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Almost all EU countries have thousands of citizens affected by FX LOANS. Spain, Croatia and Hungary are some of the countries that are getting very good results at the courts against the banks and their products.
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FX LOANS respond to a clear pattern of repetition (and deliberation), obliging the main associations of each country to come together to form a new european association in defense of those that have been affected. The aim is to fight from a national level as also now a European one. and banking and eradicate the toxic product.
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ASUFIN with PROFUTURIS, PARAKLETOS and TUCONFIN will be in Brussels on June 7 to explain this problem that has been systematic in Europe. The various European associations will unite to defend those affected by the FX Loans now from a European approach.
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AUSTRIA
The country in Europe most affected, in terms of the titanic volume of loans, is Austria. Approximately 150,000 households have loans, mostly mortgages that are in Swiss francs. These were acquired expecting to receive profit from the advantages that were granted due to the low interest rates. After the sudden jump of the franc, the debt has grown by 20%.
According to the Austrian press reports, the households that are most affected were those that took their loans in the late 90’s to an exchange rate of 1.45 francs per euro. The problem is these must be repaid by 2017-2018. The system used by the Austrian bank was the following:
-The customer returns only monthly interests. This provides aside certain amount for an investment fund. When this is done, they liquidate the loan amount in acquired swiss francs.
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HUNGARY
Everything related to FX Loans is a political issue. In neighboring Hungary, loans in Swiss francs have been a political issue for years under the government of Viktor Orbán. The conservative politician has openly confronted the main banks, especially those that are foreign. These loans, granted mainly by non-local banks, were converted at different stages from francs to forints (the national currency).
The result of the mentioned above, was that the financial institutions had great looses. The hungarian authorities transformed nearly half a million mortgages in forints. Now a days in Hungary you can only find personal credits in swiss francs.
Still 377,000 remain outstanding on these loans (personal credits). Most of them were used for purchasing cars, home appliances and other consumer goods, with a volume of 2,000 million euros. But even in these particular cases, the depreciation of the forint against the franc greatly affects the customers.
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POLAND
In 2013 there were 562,487 mortgages in Swiss francs, representing almost a third of all the loans. “This meant that, overnight, a large number of households have seen an increment of the credit. Between 2004 and 2010, Polish citizens signed a loan in Swiss Francs claiming it “was what was recommended (important to state it was by the citizens and mainly the Banks), and that it was what everyone was doing”. There was a real pressure from the banks to make them sign by comparing the interest rates: 4.65% if the loan was payed in Swiss Francs and if done in the Polish national currency the interest rate was of 10 to 12%.
This is why the Polish Government has stated it is willing to commit to finding new measures that could alleviate the current situation of the mortgages. The Government, Financial Control Commission, the Authority for the Protection of Competition and Consumers and the banks themselves have stated they will try to rescue the mortgaged. The banks have had to lower the supply of these mortgages and have been obliged to take into account the negative libor, so the interest rates of the customers should decrease.
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CROATIA
The total volume of loans in francs is worth nearly 3,160 million euros. This debt is assumed approximately 60.000 households. The decisions made by the croatian government have been very unpopular, to the extent that even the BCE have harshly criticized them. The “retroactivity” decided by the Government is against the european directives
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ROMANIA
Meanwhile in Romania there are 200.000 people with loans in swiss francs. These loans are mostly mortgages. The outstanding volume of return in the Balkan country, the poorest in the European Union, is of 3,000 million euros.
According to Adevarul Fund, those affected are starting to organize themselves, and are becoming very strong. They have associations like Parakletos, and have created a Facebook page called “Client Group indebted in Swiss Francs” where more than 23.000 people are actively fighting and demanding a change in national legislation and the opening of negotiation with the banks.
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GREECE
Greek courts the last 2 years have recognized that the term of the mortgage contract which in fact burdens the customer to suffer any currency fluctuation from euro to Swiss franc is totally void. The reasoning behind that was based mainly on the 2251/1994 Greek Bill of Consumer law article 2 which deals with the rights of the consumer at the time of the dealing with the bank. In fact the specific law is part of the 93/13 European regulation issued on the 5.4.1993 and in particular article 3 which states that “A term of the contract which was not part of the negotiations among the parties is to be rendered void when it creates serious imbalance between the rights and obligations of the parties.” Recently consumers won in Athens an individual case and also a class action law suit against Eurobank.
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ITALY
The problem with the FX LOANS in Italy was due to Barclays. The national banks did not allow the families or citizens with less resources to have access to mortgages. Barclays offered them this possibility, with the mortgages that appeared in different currencies, known as FX LOANS. It is estimated that more than 5000 families, with not many resources, have this product. The difference between Italy and some of the european countries mentioned in this article, is that in Italy there has hardly been any awareness of the situation with the banks and their products.
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GERMANY & GREAT BRITAIN
For these two countries, we have decided to do one section for they are allies when it comes to talking about mortgages. They have both disapproved the decisions made by other european countries, especially Hungary and Poland that are defending the interests of the citizens. They both have drawn upon the Court of Justice of the European Union to defend the businesses of they banking sector.
Most of the multicurrency mortgages that were placed in the Eastern and Southern European countries were from british and german banks. One out of every three families has signed on of these mortgages. This has generated an extremely high amount of money for the german and british banks. National policies like the one decided by the Croatian government, affects their national banks and therefor weakens them.
The two Western European countries want to avoid a new sentence, against these financial products. They are using all the judicial instruments to prevent it. The unexpected eruption is due to the policies, harsh on the international banks, the other European countries have decided.
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SPAIN
In Spain approximately 70.000 householdings have fx loans. These were acquired between 2007-2008. Despite the major problem fx loans is for the spanish population, there is not ant official data. The contrary of other european countries, in Spain mortgages could be indexed in several currencies. Despite this peculiar characteristic, most of the loans are in swiss francs, many in japanese yen and some are in the sterling pound.
In the past years, spanish jurisprudence, has been in favor of the bank consumers, especially after the sentence of the TJUE of 30.04.14 (Asunto c26/13) and later with the one from the Supreme Court (Tribunal Supremo), who was the pioneer with these type of sentences. The 30.06.2015 the Supreme Courst considered that FX Loans was a financial derivative and therefor the banks were obliged to apply MiFID (LMV). Despite this, later on the TJUE (3.12.15 Asunto C 312-14) considered that FX Loans was not an investment product. Despite the setback, spanish courts are still favoring the bank clients, because they believe that the clauses did not respond to a transparency control. In Spain the leading association in defense of the consumers and to make the FX Loans come to an end is ASUFIN.
