EBRD

Hungarian finance minister calls on EBRD to focus on central Europe

The European Bank for Reconstruction and Development (EBRD) should focus more on central Europe, especially the countries neighbouring Ukraine, Finance Minister Mihály Varga told MTI on Wednesday, after attending a meeting of the EBRD’s Board of Governors in Marrakesh.

The EBRD was set up in 1991 to help central and eastern European economies recover after the collapse of Communist regimes in the region. While it is important to support development in Asia or the Sahel region, the EBRD must not lose its focus as a primarily European bank, he said.

Hungary, the Czech Republic, Slovakia, Estonia and Latvia have drafted a proposal for funding for local EBRD branches.

“We aim to acquire funding for more projects through the bank,” he said.

Regarding the Russia-Ukraine war, Varga said

Hungary had already spent some 40 billion forints (EUR 105.2m) on handling the refugee crisis.

He called it “fair and just” that other countries should shoulder some of the burden.

The EBRD is launching a 2 billion euro programme in support of those countries most affected by the war, especially those neighbouring Ukraine, he said. The scheme could get under way within days, he added. EBRD President Odile Renaud-Basso said at talks on Tuesday that Hungary would be part of that programme, Varga said.

The programme will aid local authorities and companies investing in projects that aid refugees, such as building refugee shelters or developing education projects, he said.

The bank will also launch a programme to boost post-war reconstruction and infrastructure development in Ukraine, he said. Varga said Hungary was ready to participate in that scheme too.

Hungary to share in EBRD support for mitigating impact of war

ebrd

Hungary will share in some 2 billion euros of resources the European Bank for Reconstruction and Development (EBRD) is making available to ease the impact of the war in Ukraine on neighbouring countries, Finance Minister Mihaly Varga said after a meeting with EBRD President Odile Renaud-Basso in Marrakesh on Tuesday.

Varga welcomed the EBRD’s inclusion of the matter of energy security in the support programme and urged the lender to implement the financing as soon as possible.

He noted that landlocked Hungary is “heavily exposed” to Russian energy imports, adding that alternative delivery infrastructure has never been built, in spite of the country’s efforts.

“Pipelines from the west deliver the same Russian oil and gas as pipelines from the east,” he said.

Varga said he told Renaud-Basso that Hungary is prepared to cooperate with the EBRD on its participation in the post-war reconstruction.

He noted that

the EBRD has ploughed over 1,000 billion forints (EUR 2.63m) into Hungary, so far, making close to 200 investments.

As we wrote today, annual inflation in Hungary almost in double digits in April, read details HERE.

EBRD supports Solus copper foil plant in Hungary

The European Bank for Reconstruction and Development (EBRD) on Monday announced a 28 million dollar loan for the construction of a plant by South Korea’s Solus Advanced Materials that will make copper foil for electric vehicle batteries.

The plant, in Tatabánya, in northwest Hungary, will be the first of its kind in Europe, the EBRD said. It will support the move to electro-mobility and advance the European Union toward its goal of achieving a climate-neutral economy, while contributing to the circular economy as it relies fully on scrap copper for its feedstock, the EBRD said.

“We fully support Solus Advanced Materials’ growth and its contribution to Hungary’s becoming a hub for the European EV battery industry,”

EBRD Head of Industries Frederic Lucenet said.

To date, the EBRD has invested almost 3.3 billion euros in 192 projects in Hungary.

Car industry
Read alsoProduction starts of first electric car manufactured in Hungary

Hungary’s GDP to skyrocket in 2021

Factory
The European Bank for Reconstruction and Development (EBRD) raised its forecast for Hungary’s GDP growth this year to 7.7 percent in a biannual report published on Thursday.
 
The forecast was raised from 5.5 percent in the previous Regional Economic Prospects report, published in June. Hungary’s government anticipates growth of around 7 percent for 2021. First-half GDP growth reached 7.6 percent. The EBRD sees Hungary’s GDP growth
 
slowing to 4.8 percent in 2022.
 
