Hungary’s government will put an end to the “era of bankers” and protect people from having to bear all losses and risks, Prime Minister Viktor Orban said in a Monday interview with free-sheet daily Metropol.
Orban said the governments of Romania and Poland had successfully protected people from bankers but Hungary’s past leaders had taken the side of the banks.
Orban noted recent announcements to ban forced evictions and enable the full repayment of mortgages denominated in foreign currency at a market discount.
He said that while the affected banks had initially condemned the government’s announcement, they were likely to reconsider their position. He added that similar measures were expected to be introduced in several European countries.
The prime minister said the government was determined to help people who had put their homes up as collateral as well as householders threatened by forced eviction.
Orban said that it was not expected that the Swiss franc’s exchange-rate would drop to the past level of stability against the forint so it was worth repaying mortgage at the fixed rate in a lump sum, even this meant taking out a forint loan for this purpose.
He said, however, that the government would not force banks to offer forint loans since doing so would boost fears about the stability of the country’s banking system. Nevertheless, banks will in all likelihood offer forint loans if there is a demand, he added.
He said Hungary’s complicated progressive tax system in the past had worked against labour, families and enterprises. This is why the government had decided to phase out super-grossing – adding social contributions to the tax base – and develop a labour-based economy, he added.
“Hungary must become a production centre for Europe,” which can materialise if people feel that it is worth working and the current tax systems encourages this, he said.
Orban said the flat-rate tax system would form part of a new stability act, a so-called cardinal law requiring a two-thirds majority – to be submitted in the near future. The stability act will also include rules for preventing any new build-up of the public debt, he added.
The prime minister said the number of people involved in public-works schemes would rise to between 200,000 and 300,000 by the end of 2012.
Orban said next year’s tasks also included setting straight the health insurance fund in order to ensure that revenues cover expenses.