“European growth is driven by Central and Eastern Europe; a multi-geared Europe could not grow if it lost is engine. The continent can only remain competitive on the world market if it is unified”, Minister for National Economy Mihály Varga said on Friday at an informal meeting of the European Union’s Economic and Financial Affairs Council (ECOFIN). EU Finance Ministers discussed the future of EU economic policy and possible methods for handling the aftermath of non-performing bank loans.

At the meeting, the Minster said that Brexit is an excellent example of the fact that as a brand, Europe has lost some of its value. “It is the joint task of Europe’s leaders to from the reasons behind this”, he added. “The answer could indicate that Europe should do less in some areas, while in other areas Member States should work together to a greater extent than ever before. We cannot allow Brussels to force tax-related proposals onto us that would lead to an increase in tax burdens”, Mr. Varga highlighted.

During the meeting’s afternoon session, the Ministers and national bank directors discussed the state of non-performing bank loans (NPLs) that have accumulated within the European banking system, the high level of which in Europe and certain countries continue to represent a risk. “The rapid increase in NPLs began with the economic crisis in 2008. Non-performing loans have a negative effect on economic growth and represent a significant risk to financial stability. Hungary recognised the problem soon after the low-point of the crisis and has since done much in the interests of decreasing the high number of NPLs.

The National Asset Management Company and the introduction of personal bankruptcy have done much to help borrowers who have found themselves in difficulties and new debt brake regulations are preventing the appearance of future non-performing loans”, Mr. Varga explained. “The number of bad loans is still high despite the positive developments of recent years, and we still have much to do in the area at both national and EU level”, he added.

(Ministry for National Economy)