The EBRD said a minimum wage rise of close to 20 percent and a personal income tax rebate, both scheduled for 2022, are expected to boost household consumption. Higher energy prices and the semiconductor shortage are negatively impacting the manufacturing sector, especially the automotive segment, which is expected to weigh on Hungary’s exports in the short term, it added.

Investments co-financed with European Union funding are likely to boost the post-crisis recovery, the EBRD said, noting that the government recently issued the equivalent of 4.5 billion euros of FX bonds to pre-finance projects while the country waits for its Recovery and Resilience Facility (RRF) plan to be approved.
 
 
 
Meanwhile, the number of home building permits issued in Hungary rose by an annual 29.8 percent to 22,430 in the first three quarters even as the number of new projects in the capital declined, data released by the Central Statistical Office (KSH) on Thursday show. The number of home building permits issued in county seats and cities with populations over 50,000 rose by 43.2 percent to 4,474 and the number in smaller cities increased by 56.9 percent to 7,452. The number issued in towns was up 59.9 percent at 6,289.
 
In Budapest, the number of home building permits fell by 22.9 percent to 4,215.
 
The finance ministry has lowered its projection for GDP growth this year to 6.8 percent against the backdrop of higher energy prices, inflationary pressure and the impact of the fourth wave of the pandemic, Finance Minister Mihaly Varga said at a conference organised by the Hungarian Insurers Association (MABISZ) on Thursday. Earlier, the ministry had put this year’s GDP growth at 7-7.5 percent.

Varga said rising energy prices would “significantly restrain” the performance of European economies, parallel with higher inflation, while the economic impact of the fourth wave of the pandemic, albeit smaller than that of the second and third waves, would still be felt. He noted that Hungary is one of just ten countries in the European Union whose economies have recovered to pre-pandemic levels.
Read alsoSerious punishments for not wearing mask at the Hungarian universities

Jobbik demands govt help to ‘victims of debt collection’

Daily News Hungary

Conservative opposition Jobbik’s deputy leader called on the government to help “several hundreds of thousands of victims of forced debt collection”.

Dániel Z Kárpát told an online press conference on Wednesday that salaries and pensions not exceeding the minimum wage should be protected from the forced collection of debt, at least during the state of emergency and economic crisis resulting from the coronavirus epidemic.

Unlike banks, multinationals and property investors, this demographic did not get help from the government in the epidemic and they can lose 33 percent or up to 50 percent of their income as a result of forced debt collection, he said.

Jobbik MP accused the cabinet of being in cahoots with financial institutions, citing a “pact” signed with the EBRD in February 2015.

It is currently up to factoring companies and debt managers to decide whether the affected people should be allowed to survive the economic crisis, he said.

He called for “mending the social net” so that nobody would be evicted without access to shelter and small incomes or pensions should exempt from forced debt collection.

Daily News Hungary
Read alsoJobbik demands govt help to ‘victims of debt collection’

Leftist opposition call on courts to suspend forex loan-related procedures

Civil groups and the opposition Socialist, Párbeszéd and Democratic Coalition (DK) parties have called on the courts to suspend all ongoing non-payment procedures, auctions and home evictions relating to foreign currency loans.

At a press conference in Budapest on Monday, Mrs. István Hosszú, representing the Debtors’ Chamber and a consultation body for troubled forex loan holders, called on the Kúria, Hungary’s supreme court, to advise the government to permanently settle the issue of foreign currency-denominated loans.

DK deputy leader László Varju accused the government of “deliberately blocking” the resolution of the situation of forex debtors and refusing to implement the European Commission’s decisions in the matter.

Varju called on the government to release its 2015 agreement with the European Bank of Reconstruction and Development (EBRD) on the financing of forex loans.

László Szakács of the Socialists said the government was “denying the forex loan problem while 60-80 families are evicted from their homes each week”. He called for holding banks accountable, the suspension of non-payment procedures and the cancellation of the government’s pact with the EBRD.

Párbeszéd co-leader Tímea Szabó criticised the lawmakers of the ruling Fidesz-Christian Democrat alliance for boycotting an earlier special session of parliament convened to debate the situation of forex debtors. She accused the prime minister and the government of indifference over the situations of people in need.

