Hungarians are paying for our mistakes
BUDAPEST, HUNGARY – In Hungary, the post-Communist boom has turned to bust. And many Hungarians feel the rest of Europe is so preoccupied with its own problems that it simply can’t see how bad things are here.
The country’s prime minister Ferenc Gyurcsany warned this week about a new “Iron Curtain” descending across the continent, dividing rich from poor.
He’s also hinting darkly that Europe could see record levels of economic migration unless Brussels bails Hungary out; this sounds like economic blackmail to me. And so far it isn’t working. But Hungary’s plight is on a tragic scale.
Laszlo Vadasz is on the wrong side of that rich-poor divide. Like hundreds of thousands of Hungarians, he took out a mortgage in another European currency. Then the local currency, the Hungarian forint, collapsed and so the cost of his monthly repayments almost doubled.
Then he lost his job as a plumber. And because Laszlo can’t pay his mortgage, he and his wife Elizabeth face eviction from their home. Along with their severely handicapped son, Attila, who can’t speak or walk and lies in bed in their sitting room all day.
The irony is that Laszlo had never borrowed any money before in his life. The interest rate from an Austrian bank seemed too good to be true, and so it turned out. Things have got so bad that his wife tried to commit suicide.
That’s what Laszlo’s lawyer told me. She’s head of Hungary’s “Association of Bank Loan Victims” and her caseload of capitalism’s ingénues now struggling with unimaginable debt is full to bursting point.
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Laszlo explained to me why he took out his loan. “The foreign banks were advertising in newspapers and on TV,” he said. “They were egging us on to take out these loans. The property market boomed, so the whole country took out loans in foreign currency, 80 per cent of my friends did!”
Budapest’s elegant boulevards are littered with flashy European banks. Even the lampposts have signs directing you to the nearest branches. These banks are now themselves exposed to massive risks because people like Laszlo cannot pay them back.
I left his home feeling that western Europe had encouraged Hungary to copy the rest of us, to ape our mistakes. And Hungarians are now paying the price.
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