Hungary Buys Time in Solving Its Loan Dilemma

Hungarian Prime Minister Viktor Orban is trying to balance the welfare of his electorate against pressure from a largely foreign-owned banking sector. Orban announced July 26 that his administration will take decisive but measured action to reduce Hungarians' vulnerability to foreign currency-denominated loans. This would be a change from Orban's previous and less modest strategy, which resulted in significant losses for banks. However, the announcement is probably hollow and meant to give Orban time to gain leverage in the foreign currency-denominated loan issue.