Socialists seek termination of EBRD agreement to benefit forex debtors

Daily News Hungary

The opposition Socialists have proposed that parliament should terminate an agreement between the government and the European Bank of Reconstruction and Development signed in 2015 because its stipulations were aimed at “benefitting banks to the detriment of forex debtors”.

László Szakács, deputy leader of the Socialist Party, told a press conference on Wednesday that the contested agreement ensured that “banks would not suffer any losses” through the conversion of forex loans to forint ones, while paving the way for the eviction of mortgage borrowers in arrears.

On Tuesday, the Kúria, Hungary’s supreme court, threw out an earlier court decision which ruled in favour of a forex loan-holder, thereby annulling the complainant’s loan agreement.

Concerning Tuesday’s ruling, Szakács accused the court of disregarding the relevant domestic and European Union laws that protect loan-holders “against the formidable power of the banks”.

Attorney László Ravasz, representing the Debtors’ Chamber, said that the Kúria had “used all the procedural tricks at its disposal” to evade the issue of whether the bank had adequately informed its clients about possible risks. He insisted that neither Hungarian nor European law permitted contracts if the client was not adequately informed.

“The Kúria’s failure to examine that issue was unlawful,” he added.

Socialists call on Hungarian government to withdraw from EBRD pact

Daily News Hungary economy

Hungary’s 2015 agreement with the European Bank of Reconstruction and Development (EBRD) on the financing of foreign currency loans has handed Hungary’s banks political influence over the government to the detriment of FX loan-holders, the deputy leader of the opposition Socialists said, demanding Hungary’s withdrawal from the pact.

László Szakács told a press conference on Wednesday that moratoriums on home evictions are not allowed under the agreement, neither are measures that may harm banks’ bottom line.

He said the interests of FX loan-holders were not served at all since Prime Minister Viktor Orbán “executes the pact to the letter”.

Szakács said

the Socialists will submit a bill on scrapping the pact so that the ruling Fidesz party can vote in a way that demonstrates “the prime minister governs the country independently of the banks”.

József Szabó, leader of a civil organisation representing FX loan holders, said borrowers not once had been consulted on any decision concerning FX loans over the few past years. He expressed doubt that talks between the National Bank of Hungary and the Hungarian Banking Association on redrafting 300,000 loan contracts to allow repayment at a fixed interest rate would yield a positive solution.

Meanwhile, on the subject of the European Parliament election, Socialist leader Bertalan Tóth told MTI that the Socialist party will hold a vote on its list of candidates for the EP election at its congress on Feb. 16.

Ruling Fidesz responded that the Socialists “drove over one million families to taking out FX loans … and then left them without any safety net, failing even to vote for the rescue measures [proposed by Fidesz] in parliament.” If it had been up to the Socialists, “several hundred thousand families would have been evicted by now,” Fidesz said in a statement.

Socialists-Párbeszéd calls on government to pull out from EBRD agreement on FX loans

Daily News Hungary economy

The opposition Socialist-Párbeszéd party alliance on Thursday called on the government to pull out from an agreement signed with the European Bank of Reconstruction and Development (EBRD) on the financing of loans taken out in foreign currencies, saying that it did not serve Hungarian people’s interests.

Signed in 2015, the agreement guaranteed that FX loans, which suffered greatly after the forint plummeted during the 2008 economic crisis, could be converted to forint-based loans “without any cost on the banks’ part” and that the Hungarian government would not stand in the way of evictions, László Szakács, the deputy head of the Socialist party, said on Friday.

Prime Minister Viktor Orbán “sold FX loan borrowers to the banks for money,”

Szakács said, noting that at a press conference on Thursday, Orbán pledged Hungary would keep the agreement.

The parties will submit the proposal to parliament, so “Fidesz can also vote on it”, he said.

In another proposal, Socialists-Párbeszéd will state that the banks have misled prospective borrowers, a claim loan holders currently have to prove individually in court, he said.

Párbeszéd board member Beáta Hegyesi said Orbán’s “unfair laws” turned demographic groups against each other, and called for widespread unity “because strength is the only thing this regime understands”.

