Government’s regular press briefing about terrorism, borkerage scandal, Paks and Budapest, Pest County to be separated

The government plans to hold coordination talks with the Hungarian Banking Association in connection with client compensation in the case of failed brokerage Quaestor, the government office chief said on Thursday. The government has approved plans to administratively separate Budapest and Pest County from 2020, the government office chief said. Hungary is ready to hold coordination talks with Brussels in the next two months over the 12 billion euro project to upgrade the Paks nuclear power plant but will take the issue to court if necessary, the government office chief said in connection with the European Commission’s decision to launch an infringement procedure over related public procurement rules. Secret service reports confirm the government’s standpoint that Hungary is right to enhance its level of security, the government office chief said.

Government to coordinate with banking association on Quaestor

The issue of compensation will be reconsidered in parliament after the talks, Janos Lazar told a weekly government press briefing in connection with Tuesday’s Constitutional Court ruling annulling certain sections of the law on Quaestor. Lazar argued that the ruling approved the involvement of banks in compensating clients.

The top court’s ruling concerned the law governing a top-up fund which was set up to help Quaestor clients. The law discriminated against some investors when determining their eligibility for compensation and placed disproportionate ownership restrictions on investment service providers that were obliged to provide compensation, the court said.

Chairman of the top court Barnabas Lenkovics, commenting on the ruling, said tweaks to the law could bring it into line with the constitution.

Levente Kovacs, general secretary of the association, told MTI after the court’s decision that taxpayers “cannot be made to pay compensation to investors seeking higher than average yields”. Hungarian banks — which would have paid into the fund under the law rejected by the court — work in a “regular and honest” way, and cannot be held responsible for the activities of brokerage companies outside the banking sector, Kovacs added.

Budapest, Pest County to be separated from 2020