Infringement proceedings initiated for restrictions on foreign currency loans
The European Commission (EC) has launched infringement proceedings against Hungary for restricting foreign currency lending, the Brussels body said on its website.
Apart from the fact that the procedure was initiated
The website does not provide details. The Government Communication Center promised detailed information on the matter Thursday morning.
MTI is aware that the EC has sent an official letter of formal notice to Hungary because it considers it violates the EU principle of free movement of capital that a government decree of July 2011 stipulates that only those whose foreign currency is has a gross monthly income which, when converted into forint, is more than fifteen times the minimum wage.
According to the committee, this significantly narrows the scope of potential borrowers by introducing a de facto restriction that resembles a total ban on foreign currency lending, which otherwise came to an end on July 1, 2011, before the government decree was issued.
The Treaty on the Functioning of the Union
Generally prohibits any restriction on the free movement of capital, and only rarely does it allow exceptions for the reasons set out in the Treaty or for reasons of public interest. The restriction must be proportionate and proportionate to the objective pursued, but under EU rules it cannot go beyond what is necessary.
According to the MTI, the Committee believes that the Hungarian regulation violates the principle of proportionality, because the aim pursued could be achieved in other ways, by means of less restrictive but effective measures. The Committee is aware of the situation in Hungary and the consequences of over-indebtedness in foreign currencies and therefore does not question the purpose of the measures at all.
At the same time, Brussels would consider it acceptable to tighten up consumer protection rules, set other prudent credit assessment criteria or use non-binding instruments, which Hungary is free to decide within the framework of EU law.
The decision to open infringement proceedings was taken on 20 June. The mere fact of this, without giving details.
Was also published by the committee on its website
If the infringement procedure is initiated by the Committee in the second or third stage, that is, when a reasoned opinion is sent by the Brussels panel or the matter is referred to the European Court of Justice, it will make a communication available to the public on the same day.
However, no information on the opening of infringement proceedings, its first phase, the letter of formal notice, will be issued by the committee’s press service on that day, which will be posted on the College’s website days later (MTI).