Commenting on the initiative, ruling Fidesz said in a statement that the first Fidesz government’s home subsidy scheme was scrapped under the subsequent Socialist governments. Those “bringing up forex loans are the ones who let the public amass FX debts,” it said. These parties never supported proposals to make banks accountable, to convert FX loans to forint-based ones or to launch home subsidy schemes, Fidesz said.

LMP to turn to authorities over Budapest e-fare system

bkk e-system

Opposition LMP will turn to authorities concerning delays in the introduction of a unified electronic fare system in Budapest’s public transport network, a municipal lawmaker of the party said on Friday.

After ten years of planning, the e-ticket system should have been put in place in January this year, but the project has still been stalled and it even lacks a target date of introduction, József Gál told a press conference.

He also raised concern over spending on the project, noting that Budapest’s municipality had already drawn 5.3 billion forints (EUR 16.2m) from the 17 billion forint EBRD loan it had taken out. So far only 29 buses and trolleybuses have been equipped with e-ticket terminals as against the targeted 11,000.

In the meantime,

several rules of law have been amended which would justify redesigning the entire e-ticket system, the councillor said.

 

International Investment Bank to open a regional branch office in Budapest

Investment bank IIB, Varga initial agreement to bringing regional office to Hungary

The International Investment Bank (IIB) is to open a regional branch office in Budapest, Minister of Finance and Deputy PM for Economic Policy Affairs Mihály Varga said after having signed an MoU with IIB Chairman Nikolay Kosov.

Budapest is a rapidly growing economic and financial hub. Besides the opening of this office, the fact that the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) had decided to open representative offices in Budapest also reflects this trend, the Minister stressed.

The IIB’s new European Regional Office is also important for Hungary,

given the fact that the opening is in line with the Government’s efforts aiming to foster economic relations between the member states of the bank and facilitate their economic growth through the assets of the bank. “With the opening of the branch office we are aiming to help the IIB to get more closely integrated into the business and financial spheres of the region and the European Union, and bolster the bank’s presence in Central Europe,” Mihály Varga noted.

One of the main issues of coming years will be for Hungary and the fast-growing countries of the CEE region to boost competitiveness. This requires the extension of corporate lending, and the IIB can do that more efficiently from Budapest.

Hungary’s capital city fulfils all the criteria necessary for the successful operation of the new unit, and the Government of Hungary is working to provide the support which the successful operation of the new unit demands,

the Minister said. Following the signing of the MoU, the parties will prepare the documents designed to establish the legal status of the branch office. As soon as this agreement is adopted by the parliament, the office is projected to open at the beginning of 2019.

Hungary’s membership in the bank was renewed in 2015.

After Russia and Bulgaria, Hungary has become the third largest shareholder of the bank.

In the positive decision concerning bank membership, the fact that the bank’s management had placed the operation of the institution on new foundations has been decisive. The bank’s new strategy and its rapid implementation enabled the IIB to become a modern international development bank, Mihály Varga pointed out.

Photo: Ministry of Finance

Good chances for Hungarian companies to win international tenders

EBRD

Last year the European Bank for Reconstruction and Development (EBRD) provided opportunities to tender for supplier and construction contracts for € 989 million and contracts for consulting services for € 111 million, and 11 Hungarian companies won tender contracts for € 138,000. On 26 April 2018 EXIM and EBRD held a joint workshop for Hungarian companies, with the participation of EXIM Deputy Chief Executive of Operations Dr. Dancsó József and EBRD’s Senior Public Procurement Specialist Dirk Plutz.

Last year the European Bank for Reconstruction and Development (EBRD) provided opportunities to tender for around 250 supplier and construction contracts (for a total of €989 million) and over 2,000 consulting and service contracts (for approximately € 111 million). 11 Hungarian companies submitted their bids and won 4 contracts, for a total of € 138,000. As this great result indicates, Hungarian enterprises have good chances to succeed at international tenders.

The number of active Hungarian small and medium-sized enterprises increased significantly in recent years, thanks, among other factors, to the supporting programs of the Hungarian government.

