus surely the Fidesz print media as well) carries a one-page-advertisement about “Hungary’s victory” – regarding the deficit procedure:

    It is the same in Népszava. Huge!

    I hope that will stop all of you lamenting that poor Szabad Nép & Népszara don’t receive any state advertisements because the government cut the money pipes.
    lol…

  21. Maria :
    They must indeed think of their underlings as very stupid people.

    No, they just know the fan base of Népszabadság inside out.

  22. Joe Simon :
    In no country in the world, certainly not in Canada or the US, could banks do what was done in Hungary with those ‘deviza-kölcsönök’. Those Swiss frank loans did more than anything else to undermine people’s faith in Western democracy. Fidesz is doing its best to counteract all this. When it comes to the EU, Hungarian PR is a disaster, not sophisticated enough. Hungary needs Madison avenue!!!

    Joe Simon, this just shows how uninformed you are, and there is no base for your opinion other than unfounded sympathy for political subjects based on rumours, and your wish list.
    I do have two bank accounts, one in USD, and the other in CAD. I do speculate by transferring money between the two. THe loans in Hungary were nothing more than speculations. Are you suggesting that if the Swiss frank would of fallen those who took out mortgage should of repay the difference? Are you also suggesting that in Casinos the people who loose money should be compensated and the winners should give back the money they lost?
    AT any case what is speculation or mortgages has to do with democracy?

  23. Johnny Boy :

    Maria :
    They must indeed think of their underlings as very stupid people.

    No, they just know the fan base of Népszabadság inside out.

    No Johnny Boy, they knew you would be appreciate it how taxpayers money will be spent on lies.

  24. Joe Simon :
    In no country in the world, certainly not in Canada or the US, could banks do what was done in Hungary with those ‘deviza-kölcsönök’. Those Swiss frank loans did more than anything else to undermine people’s faith in Western democracy. Fidesz is doing its best to counteract all this. When it comes to the EU, Hungarian PR is a disaster, not sophisticated enough. Hungary needs Madison avenue!!!

    Probably you do not know the history of the foreign currency loans. They were established under the first Fidesz government in 2000. At that time it was mainly car loans. In 2004 it changed to mortgages. At that time MSZP should have stopped it, but nobody want to take the political risk.

    Click to access balas-nagy_EN.pdf

  25. “the EU had to stop the deficit procedure against Hungary, which lastet since 2004. That means that we can access all the EU money that belongs to Hungary. THIS IS YOUR VICTORY against those – at home and abroad -, who didn’t want us to succeed. ”
    I guess this includes Viktor Orban himself who personally lobbied the European People’s Party in 2006 asking their support to force the EU to freeze any money going to Hungary! I hope someone will put up an advertisement about that.

  26. Today’s issue of Metropol also had the one-page “Kormány információ” on p.11 including a part that proudly notes “Even the EU acknowleges it.”

    Yet on p. 2 is a sidebar with an Orbán quote as an amusing headline: “The EP has crossed a line,” which makes it sound like Hungary is fed up with the jokers in the EU, and not the other way around!

  27. Joe Simon :
    In no country in the world, certainly not in Canada or the US, could banks do what was done in Hungary with those ‘deviza-kölcsönök’. Those Swiss frank loans did more than anything else to undermine people’s faith in Western democracy. Fidesz is doing its best to counteract all this. When it comes to the EU, Hungarian PR is a disaster, not sophisticated enough. Hungary needs Madison avenue!!!

    Basically there are two ways Joe can get it wrong: one is when he says “it’s the same in the US” the other is when he says “this isn’t the same in the US”.

    I don’t really want to question your financial genius Jose, but in a country with the strongest economy don’t expect a big market for financial products that bet on other countries. FX loans and lottery are for the poor countries. They bet on their own economy, then vote in a government that trashes the economy. Then they organize peace marches and blame the evil banking industry …

    But if you really want to shoot yourself in the foot you can get and adjustable rate mortgage that is tied to the LIBOR. It’s calculated from a dozen currencies among them the swiss franc.

    In the US few years ago people were gambling with adjustable rate mortgages (negative amortization anyone?) the same way as Hungarians were gambling with FX loans. I bet the same will happen in Hungary in a few years.

    Now you got me thinking … I’ve been a Mega Million subscriber with the Virginia Lottery from more then ten years now and all I got was a few measly 2 dollar checks. I spent 1000 dollars for nothing! I want justice!

  28. Johnny Boy :

    Maria :
    They must indeed think of their underlings as very stupid people.

    No, they just know the fan base of Népszabadság inside out.

    Zing!

    The the first quarter in 2013 was 3.8%. It was just published. Now this ad. Typical Hungarian success story.

  29. in the past the aristocracy had “the duty to protect the people from oligarchs and from tyranny. The world and Europe in the XXI. century has changed. Today, we do not talk about aristocracy, but about political, economical and cultural elite. Today, this elite, especially the political elite should follow this example and carve in stone that democracy mandates. Hungarians think this is the message from ’56 in 2013 to the European Union.”

