Gov't 'Threat' to Bank Deposits in Hungary, Says Opposition DK

  • 24 Nov 2022 11:18 AM
  • Hungary Matters
Gov't 'Threat' to Bank Deposits in Hungary, Says Opposition DK
The government is a threat to bank deposits, the opposition Democratic Coalition said, insisting that banks had been told to cap interest payments on deposits at the same rate as government securities with a maturity of three months.

The government is trying to force depositors to invest their money in government bonds to finance the state budget, Zoltán Bodnár, DK’s shadow finance minister, told an online press briefing, citing “an unexpected and shocking announcement” by the economic development minister which the DK politician branded as “irresponsible and dangerous”.

The interest-rate cap applies to deposits of financial enterprises and private bank deposits of more than 20 million forints, he noted, adding that the rule does not currently apply to most Hungarians.

But, he added, this could easily apply to smaller depositors with the summary signing of a government decree.

“Tomorrow, it could well also be the amount of deposits that can be withdrawn,” Bodnár said, adding that a new decree could well cover foreign currency deposits, too. He said such measures only served to heighten distrust in the government at home and abroad.

The central bank is exclusively responsible for setting interest rates, and now the government has taken away these powers, “grossly violating” the central bank’s independence, the DK politician said.

Ruling Fidesz said in reaction that DK was “lying” and “protecting the interests of banks over those of the Hungarian people”.

“The only ones to take Hungarians’ money away were [DK leader Ferenc] Gyurcsány and his people, and even now they’re the only ones who pose such a threat,” Fidesz said in a statement.

During Gyurcsány’s tenure as prime minister, it was an everyday occurrence for Hungarians to have their benefits taken away, the party said.

The cap on deposit interest payments is needed because of the crisis and the inflation caused by “Brussels’ flawed sanctions”, they said, adding that the aim was to prevent certain financial sector players from making excessive profits.

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