Loan repayment moratorium extended again
September 20th, 2021Two liberal commentators find the government’s decision to keep the loan repayment moratorium in force beyond the 2022 election controversial and potentially counterproductive.
The government announced that the loan repayment moratorium introduced in March 2020 (see BudaPost March 20, 2020) will be extended until June 2022 for families with children, public sector employees, pensioners and debtors whose incomes have shrunk during the pandemic. The government also cut credit card interest rates as a result of which banks will need to pay back 20-25 billion Forints to borrowers.
In Heti Világgazdaság, Gábor Kovács deems the further extension of the loan repayment moratorium risky and controversial. The liberal commentator acknowledges that the moratorium was an important tool to remedy the negative impact of the economic slowdown resulting from the pandemic. He notes however that its partial prolongation until next June will harm banks as well as borrowers. Banks have to swallow losses due to the government’s retroactive cut of credit card interest rates, while borrowers opting in will accumulate even more debt, Kovács writes. He adds that the retroactive cut of interest rates may be frustrating for those who heeded an earlier recommendation by the National Bank and the government that those who were able to service their debt should do so.
444.hu’s Dénes Csurgó thinks that the extension of the moratorium serves the government’s political interests. The liberal columnist suspects that the government wanted to offer perks to voters by not ending the moratorium until the 2022 Parliamentary election. He recalls that commercial banks as well as the National Bank have called for an end to the moratorium, but the government nonetheless decided to do a favour to those two-thirds of debtors who have suspended loan repayment. Csurgó fears that the government is not just lending a helping hand to those who would find it difficult to meet their payments, but also to those who would be able to continue paying without difficulty.