BUDAPEST, Hungary — With winter fast approaching, the bailiffs of Budapest are in a race against the clock.
They have only days before temperatures plummet and evictions are frozen by law. Demand for their services is soaring, and in the last seven weeks at least three people in the capital have committed suicide over the prospect of losing their homes.
Ani Beres, a 58-year-old woman whose family farming business went bankrupt, sat on her bed and spoke of hurling herself out of the window as the debt men knocked on the door of her 9th floor apartment this week. Her last line of defense was a throng of angry family members and activists trying to get in their way.
Hungary's eviction crisis has its roots in 2005, when hundreds of thousands of Hungarian families began taking out mortgages and other loans in foreign currencies — overwhelmingly in Swiss francs — to take advantage of lower interest rates and a strong Hungarian forint.
But the Hungarian currency has plummeted over the past two years as the economy, highly dependent on exports, spiraled downward in the global economic crisis.
Today, the currency is falling further as the economy teeters on the verge of recession. Hungary's credit rating is threatened with downgrade to junk status. Investors are spooked by the government's unorthodox economic policies. And exports to Western Europe are being buffeted by the eurozone's own debt crisis.
In a sign of the depth of the currency shock, authorities said Thursday that state security services will investigate possible speculative attacks on the forint after it plunged to an all-time low against the euro this month.
While a Swiss franc was worth 150 forints in 2008, it has now risen to around 250 forints and the Beres family's 8-million-forint loan ($34,500, €25,700) has ballooned to at least 12 million forints ($69,000, €51,400).
The family depends on welfare payments of 48,000 forints ($208, €155), not enough to live on, much less to repay their loan.
"We get food from the neighbors to survive," Beres said. "You can ask them!"
A bailiff backed by several police officers had come to evict her family, whose home was bought at auction by real estate investors after she was unable to repay a foreign-currency bank loan.
"We took out the loan to invest in our vegetable-growing business ... but we went bankrupt and had to sell everything," Beres said, as her husband, Laszlo, screamed at the bailiff in the stairwell and had to be restrained from attacking him.
"I'm hopeful we can sort things out. But I'll do it, I'll jump out right here in front of everyone!" she said. "How many people need to die in this country until a solution is found?"
Hungary was a favored destination for international investors during the years after the first post-communist elections in 1990. But in the 2008 global recession, it became the first EU country to receive a bailout from the International Monetary Fund to avoid defaulting on its loans.
Last year, Prime Minister Viktor Orban's government decided to forgo IMF support so it could apply its unconventional economic policies, including allowing people to pay back foreign currency loans at exchange rates much lower than current market rates, with banks forced to absorb the difference.
Last week, however, the government announced it would seek a "safety net" from the IMF and the EU but denied that the financial assistance would take the shape of a new loan, thereby giving the IMF undeniable say in Hungary's economic policy.
Despite Orban's intention of keeping a "free hand" in economic matters, analysts are skeptical lenders will be so considerate.
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