  30. Just a remark about Kim Lane Scheppele.
    She is allegedly a jurist, yet she applauds the Tavares report which acts as if it had any real relevance. But there is absolutely no legal foundation behind the Tavares report, EU rights are laid down in e.g. the Lisbon Treaty and that law cannot be overruled by any repotr adopted by a simple majority in the EP. The report wants to create an investigation body and implement restrictive measures that are completely out of any legal boundaries of the EP.
    Scheppele, praising this report, is acting completely unprofessional and she cannot call herself a jurist, but at most a journalist.

  31. Johnny Boy: if you read the report, you realise that it does not deal with existing legal frameworks. It proposes a new legal framework to be established – in accordance with the law-making mechanisms already in place. Whether or not the Commission and others who should be part of that mechansim will indeed make such law, is the question of the future. The report is only a recommendation to that effect as much as a recommendation to the Hungarian state. If you wish, each set of recommendations have different addressees. In this sense there is no difference when a minister submits a proposal to the government to submit a change in law to the plenary session of the parliament. That is what happened, except that the MPs in the EP expressed their strong support towards such recommendations. I am not sure whether or not you are a lawyer, but if yes, you are surely aware of the serious affects of these kind of “soft laws” in international relations. Law is not always just the text of acts and government decrees. And the first step of making law (well…not in today’s Hungary, but in civilized countries) is always a proposal.

  32. THe member of Kubatov’s Army that was called in instead of the police to protect the Fidesz building from the deviant student protesters back in March, was involved in a car chase that ended with the use of baseball bats, and iron bars. Orban’s close friend Gabor Kubatov is to proven to be very tight with killer Szoke, who was involved in this new brawl, and was in the special unit Kubatov counted on defending .. I am not sure what.
    Take a look on the scary student crowd:

    Now take a look on Kubatov’s Army:
    http://nol.hu/belfold/a_fideszvedo_bortonviselt_biztonsagis_visszavag
    Who would you be more afraid of? Fidesz and law… bahahaha

  33. You can almost hear the prompting ‘Johnny Boy’ is getting from Fidesz HQ!

    You need to do your trolling with a little more subtlety, JB – you used to be much better at it.

  34. The seven television channels freely available in Hungary from August 1st

    M1 – “public” (Fidesz)
    M2 – “public” (Fidesz)
    Duna – “public” (Fidesz)
    Duna World – “public” (Fidesz)
    Euronews
    TV2 – commercial, little news, connected to Fidesz
    RTLKlub – commercial, little news

  35. Some1 :

    Joe Simon :
    In no country in the world, certainly not in Canada or the US, could banks do what was done in Hungary with those ‘deviza-kölcsönök’. Those Swiss frank loans did more than anything else to undermine people’s faith in Western democracy. Fidesz is doing its best to counteract all this. When it comes to the EU, Hungarian PR is a disaster, not sophisticated enough. Hungary needs Madison avenue!!!

    Joe Simon, this just shows how uninformed you are, and there is no base for your opinion other than unfounded sympathy for political subjects based on rumours, and your wish list.
    I do have two bank accounts, one in USD, and the other in CAD. I do speculate by transferring money between the two. THe loans in Hungary were nothing more than speculations. Are you suggesting that if the Swiss frank would of fallen those who took out mortgage should of repay the difference? Are you also suggesting that in Casinos the people who loose money should be compensated and the winners should give back the money they lost?
    AT any case what is speculation or mortgages has to do with democracy?

    I sent my wife out to get a small mortgage for the home that we purchased. I was very surprised when she came home with the Swiss franc option. I was shicked that any one would consider a loan for a primary residence that wasn’t in a currency they were earning. That coupled with the difference in the interest rate told me that the actuaries, or those that evaluate risk, determined that the currency risk was quite high. Long story short, we went for the franc loan ‘cos for us therecwas no risk. In just the last month I learned that the mortgages were all HUF funded but hedged against the franc. And so in some twisted way the banks were able to paras along the risks without actually taking them on themselves. That said, it has not really changed my opinion. A group of financially illiterate people were taken advantage of by another group of people and the government did *nothing* to intervene. So, shame on those taking on the loans without getting proper independent advice, shame on the banks for abusing their customers and shame on the government for letting it happen. IMHO a three parties share equal liability.

    As for FX loans in Canada. I don’t really know the rules but i have never in my life seen a bank offer a mortgage in any tag other than CDN. I suppose you could register a lean on the property in pigs and chickens but….. I have no idea how you’d sell a Canadian on an FX loan.

  36. From behind the lines…

    In my role as a mole of sanity within the Orbán love-in that is my family, I can tell you that their response to the European debate/vote (those that know or care about it) was to share Orbán’s speech all over Facebook. A great speech, according to my wife…

  37. @LwiiH: Well, the banks did not go out and loan in fx expecting the forint to tank and make a killing on the change in the exchange rates. In those days, everybody pretty much expected Hungary to be on the Euro soon and thus expected some sort of stability in exchange rates… wishful thinking. Nobody expected to still have the forint in 2013, just as nobody expected the financial turmoil of 2007-08 and all the extreme movements in exchange rates it brought along. At that time, it just seemed like a pretty good deal for everyone involved… .

