Reuters is reporting that Central Europe’s political and economic elite are giving little consideration to a Hungarian plan to bolster their financial situation against any potential crisis. The country’s prime minister Viktor Orban was to propose a series of measures, including access to foreign currency swap lines, and an ability to stop capital outflows from local banks to their western parent banks. With an IMF line of credit of its own, Poland’s finance ministry claimed emergency preparations had already been taken. The Czechs insist that with deposits in its banks significantly higher than outstanding loans, its banks were in good shape. Slovakia’s finance ministry claimed it had no knowledge of the Hungarian plan. With its unpopular tax on banks having already soured the mood among Europe’s banks, Hungary’s weak fiscal position is making it look like the biggest risk in case of a crisis.
