ICL Journal © Verlag Österreich 1 Hungarian Constitutional Court: The unconstitution- ality of contracts and amending contracts via legisla- tive measures Jugdment of 20 March 2014, Decision 8/2014 (III 20) Gergely G Karácsony In this decision the Constitutional Court of Hungary interpreted the Fundamental Law and has ruled on several ques- tions relating the unconstitutional nature of consumer loan contracts where loans are granted in foreign exchange (hereinafter: ‘FX loans’). The Government, as petitioner, asked the Constitutional Court inter alia as if the unconstitu- tionality of private law contracts can be declared, and what are the constitutional requirements for the legislator to change the contents of existing contracts via legislative measures. I. Facts of the Case On behalf of the Government of Hungary the Minister of Public Administration and Justice requested the in- terpretation of Article M paragraph 2, Article II and Article B paragraph 1 of the Fundamental Law. The petition details the specific problem in connection with FX loans that requires the interpretation of the Fundamental Law. The petitioner points out that the major and unexpected change of exchange rates, and the significant increase of the loan instalments – stemming in part from these factors – cause severe difficulties for a large part of the population. This makes it necessary to find a permanent solution for the problem of FX loans. It also complicates the situation that – in the opinion of the Government – the courts do not have a uniform view on FX loans and FX loan contracts. The Government thus asked two questions from the Constitutional Court. In the first question the Government asked the Constitutional Court to interpret Article M paragraph 2 of the Fundamental Law, as to whether it is possible based on this provision, to declare the unconstitutional nature of certain contractual provisions used en masse in consumer loan contracts that are introduced unilaterally and are affecting consumers adversely. By such provisions the Government means specifically the ones in consumer FX loan contracts that set forth that only the debtor takes the risk of the change of exchange rates, the ones enabling the creditor to unilaterally increase interest rates by a rather large margin of discretion, as well as the ones enabling the use of exchange rate margins. Within this question the Government also wanted to know whether it is possible to declare the unconstitutionality of court judgments affirming such practice, and the legislation which these provisions are based on. The second question regarded the interpretation of Article II and Article B paragraph 1 of the Fundamental Law, as to which constitutional conditions should be met – and how are they different from the ones based on the former Constitution – in order to amend existing contracts via legislation. Next, the Government detailed the background of the questions as follows. The Constitutional Court had previously ruled on a case concerning consumer FX loans and the possibilities of a Government intervention. In this case 1 the Court rejected to declare the unconstitutionality of the legal provisions that set forth the possibility of the final settlement of foreign exchange debts. The Constitutional Court ruled that in this case the requirements for government intervention were met. In this case the Govern- 1 Decision 3048/2013 (II 28) of the Constitutional Court