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Hungary is planning to offer citizenship to any foreigner who buys at least £200,000 of its government’s bonds.
Legislation would grant residency and ultimately a Hungarian passport... allowing the holder to live and work anywhere in the European Union.
The move, backed by the ruling party, is aimed at wealthy investors, especially from China.

Radical proposals: The Hungarian Parliament in Budapest, where legislators are considering issuing bonds to foreign investors in exchange for citizenship

Hungary has billions of pounds of foreign currency debt maturing in the next few years and needs to find ways to refinance it.

Budapest has asked for help from the EU and the International Monetary Fund but talks are dragging on and analysts see only a 50 per cent chance of a deal.

 

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The citizenship scheme calls for the debt management office to issue special ‘residency bonds’ to foreigners.

Holders of at least a quarter of a million euros of Hungarian debt would get preferential immigration treatment.

Legislation would grant residency and ultimately a Hungarian passport... allowing the holder to live and work anywhere in the European Union (flag pictured)

'The goal of the modification is to create the institution of ‘investor residency’ in Hungary,' the lawmakers who put forth the legislation wrote in their proposal.

‘The proposal ties gaining citizenship to buying bonds because it intends to aid state financing this way.

‘Other investments from those applying for such residency could boost the real estate, retail and investment markets.’

Mihaly Babak, a lawmaker with the ruling party, said: ‘The Chinese have articulated repeatedly that we should help their Hungarian investments.’
Public debt in Hungary is equivalent to about 80 per cent of its annual economic output and households also are struggling with a mountain of foreign-currency debt.

HUNGARY'S DEBT

• Hungary is currently in recession – its GDP contracted by 1.2 per cent in the first half of 2012 and is expected to fall by 1.5 per cent over the full year, according to the European Bank for Reconstruction and Development (EBRD)
• Many of Hungary’s local governments have warned they could be bankrupt by early next year. They have $5.5 billion of debt – the highest level among the EU’s eastern nations
• The country is in discussions with the EU and IMF over a financing backdrop

One of the authors of the proposal said Chinese investors were specifically targeted.
Tory MP Priti Patel said: 'This is a shocking abuse of EU membership by the Hungarian Government and highlights one of many flaws in the EU and in the way it operates.
'This policy could pose significant challenges for the EU when it comes to immigration, social and economic policies and will do little to restore any trust and confidence in the EU with the British public.'
Tory MP Ian Liddell Grainger said: 'At the end of the day this is not the way to encourage investment. It never has been and it never should be. All you do is undermine your institutions.
'It is up to them what they do. But dare I say it it is not a very clever way of doing it.'

Read more: http://www.dailymail.co.uk/news/article-2225339/Hungary-offer-wealthy-foreigners-citizenship-return-investment.html#ixzz2Ape2cqmI
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