The Hungarian Development Bank will form part of a national association for lending support to people struggling with their monthly mortgage repayments due to the low level of the forint against the euro and Swiss franc, and a concept will be ready by October 15, Matolcsy told TV2.
Borrowers will be given the option of converting their loans into forints or renting the property after it is bought by an asset manager. But the state will not be able to pay for the measures and banks would have to assume the costs, he said.
Matolcsy, speaking about the budget, said austerity measures would not be needed to reduce Hungary’s 2011 deficit to below 3 percent of gross domestic product since the banking levy and state-administration streamlining would be sufficient to plug the gap.
He noted that the International Monetary Fund wanted Hungary to cut spending by 300 billion forints, but the government had decided to introduce the tax this year and in 2011 instead.
Matolcsy underscored the government’s commitment getting the budget shortfall to below 3 percent in 2011. Should the EU refuse to countenance accounting changes to adjust for pension reform Hungary will still meet the target, he insisted.
The minister reiterated the government’s determination to introduce a 16 percent flat personal income tax from January 1, 2011, but he said it was still unclear whether it would be able to do so in two or three phases.