To inform Hungarian SMEs about international tender opportunities, rules of participation and the operation of the European Bank for Reconstruction and Development, EXIM and EBRD held a joint workshop on 26 April 2018 in Budapest. The event was attended by 70 representatives from 50 companies.

Deputy Chief Executive of Operations of EXIM, Dr. Dancsó József emphasized in his welcome speech: “EXIM plays a key role in strengthening relations between SMEs and international financial institutions, helping the good positioning of Hungarian enterprises and their successful participation in international tenders”. He added that “the cooperation is now especially important for Hungarian companies because EU funding is expected to be lower after the end of the EU2020 period. Therefore it is imperative to encourage the expansion of international relations, as the expansion in foreign markets might be one of the main pillars of sustainable long-term growth for Hungarian companies.”

Senior Public Procurement Specialist and Associate Director of the Procurement Policy Department of EBRD Dirk Plutz said:

“The EBRD provides many opportunities for suppliers, contractors and consultants in Hungary. I strongly encourage Hungarian enterprises to participate in tender processes. You can’t win a tender without first submitting your bid.”

EXIM’s Director for International Organizations and Foreign Representative Offices Szőcs Gábor said: “EXIM closely monitors tender opportunities on a daily basis and informs interested companies. EXIM supports and helps Hungarian enterprises to win tender contracts.”

After the presentations, Hungarian company representatives had the chance to meet EBRD representatives in B2B meetings organized by EXIM.

The purpose of the event was to contribute to the strategic goals of EXIM, i.e. support direct and indirect access of Hungarian enterprises to export markets, improve the competitiveness of Hungarian SMEs, improve the foreign trade performance of Hungary and contribute to the country’s economic growth.

Economy minister commenting on a fresh WEF report: Hungary’s competitiveness improving

weforum

Not only has Hungary seen an improvement in its sovereign ratings, but its competitiveness ranking is also on the rise, Economy Minister Mihály Varga told journalists in Singapore, commenting on a fresh World Economic Forum (WEF) report.

According to the WEF, Hungary has advanced by nine spots on its competitiveness list.

Varga, who is part of a delegation headed by Prime Minister Viktor Orbán, said the WEF had registered “serious advances” in its financial and capital market institutions, reflecting the past few years of “serious work, which has made the environment a lot more helpful and stable”.

Hungary’s banks are now in a far more stable position compared with previous years, thanks to agreements the government has struck with international institutions such as the European Bank of Reconstruction and Development (EBRD) and domestic players to find the most stable way to operate the banking system.

He insisted that several positive changes had not yet appeared in the WEF report, so it is expected that

Hungary will continue to make steps forward in the competitiveness rankings.

Like Singapore, Hungary is performing well in terms of its “start-up culture”, and the country is among the most advanced in this area in central and eastern Europe, he said.

Hungary has improved its position on the WEF’s latest Global Competitive Index by nine spots to 60th place in the ranking of 137 economies around the world.

“The rise is to a large extent due to an improvement technological readiness (an increase in technology take-up by firms from a low level — from 135th to 109th on firm-level technology absorption — and significant increases in Internet take-up by individuals, from 73 percent of the population in 2015 to 79 percent in 2016),” the WEF said in the index’s 2017-2018 edition.

“In addition, business executives are reporting improvements in the development of financial markets as well as the business and innovation environment,” it added.

Hungary’s overall index score was 4.3 on a scale of 1-7, with 7 being the best score. 

The country scored 3.5 for the institutions component of the index, 4.4 for infrastructure, 5.1 for macroeconomic environment and 5.6 for health and primary education.

EBRD lifts Hungary growth forecast

Daily News Hungary economy

Budapest, May 10 (MTI) – The European Bank for Reconstruction and Development (EBRD) forecasts Hungarian economic growth of an annual 3 percent in 2017 and 2018, the organisation said on Wednesday in its latest Regional Economic Prospects report.

The EBRD raised its GDP growth forecast for 2017 from 2.4 percent.

The economic outlook has improved in Hungary on the back of personal income tax cuts and reductions in social security contributions, the report said.

