My room mate once welcomed me with the news that he had made money that day. We were cash-strapped students so it was delightful news. Great, I said, how? “I called my father and he sent me 200.” I was beyond angry. In my limited world view that was not “making money”. That’s because I was young and naive back then. No surprise I stayed so poor.
Others know better. Turns out, begging for money does count as making it. And so does getting loans from a bank. Just look at our oligarchs.
A normal person would assume that getting a loan from a bank is not exactly a cause of relief. It is an obligation that ultimately costs money in interests. But only a naive person thinks of loans as something to pay back at some point.
Our “national bourgeois” class (aka. oligarchs) are totally unworried about the debt they have amassed. Not so the banking system. Átlátszó.hu, an investigative journalism site has collected data about the existing debt of Hungarian oligarchs towards banks and asked experts whether the amount is a sign of a healthy growth – either of their state-nourished family business or of the economy. (The two things are interchangeable in political lingo these days. The oligarchs are us and we, in turn, are nobodies.)
Turns out, financial markets are worried about lending by commercial and state-owned banks that are financing the so called “national oligarchs” of the Orbán government. “Átlátszó estimates the Hungarian banking system is currently burdened by at least HUF 129 billion (EUR 424.8 million) of politically risky loans. Some experts believe the figure to be higher.”
Átlátszó only collected data that was publicly available and not protected by bank secrecy. They have also only included loans to ‘national oligarchs’ since 2014. But the problem is older and deeper and secrets are a tool of power these days.
Further adding to the instability is that there isn’t any data available on the soundness of the collateral or the size of the downpayments, but there are stories where the bank was not allowed to resell the property offered as collateral without the consent of the debtor. And the business model of all these oligarchs – if any – is always based on winning new public tenders, subsidies and benefiting from legislation.
Orbán announced at the very beginning of his government that he wants the majority of the banking system in what he calls “Hungarian hands”. And it is also obvious that he chose the hands into which these banks were played. Today, MKB (EUR 143.7 million) and Eximbank (EUR 100.5 million) are the two main sources of crony-loans – both state-owned or crony-owned after Orbán’s drive to make commercial banks sell to him.
These are the steps a national oligarchy is built, ladies and gentlemen. First, you use legislation and taxation to make the banks sell. Then you use your banks to lend to your oligarchs. Your oligarchs then buy up every business in the country. Then you literally own your entire country and need no more laws to make everyone obey.
The most indebted oligarch, Lőrinc Mészáros, owes a cumulative EUR 178.2 million. Yet, banks cannot run fast enough to lend him some more every time “he” picks a company to buy – which is every other day. Since 2014 he amassed 203 companies in his portfolio, in every sector imaginable and he is far from finished. Yet, he seems surprisingly ignorant even of what he owns. Some malevolent rumors (and logic) dictate that he is merely the front for the real boss. That may also explain why he looks so calm and unfazed by the 178.2 million euros of loans he is sitting on.
As the saying goes, when you owe 1 million to the bank, you should be worried. When you owe 100 million to the bank – the bank should be worried.
Or the entire banking system.