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Hungary could scrap residency bond programme -PM's aide

by Reuters
Thursday, 27 October 2016 13:41 GMT

(Adds more comments, background)

BUDAPEST, Oct 27 (Reuters) - Hungary said on Thursday it could scrap a euro-denominated residency bond programme which attracted thousands of mostly Chinese investors but drew criticism from the far-right opposition party Jobbik.

An aide to Prime Minister Viktor Orban said the scheme, which guarantees residency for at least five years to foreigners buying a bond for up to 300,000 euros, was no longer required because of an upturn in Hungary's financial outlook.

But Jobbik had warned it would not back the government's planned amendment to the constitution to ban the resettlement of migrants in Hungary unless Orban abolished the residency bond scheme which was introduced three years ago.

With Jobbik's parliamentary support, Orban should be able to secure the two-thirds majority for passing the amendment.

Orban's government has pushed ahead with the law after a referendum in which an overwhelming majority of Hungarians who voted had rejected EU migrant quotas, but with too low a turnout for the vote to be binding.

Orban's chief of staff, Janos Lazar, told a news conference on Thursday that the decision to review the residency bond programme had nothing to do with Jobbik's "blackmailing" and the review of the programme had been under way for a while.

The review was needed, he said, because two credit rating upgrades enabled Hungary to return to traditional means of financing.

"I think we can return to traditional means of financing, with respect to the external debt of the state, so I am convinced that the residency bonds will not be needed in the upcoming period," Lazar said.

Almost 10,000 Chinese have taken advantage of the scheme to move to Hungary and the government had welcomed these and other affluent investors from Russia and the Middle East who bought residency bonds.

The government has not yet made a formal decision about the bonds. Lazar said Economy Minister Mihaly Varga was in the process of reviewing the programme.

"We reject Jobbik's blackmailing," Lazar said. He added later: "I hope ... Jobbik will reconsider its current rejection (of the constitutional amendment)."

Orban's government has sealed Hungary's southern borders with a razor-wire fence and deployed thousands of soldiers and police to keep out migrants who fled war and poverty in the Middle East and Africa.

(Reporting by Gergely Szakacs and Krisztina Than; Editing by Richard Balmforth)

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