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subsidiaries, booked an impressive HUF676bn in net earnings, due to
the release of provisions and money parked at the MNB for high rates. But industry players claim that the favourable environment will be temporary, as the MNB is set to continue rates as disinflation gathers pace and the economy is facing the longest recession since 1995.
Hungarian banks are already sharing the financial burden with extra levies announced in 2022. So far this year, lenders have paid HUF77bn in bank tax, HUF226bn in windfall tax, and the interest rate caps on corporate and retail loans set them back HUF56.1bn.
Any increase in taxes would unquestionably hinder the expansion of credit supply by banks, precisely at a time when economic policy is eager to witness
a swift resurgence in the credit market.
Shortly after Varga’s speech, the Fidesz faction issued a statement saying the government would not change interest- subsidised loans and would not raise bank taxes either. Faction leader Mate Kocsis, speaking at the break of a caucus meeting of the party said the comments reflect the private opinion of the finance minister, The rare rebuttal clearly marks a rift inside the ruling party on how to communicate impending and painful austerity measures, which look inevitable.
Financial analyst and prominent asset fund manager Viktor Zsidai said it is
not a surprise that the government is targeting banks, reaping the benefit of high interest rates. In retrospect, it was naïve to believe that bank levies could be reduced, he added.
The Hungarian economy is facing
the classic trap of countries pursuing procyclical fiscal policy, which is stimulating their economies in good times but lacking resources when a recession hits. This is compounded by high inflation, which is also hurting the country’s recovery.
Hungary’s OTP plunged 7% during the day to below HUF13,000 after Varga’s comments. It erased some of its losses in the afternoon when Kocsis refuted the news that the bank levy would be upped. OTP shares plummeted 6.3% to HUF13,135 at the end of trading on the Budapest bourse.
The forint traded at 387.75 to the euro in the evening hours, weakening 1% on the day.
Poland’s first nuclear power plant clears
key hurdle in ambitiously timed plan
Wojciech Kosc in Warsaw
The first-ever Polish nuclear power plant project has cleared a crucial hurdle on the path to completion by securing the all-important environmental decision on September 22.
The decision sets rules that the project must keep in order to limit its impact on the environment and is a must before the next major step, which is getting a go-ahead for the actual construction.
“This is a milestone in the implementation of an investment that is crucial from the point of view of [Poland’s] energy security,” Climate And Environment Minister Anna Moskwa said on X (formerly Twitter).
The plant will be located in the seaside municipality of Choczewo, some 80 kilometres west of Gdansk. According to the Polish government’s ambitious plan for the project, construction is set to begin in 2026, with the first of three
units of the plant going on-grid just seven years later in 2033.
Poland will thus join most other CEE states as a producer of electricity from nuclear fission.
Nuclear power is the cornerstone of Poland’s plan to reduce the currently dominant share of coal and lignite
in electricity generation. Due to its reliance on dirty fossil fuels, the Polish electricity grid is one of the most carbon-intensive in Europe.
The country’s energy transformation strategy assumes that coal’s share in the energy mix will drop from roughly 70% today to no more than 28% in 2040.
Wind power – both on land and offshore – and solar energy are expected to
drive Poland’s decarbonisation effort before nuclear power complements
the overhauled energy mix, which was
virtually 100% coal only 20 years ago.
The plant in Choczewo will use the
US company’s Westinghouse AP1000 technology and consist of three units. Poland's state-owned company PEJ is in overall charge of the project.
Critics have long questioned the ambitious schedule, pointing to the heavily delayed nuclear power projects elsewhere in the EU. There also is a local opposition to the project, claiming that the large plant will ruin local tourism potential.
The project has broad political support, however. Key opposition parties, the centrist Civic Coalition and the Left, both pledge to go on with further permitting and eventual construction of the plan should they replace the ruling Law and Justice (PiS) after the election on October 15.
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