Government proposals for franc-debtors

Janusz Piechociński, the Deputy Prime Minister and the Minister of the Economy presented the government's recommendations for lenders regarding the situation of franc-debtors caused by the CHF appreciation, the press reported. The ministry is recommending establishing three-year "loan vacations" (repayment suspension) and setting limits on monthly installments, Piechociński informed. What is more, the debtors should have an opportunity to convert franc-denominated loans to the złoty. However, the conversion should be done at the current exchange rate rather than at the rate as of when their loan deal was signed, as was earlier postulated by the Financial Supervision Authority. Minister Piechociński called on the debtors to refrain from making decisions for a while. The government wants Polish banks to take negative LIBOR interest rates into consideration while dealing with the current situation. The Ministry of Finance suggested establishing the tax exemption for those debtors whose loans have been partly extinguished. Janusz Piechocinski admitted that systemic solutions regarding mortgages are needed. Two weeks ago, the Swiss National Bank announced it will no longer maintain the franc’s exchange rate against the euro above 1.20, causing an upheaval on global currency markets. The price of the Swiss franc soared to PLN 4.3 from PLN 3.5 last Wednesday, putting a strain on some 600,000 Poles with franc-denominated mortgages.