Growth last year was curbed by a dramatic fall in investment and, as in most other EU new member states, public investments have dwindled since the start of 2016 due to the slow start of the new European Union 2014-20 funding cycle, the bank said, adding that with corporate credit still contracting, private investment growth was also downbeat.

In contrast, household consumption was up 5 percent, driven by real wage growth of 6 percent and the unemployment rate falling to just 4.2 percent in January 2017, the report said.

In 2017, cuts in social security contributions and the minimum wage increase will keep consumption strong but the emerging skill-mismatches and worsening demographic trends are expected to put further pressure on earnings, thus weighing on Hungary’s international competitiveness, the bank said.

The reduction of the corporate income tax to 9 percent, the lowest level in the EU, is expected to pep up corporate investment, however, the EBRD said.

EBRD and Hungarian government to set up working group

Budapest, March 20 (MTI) – The European Bank for Reconstruction and Development (EBRD) and the Hungarian government have agreed to set up a working group to analyze the impact on the banking sector of the recent amendment of the Judicial Enforcement Act, EBRD said on Monday.

The bank said it is committed to continuing its fruitful cooperation with the Hungarian authorities and institutions such as the central bank and the Banking Association and the working group will work to identify ways to mitigate any potential adverse consequences of the amendment.

At the start of March Hungary’s parliament approved amendments ensuring repossessed homes are offered at their full market value during the first year after foreclosure. If a repossessed home remains unsold after one year, the legislation lowers the threshold to 90 percent of market value. Earlier, repossessed homes could be sold for 70 percent of market value.

The EBRD noted that the Hungarian government signed a Memorandum of Understanding in February 2015 aimed at strengthening the country’s financial sector, improving its level of efficiency and profitability as well as boosting lending.

Under the memorandum the government pledged to “promote a stable and predictable framework to support macroeconomic stability.” The successful implementation of the memorandum had positive impacts on the development of the economy and strengthened the local banking sector, the EBRD added.

Legal changes taking effect on Jan. 1 in Hungary

Daily News Hungary economy

Budapest, January 1 (MTI) – Hungary faces several legal changes as of Jan. 1, 2017, including a drop in the bank levy, whose upper bracket will be reduced by 3 basis points to 0.21 percent.

The reduction in the tax comes as part of an agreement with the European Bank for Reconstruction and Development (EBRD). The tax’s lower bracket will remain at 0.15 percent up to 50 billion forints (EUR 161m) at least until the end of 2018.

The tax breaks for two-child families will be raised to 30,000 forints per month. Old-age pensions, widow’s pensions, orphan support, rehabilitation benefits and disability pensions will all increase by 1.6 percent, according to a recently issued government decree.

Under a career model implemented in 2015, police officers, prison officers, firefighters, officers of counter-terrorism force TEK and the National Protection Service as well as intelligence personnel will all see their wages rise by 5 percent. The government has also introduced a career model in the armed forces, whose members will also see a 5 percent wage increase.

According to the government’s calculations, the reduction of VAT rates on milk, eggs and poultry from 27 percent to 5 percent will leave two-child families with an additional 35,000-40,000 forints a year in disposable income. The rates for internet service and catering will be lowered to 18 percent.

Under a six-year wage deal reached in November between the government, employers and unions, minimum wages for unskilled workers will be raised by 15 percent and for skilled workers by 25 percent this year, while payroll taxes will be cut by 5 percent.

The corporate tax rate has also been lowered to a flat 9 percent.

The government has also expanded the mandatory use of tills connected directly to the tax office to automotive and motorcycle repair shops and replacement parts retail stores, plastic surgery clinics, disco and dancehall operators, laundries and physical training coaches. Currency exchange offices and taxi drivers are also required to use online tills starting today.

Under changes to the excise tax law, the retail prices of tobacco products will be set by tax office NAV, which reserves the right to change the prices of products that are subject to the new excise tax law no more than twice a week, the tax office has told MTI.

Orbán calls for higher wages at EBRD conference

Budapest, November 10 (MTI) – Prime Minister Viktor Orbán has called for a “firm increase” in wages in the Hungarian economy, which he said required increasingly competitive businesses.

