BUCHAREST, Romania (AP) – Elvis Constantin Cluci and his wife had planned a second child, their dreams set on a little brother for their 2 ½ year-old daughter. But due to a surge in the Swiss franc that caused the Romanian couple’s mortgage payments to rise, not only is another child out of the question but they have had to send their daughter to live with grandparents 100 kilometers (60 miles) away.
Now they see her only once or twice a month. They simply cannot afford both day care and their mortgage on a small studio apartment in Bucharest. They can barely even scrape together the gas money to drive to see her.
“I can hardly smile anymore,” said Cluci, 37. “My wife is completely destroyed. As the man I have to be strong and bear it.”
On Jan. 15, the Swiss national bank ended a policy meant to limit the franc’s value against the euro – causing the franc to surge. That move by one of Europe’s richest countries is adding to the financial despair of hundreds of thousands of people across some of the poorest regions of the continent due to mortgages taken out years ago in Swiss francs.
Many of the borrowers were in their 20s and 30s who took out loans in the boom years before the crisis of 2008. They were supposed to be the first generation to benefit fully from the economic promise that came with the fall of communism and the entry into the European Union. Mortgages in foreign currencies were particularly popular because they came with the lower interest rates.