Friday, Jun 04, 2010
Another European currency in trouble
BBC: Hungary debt fears worry markets
"Of particular concern to markets is the fact that so many homeowners in Hungary took out mortgages denominated in Swiss francs, because of the low interest rate in that currency. This means that Hungarians have to pay a lot more on their mortgages if the forint loses value against the Swiss franc. And unfortunately the Hungarian currency has fallen in recent weeks back towards the extreme levels against the Swiss franc reached during the financial crisis. This leaves markets and economists fearful that Hungarians will default on their home loans, sparking a banking crisis in the country."
Posted by alan @ 07:10 PM (798 views) Add Comment
3 Comments
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1. mark wadsworth said...
What's the problem?
No doubt the UK Home-Owner-Ists will be only too willing to commit UK taxpayers' cash to bailing out the Hungarian Home-Owner-Ists.
Anything else would be rank hypocrisy.
2. Spiderchannel Budapest said...
Don't be so smug Mark, Blighty will be next and it will be the UK's turn to ask for help. The difference is that Hungary doesn't need a house price crash and the UK does! Expats in search of foreign bargains did their best to fuel a price hike but the fees involved in buying and selling prevented a bubble forming despite best efforts from the borrow to let roaming hordes. Not very scientific but I'm trying to get back to the theme of HPC rather than use the site to do DM style foreigner bashing.
3. H Kovacs said...
The new government is claiming this because it hopes to get out of pre-election promises for tax cuts.
In actual fact, Hungary has managed to reduce its deficit through a lot of pain to the population, not very widely reported.
Look at the HUF over the past few years, it shows a much better picture.
The new government has some strangely isolationist economic ideas, which for a country of that size and those resources is a bit laughable.
A lot of Hungarians are horrified now and look to the EU to keep their own democratically elected government in check.
Crazy.