BUDAPEST, April 10 Hungary's supreme court will
make a final ruling on troubled foreign-currency loans in the
autumn, which will be the final legal decision the government
has been waiting for before it takes measures to help borrowers.
Prime Minister Viktor Orban's government, which was
re-elected for the second term in parliamentary elections over
the weekend, has promised further measures to resolve the
problem of the loans. It said it would wait for courts to clear
all legal issues before it takes action.
Some government officials had expected the supreme court,
called the Kuria, to rule on the loans around the end of May.
But in a reply to Reuters questions late on Wednesday, the court
said the ruling was not expected until autumn.
Investors and Hungary's mostly foreign-owned banks will be
looking closely at the decision. The banks fear a new relief
scheme for borrowers could inflict further losses on them.
Foreign-currency mortgages were popular in Hungary before
the 2008 global crisis, because they let borrowers take
advantage of much lower interest rates on the loans. But the
forint has weakened since then, causing loan payments to soar
and leading to widespread non-payment.
The next stage in the legal maneuvering is a final ruling
expected from the European Court of Justice at the end of this
month, and then the Kuria ruling in the second half of the year.
Hungary's supreme court has already ruled on the main legal
issue, finding that lenders were not to blame when borrowers
lost out because the exchange rate changed. But it referred
certain issues to the European court.
That was a partial reprieve for banks, which are largely
foreign-owned. They include units of Belgium's KBC,
Austria's Raiffeisen Bank, Erste Bank and
Italy's Unicredit. Banks have already lost more than a
billion euros in a previous, 2011 relief scheme.
(Reporting by Krisztina Than and Marton Dunai; Editing by Larry