    Of course, the banks also took on an exchange rate risk (namely that the forint rate goes up, in that case, the banks would have lost money on the deal), but being financial institutions that actually understand risks, they hedged against it. Of course, unlike the bank, the average customers did not understand the exchange rate risks fx loans involve and were caught off guard when the exchange rates moved against them.

  38. London Calling!

    The biggest fx gambler was the ex-mayor of Hódmezővásárhely – who ‘mortgaged’ the town to the hilt – Hungary’s most indebted municipality.

    Truly enormous debt resulting from enormous gambles on tiny fx margins.

    Which have now been absorbed into national debt – as Orban renegotiates a lower interest bill because it is now ‘national’ and not municipal debt – after János Lázár tried to bully the banks into submission.

    Lázár has been rewarded as a minister of state – gambler supreme, running Hungary.

    Of course another manifestation of the banks being at fault, Simple Simon?

    All fx mortgages required the mortgagee to sign a clause that they understood that the mortgage carried fx risk.

    Many people in England too took out fx mortgages – and equally came unstuck. At one time colleagues and friends were bragging how clever they were until the market moved against them – then all went quiet.

    Of course it’s not their fault – the banks forced them into it of course.

    Regards

    Charlie

  39. CharlieH :
    Of course it’s not their fault – the banks forced them into it of course.

    ‘Lured’ is the word. By down selling the risk on the principal, while stressing the immediate low interest rate.

    Indeed some customers did understand they were actually engaging in carry trading (and, as you said, bragged about the coolness of it while it lasted), but I strongly doubt it was the case of most people, especially on the Continent where financial literacy is poor.

    And now, while public institutions such as local governments, hospitals etc., are in the position to use some leverage, households aren’t. Some are suing the banks by the way, including in France and Austria (so much for Mutt’s “poor countries”).

    That said, in this matter the Hungarian Government again demonstrated its usual populist approach: short-sighted “solutions” and xenophobic rants…

  40. tappanch :
    Orban’s minister has ordered the Tobacco Trade Co. to destroy evidence about the tobacco license scandal by sending back the losing tenders.
    http://hvg.hu/gazdasag/20130704_Nemethne_utasitott_szabaduljanak_meg_a_tr

    ORBAN’S HUNGARY THROUGH SMOKE RINGS

    Ring 1: 2012: Fidesz Government (i.e., Mr. Viktor Orban, P.M.) decides to use parliamentary supermajority power (yet again), this time to reduce the number of tobacco concession licenses countrywide from 40,000 to about 5,500.

    Ring 2: Ostensible pretext: To reduce smoking

    Ring 3: Owners of about 40,000 tobacco shops (“Trafiks”) countrywide, some of them decades-old family businesses, are informed that all of them will lose their right to sell tobacco and must apply to a nationwide assessment  that will distribute the 5,500 licenses that will remain.

    Ring 4: The assessment takes place, and the recipients almost all turn out to be Fidesz supporters and their families, some families and individuals being awarded multiple concessions (one each to the husband and wife in one family, 9 to the cleaning lady of another family,).

    Ring 5: Almost none of the original 40,000 concessionaires were awarded licenses; almost all those who did win them had no prior experience in the trade: their only common attribute was their Fidesz connection.

    Ring 6: News of the outcome emerges; Fidesz denies bias: licenses were awarded to the best qualified.

    Ring 7: Testimony as well as tapes emerge of the deliberations in selecting the winners, and the explicit criterion is Fidesz fidelity.

    Ring 8: The public demands to see the data on the deliberations.

    Ring 9: Orban uses Fidesz supermajority power (yet again), to make the data inaccessible to the public.

    Ring 10: July 1 2013: Fidesz preparing to declare its anti-smoking campaign a great success, and to declare Hungary again a model for the rest of the world, as it is in so many other things: finance, governance, justice, constitutionality, and anti-corruption measures.

    Ring 11: July 3, 2013: EU votes to put Hungary’s government under monitoring for breaching fundamental rights: EU vote is bipartisan, supported by both the left and the right.

    Ring 12: Orban uses Fidesz supermajority power (yet again) in a Hungarian parliamentary vote that declares the EU parliamentary vote a biassed, illegal and anti-Hungarian conspiracy of the EU Green/liberal/left under the influence of the international business and bank lobby opposed to Fidesz’s utility expense rebate to Hungarian voters…

  41. Marcel Dé (@MarcelD10) :

    CharlieH :
    Of course it’s not their fault – the banks forced them into it of course.

    Some are suing the banks by the way, including in France and Austria (so much for Mutt’s “poor countries”).

    In Hungary an estimated 287,000 households – approximately 1.2 million individuals – held a total of 5000 billion HUF worth of loans in foreign currency. In a country of less than 10 million. No you tell me the Austrian and French numbers.

    We were so stupid and greedy that the government had to ban it.

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