Addressing a conference organised by the European Bank of Reconstruction and Development (EBRD) in Budapest, Orbán said that reducing corporate and personal income taxes, as well as employer contributions were necessary to enhance competitiveness. He added that red tape should be cut, while efforts are needed to make the labour force more competitive and increase competition in the banking sector, too. Concerning Hungarian banks, Orbán said that the sector was profitable but it was lagging behind the most advanced countries in terms of efficiency and new technologies.

Competitiveness is no longer supported by cheap labour alone, Orbán said, adding that both Hungary and the entire region must face the phenomenon of wage pressure, a demand of higher wages dictated by political realities and economic development.

Summing up his government’s achievements in the past six years, Orbán said that the number of taxpayers has increased from 1.8 million to 4.4 million, the national debt was reduced from 85 percent of GDP to 75 percent, while a budget deficit of over 7 percent has gone down to below 3 percent.

The Hungarian government’s economic policy is not in the mainstream of European economics, Orbán said, but added that it was a successful model, and its components should be incorporated into European policies.

On the subject of the recent US presidential election, Orbán said that western civilisation could now “return to real democracy”. “What we call liberal non-democracy, in which we spent the past 20 years, is over. We can now return to discourse freed from political correctness and address problems with a pragmatic attitude based on common sense,” the prime minister said.

Concerning Brexit, the prime minister said “it is not at all a disaster or defeat but an attempt by a great nation to achieve success in a different way”.

According to Orbán, the whole western world has just taken “important steps in an intellectual transformation” in which “we should not be concerned but find the opportunities it may offer”.

EBRD head Suma Chakrabarti told the conference that central and eastern European states’ anti-integration rhetoric could lead to ill-considered moves in emerging economies. He warned that a passive attitude should be replaced by efforts to find answers to global challenges. Among challenges in the CEE region, he mentioned negative demographic trends, an innovation gap with western countries, and low energy efficiency. He said the region needed further capital investments and efforts to distribute economic gains in a more equitable way.

Hungary’s bank sector grew stronger once again

Daily News Hungary

The transaction through which the State of Hungary and the European Bank for Reconstruction and Development (EBRD) obtained a stake of 15 percent each in Erste Bank Hungary was concluded on 11 August, as the purchasing price has been transferred.

The objective of the Government continues to be to bolster bank lending and thus boost economic growth.

With this step, another condition stipulated by the Memorandum of Understanding concluded by the EBRD and the State of Hungary on 9 February 2015 has been fulfilled. In the document, the Government of Hungary committed itself – among others – to significantly reducing the bank tax and conducting closer negotiations with the bank sector on regulatory issues concerning financial institutions. As promised, the Government reduced the special bank tax by altogether HUF 80bn in 2016 and 2017, and it has also fulfilled other obligations set out by the MoU.

The contracts on purchasing stakes in the Bank were signed by the Parties on 20 June 2016, and in line with these the State of Hungary and the EBRD have paid EUR 38.9bn for 15-15 percent stakes of the Bank. The price had been determined by external experts, on the basis of market valuations.

Minister of State for Financial Affairs Ágnes Hornung said, it was very important from the aspect of economic growth that Erste Bank has expressed long-term commitment to Hungary. Rapid lending growth has been assisting Hungarian enterprises to more easily obtain resources required for their operation and investments and it thus underpins further economic expansion. Erste Bank’s growing business activity, confirmed by favourable earnings data from the first half of the year, also makes the state’s investment more profitable.

Under the agreement, Erste Bank Hungary continues to be managed by Erste Group, but the State of Hungary can delegate one member to the Board of Directors and another one to the Supervisory Board. At the Board of Directors, Deputy State Secretary Zoltán Marczinkó will represent the Ministry for National Economy (NGM). The politician with a degree in economics has been active in the field of finance for 23 years: prior to his public administration job he had worked at various commercial banks. At the Supervisory Board, the NGM is going to be represented by NGM Department Head Alíz Zsolnai. She has been working as government officer responsible for bank regulation issues since 2001 and has a PhD degree in economics.