(Adds quotes, central bank, background)
By Radu-Sorin Marinas
BUCHAREST, Oct 7 (Reuters) - Romanian parliamentary committees are likely to approve on Monday a bill to help Swiss franc borrowers convert mortgage loans into leu currency at historical rates, deputies said on Friday, going against central bank recommendations.
Before the financial crisis, thousands of East Europeans took out low interest rate loans in currencies such as the Swiss franc, only to find these loans hard to repay after their own national currencies slumped in value.
Governments across the region have been looking at ways to reduce the debt burden on their citizens - such as converting the loans into domestic currencies at the original exchange rates - without imposing a crippling burden on banks.
Over the past weeks there have been debates among Romanian MPs on converting loans including one proposing the conversion of hard currency loans by individuals at historical exchange rates plus a 20 percent increase, or offering state guarantees to banks and a discount to borrowers.
A drive to offer legislative support to Swiss franc borrowers has intensified this year and as political parties position for a Dec. 11 general election.
“We back a historical rate conversion. There’s agreement (among MPs). We should have approved this long time ago, people are right to have demanded this solution,” legal committee member Nicolae-Ciprian Nica told Reuters.
Social Democrat deputy Iuliu Nosa, vice-president of the Budget and Finance committee said: I‘m confident that nothing surprising can happen, I do expect conversion at historical rate solution to clear committee on Monday and, if all goes well, will pass parliament later in the week.”
“Costs for banks would be bearable.”
A final vote in the legislative assembly could occur as early as on Tuesday, they said.
Eugen Nicolaescu of the rival Liberal Party - the country’s second largest political grouping after PSD - and a vice-president of the same commission, who said he could not rule out a “last minute” change said that: “All opinions are converging towards converting outstanding Swiss franc loans at the exchange rate they we taken.”
The central bank said that, if approved, such a measure will have an impact of about 2.4 billion lei ($600 million) on local banks from exchange rate difference.
It said that out of a total number of about 70,000 loans, there have been about 57,000 conversion and restructuring request filed by borrowers of which about 34,000 have been solved through direct negotiation between the parties.
The Dec. 11 national ballot will produce a new parliament that will propose a prime minister to replace incumbent premier Dacian Ciolos who came to power last November with a caretaker team of technocrats for a limited, one-year mandate.
Opinion polls showed the leftist Social Democrats likely to garner most votes, around 38-40 percent followed by the centrist Liberals with about 30-32 percent.
$1 = 4.0383 lei Reporting by Radu Marinas