Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2020-12/650 – Updated – measures in Hungary
|Country||Hungary , applies nationwide|
|Time period||Temporary, 18 March 2020 – 31 December 2022|
|Type||Legislations or other statutory regulations|
Measures to prevent social hardship
– Preventing over-indebtedness
|Author||Nóra Krokovay (KOPINT-Tárki) and Eurofound|
|Measure added||15 April 2020 (updated 27 February 2023)|
Under Section 1 of the 47/2020 (18 March) government decree and 62/2020 on detailed rules concerning the payment moratorium, the reason for the measure is to alleviate the adverse effects of the coronavirus pandemic during the period Hungary is in a ‘state of emergency’ announced by the government on 11 March. The goal is to protect people who lose their income because of the pandemic and cannot make debt repayments. Another goal is to keep lending activities afloat despite the crisis.
Every commercial loan, mortgage or other loan contract signed before 2020 March 18 will receive a freeze on loan repayments, capital repayment and any related fees until at least 31 December 2020 (can be extended). The length of the loan will be extended by the period of the freeze. The Banking Association said the interest on deferred loan payments would amount to about HUF 450 billion in the 9-month period, but our estimations based on partner interviews suggest it would be at most half of that amount. Clients must sign a statement (online) to opt out of the payment freeze scheme, so the default is that they do get the suspension.
Hundreds of thousands of people or about 30-50% of credit clients have indicated to their banks until April 2020 that they would not avail of the payment freeze option and continue to make payments as before. The prediction of the National Bank of Hungary on the uptake was about 30% of all individual clients at the time. In its inflation report of June 2020, the National Bank of Hungary said that the loan suspension for individuals managed to serve its purpose of replacing lost income so that consumption could stay level or flatten out. Out of a total of about HUF 1,100 billion (€3.274 million) in household loan repayments eligible for the deferral, HUF 600 billion worth of repayments were requested for deferral under the scheme. The bank estimates that 50-70% of the amount freed in this way was spent towards consumption by households (private individuals). In March 2021, some 1.6 million individuals benefitted from the payment freeze. This amounted to HUF 4.2 billion or 42% of all loans (54% of retail loans). Analyses warned that many people who opted for the payment freeze and continue to stay in the scheme have not been sufficiently informed that in some cases this could mean that their loan will be extended not only be the time of the freeze period but, by many more months, even years. This is due to the fact that monthly repayments cannot be raised, but interest rates do rise during the period. It is clear from banks' records that it is the lower educated and lower earners who have opted to use the loan deferral scheme in larger numbers.
|Does not apply to workers||Does not apply to businesses||Applies to all citizens|
Company / Companies
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
The Banking Association was consulted about the measure prior to announcement.
Eurofound (2020), Suspension on loan payments for private individuals, measure HU-2020-12/650 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2020-12_650.html
30 January 2023
Governments across the EU continue to implement policies to support citizens and businesses in the face of rising food and energy prices caused by the COVID-19 crisis and intensified by the war in Ukraine. This article summarises the policy responses as reported in Eurofound's EU PolicyWatch database from January to September 2022.Article
12 September 2022
Although the worldwide pandemic situation had already disrupted supply chains and triggered increases in energy and food prices in 2021, the situation deteriorated in 2022 with the Russian invasion of Ukraine.Article
12 September 2022
This article summarises the first policy responses that governments across the EU have started to implement to support companies affected by the rising prices, and those with commercial ties to Ukraine, Russia or Belarus.Article
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.