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Hungary Gets $6.7B Loan to Avert Meltdown

Budapest secures huge loan to prevent default à la Iceland

By Jason Farago, Newser Staff

Posted Oct 17, 2008 8:33 AM CDT

(Newser) – The Hungarian government secured a $6.7-billion loan yesterday from the European Central Bank in an attempt to stave off an Icelandic-style national meltdown. The EU newcomer's troubles derive from loans denominated in euros or Swiss francs, rather than the softer Hungarian forint. Frozen credit markets have left Hungary's government and citizens struggling to repay their debts.

Because of high interest rates, many Hungarians took out loans in foreign currencies, leaving the nation—just like Iceland—acutely vulnerable to a falling currency. The forint has plunged almost 8% just this week; today Hungary slashed growth forecasts and began to prepare a new budget. Hungary has also called in the IMF in case the country defaults, though the country's finance minister insisted that was "a last resort."

Hungary's Parliament buildings, in Budapest. The Eastern European nation is struggling to stave off an Iceland-style economic disaster. (©Bluelemur)

Hungary's Parliament buildings, in Budapest. The Eastern European nation is struggling to stave off an Iceland-style economic disaster. (©michael clarke stuff)

Hungary's Parliament buildings, in Budapest. The Eastern European nation is struggling to stave off an Iceland-style economic disaster. (©Neilhooting)

Hungary's currency, the forint, has dropped by 8% this week, pinching citizens with foreign-denominated loans. (©Diana Lili M)

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Hungary Gets $6.7B Loan to Avert Meltdown

Budapest secures huge loan to prevent default à la Iceland

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IMF Bails Out Hungary, Ukraine

Multibillion-dollar loans prop up Eastern Europe's basket cases

IMF Plans Huge Credit Line for Poor Nations

Wave of defaults in developing world could imperil global economy

Generous Pensions Toppling Hungarian Economy

Public spending dilemma threatens to engulf Eastern Europe

Crisis Makes Former Skeptics Rethink Euro

From Poland to Iceland, once-resistant nations want to join up

Why AIG Got a Bailout (and Lehman Didn't)

Credit default business dooms, saves giant

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Hungary Gets $6.7B Loan to Avert Meltdown

Budapest secures huge loan to prevent default à la Iceland

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OTHER STORIES ON OUR RADAR

Eastern Europe • IMF • Hungary • credit market • default • mortgage defaults • financial crisis • Hungarian forint

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

IMF Bails Out Hungary, Ukraine

Multibillion-dollar loans prop up Eastern Europe's basket cases

IMF Plans Huge Credit Line for Poor Nations

Wave of defaults in developing world could imperil global economy

Generous Pensions Toppling Hungarian Economy

Public spending dilemma threatens to engulf Eastern Europe

Crisis Makes Former Skeptics Rethink Euro

From Poland to Iceland, once-resistant nations want to join up

Why AIG Got a Bailout (and Lehman Didn't)

Credit default business dooms, saves giant

About Us

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Newser By Users

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What is Newser?